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I have no rich friends to protect, but I still think short sellers suck. I don’t think they should be banned but they fucksure aren’t deserving of compassion or

I have no rich friends to protect, but I still think short sellers suck. I don’t think they should be banned but they fucksure aren’t deserving of compassion or concern when their gambles backfire. People defending short sellers are likely to be one and/or protecting their rich short seller friends.

rswail 6y ago
Short sellers are taking a bet on the share price. Long buyers are taking the other side of that bet. Neither side is deserving of compassion or concern as long as they are fully informed on the underlying nature of the share of the business they are buying. Selling a house that you have a mortgage on is selling something that you only partially own. Short sellers are selling something they borrowed because what they borrowed is fungible (ie one share in GME is equivalent to any other share in GME). The real question is whether what they borrowed exists and whether the owner of that is doing the right thing by lending it. If owners of shares won't lend, then short sellers can't borrow. Should a pension fund that owns shares that are expected to increase in value (otherwise why do they own it), lend that share to someone who is actively trying to reduce its value?
- benrbray 6y ago
  The reason for the stock market to exist is ostensibly to help businesses succeed by competing for investors. But at the moment we have a casino, and shorts are one manifestation of that fact. Short sellers are effectively betting against the success of a company, which gives them an incentive to do everything in their power to put that company out of business. And don't say "but that's illegal!" since our enforcement system has no teeth and big players commit crimes all the time whenever the fines are lower than the cost of legal alternatives.
  - ashtonkem 6y ago
    > Short sellers are effectively betting against the success of a company And when a company is overvalued or committing fraud, that is a good thing. Stopping a bubble from growing is how you reduce the harm inflicted on regular investors. > which gives them an incentive to do everything in their power to put that company out of business And the long position is incentivized to hype up a business up to and beyond the line of fraud. Both sides of a financial transaction can perform their duties fairly, or corruptly. Life is not so simple as to declare only one party the problem.
ashtonkem 6y ago
> People defending short sellers are likely to be one and/or protecting their rich short seller friends. Please don't do this. It's toxic for the discussion.

rswail 6y ago

Short sellers are taking a bet on the share price. Long buyers are taking the other side of that bet. Neither side is deserving of compassion or concern as long as they are fully informed on the underlying nature of the share of the business they are buying. Selling a house that you have a mortgage on is selling something that you only partially own. Short sellers are selling something they borrowed because what they borrowed is fungible (ie one share in GME is equivalent to any other share in GME). The real question is whether what they borrowed exists and whether the owner of that is doing the right thing by lending it. If owners of shares won't lend, then short sellers can't borrow. Should a pension fund that owns shares that are expected to increase in value (otherwise why do they own it), lend that share to someone who is actively trying to reduce its value?

benrbray 6y ago
The reason for the stock market to exist is ostensibly to help businesses succeed by competing for investors. But at the moment we have a casino, and shorts are one manifestation of that fact. Short sellers are effectively betting against the success of a company, which gives them an incentive to do everything in their power to put that company out of business. And don't say "but that's illegal!" since our enforcement system has no teeth and big players commit crimes all the time whenever the fines are lower than the cost of legal alternatives.
- ashtonkem 6y ago
  > Short sellers are effectively betting against the success of a company And when a company is overvalued or committing fraud, that is a good thing. Stopping a bubble from growing is how you reduce the harm inflicted on regular investors. > which gives them an incentive to do everything in their power to put that company out of business And the long position is incentivized to hype up a business up to and beyond the line of fraud. Both sides of a financial transaction can perform their duties fairly, or corruptly. Life is not so simple as to declare only one party the problem.

ashtonkem 6y ago

> People defending short sellers are likely to be one and/or protecting their rich short seller friends. Please don't do this. It's toxic for the discussion.