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> I can't help but have zero sympathy for short sellers, and others to try to game the market. It doesn't seem like anything positive comes from shorting a stoc

by djbebs 6y ago

> I can't help but have zero sympathy for short sellers, and others to try to game the market. It doesn't seem like anything positive comes from shorting a stock other than someone getting rich. Short sellers probide a valuable service to all investors, can you elaborate as to why you think they "game the system"?

fossuser 6y ago
It’s good when shorts find fraud (Nikola, Luckin Coffee) and then expose that fraud - it’s bad when there isn’t fraud and shorts push negative stories to try and manipulate the public market to save their position (or when the short position is actually being pushed by competitors failing to compete). I think in the Tesla case people were annoyed at the latter, lots of stuff about Tesla’s success being impossible, model3 will never ship, etc. etc. - all of it total bullshit.
- vkou 6y ago
  > It’s good when shorts find fraud (Nikola, Luckin Coffee) and then expose that fraud - it’s bad when there isn’t fraud and shorts push negative stories to try and manipulate the public market to save their position (or when the short position is actually being pushed by competitors failing to compete). The same can be said about longs. Longs are bad when their holders try to manipulate the public market to save their position, by cheerleading the company's performance.
emilsedgh 6y ago
Im really not an expert in this area. So please tell me how I'm wrong. Shorting a company means you'll benefit from value of the company going down. In normal circumstances, I can understand that it can have a positive effect on the market as some sort of scrutiny over the companies. But in a post-truth world, it means some people have the power to short the stock, and then actively try to undermine it by running fake news; effectively becoming a barrier for the companies to create more value, which is in everyone's interest (employees, shareholders, investors, etc) except for those who short.
- vkou 6y ago
  Longing a company means that you'll benefit from value of the company going up. In a post-truth world, this results in over-investment in poorly ran companies that have good investor PR, but aren't actually solid businesses, compared to their peers. This results in an unoptimal distribution of resources, except for the people who took a long position, and then cashed out at the top. Nothing stops a company from creating value just because people are shorting its stock. Musk's complaints about shorters aren't because shorters are bad for Tesla- it's because they are bad for him, as he dips heavily into debt (backed by the value of TSLA shares), to finance his lifestyle.

by djbebs 6y ago

fossuser 6y ago

It’s good when shorts find fraud (Nikola, Luckin Coffee) and then expose that fraud - it’s bad when there isn’t fraud and shorts push negative stories to try and manipulate the public market to save their position (or when the short position is actually being pushed by competitors failing to compete). I think in the Tesla case people were annoyed at the latter, lots of stuff about Tesla’s success being impossible, model3 will never ship, etc. etc. - all of it total bullshit.

vkou 6y ago
> It’s good when shorts find fraud (Nikola, Luckin Coffee) and then expose that fraud - it’s bad when there isn’t fraud and shorts push negative stories to try and manipulate the public market to save their position (or when the short position is actually being pushed by competitors failing to compete). The same can be said about longs. Longs are bad when their holders try to manipulate the public market to save their position, by cheerleading the company's performance.

emilsedgh 6y ago

Im really not an expert in this area. So please tell me how I'm wrong. Shorting a company means you'll benefit from value of the company going down. In normal circumstances, I can understand that it can have a positive effect on the market as some sort of scrutiny over the companies. But in a post-truth world, it means some people have the power to short the stock, and then actively try to undermine it by running fake news; effectively becoming a barrier for the companies to create more value, which is in everyone's interest (employees, shareholders, investors, etc) except for those who short.

vkou 6y ago
Longing a company means that you'll benefit from value of the company going up. In a post-truth world, this results in over-investment in poorly ran companies that have good investor PR, but aren't actually solid businesses, compared to their peers. This results in an unoptimal distribution of resources, except for the people who took a long position, and then cashed out at the top. Nothing stops a company from creating value just because people are shorting its stock. Musk's complaints about shorters aren't because shorters are bad for Tesla- it's because they are bad for him, as he dips heavily into debt (backed by the value of TSLA shares), to finance his lifestyle.