Veteran investor and founder of Helios Capital, Samir Arora commented on the inexplicable enthusiasm of fund managers to buy shares that are witnessing heavy selling by promoters or major shareholders.
Arora, in a post on the X platform (formerly Twitter), wrote that he has never seen this attitude before in his three decades as a fund manager.
He wrote, "In my 30 yrs as a Fund Managers, I have never seen fund mgrs/investors get so excited when management/promoters/major shareholders (PE funds etc.) are selling big blocks."
In a response to a comment, Arora wrote that this wasn't a phenomenon in one particular stock but across many stocks.
In a sarcastic tone, Arora added what he thinks the fund managers' thinking might be: "Fund mgr: ohhhh, big block is coming. Let me quickly put in a big bid before they decide to sell even more. Good things must be about to happen otherwise why would they sell. Also it is our collective duty to get the selling shareholders a good exit price."
A user asked, in the comments, what the normal has been so far and whether it has been that big blocks are being sold and therefore give the stock a go since the company must be on the verge of closing.
Also read: FIIs to hit pause, markets to stabilise, no need to recalibrate portfolio just yet, says Samir Arora
Arora said that the normal so far has been that "you dont buy at illusional discounts plus prices don't jump days before big blocks are coming".
A user commented that they (major shareholders) were selling at prices that have since doubled, meaning to say that they may have miscalculated and the fund managers may have been right to take the plunge.
To this, Arora said that there is no collective "they", that selling has been done by different entities across different stocks.
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