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The problem with shorting is that everything they’re doing is driving towards higher revenue. Any negative effects of their actions could be measured in years,
by flyinglizard 8y ago
The problem with shorting is that everything they’re doing is driving towards higher revenue. Any negative effects of their actions could be measured in years, not months or quarters.
The other issue is that more than anyone, Facebook very shrewdly mitigated their competition by M&A; where would users go?
- yhoneycomb 8y agoExactly. Shorting leaves you vulnerable to an infinite amount of debt. It's not as easy as it sounds.
- mmt 8y agoOutright short-selling has unbounded losses, but there are other ways of "being short" (i.e. betting on a price drop) where the loss is limited, such as buying put options, though these tend to be time-limited as well, to a couple years.
- ismail 8y agoYeah. Good point the effects will take several years to be demonstrated. So maybe a better comment would be, avoid FB for holding in the long term. Would you think they are sacrificing the long term for the short? I suspect we will get more scandals from FB.