RE:RE:RE:RE:RE:RE:negativity Its all legal/ethical. They all play the same game. The investment bank gets a "story" from the company that they can sell to investors to buy up shares in an issuance and give the company that issued the shares say 85 cents on the dollar for every dollar they sell. They don't really care what happens to the shareprice after as they already collected a fat commission, although most will have done a certain amount of DD, but its buyer beware, which is probably why they had trouble selling Concordias and had to give a bridge loan. Rbc would have followed all rules and regulations for sure. You just have to be careful with the price targets of the underwriters as they tend to make things look as rosy as they can with high price targets as a carrot. Selling a good story to investors makes them alot of money without much risk unto themselves. Just look how many times the price targets have been revised down!
kstantzo wrote: Craigbad wrote: The way it usually works is a bank underwrites a certain amount of bonds or shares, sells them to investors and reaps a big commission. They usually make out like bandits. If i recall correctly, they had trouble selling Concordias, which would mean they probably got stuck keeping a certain amount of the debt and/or shares themselves. Part of the underwriting is they commit to a certain amount for the company. I suspect that since they had trouble selling to investors, Rbc probably got stuck with debt and/or shares, as they were one of the underwriters, and thats why we see these ridiculous target prices from them.
You are confirming my worst fear here.
I'm ready to move from RBC to another bank if there is one that is more ethical. I'm guessing they all "play" the same undocumented rules at our expense? Very sad.
How many were fooled by RBC's predictions which were very high in spring! Do they ever get pulled in to class action suits? Recommending on one hand and institutional selling on the other?