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Is your serious belief that people can only buy or sell their entire collection of shares as one unit? Because that’s the only way your post makes any sense. I

Is your serious belief that people can only buy or sell their entire collection of shares as one unit? Because that’s the only way your post makes any sense. If you own $1B shares of Lyft, and you think it would be great to sell them for less than X, you’d be pretty dumb for not selling whatever you can at X. The fact that they are not doing this suggests they would not be happy to sell for less than X.

wpietri 3y ago
That's not the case at all. You're presuming a level of liquidity that just isn't there. You're also presuming that nobody pays attention to a large shareholder selling lots of stock. But these number are public. If a major Twitter shareholder starts selling things off, even if they do it slow enough that the price doesn't fall too far right way, people will notice, taking at a signal that the major shareholder has a good reason to sell, thus causing the price to drop. These large shareholders might be quite happy to have a way out without taking further losses, even if it doesn't mean further gains.
- fauxpause_ 3y ago
  I don’t know what to say other than that you’re wrong. you can easily sell lyft shares. The public generally does not know who holds lyft shares or when they’re sold or care when they do. The only exception to this is those with insider information. But even then most people don’t care.
  - wpietri 3y ago
    You can easily sell a few Lyft shares. You cannot easily sell a billion dollars worth of Lyft shares because the market is not liquid enough for that. If you seriously think there's somebody out there with that kind of money just waiting to buy at current market price, please say who you think they are, because I believe they don't exist. The major shareholders of Lyft are absolutely known, and that's because federal law requires disclosure from everybody over 5%. And I promise you that people who have or who are thinking about taking a serious position in Lyft pay attention to what they're doing. An obvious example here is Musk's shenanigans with the Twitter acquisition. He was required to declare his stake publicly, which bumped the stock price. When things weren't going his way, he threatened to dump his whole stake at once, the implication being that the stock price would drop precipitously as he burned through the order book, causing much sadness among remaining investors.
    - fauxpause_ 3y ago
      You’re doing that thing again where you imply there is no middle ground between a few shares and a billion dollars worth of shares. It’s a dumb straw man. Elon musk saying he would sell his shares because he was backing out of an agreement to purchase those shares at an inflated price is obviously going to drop the price. This is not the same thing as a random shareholder who happens to own stocks and wants to divest some. If you want to sell all your shares for X, you’d be an idiot for not selling some of them for more than X. This is not difficult to understand. Acquisition offers for less than market value are extremely rare, absent non public information. They are called takeunders. They generally only happen when a company is on deaths door. Which lyft is not. It would be seen as really dumb to offer less than market value in an acquisition bid. Stop making up rhetoric as if this were a normal reasonable thing to do. It’s not.
      - wpietri 3y ago
        Somebody who owns a large percentage of a company is not "a random shareholder". Your simple-minded models work for random shareholders, but not for people who own significant fractions. They're playing a different game. They can't exit without moving the market. Their actions are tracked by other players, who will treat it as material information. Liquidity is not some magic reservoir; it's composed of individuals with fixed sums of money making trading decisions. I will take your continued inability to name anybody who would buy a major stake in Lyft at market price as an admission that you agree there's nobody like that. Since you claim to be concerned about straw men, I'll point out that I never suggested "this were a normal reasonable thing to do". You asked why somebody might take an offer that didn't have a premium, one that "won’t be higher than the current stock price". I explained why Lyft's current shareholders might do that. That's all.

wpietri 3y ago

That's not the case at all. You're presuming a level of liquidity that just isn't there. You're also presuming that nobody pays attention to a large shareholder selling lots of stock. But these number are public. If a major Twitter shareholder starts selling things off, even if they do it slow enough that the price doesn't fall too far right way, people will notice, taking at a signal that the major shareholder has a good reason to sell, thus causing the price to drop. These large shareholders might be quite happy to have a way out without taking further losses, even if it doesn't mean further gains.

fauxpause_ 3y ago
I don’t know what to say other than that you’re wrong. you can easily sell lyft shares. The public generally does not know who holds lyft shares or when they’re sold or care when they do. The only exception to this is those with insider information. But even then most people don’t care.
- wpietri 3y ago
  You can easily sell a few Lyft shares. You cannot easily sell a billion dollars worth of Lyft shares because the market is not liquid enough for that. If you seriously think there's somebody out there with that kind of money just waiting to buy at current market price, please say who you think they are, because I believe they don't exist. The major shareholders of Lyft are absolutely known, and that's because federal law requires disclosure from everybody over 5%. And I promise you that people who have or who are thinking about taking a serious position in Lyft pay attention to what they're doing. An obvious example here is Musk's shenanigans with the Twitter acquisition. He was required to declare his stake publicly, which bumped the stock price. When things weren't going his way, he threatened to dump his whole stake at once, the implication being that the stock price would drop precipitously as he burned through the order book, causing much sadness among remaining investors.
  - fauxpause_ 3y ago
    You’re doing that thing again where you imply there is no middle ground between a few shares and a billion dollars worth of shares. It’s a dumb straw man. Elon musk saying he would sell his shares because he was backing out of an agreement to purchase those shares at an inflated price is obviously going to drop the price. This is not the same thing as a random shareholder who happens to own stocks and wants to divest some. If you want to sell all your shares for X, you’d be an idiot for not selling some of them for more than X. This is not difficult to understand. Acquisition offers for less than market value are extremely rare, absent non public information. They are called takeunders. They generally only happen when a company is on deaths door. Which lyft is not. It would be seen as really dumb to offer less than market value in an acquisition bid. Stop making up rhetoric as if this were a normal reasonable thing to do. It’s not.
    - wpietri 3y ago
      Somebody who owns a large percentage of a company is not "a random shareholder". Your simple-minded models work for random shareholders, but not for people who own significant fractions. They're playing a different game. They can't exit without moving the market. Their actions are tracked by other players, who will treat it as material information. Liquidity is not some magic reservoir; it's composed of individuals with fixed sums of money making trading decisions. I will take your continued inability to name anybody who would buy a major stake in Lyft at market price as an admission that you agree there's nobody like that. Since you claim to be concerned about straw men, I'll point out that I never suggested "this were a normal reasonable thing to do". You asked why somebody might take an offer that didn't have a premium, one that "won’t be higher than the current stock price". I explained why Lyft's current shareholders might do that. That's all.