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For me, this highlights why tech investing is so frustrating. I saw this coming and would have shorted Autonomy if I had the money. But guess what? I'd have

For me, this highlights why tech investing is so frustrating. I saw this coming and would have shorted Autonomy if I had the money. But guess what? I'd have lost a fortune even though I was (allegedly) right. DHH has been shorting Salesforce for a good while. He's losing that bet as well. Equity investing often bears no relation whatsoever to reality. The "bigger fool" element is huge. That said, I think this may be the end of HP. A bold claim, but they are going to have to fight some serious allegations of corruption, incompetence and negligence.

twoodfin 14y ago
The market can stay irrational longer than you can stay solvent. I think it's like any other kind of investing: You have to diversify your doom and gloom. DHH was short Zynga too, and he claims that his last short of Salesforce ended up in positive territory: http://www.horsesaysinternet.com/people/dhh-vs-the-stock-market/ http://www.horsesaysinternet.com/people/dhh-vs-the-stock-mar... (Don't miss DHH's recent comment at the bottom.)
ChuckMcM 14y ago
It is sad that there isn't a "better" way to bet against (or for) a company. Per pg's startup ideas though it does seem to suggest a small opportunity. Sort of a variation on the sports book where you get to bet for or against company outcomes. The tricky bit would be to capture this sort of event (purchase then giant write down) as a wager.
- adam 14y ago
  You could use prediction markets for something like this (disclaimer: i founded a prediction market software company) but unfortunately using real money isn't allowed in the States which would limit the interest of more serious traders.
  - ChuckMcM 14y ago
    Presumably because this is classified as a form of gambling right? (how the stock market gets away with it I'll never know.) Given that options are a financial instrument that converts a prediction market into something you can invest in, I wonder if there is some other financial instrument you could work out here.
    - jacques_chester 14y ago
      > how the stock market gets away with it I'll never know Because a share represents part ownership of the company.
firebones 14y ago
Going through DHH's tweet history a couple of months ago when I was trying to get into a short CRM position, I'm not sure he's losing much on the CRM short. Based on the times that he was tweeting about taking or adding onto positions, my guess is that his cost basis for the short is somewhere in the $140-$155 range. That is assuming that he didn't short more when it dropped to around $100 (which involved a lot of tweets about how overvalued they were, but no indications that he was increasing his short position.) So he may be down 5-10%, but probably not losing his shirt.
pavlov 14y ago
I saw this coming and would have shorted Autonomy if I had the money. Shouldn't you have shorted HP rather than Autonomy? They're the ones who were making the mistake. Looking at HPQ's chart, the stock is down about 60% since Apotheker decided to put it out of its misery.
- AlexMuir 14y ago
  I thought this long before HP acquired Autonomy. Had I shorted Autonomy I'd have lost. But you're right about HP.

twoodfin 14y ago

The market can stay irrational longer than you can stay solvent. I think it's like any other kind of investing: You have to diversify your doom and gloom. DHH was short Zynga too, and he claims that his last short of Salesforce ended up in positive territory: http://www.horsesaysinternet.com/people/dhh-vs-the-stock-market/ http://www.horsesaysinternet.com/people/dhh-vs-the-stock-mar... (Don't miss DHH's recent comment at the bottom.)

ChuckMcM 14y ago

It is sad that there isn't a "better" way to bet against (or for) a company. Per pg's startup ideas though it does seem to suggest a small opportunity. Sort of a variation on the sports book where you get to bet for or against company outcomes. The tricky bit would be to capture this sort of event (purchase then giant write down) as a wager.

adam 14y ago
You could use prediction markets for something like this (disclaimer: i founded a prediction market software company) but unfortunately using real money isn't allowed in the States which would limit the interest of more serious traders.
- ChuckMcM 14y ago
  Presumably because this is classified as a form of gambling right? (how the stock market gets away with it I'll never know.) Given that options are a financial instrument that converts a prediction market into something you can invest in, I wonder if there is some other financial instrument you could work out here.
  - jacques_chester 14y ago
    > how the stock market gets away with it I'll never know Because a share represents part ownership of the company.

firebones 14y ago

Going through DHH's tweet history a couple of months ago when I was trying to get into a short CRM position, I'm not sure he's losing much on the CRM short. Based on the times that he was tweeting about taking or adding onto positions, my guess is that his cost basis for the short is somewhere in the $140-$155 range. That is assuming that he didn't short more when it dropped to around $100 (which involved a lot of tweets about how overvalued they were, but no indications that he was increasing his short position.) So he may be down 5-10%, but probably not losing his shirt.

pavlov 14y ago

I saw this coming and would have shorted Autonomy if I had the money. Shouldn't you have shorted HP rather than Autonomy? They're the ones who were making the mistake. Looking at HPQ's chart, the stock is down about 60% since Apotheker decided to put it out of its misery.

AlexMuir 14y ago
I thought this long before HP acquired Autonomy. Had I shorted Autonomy I'd have lost. But you're right about HP.