However, they claimed that these loans have been short-term and have always been repaid. The executives at Infibeam did agree that loans were being given out to group companies. This was being done by giving interest-free loans to a subsidiary company that did not have any assets to pay back the loan in the event of default. The message also alleged that the company had been embezzling investor cash. The message alleged that the company had been cooking up its books by using questionable accounting policies.
The contents of the message alleged that Infibeam had been indulging in some fraudulent behavior. It turns out that somebody had intentionally sent out a fake message to malign the image of both Infibeam as well as Equirus capital. The brokerage firm has denied any links with the message.
Preliminary investigations have revealed that the initial crash was triggered by the circulation of a Whatsapp message that was allegedly attributed to Equirus capital.
The Whatsapp Message that Caused This Crash About two-thirds of the market capitalization of the entire firm was lost in a single day. The end result was that the stock prices plummeted into a bottomless pit. This is when retail investors and arbitrage funds also started selling. Since so many derivative traders sold their stocks at one go, the market tanked almost immediately. Hence, they were forced to cut their positions and sell. The derivatives traders did not have the cash required to fulfill these calls. Hence, when the stock of Infibeam fell 6% or so, this triggered massive margin calls. As a result, a 1% loss gets magnified to a 10% loss. This is because derivatives traders place leveraged bets. As soon as the stock fell a few percentage points, the derivatives traders were negatively affected. Most of the positions being taken in this stock had short-term intent.Īs a result, when the selling started, it was impossible to contain the damage. This is because the share was being held in huge quantities by derivatives traders as well as arbitrage funds. The shares of Infibeam Avenues lost 73% of their value on one single day. This is also the reason that many skeptics believe that stocks like Infibeam which have very high volatility should not be included in the derivatives market. This is the reason that this stock was being widely used by speculators in the F&O segment. The stock has been down by more than 40% on a single day on three occasions prior to this. This is not the first time that Infibeam has seen a mega fall. Infibeam Avenues was considered to be a high growth stock. The stock has gained over 437%, and the company was now valued close to 11,000 crores. However, since the IPO, this stock has been extremely bullish. At that time, the company was valued close to 2000 crores. This company had raised Rs 450 crores via an IPO in 2016. Infibeam Avenues in the first Indian e-commerce company to be listed on the stock exchanges. In this article, we will have a closer look at the case of Infibeam Avenues. As a result, the subpoenas being issued by the government become worthless. The problem is that it is not very easy to track this new technology. A new form of economic terrorism using encrypted messaging services has been unearthed. However, the peculiar case of Infibeam Technologies in India has shown how dangerous Whatsapp messages can be. It is a known fact that in many terrorist attacks, Whatsapp has been used by the perpetrators. During election campaigns, politicians run concerted smear campaigns against their opponents using messaging services like Whatsapp. A lot of times this information is related to politics. Almost everybody knows that Whatsapp messages are often used to spread false information.
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