Why did Orchid Chemicals fall 40% with huge volumes today. Is it because FCCB got converted to shares today?

The 40% fall is attributed to the selling seen in this stock by the Bear Stearns and Morgan Stanley. One more reason is US recession, as the this company is more dependent on US for its revenues.



MACQUARIE BANK also sold out its holding.

Why did Orchid Chemicals fall 40% with huge volumes today. Is it because FCCB got converted to shares today?
Dood is absolutey right.
Reply:check out this article about Orchid Chemicals %26amp; Pharmaceuticals

http://freemanstrikes.blogspot.com/2008/...
Reply:it fell because



1- bear stearns sold about 10 lakh shares

2- promotors of orchid chemicals bought shares on margin

from indiabulls and religare.and then when prices started

to fall, company got the margin calls,which it was unable to

meet,so brokers sold the holding shares.

so it was a cascading effect.
Reply:Reason 1) Company is sid to have incurred huge losses on Forex Hedging.

Reason 2) JP Morgan buying into Bear Sterns which holds a large chunk of Orchid Chem in its portfolio, which it sold at a huge discount to the CMP.

Reason 3) It was one of the Stocks which did not go down with proportion to the Entire market..so it had to do the catch up, which it did vertically instead of 10% down every day.

Reason 4) and this is the major cause for a sharp correction in the stock price in on single day - - Promotors bought shares on margin from indiabulls and religare.and then when prices Crashed, The margin calls got executed automatically, due to lack of Margin, so brokers sold the holding shares.

Any one who got it at those prices or even today's price of 117 is a good opportunity to enter into this stock.
Reply:This one had grown too much in a short duration without any justifiable reason. Now that markets have crashed, people are trying to see at valuations in every stock and stocks as this who have run up without any reason, are beaten down the most.