First Known Use of daisy-chain
Definition of daisy chain
- a daisy chain of computer peripherals
- a daisy chain of toddlers
Examples of daisy chain in a Sentence
She wore a daisy chain around her neck.
a daisy chain of electronic devices
The children linked arms forming a daisy chain.
First Known Use of daisy chain
Financial Definition of DAISY-CHAIN
What It Is
In finance, a daisy chain is an investment scam whereby a group of fraudulent investors inflate the price of a security and then sell it at a profit.
How It Works
In a daisy chain scenario, an investor or group of investors holding a long position in a low-price, small-cap stock unfoundedly publicize the stock as a promising opportunity. Susceptible, credulous investors subsequently purchase shares, which, collectively, leads to a rise in the stock's price because of heightened demand.
Once the original perpetrators have decided that the price of the stock has peaked, they sell off the entirety of their positions for a profit. Subsequently, the false advertising campaign ends and the stock price returns to its original level.
Why It Matters
Daisy chain scams are an illegal practice punishable by heavy fines by the Securities and Exchange Commission (SEC). With the advent of easily accessible and effective advertising via the Internet, the scams have become more common in recent years. Though investment advice such as stock tips can be convenient, investors are strongly advised to perform their own research on recommended stocks in order to avoid get-rich-quick scams.
DAISY-CHAIN Defined for English Language Learners
Definition of daisy chain for English Language Learners
: a string of daisies that you make by tying the stems together
: a group of things or people that are connected in a series
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