Trade-Based Manipulation Or Speculative Bubble: A Case Study

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Xiaofeng Zhao


Pump-and-Dump, Manipulation, Speculative Bubble


This paper examines the unusual and puzzling stock price performance of USEC Inc. during July 2013. The stock price surged as much as ten times during merely sixteen trading days without apparent value-changing information being released. Four possible reasons are analyzed - mean reversion, information-based manipulation, speculative bubble, and trade-based manipulation. Trade-based manipulation and speculative bubble resulting from investors overconfidence seem to be more plausible and better explain the dramatic stock price changes.


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