4 ms·

It's an incredible testament to the distortions of the capital markets that Nikola's current market cap is still $7.84 billion, and not zero. There's nothing th

by cultus 6y ago

It's an incredible testament to the distortions of the capital markets that Nikola's current market cap is still $7.84 billion, and not zero. There's nothing that justifies that other than the hope that one will be able to leave others holding the bag.

edoceo 6y ago
Yea, the WSB crowd is having a field day with this one. Calling in Theranos 2.0
- cultus 6y ago
  Theranos at least fell apart once the WSJ put out extremely strong evidence that it was fradulent. The innovative tech that Nikola claimed to have was shown to be fradulent months ago, but they're still worth billions of dollars.
  - bob33212 6y ago
    It is because of TSLA, there is a significant number of people who do not understand that the EV industry isn't the same thing as the furniture industry. You can't just spin up a real EV company the way you can spin up a real furniture company. But they don't see it so they want to get in on the ground floor of the next TSLA.
miohtama 6y ago
Hopium is strong in RobinHood bag holders. See: already bankrupted Hertz shares.
- MattGaiser 6y ago
  Several stimulus cheques went there: https://www.cbc.ca/news/business/hertz-stock-sec-1.5616307 https://www.cbc.ca/news/business/hertz-stock-sec-1.5616307
esalman 6y ago
Indeed. Much like DOW hitting record highs while people line up at food banks.
lumost 6y ago
https://www.google.com/amp/s/www.architecturendesign.net/inside-a-new-york-mansion-frozen-in-time-after-it-was-abandoned-in-the-1970s/amp/ https://www.google.com/amp/s/www.architecturendesign.net/ins... The market can only price accurately if all participants are rational or at the very least are on average rational. As the effective number of participants falls and the need for those participants to make rational economic decisions falls, were likely to see more weworks, theranos, and nikolas. Wait until we see someone buy multiple city blocks of Manhattan for conversion into a private yard.
- jariel 6y ago
  WeWork and Theranos were priced badly in private markets, which is a completely different kind of fraud/misleading than after the IPO, when it's a matter of public communications. Before IPO, I think almost every fraud is unique, even if they have common themes ... but after IPO I think it's more similar to just hype-man using PR and media to keep retail investors avoiding the reality of the balance sheet.
- Cactus2018 6y ago
  Would love to see photos of the indoor tennis court in its prime. I'm surprised property taxes never caught up with that mansion!?
  - muststopmyths 6y ago
    >Would love to see photos of the indoor tennis court in its prime. OTOH you couldn't pay me to spend a night in the same room with that creepy doll !
phkahler 6y ago
Almost the entire market is now a scam IMHO. Remember, price is a function of supply and demand. People are blindly putting money in their 401k at a fantastic rate which is higher than the rate they take it out. This is part of why it was so important not to let Covid affect white collar jobs.
- MattGaiser 6y ago
  How does that make the market a scam? It just makes it more expensive.
- lokedhs 6y ago
  Isn't 401k tax-free in the US? At least where I'm from, people put money into these kinds of pension funds since they don't have to pay any tax on the profits, which is usually enough to beat any other low-risk investments.
  - dragonwriter 6y ago
    > Isn't 401k tax-free in the US? Traditional 401k is pre-tax going in, taxed coming out (a good deal for most people, who even with savings are likely to be lower tax bracket in retirement than during much of their working career.) Roth 401k is post-tax going in, tax-free coming out (a good deal if you are saving enough to end up in a higher tax bracket in your retirement than most of your working years.)
chadash 6y ago
The beauty of public markets is that you can make a handsome profit if this is your conviction, you put your money where your mouth is and it turns out to be true.
- opportune 6y ago
  Not really because the IV and presumably cost to borrow NKLA to short it are both high. Essentially that means the market has already priced in that NKLA has a very high risk of failure. But as long as people keep agreeing to buy the stock for a certain value (even if it's a very small group) it won't crash.
  - kjksf 6y ago
    At this point you might not be able to short profitably but there was plenty of opportunity even with relatively high borrow costs (~8% currently). You just need to do it at the right time, before the market prices in the obvious fraud. I naked shorted Nikola after the ridiculous spike caused by the initial GM deal. I'm already $100k up on that and I predict I'll make even more as the stock price drops. I also shorted via short term puts a few days ago, when the price spiked a bit on the hopes of new GM deal. I'm betting that the stock price will drop tomorrow due to expiration of a lock up period which will unleash millions of new shares. I'm already up 100% on that and hoping for at least 500% (although if the stock goes up, I might loose 100%; will know by Friday). What you call "market has already priced in" is people like me, who acted decisively and took the risk. The information was there, I (and people like me) didn't have any secret info. But unlike those other people, we had the courage of conviction and risk tolerance to take on high risk / high reward bet.
- cultus 6y ago
  "The market can stay irrational longer than you can stay solvent." - Keynes I think
deleted 6y ago
[deleted]
macspoofing 6y ago
>It's an incredible testament to the distortions of the capital markets that Nikola's current market cap is still $7.84 billion, and not zero. Yes, but it'll get there yet.

by cultus 6y ago

edoceo 6y ago

Yea, the WSB crowd is having a field day with this one. Calling in Theranos 2.0

cultus 6y ago
Theranos at least fell apart once the WSJ put out extremely strong evidence that it was fradulent. The innovative tech that Nikola claimed to have was shown to be fradulent months ago, but they're still worth billions of dollars.
- bob33212 6y ago
  It is because of TSLA, there is a significant number of people who do not understand that the EV industry isn't the same thing as the furniture industry. You can't just spin up a real EV company the way you can spin up a real furniture company. But they don't see it so they want to get in on the ground floor of the next TSLA.

miohtama 6y ago

Hopium is strong in RobinHood bag holders. See: already bankrupted Hertz shares.

MattGaiser 6y ago
Several stimulus cheques went there: https://www.cbc.ca/news/business/hertz-stock-sec-1.5616307 https://www.cbc.ca/news/business/hertz-stock-sec-1.5616307

esalman 6y ago

Indeed. Much like DOW hitting record highs while people line up at food banks.

lumost 6y ago

https://www.google.com/amp/s/www.architecturendesign.net/inside-a-new-york-mansion-frozen-in-time-after-it-was-abandoned-in-the-1970s/amp/ https://www.google.com/amp/s/www.architecturendesign.net/ins... The market can only price accurately if all participants are rational or at the very least are on average rational. As the effective number of participants falls and the need for those participants to make rational economic decisions falls, were likely to see more weworks, theranos, and nikolas. Wait until we see someone buy multiple city blocks of Manhattan for conversion into a private yard.

jariel 6y ago
WeWork and Theranos were priced badly in private markets, which is a completely different kind of fraud/misleading than after the IPO, when it's a matter of public communications. Before IPO, I think almost every fraud is unique, even if they have common themes ... but after IPO I think it's more similar to just hype-man using PR and media to keep retail investors avoiding the reality of the balance sheet.
Cactus2018 6y ago
Would love to see photos of the indoor tennis court in its prime. I'm surprised property taxes never caught up with that mansion!?
- muststopmyths 6y ago
  >Would love to see photos of the indoor tennis court in its prime. OTOH you couldn't pay me to spend a night in the same room with that creepy doll !

phkahler 6y ago

Almost the entire market is now a scam IMHO. Remember, price is a function of supply and demand. People are blindly putting money in their 401k at a fantastic rate which is higher than the rate they take it out. This is part of why it was so important not to let Covid affect white collar jobs.

MattGaiser 6y ago
How does that make the market a scam? It just makes it more expensive.
lokedhs 6y ago
Isn't 401k tax-free in the US? At least where I'm from, people put money into these kinds of pension funds since they don't have to pay any tax on the profits, which is usually enough to beat any other low-risk investments.
- dragonwriter 6y ago
  > Isn't 401k tax-free in the US? Traditional 401k is pre-tax going in, taxed coming out (a good deal for most people, who even with savings are likely to be lower tax bracket in retirement than during much of their working career.) Roth 401k is post-tax going in, tax-free coming out (a good deal if you are saving enough to end up in a higher tax bracket in your retirement than most of your working years.)

chadash 6y ago

The beauty of public markets is that you can make a handsome profit if this is your conviction, you put your money where your mouth is and it turns out to be true.

opportune 6y ago
Not really because the IV and presumably cost to borrow NKLA to short it are both high. Essentially that means the market has already priced in that NKLA has a very high risk of failure. But as long as people keep agreeing to buy the stock for a certain value (even if it's a very small group) it won't crash.
- kjksf 6y ago
  At this point you might not be able to short profitably but there was plenty of opportunity even with relatively high borrow costs (~8% currently). You just need to do it at the right time, before the market prices in the obvious fraud. I naked shorted Nikola after the ridiculous spike caused by the initial GM deal. I'm already $100k up on that and I predict I'll make even more as the stock price drops. I also shorted via short term puts a few days ago, when the price spiked a bit on the hopes of new GM deal. I'm betting that the stock price will drop tomorrow due to expiration of a lock up period which will unleash millions of new shares. I'm already up 100% on that and hoping for at least 500% (although if the stock goes up, I might loose 100%; will know by Friday). What you call "market has already priced in" is people like me, who acted decisively and took the risk. The information was there, I (and people like me) didn't have any secret info. But unlike those other people, we had the courage of conviction and risk tolerance to take on high risk / high reward bet.
cultus 6y ago
"The market can stay irrational longer than you can stay solvent." - Keynes I think

deleted 6y ago

[deleted]

macspoofing 6y ago

>It's an incredible testament to the distortions of the capital markets that Nikola's current market cap is still $7.84 billion, and not zero. Yes, but it'll get there yet.