SpaceX's core business is transferring money from believers in Elon Musk's enrichment schemes to banks and short sellers.
Not quite, it's also about transferring money to the Saudi princes who financed his buyout of Twitter.
SPCX is now Wall Street's most shorted new stock
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Re: SPCX is now Wall Street's most shorted new stock
#32In a few weeks the pre-ipo share owners can offload the first batch of their shares (after q2 results release) So guessing non investors in SpaceX are shorting for this event in expectation of a drop
Typically this would be prohibited (at least as an employee)
If you have holdings that are locked up, are you allowed to short stock or use options to hedge your position?
Re: SPCX is now Wall Street's most shorted new stock
#33Every single shorted stock, was purchased by someone else who is taking the long side of the trade. So there's as many people betting the stock will go up. This says more about volatility and volume of trading, than anything else.
This isn't saying anything, anyone selling a stock is selling to someone going long.
That's exactly the point. The clickbait title wants you to forget that fact and draw an incorrect conclusion. It could have also been, "SPCX is the most purchased new stock", but that wouldn't have fed the desired narrative.
Re: SPCX is now Wall Street's most shorted new stock
#34In a few weeks the pre-ipo share owners can offload the first batch of their shares (after q2 results release) So guessing non investors in SpaceX are shorting for this event in expectation of a drop
Typically this would be prohibited (at least as an employee)
I'm not an employee :)
Re: SPCX is now Wall Street's most shorted new stock
#35Every single shorted stock, was purchased by someone else who is taking the long side of the trade. So there's as many people betting the stock will go up. This says more about volatility and volume of trading, than anything else.
> Every single shorted stock, was purchased by someone else who is taking the long side of the trade.
> So there's as many people betting the stock will go up.
The first sentence is a useful reminder, but second has a error: A single person can have multiple bets, and not all bets are the same volume.
For example, Alice has a budget of $10 and believes the coin-flip will land Heads. Alice makes a $5 wager with Bob and a $3 wager with Carol and a $2 wager with Dan. The equilibrium is in money, rather than opinion-havers.
Re: SPCX is now Wall Street's most shorted new stock
#36Re: SPCX is now Wall Street's most shorted new stock
#37Earlier quoted context omitted.
Yes, people expect it to trade much lower, around $40 per share, still would be a huge valuation for what the company has done. Goldman Sachs analysts had an extreme range, of like $6 Billion to $5T, but the consensus $2T required 100x revenue multiple by 2030. If revenue was less than 10x by 2030 it's less than $100B company, and only $6B if it remains flat. So a lot of downsides and the upside requires a continuati…
I haven't seen anything saying $40. The lowest I have seen is $70.
From TFA:
> "I think it could be half over the course of the year," Noble said, adding that he believes a fair value for the shares is around $30, implying a decline of roughly 78% from current levels.
Re: SPCX is now Wall Street's most shorted new stock
#38Earlier quoted context omitted.
Yes, people expect it to trade much lower, around $40 per share, still would be a huge valuation for what the company has done. Goldman Sachs analysts had an extreme range, of like $6 Billion to $5T, but the consensus $2T required 100x revenue multiple by 2030. If revenue was less than 10x by 2030 it's less than $100B company, and only $6B if it remains flat. So a lot of downsides and the upside requires a continuati…
> Goldman Sachs analysts had an extreme range, of like $6 Billion to $5T What a weird way for them to say "we don't know"! It's like saying this house has 0 to 100 bathrooms.
"So you're saying there's a chance? It might actually be possible to have 100 bathrooms! I knew it!"
Re: SPCX is now Wall Street's most shorted new stock
#39I just hope this doesn't destroy the company that would suck lose their edge and then China comes in
Re: SPCX is now Wall Street's most shorted new stock
#40Every single shorted stock, was purchased by someone else who is taking the long side of the trade. So there's as many people betting the stock will go up. This says more about volatility and volume of trading, than anything else.
That is true for the stocks but not options. Anyone with a brokerage account can write some calls and if they get exercised it’s up to them to find the stock to buy. Most pricing models assume the liquidity is always available but that’s not necessarily the case.
true, but the other side of that trade is almost always an options market maker who will hedge their delta by trading the underlying stock. so, yes, buying a call doesn't directly represent share ownership, but it almost always results in a commensurate share purchase. not 1:1, but reflecting the delta of the option.