4 ms·

Why are these people still in business?

by codewritinfool 9y ago

craftyguy 9y ago
I suspect a variation of 'too big to fail'
platz 9y ago
you are not the customer
mikestew 9y ago
"Still in business"? Hell, not only that, their stock continues to go up after bouncing off what appears to be the bottom. Which makes me torn, because despite wanting very much to see Equifax and those of their ilk go out of business, I have a bunch of call options I bought when it looked like low 90s was about as low as they were going to go. I still hold those options (though they're set to expire in about two weeks). You see, once EFX bounced off its low, I thought I'd catch a "dead cat bounce" with some call options I'd hold for a week and make a few bucks. It's a proven strategy for me, find a company with a scandal, wait a week for it to blow over, make a quick and small profit when it bounces back up. Then unload, because it won't last. Worked for me with United Airlines as one example. But EFX just keeps going up...and up, and I have no idea why. They were always a horrible, if profitable, company. But the Equifax problem isn't even remotely close to being resolved, and yet at the rate it's going it'll be back to pre-scandal prices before long. (Note that I don't believe it will get back to those prices any time soon, but it's trending that way.) So to answer your question: I don't have a good answer. The almighty market seems to think things aren't all that bad, despite the masses of unpopular sentiment. My best guess is that there are a lot of fingers in that pie (this article being but one example) that don't want to see their source of data disappear. Still can't figure out why that's driving the stock price up, though.
- MrLeap 9y ago
  I call those BP oil spill trades. Starts with a surprise events that is seemingly catastrophic. If real consequences require special government action -- the consequences will be underwhelming and easily mitigable. If you believe there's no ethical consumption under capitalism, there's no problem profiting off this effect! See: BP oil spill, HSBC money laundering scandal, Wells Fargo fraudulent account scandal, Equifax data leak, United Airlines beating up a passenger... I know I'm forgetting some. I'm pretty sure you could beat the yearly S&P's performance in a single trade for any of those events. Apple having to delay a new iphone release would have a more significant long term effect on that company's stock price than workers at foxxconn facilities killing themselves
  - mikestew 9y ago
    If you believe there's no ethical consumption under capitalism, there's no problem profiting off this effect! Yeah, I don't know where I stand on it quite yet. I mean, I won't outright buy Exxon shares to hold long-term. Is it hypocritical to make a short-term trade using options? Yeah, probably. But it's not like that money goes straight into Equifax's pockets, it just adds a minuscule amount of liquidity to a market for abstractions of EFX. Meh, I've got bigger ethical fish to fry right now. As aside, to add to your list: the private prison company whose stock went down last year when the Feds said they were going to curtail using private prisons. A few seconds of reading confirmed that it's states that make the most use of private prisons, not the Feds. Made bank on that one, can't say I feel good about it. But I also can't articulate exactly why I shouldn't feel good about it other than, "private prisons, yucky!" I'm pretty sure you could beat the yearly S&P's performance in a single trade for any of those events. Of the three that come to mind that I've personally traded recently, that is most certainly true (the in-the-money EFX calls I have are up about 300%). Problem is, such scandals need to happen more frequently in order to make a trading strategy out of it. About once or twice a year is as frequently as I see such opportunities come up. One could have made a year's SV salary on EFX calls with a $50K investment, but because it's options that $50K could very easily be worth $0 in just a month or two.
- Spooky23 9y ago
  It's just a PR exercise to fix. Nobody cares about Equifax. What's going to happen? You have a republican congress that won't regulate them away, the banks need them, and the actual thieves are criminals or nation states who'll get tagged with the actual crimes that get committed later. They will wait until they get their fine, take the media hit, and then rename the company after Trump kicks a kitten or something and overtakes the news cycle.
takeda 9y ago
We are not their customer, we should pressure government to do something about them both federal and local. It looks like that's the only way, we can't just "vote with our wallet" in this situation.

Why are these people still in business?

craftyguy 9y ago

I suspect a variation of 'too big to fail'

platz 9y ago

you are not the customer

mikestew 9y ago

"Still in business"? Hell, not only that, their stock continues to go up after bouncing off what appears to be the bottom. Which makes me torn, because despite wanting very much to see Equifax and those of their ilk go out of business, I have a bunch of call options I bought when it looked like low 90s was about as low as they were going to go. I still hold those options (though they're set to expire in about two weeks). You see, once EFX bounced off its low, I thought I'd catch a "dead cat bounce" with some call options I'd hold for a week and make a few bucks. It's a proven strategy for me, find a company with a scandal, wait a week for it to blow over, make a quick and small profit when it bounces back up. Then unload, because it won't last. Worked for me with United Airlines as one example. But EFX just keeps going up...and up, and I have no idea why. They were always a horrible, if profitable, company. But the Equifax problem isn't even remotely close to being resolved, and yet at the rate it's going it'll be back to pre-scandal prices before long. (Note that I don't believe it will get back to those prices any time soon, but it's trending that way.) So to answer your question: I don't have a good answer. The almighty market seems to think things aren't all that bad, despite the masses of unpopular sentiment. My best guess is that there are a lot of fingers in that pie (this article being but one example) that don't want to see their source of data disappear. Still can't figure out why that's driving the stock price up, though.

MrLeap 9y ago
I call those BP oil spill trades. Starts with a surprise events that is seemingly catastrophic. If real consequences require special government action -- the consequences will be underwhelming and easily mitigable. If you believe there's no ethical consumption under capitalism, there's no problem profiting off this effect! See: BP oil spill, HSBC money laundering scandal, Wells Fargo fraudulent account scandal, Equifax data leak, United Airlines beating up a passenger... I know I'm forgetting some. I'm pretty sure you could beat the yearly S&P's performance in a single trade for any of those events. Apple having to delay a new iphone release would have a more significant long term effect on that company's stock price than workers at foxxconn facilities killing themselves
- mikestew 9y ago
  If you believe there's no ethical consumption under capitalism, there's no problem profiting off this effect! Yeah, I don't know where I stand on it quite yet. I mean, I won't outright buy Exxon shares to hold long-term. Is it hypocritical to make a short-term trade using options? Yeah, probably. But it's not like that money goes straight into Equifax's pockets, it just adds a minuscule amount of liquidity to a market for abstractions of EFX. Meh, I've got bigger ethical fish to fry right now. As aside, to add to your list: the private prison company whose stock went down last year when the Feds said they were going to curtail using private prisons. A few seconds of reading confirmed that it's states that make the most use of private prisons, not the Feds. Made bank on that one, can't say I feel good about it. But I also can't articulate exactly why I shouldn't feel good about it other than, "private prisons, yucky!" I'm pretty sure you could beat the yearly S&P's performance in a single trade for any of those events. Of the three that come to mind that I've personally traded recently, that is most certainly true (the in-the-money EFX calls I have are up about 300%). Problem is, such scandals need to happen more frequently in order to make a trading strategy out of it. About once or twice a year is as frequently as I see such opportunities come up. One could have made a year's SV salary on EFX calls with a $50K investment, but because it's options that $50K could very easily be worth $0 in just a month or two.
Spooky23 9y ago
It's just a PR exercise to fix. Nobody cares about Equifax. What's going to happen? You have a republican congress that won't regulate them away, the banks need them, and the actual thieves are criminals or nation states who'll get tagged with the actual crimes that get committed later. They will wait until they get their fine, take the media hit, and then rename the company after Trump kicks a kitten or something and overtakes the news cycle.

takeda 9y ago

We are not their customer, we should pressure government to do something about them both federal and local. It looks like that's the only way, we can't just "vote with our wallet" in this situation.