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I doubt Groupon will bankrupt any of hacker news readers' portfolio; I bet most of them are licking their chops to short this thing (just like they are shorting

I doubt Groupon will bankrupt any of hacker news readers' portfolio; I bet most of them are licking their chops to short this thing (just like they are shorting LinkedIn). Effectively, all these IPO/overvaluation bubbles are meant to steal from (mostly public) pensions of older investors. So the next time you see your uncle or grandpa, buy them a nice bottle of wine! They're paying for your startup (while losing their retirement money), don't you know.

sili 15y ago
Although I'm not investing directly, my concern is what the fund manager in charge of my 401k thinks of this.
- whakojacko 15y ago
  If you have that concern, you probably aren't investing in the right mutual funds. Almost all 401(k)s have a very low cost index fund that will mirror the s&p 500.
dustingetz 15y ago
quoted from http://shortlogic.tumblr.com/post/5834390772/right-now-our-desk-is-seeing-something-theyve http://shortlogic.tumblr.com/post/5834390772/right-now-our-d...: "Right now our desk is seeing something they’ve never seen before. It currently costs roughly 100% annualized to short LNKD. So put in monthly terms, if you borrowed $20,000 of LNKD to short, each month you would have to pay an 8.3% borrowing charge (100% / 12 months = 8.3%) or $1667 per month. That is absolutely unreal. Of course this charge amount can change, and it probably would decline if/when LNKD becomes easier to borrow. But right now is virtually impossible to borrow, so the charge is off the charts."
- thisisfmu 15y ago
  Could this be due to short demand from insiders to protect the IPO value of their stock until the lock-up period expires?
  - dustingetz 15y ago
    my colleagues have some finance background, they think it's because its a brand new stock, and current holders aren't sure what's going to happen so they don't want to decrease their agility by lending out shares to shorters. Long term holders would be more inclined to lend shares but its too soon for anyone to make a long-term commitment to LNKD.
- mynameishere 15y ago
  There are no shares to borrow that I can find. The options are so expensive I'm tempted to buy some shares. You can make 4 percent writing june calls (15 days). Annualize that.
  - kwantam 15y ago
    You probably want something to hedge your long position while you write calls against it, though, or at least limit the downside a bit. After all, you're betting that the stock will go down. Go long, buy some out of money puts, and write calls against your long position, hoping that you get to write enough calls that the cost of the puts is covered?

sili 15y ago

Although I'm not investing directly, my concern is what the fund manager in charge of my 401k thinks of this.

whakojacko 15y ago
If you have that concern, you probably aren't investing in the right mutual funds. Almost all 401(k)s have a very low cost index fund that will mirror the s&p 500.

dustingetz 15y ago

quoted from http://shortlogic.tumblr.com/post/5834390772/right-now-our-desk-is-seeing-something-theyve http://shortlogic.tumblr.com/post/5834390772/right-now-our-d...: "Right now our desk is seeing something they’ve never seen before. It currently costs roughly 100% annualized to short LNKD. So put in monthly terms, if you borrowed $20,000 of LNKD to short, each month you would have to pay an 8.3% borrowing charge (100% / 12 months = 8.3%) or $1667 per month. That is absolutely unreal. Of course this charge amount can change, and it probably would decline if/when LNKD becomes easier to borrow. But right now is virtually impossible to borrow, so the charge is off the charts."

thisisfmu 15y ago
Could this be due to short demand from insiders to protect the IPO value of their stock until the lock-up period expires?
- dustingetz 15y ago
  my colleagues have some finance background, they think it's because its a brand new stock, and current holders aren't sure what's going to happen so they don't want to decrease their agility by lending out shares to shorters. Long term holders would be more inclined to lend shares but its too soon for anyone to make a long-term commitment to LNKD.
mynameishere 15y ago
There are no shares to borrow that I can find. The options are so expensive I'm tempted to buy some shares. You can make 4 percent writing june calls (15 days). Annualize that.
- kwantam 15y ago
  You probably want something to hedge your long position while you write calls against it, though, or at least limit the downside a bit. After all, you're betting that the stock will go down. Go long, buy some out of money puts, and write calls against your long position, hoping that you get to write enough calls that the cost of the puts is covered?