I know the term “operational stock,” but few individual investors know exactly how it works.
A company whose financial statements are sound but whose stock price moves strangely.
There is always a network behind it.
Structure of Operations — Designed by Networks, Not Individuals
Lee & Kim (SSRN) empirical:
Stock price manipulation is carried out by organized networks rather than single actors.
Typical structure:
① Planning stage
Major shareholders/executives + corporations scheduled to be acquired by CB + stock price boosting forces connected
- Network pre-configuration through corporation establishment and executive assignment
- External observation is almost impossible at this stage.
② Funding stage
Issuance of CB or BW (bonds with warrants)
- Acquired by an internally linked corporation → actual circulation of funds
- Debt increases in financial statements, but in reality it is retained internally
③ Stock price boost stage
False or exaggerated disclosures or IR activities
- Inflow of internal network buying power → Increase in trading volume and stock price
- Attracting inflow of individual investors
④ Conversion/sale stage
CB conversion → Bulk acquisition of stocks
- Sell when the stock price is at its peak or when individual buying forces are inflow.
- Simultaneous decrease in majority shareholders’ shares
⑤ Result
Stock prices plummet → losses for individual investors
- Dissolution of corporation or replacement of executives → Dilution of traces
- Incorporation into decommissioned or managed stocks
What signal do you capture?
Patterns that Relational Risk identifies as leading signals:
CB acquisition corporation establishes relationships with major shareholders and executives
- The corporation has a short history of establishment (less than 3 years) and has a small amount of capital.
- The same executive is simultaneously registered in multiple small unlisted corporations
- There is a sharp increase in announcements of changes to executive positions before the stock price rises.
- Change in majority shareholders’ shares within 6 months after CB issuance
This is not in the financial statements.
It only exists in network data.
Why do individuals always suffer
Individual investors do not have the tools to view this network structure.
DART disclosure is fragmented
- Executive history is dispersed in each company’s disclosures.
- The relationship between CB acquirer and majority shareholder requires manual connection.
RaymondsRisk has automated this connection.
3,109 companies × 49,446 executives × CB investor behavior.
key message
Operations are carried out by networks, not individuals.
By reading the network, you can find out about the game before it starts.
■ Reference materials
Lee & Kim (SSRN): Demonstration of stock price manipulation and network design
- Heo Seo-young (2025): CB conversion event and minority shareholder loss
- Keum (2024): Private placement CB = red flag
- RaymondsRisk White Paper: https://www.konnect-ai.net/whitepaper
#relationalrisk #raymondsrisk #raymondsindex #konnectai
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