Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

SPCX is now Wall Street's most shorted new stock

invezz.com

Post reply on HN
Print view View original

81–90 of 134 posts

Re: SPCX is now Wall Street's most shorted new stock

#81

Post by WarmWash »

quantummagic wrote: post #75
WarmWash wrote: post #73

Earlier quoted context omitted.

>There's just as much optimism as pessimism about the stock, at that price. No, there isn't, because the price breaks in the direction that there is more optimism or pessimism. When the pessimists run out of optimists at $135/share, they start digging for them at $134/share. The price ran out of optimists and had to move down to find more. Otherwise the price would lock at a single point. And abundance of pessimists…

People respond to market forces. When they see that there are other people making irrational valuations, they may wait to buy even lower. It's not a judgment about the intrinsic value of the stock at the current price, but of opportunities in the market. It's still a hard fact that for every single trade, there is someone as fully optimistic, to perfectly match the pessimistic side. And people have to be pretty commi…

Your hard fact is correct, but it's your extrapolation that it tells you something meaningful that isn't. The fact provides zero information. Its on par with "every gallon of milk is sold to a person" or "every leaf comes from a tree".

Re: SPCX is now Wall Street's most shorted new stock

#82

Post by unknownfuture »

cj wrote: post #32
echrisinger wrote: post #23

Earlier quoted context omitted.

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?

No. Typically lockup agreements prevent any kind of trading of derivative or synthetic positions (think: shorts, swaps, options, etc).

Re: SPCX is now Wall Street's most shorted new stock

#83

Post by unknownfuture »

BobbyJo wrote: post #65
cj wrote: post #32

Earlier quoted context omitted.

If you have holdings that are locked up, are you allowed to short stock or use options to hedge your position?

Almost certainly, outside of standard trade restriction windows. I don't think they have any control over what you do in the market outside of preventing insider trading.

Yes they absolutely can and do. Lockup provisions are contractual and typically quite strict.

Re: SPCX is now Wall Street's most shorted new stock

#84

Post by quantummagic »

WarmWash wrote: post #81
quantummagic wrote: post #75

Earlier quoted context omitted.

People respond to market forces. When they see that there are other people making irrational valuations, they may wait to buy even lower. It's not a judgment about the intrinsic value of the stock at the current price, but of opportunities in the market. It's still a hard fact that for every single trade, there is someone as fully optimistic, to perfectly match the pessimistic side. And people have to be pretty commi…

Your hard fact is correct, but it's your extrapolation that it tells you something meaningful that isn't. The fact provides zero information. Its on par with "every gallon of milk is sold to a person" or "every leaf comes from a tree".

No, you're just working very hard to miss the point. Nobody can place the pessimistic bet, unless there is someone equally optimistic in the other direction. The fact that you're fixated on the price varying as each side attempts to do the best it can is just a commitment to a narrative, not a useful insight.

Here's the simple way to know you're wrong. The stock price isn't zero. That means there people willing (at some price) to put their money where their mouth is, that the people betting against the stock at that price are wrong.

But at that point they're both just making bets.. all it says is that there are an equal number of dollars willing to gamble at that price point. It says nothing about which side of the gamble will win.

Shorts don't exist in a vacuum. They literally can't be made, unless there was someone in the market who thinks that at the short price, the stock is a good investment opportunity. Every trade is proof that the market thinks the stock is a good investment at that price. I don't know why you have such a hard time facing up to that fact, even after you admit it is one.

Re: SPCX is now Wall Street's most shorted new stock

#85

Post by unknownfuture »

AviationAtom wrote: post #44
rconti wrote: post #37

Earlier quoted context omitted.

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.

That's an absurd valuation. Typically stocks are valued at what people are willing to pay, with earnings partially driving that value.

I'd argue the opposite. If the price is largely vibes, you could see wild swings if sentiment changes dramatically. The bitcoin market is an excellent example of this. Worse, the recent BBB- rating on their bond issuance suggests a lack of lender confidence, and if their stock continues to decline those factors could compound.

Re: SPCX is now Wall Street's most shorted new stock

#88

Post by M3L0NM4N »

quantummagic wrote: post #84
WarmWash wrote: post #81

Earlier quoted context omitted.

Your hard fact is correct, but it's your extrapolation that it tells you something meaningful that isn't. The fact provides zero information. Its on par with "every gallon of milk is sold to a person" or "every leaf comes from a tree".

No, you're just working very hard to miss the point. Nobody can place the pessimistic bet, unless there is someone equally optimistic in the other direction. The fact that you're fixated on the price varying as each side attempts to do the best it can is just a commitment to a narrative, not a useful insight. Here's the simple way to know you're wrong. The stock price isn't zero. That means there people willing (at s…

> No, you're working very hard to miss the point.

It seems the opposite is true here.

> [Shorts] literally can't be made, unless there was someone in the market who thinks that at the short price, the stock is a good investment opportunity. Every trade is proof that the market thinks the stock is a good investment at that price.

Again, this isn't true. The spot price has to decrease from the point where short-selling is happening for there to be a willing buyer, unless there is a new bid. Yes, transactions happen at one singular price, but if you're only saying that every seller has a buyer and every buyer has a seller, then the guy that you replied to is correct. What you're essentially saying is that "every gallon of milk is sold to a person". This is not useful information.

Re: SPCX is now Wall Street's most shorted new stock

#89

Post by mikewarot »

I'm not crazy enough to try to short it, but getting out of the money put options a year or two out seems like a good idea.

If you're going to short it, you better have a buffer big enough to cover it going up to $500 for a moment somewhere before Elon is free to sell next summer. Someone will do a short squeeze, and slowly sell into it.

Re: SPCX is now Wall Street's most shorted new stock

#90

Post by WarmWash »

quantummagic wrote: post #84
WarmWash wrote: post #81

Earlier quoted context omitted.

Your hard fact is correct, but it's your extrapolation that it tells you something meaningful that isn't. The fact provides zero information. Its on par with "every gallon of milk is sold to a person" or "every leaf comes from a tree".

No, you're just working very hard to miss the point. Nobody can place the pessimistic bet, unless there is someone equally optimistic in the other direction. The fact that you're fixated on the price varying as each side attempts to do the best it can is just a commitment to a narrative, not a useful insight. Here's the simple way to know you're wrong. The stock price isn't zero. That means there people willing (at s…

> Every trade is proof that the market thinks the stock is a good investment at that price.

And every (short) sale is proof that the market thinks it's a bad investment at that price, which logically nullifies your point.

So to climb out of this nullification, we have to consider how many actors didn't get filled at the price they want. There isn't infinite liquidity at every price point.

Post reply on HN