eli5: what is the difference between market manipulation and simply buying a bunch of stock?
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Let’s take Elon Musk’s recent controversy as an example.
Elon is a public figure who became incredibly successful through his investments. So obviously, his actions will influence the actions of other investors. If he buys a bunch of stock, other people will copy him and cause the price to rise, thereby making it more expensive to buy more stock.
By not disclosing his investment as he is legally required to do so, he prevented the price from going up. This allowed him time to buy the amount of stock he needed much more cheaply. Thus, his failure to disclose can be considered market manipulation.
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