Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: Taikun who wrote (57144)	12/12/2004 8:29:47 PM
From: LLCF	Read Replies (1) of 74559

We'll start at the end: <Certain Authorized Participants are expected to have the facility to participate directly in the gold bullion market and the gold futures market. EDIT:Therefore, the creation of baskets of shares is expected to include participate in the futures market. It is right there in the prospectus. Futures seem completely unnecessary.>> This means that there will be players of the stock that arb the stock vs the futures. This is bound to happen, and they are simply planning ahead for the reality of the markets IMHO. I-banks do this already, trading the futures spreads vs each other, the cash market, and of course they'll use ETF's also. It's actually VERY GOOD the company is aware of this trade, presumably they will protect themselves against the shenanigans that occured with the hedgefunds buying/selling baskets of stocks during the day and then offsetting this with mutual fund transactions based on the close etc... I believe there are still people to go to jail for this. HOPEFULL [?] the company is ALL OVER the possibility for this type of abuse... ie. redemption times/prices etc. <"Stabilizing transactions consist of bids or purchases for the purpose of preventing or retarding a decline in the market"> I assume they're talking buying their own shares at a discount in a down market rather than purchasing gold with new money??? < was the sale of 15 tons a 'stabilizing sale' with no seller? > Who said there was no redemption??? Who said the stock wasn't at a discount? If they sell gold at 350 and buy their own shares @ 34.90 they are making nice money for their shareholders. I have no idea... I just think someone should be able to spell out what's going on before they assume anything. <In connection with this offering, the Purchaser may engage> This sounds like boiler plate new issue stuff to me. Every new offering has the underwritter in the market making sure they're customers don't look like schmucks. DAK

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