Consider the stock price of this stock on NSE:
27 June 2012: 10.45
27 July 2012: 20.1
27 Aug 2012: 30.25
And the stock is (sound of drumroll): Ashapura Minechem
Now here is an interesting aspect to this whole jacking up of prices.
In these two months, the value of the total delivered shares on NSE is around 9.92 Crores.Now assuming BSE has the same volumes, the value of the delivered quantity on both the exchanges is approximately 20 Crores.
Now the market cap of the company has increased by 160 Crores in the interim.
So an investment of 20 Crores (actually a fraction of that much due to circular trading) can increase the market cap of your company by 160 Crores.
No wonder John Bogle said “We live in a world in which it is far easier to hype the price of a company’s stock than it is to build the intrinsic value of the corporation itself”