- Published: 12 June 2015
You would recall that a while ago, we had written Rakesh Jhunjhunwala: What his Blind Followers are Missing? We believe that this article is even more relevant today post the catastrophic incident in Surana Solar counter.
Much Ado About a Name – Rakesh Jhunjhunwala
On 10th June, 2015, Surana Solar’s shares surged ~20% after markets caught a whiff of Rakesh Jhunjhunwala’s 0.5% stake purchase in this company. Several gullible and ignorant investors went overboard and lapped up the shares of the Surana Solar. The volumes traded on that day rose 41 times from an average of 1.4 lakhs shares to ~58 lakh shares.
The great Shakespeare may have said “What’s in a name?” Well, in this case, it turned out that the name was of paramount importance – the mere name of Rakesh Jhunjhunwala changed the stock’s trajectory. As the day advanced on 10th June, news reports broke out that it was not the renowned Rakesh Jhunjhunwala but some other individual with the same name who had purchased the Surana Solar counter. Then, the stock nosedived by ~40% from the day’s high while it ended the day ~14% lower compared to the opening price.
Needless to say, the entire episode left a lot of blind followers and mimickers of Rakesh Jhunjhunwala in the red. Some investors would have lost a fortune in Surana Solar! We would like to reiterate that investors should be wary of mindlessly following him in lure of easy money.
So, we suggest that as an investor, instead of feeling like a helpless victim, you exercise caution and due diligence before investing.