4 ms·
Presumably (at least if you accept the Efficient Market Hypothesis), predictable information like that is already priced in to the stock.
by akavi 14y ago
Presumably (at least if you accept the Efficient Market Hypothesis), predictable information like that is already priced in to the stock.
- kitcar 14y agoThe issue is its not a piece of predictable information - we don't know how many of those 250M shares will actually hit the market, as it is unknown what % of employees will sell versus hold. The market knows the event will occur, but does not know the size, and therefore significance, of the event as a result.
- emmett 14y agoBut the market is pricing in "some number of those shares will hit the market" already. Since it's equally likely that the market has anticipated too-high as too-low, there's no reason to believe it will cause the stock to sink. It's equally likely it will rise.
- aston 14y agoI'd be very willing to bet against it rising. That would be nearly unprecedented.
- daveey 14y agoGood news! You can. Just short-sell the stock.
- emmett 14y agoAt what odds? This is an easy bet to make: just short-sell the stock or buy a put against it. Markets are anti-inductive. http://lesswrong.com/lw/yv/markets_are_antiinductive/ http://lesswrong.com/lw/yv/markets_are_antiinductive/