The Big Fishes Took Their Position On Paytm And Saw An Increase Of More Than 40% In Profit And They Can Square Off At Any Moment And Retail Investors Should Be Very Cautious

The Big Fishes Took Their Position On Paytm And Saw An Increase Of More Than 40% In Profit And They Can Square Off At Any Moment And Retail Investors Should Be Very Cautious

Paytm is making a lot of sounds in the market and headlines also and it is not happening naturally. Still, some operators had targeted to increase this share and to support that moment the headlines news also endorsed in favour of increasing the share price. However, be careful because every shining sandstone is not always be a diamond.After RBI sanctions on Paytm from January 31 2024.

The stock was hit lower circuits continuously for weeks and it hit 52 weeks low of 310 rupees. Paytm lost all of its business revenue source and income and the business but why it is roaring like a lion again the shares are up 41% in 36 days. What is the reason behind it there is no business and revenue up but there is no positive news and no revenue.

The main reason behind the sudden share spike

The operators had decided to target Paytm shares to gain profits. So, the big fishes on the market have continually buying these shares since June 6th and the volumes keep on increasing creating artificial scarcity in the market. So, the price of Paytm is moving in one direction even though valuations are against it. To support the rise of Paytm’s share the big business media is mixing the little masala and writing articles in favour of them.

If we can calculate the rough revenue valuations to share price

On January 19 2024 for October – December (Q3-FY24) Paytm declared results the revenue was 2,279 cores and on December 29 2023 closing day its price was 635.45 still had not reached the profits but when we compared it with previous quarters of Q3-FY24 it improved very much but the overnight sudden implementation of sanctions by the regularity body Reserve bank of India (RBI) on the day before the union budget bill on parliament. Its revenue and its core business collapsed and still, there is no hope of the future business of Paytm. 

On May 22 2024 for January – march (Q4-FY24) Paytm has declared results the revenue is 1,824 cores. We see the business had fallen due to the regularity of actions on Paytm business.

From the above table, we can see a lot of moments in volumes of Paytm shares and a very high volume of traded and delivery volumes which had fuelled the movement of the share price of Paytm in recent times and there are good things happened to Paytm and no positive news of Paytm in the instead there is a negative news on Paytm. Paytm is in talks to sell its movie ticketing business to Zomato even though Paytm gets money by selling its business. Paytm is losing one of its revenue sources and business stream in future.

SoftBank is selling its stake and Paytm is firing its employees to cut costs and it had stopped giving bonuses and now it’s under the government radar. When Vijay Shekhar said Paytm is like his daughter who met with an accident the business media mixed masala and linked it to the rise of shares price. The business media writes positive articles in favour of Paytm which directly influences the retail investors to buy more until the safe exit of big fish from Paytm which makes easy and profitable exit to the big fish and operators.

Why Big Fishes Took Their Position On Paytm

• If we compare the last Q3 FY24 revenue to Q4 FY24 it was down by 24.5%.
• The Paytm share after RBI sanctions hit a lifetime low of rupees 310 in percentage terms it was low by 32.5 %.
• If we look at it under a microscope, the valuations of the books can hold the share price to increase only up to 8% from now.
• The big fishes and market operators have taken their safe position at around 345 prices on Paytm and we see an increase of 40 % returns on their investments from the time of their position.
• The big fishes on the market targeted Paytm so it has risen rapidly and at any moment the big fishes have decided to book profit and if they square off their position Paytm will crash.

Conclusion:

The operators target one company to increase the share price or to decrease its share price.  They don’t go for every company unless they see potential growth and a mismatch between share prices and valuations.  The big people in the industry get information before the market so they will take position before a normal investor even if the particular company had declared good results and the results are positive.

The operators had already increased the price before so they will square off but after the positive results the share will fall instead of rising. To add fuel to the fall the business media will write against the company instead of favour and this will continue until the operators decide the price is safe to enter.

Indian business media has many top people of research analysts covering specific sectors, technical analysts, and economic analysts but they will never write against the tide. They even interact with and interview top Indian and global analysts so they will have a better and bigger picture than anyone. The business media can smell everything but they will never put the pen against the tide because they will miss backdoor funds of amount from big fishes.

If we invest in a good company by keeping all paramotors under consideration then control the psychology of fear and greed and execute our game plan of when to enter and when to exit and never give the market option to control our mind.