The Panic of 1901 was started because E.H.Harriman and James Hills, titans of rail road industry, wanted to control of Northern Pacific Railroad.
In those days they started buying share of Northern Pacific Railroad from open market quietly and as there was no regulation on such buying no one have any idea of it. In April 1901, E.H. Harriman started buying Northern Pacific Railroad stock quietly and stock rose 25% in a month time.
Since overall market is raising no one predict that takeover is happening in Northern Pacific Railroad. Some trader thought that Northern Pacific Railroad stock rising to fast and they started shorting it.
When someone short stock, he in fact borrowing security from someone else and selling it. When price of security goes down person who shorted it, goes to market and buy at lower price.
But in this case as there are secretly buying was happening , stock continue it run and when on May 7, stock reach $143 and news floated what was happening behind the scene. When news came that Harriman is in race of buying, Hill and J.P Morgan try to stop him by putting in bids to buy stock as much as they could. Now it was open to all that it was race between Harriman and Hill, and sometime there are many people out there holding short position.
No one was selling and big buyers were forcing the price through the ceiling. Now shorter was caught in trap , they has to deliver the stock to whom they sold else the buyer can go to market and buy at market price and come back with bill to shorter. By the May 8 stock was trading $180 a share.
Next day fear and panic started in shorter and by noon shorter has bid the stock at $1000. When you have to have it, you have to have it.
Now at same time interesting thing was started in market, as shorts caught in very dangerous situation, they started selling other holding to raise money to cover their short position. Most of the other stock was down 10 to 20 points. Panic continues on next day and most of the other stocks were down 40 to 60 points.
This was the classical example that single stock created rest all stock on down journey. Same time there were few intelligent investor who has complete understanding of situation and got the opportunity to buy the stock that all are dumping because of their stupidity.
Suzlon, Pune base Wind energy Turbine manufacture and operate in 19 countries across the globe with around 22 years of presence in the renewable energy sector
Due to high debt and less demand in global market company lost its way after 2008 crisis but now it seems it is coming back to get it title back in Renewable energy sector.
In last couple of months there is many things happen in Suzlon. Here we have mentioned few event which happened which made noise in Suzlon:
On 17 January 2017 – Suzlon Energy achieved10,000 megawattsinstalled wind energy milestone in India. Suzlon’s 10,000 MW of wind installation is capable of powering over 5 million households per annum.
On day of Vibrant Gujarat Summit Mr Tulsi Tanti, MD of Suzlon Said that Suzlon Energy plans to add1,500 megawattof power capacity. Out of this 1,500 megawatt, 500 megawatt will be wind and solar, the hybrid solution in next 3 years. The current debt of the company is around 7,000-8,000 crore and the payment of debt is going, according to the schedule. Tanti added that company is in the final stages of discussion with the banks from exiting the corporate debt restructuring (CDR) and hoped to exit from CDR this financial.
Company Secured8 MWwind power project in AP.
Company Secured105 MWfrom Axis Energy Group.
Company Secured maiden order of50 MWfromOil India.
Suzlon bags63-MWwind power order from THDCI.
Rating Agency CARE assigned A rating to Suzlon. The rating has been assigned for its proposed long term and short term bank facilities. CARE ‘A’ ratings are considered to have adequate degree of safety regarding timely servicing of financial obligations, carrying low credit risk,”
Outstanding Q3 results of 274 cr.
Suzlon is big beneficially of interest rate cut which help the company in lowing interest on its debt. In last year company has delivered better result and significantly reduces it debt. Few thing that don’t work for company is that we find is that company has promoter holding is very low to around 20 percent only. But we have to look out for this result as many thing get clear and future path of company will be decide.
Currently Suzlon is trading at 17.10 INR on 10thFeb 17 on BSE with market cap of 8k Cr. With long term view one can enter in Suzlon.