4 ms·

I know of a company, in a totally different field, operating on the same principles, with the same warning signs. They raised close to one billion and are in th

by hef19898 3y ago

I know of a company, in a totally different field, operating on the same principles, with the same warning signs. They raised close to one billion and are in the process of raising 200 million more. Happens all the time, but never to me (quoting a line from the classic Margin Call).

CoastalCoder 3y ago
I'm pretty naive about investing, but IIUC there are ways to bet against the stock price of a publicly traded company. Is there a mechanism for betting against a pre-IPO company?
- Scoundreller 3y ago
  Yes, but not as easily. Just need to be accredited and find someone willing to take the other end of the trade, as with anything else.
- hef19898 3y ago
  Oh, that one is post-SPAC...
- anonymouskimmer 3y ago
  Invest in its publicly traded competitors.
- feoren 3y ago
  That sounds a little bit like "If I can tell this company is defrauding investors, how can I get in on the fraud?" Whoever you borrow that stock from is now your mark that you are defrauding -- indirectly, of course, since you're not forging fake results or something. It still feels icky.
  - CoastalCoder 3y ago
    > That sounds a little bit like "If I can tell this company is defrauding investors, how can I get in on the fraud?" That's not how I meant it. I was thinking more generally about pre-IPO companies that you think (for reasons that you can legitimately use when investing in this manner) have dim prospects.
  - pessimizer 3y ago
    It's not you that are doing the defrauding. You're betting that it's a fraud and not trying to convince anyone of anything. Lack of short-sellers increases fraud, it doesn't reduce it. Nobody spreads more anti-short seller animus that people trying to commit fraud.
  - 8note 3y ago
    I think it's instead, "how can I get paid for calling it a fraud?" If it is a fraud you're rewarded, if it isn't a fraud, you're punished The marks are screwed regardless, but they're betting against you, claiming that it isn't a fraud, against your evidence that it is

CoastalCoder 3y ago

I'm pretty naive about investing, but IIUC there are ways to bet against the stock price of a publicly traded company. Is there a mechanism for betting against a pre-IPO company?

Scoundreller 3y ago
Yes, but not as easily. Just need to be accredited and find someone willing to take the other end of the trade, as with anything else.
hef19898 3y ago
Oh, that one is post-SPAC...
anonymouskimmer 3y ago
Invest in its publicly traded competitors.
feoren 3y ago
That sounds a little bit like "If I can tell this company is defrauding investors, how can I get in on the fraud?" Whoever you borrow that stock from is now your mark that you are defrauding -- indirectly, of course, since you're not forging fake results or something. It still feels icky.
- CoastalCoder 3y ago
  > That sounds a little bit like "If I can tell this company is defrauding investors, how can I get in on the fraud?" That's not how I meant it. I was thinking more generally about pre-IPO companies that you think (for reasons that you can legitimately use when investing in this manner) have dim prospects.
- pessimizer 3y ago
  It's not you that are doing the defrauding. You're betting that it's a fraud and not trying to convince anyone of anything. Lack of short-sellers increases fraud, it doesn't reduce it. Nobody spreads more anti-short seller animus that people trying to commit fraud.
- 8note 3y ago
  I think it's instead, "how can I get paid for calling it a fraud?" If it is a fraud you're rewarded, if it isn't a fraud, you're punished The marks are screwed regardless, but they're betting against you, claiming that it isn't a fraud, against your evidence that it is