3 ms·
Is it too late to think about shorting this stock?
by mikemarotti 14y ago
Is it too late to think about shorting this stock?
- antr 14y agoCurrent market cap (equity value) is $6.8bn, with negligible income. It'll be interesting to see how much longer GRPN takes to trade at fundamentals.
- infocaptor 14y agoThey should have taken the $6 billion Google offered and still come out as heroes
- mcknz 14y agoYes. Probably no stock available to borrow. There are put options but those are likely already at a premium.
- dxbydt 14y agoYeah but he doesn't have to do straight puts. He ca do a synthetic short. The June 9 puts are a dollar, as are the 11 call. So you sell the 11 call & buy the 9 put with the proceeds. Essentially you pay absolutely nothing. On June 12, if grpn stays below $9 you make the difference. If its between $9 and $11 you are ok as well. If its above $11, you cough up the difference. (Am NOT endorsing this trade - just pointing out that it does exist.)
- usaar333 14y agoThe premium is showing there though. This trade isn't even profitable unless grpn goes below $9 (and even then earnings are only $9-grpn_price). If grpn goes above $11, you lose grpn_price - 11. In other words, this is like shorting, only with $2 less on the upside - and that's where the premium shows. It's cheaper than buying straight puts, but way riskier. (Also, a lot of brokerages won't allow you to write naked calls) Disclaimer: I own a few grpn puts.
- rsanheim 14y agoYes. Here's an askmefi thread that may interest with more detail, and note it dates back to November: http://ask.metafilter.com/200912/Short-Groupon http://ask.metafilter.com/200912/Short-Groupon