Recently some hackers, probably North Korean Government people say, hacked Sony in response to the release of a movie called "The Interview",
No one believes the hackers were independent because, really, who supports a broke ass nation like North Korea with such a fantasy based concept of itself.
I wonder, did North Korea really do this though, or are they just a scape goat? If I have to guess, I would say they are a scape goat. Someone deliberately hacked Sony to drive the stock down and it didn't work very well. Stock is still in the upper range of the last 52 weeks. The question is, is this going to work? If I was a betting guy, I would bet that the hackers had options to sell around 20 and that they expected the stock to drop near 52 week lows, maybe more. Sony stock has dropped less than $2 a share on the NYSE since December 1st. $2 in twelve days.
I think Sony is working pretty hard behind the scenes paying people off, buying stock at near their 52 week highs and they are gonna crash in the not so distant future. Sony is global, head over to a finance website and check Sony, they have about thirty stock releases all over the globe, and some of those are closing up. In fact, some are still pushing the high limit. Can Sony keep from crashing?
Anyone willing to bet that this hack was timed with a 52 week global high by coincidence?
Personally, I figure the North Korea shit, is just shit. I figure this is a team of hackers some stock market guy put together, partially on spec, that just isn't paying off yet. Will it?
This is actually the first really complex, multi-billion dollar potential hack I have seen ever and this really rocks. This is the kind of stuff hacking should be about. Screw the scum bag corporate overlords, use the bottom feeders in the "freedom of speech" media to do it, and take home a shitlload of money. Blame a country no one gives a shit about and that is constantly rattling a vindictive saber. It is beautiful.
Bad company choice though. Sony is pretty much a dog. Not a lot of downward potential. Maximum drop over a week is only about $2.70. With a December 1st release of data, December 12th should have been down about $5.20, max. Instead, we see a drop of about $2, which is within about a 70% probability.
If the hack was done to manipulate the stock price, it doesn't seem to be working.
Is it going to work? Short sales on Dec. 1st failed. Puts on Dec 12th probably failed. So how could this hack make cash?
Options would be the way to go, the right to buy or sell a stock at a particular price. Put options give a person the right to sell shares of stock at a price. Calls give people the right to buy at a particular price.
December 12th calls to sell at 19 were running about $0.35 a share back on October 30th. If someone had decided that Sony were going to make some money they could have made about $1 per share. Contracts usually run 5,000 shares so $5,000.00 per contract.
But, did hackers bet the stock would go up? No, they bet the stock would go down. A $20 put was running a little cheaper, but, the stock closed at $20.33 so the Dec 12 $20 put options expired out of the money.
If Sony had been below about $19.50 a share on the 12th those Dec 12 puts would have made some cash. If the stock had dropped to near 52 week lows, the Dec 12 puts would have made like $5 a share. If the guys sold $19 calls, expecting the stock to be below $19.....yeah, you get the idea. Even having inside information isn't exactly a sure thing.
hmmmm, not good for the hackers, if they are in the market, so far. If they planned longer term, they might make out like bandits. The problem is, the markets can be manipulated and that option money has to come from somewhere. Who writes options? Good question, and if you know who is writing the options then you know who you are working against when it comes to the stock price. Do these people selling the options have enough resources to buy against a drop and maintain the price?
In this case, I think they did. Who owns the big chunks of Sony? Who is writing the options? Who is trying to maintain their investment? Money comes down to people and knowing the people behind the stock price is a big deal. This is the difference between fundamentals and technicals. Analysis using fundamentals means knowing the people. Analysis using technicals means knowing what happens when bad information about a company is released.
The guys at Sony play hard ball, but, put options that expire in January are probably going make money because the stock probably cannot stay elevated that long. If the hackers bet further out, they are probably going to take home a chunk of change. If they figured this fight was quick, and didn't bet longer term, they probably expired out of the money already. From the 10% drop on Friday, I think the spending to prop the stock has expired, people took their profits and, totally guessing, I figure Sony hits mid January near 52 week lows.
If these guys planned it right, releasing near the 52week high the way they did, bet on a January, or even February, price low point, maybe they made a buck. It will be interesting to seek how Wall Street handles a hack like this.
Will Sony stock price drop low enough to make the hack worth it?
So far, this has just been an embarrassment. Lets see how the stock prices close mid January, 2015. I'm betting down, but, not with my own money.