3 ms·

Tesla is imo overvalued and has been for a long time. Its bankrupted a lot of pretty savvy investors in the last 10 years trying to short them because its obvio

Tesla is imo overvalued and has been for a long time. Its bankrupted a lot of pretty savvy investors in the last 10 years trying to short them because its obviously over valued. Market irrationality vs solvency and all of that.

thenewnewguy 2mo ago
While I agree with you in general, usernametaken29 made a specific prediction about OpenAI's IPO which is an event that will very likely happen in the next year or so. That said, OpenAI isn't public, so you can't directly short it easily. I guess you could short Microsoft but I don't know if that gives you enough exposure to truly be worth it, even if you do genuinely believe what OOP claims.
- jerf 2mo ago
  IPOs experiencing significant drops after their IPO is not a crazy theory, it's pretty much the norm: https://potomacwealthmanagementllc.com/2026/03/04/underperforming-ipo-stocks/ https://potomacwealthmanagementllc.com/2026/03/04/underperfo... Not guaranteed, but the norm. I've never tried to buy PUTs on a big IPO but I wouldn't be surprised that there's a premium on them, if options trading is even available.
  - fadesibert 2mo ago
    Your instinct is correct. Options markets are wide following an IPO (ie there is a significant difference between the price at which a dealer will sell a specific option at a specific strike for a specific time). That tends to settle down ~60 days after trading, with seasonsed order flow, a realized volatility pattern, Observed volumes, open interest, liquidity in the stock (eg hedging becomes cheaper) and naturally - competition between market makers. Wide spreads are profitable for options dealers (and you need that profit to absorb losses where risk is misjudged or the stock is unpredictable) - but if two dealers are making excess profits offering wide markets in an option, a 3rd will join and undercut them. Source - I was a quant at a large investment bank, with ~5 years facing the Equity markets / 13 years across many desks and teams. Here's a chart of the last 20 IPOs with their Relative Spread (Bid + Offer / Midpoint) on each successive day of trading to show the tightening of spreads over time. https://drive.google.com/file/d/1-bLekd5OonnrlEZyjRPNQYZmvnGZXigt/view https://drive.google.com/file/d/1-bLekd5OonnrlEZyjRPNQYZmvnG...
    - jerf 2mo ago
      Oh wow, thank you for that chart. That is fantastic. The premium is huge. And for good reasons.
tencentshill 2mo ago
For good or bad, no one else is doing what they're doing. That capability (and lack of safety concern) is just not present on any other car you can buy today, and certainly not back in 2015. I do wonder how they've gotten away with it through such a wide variety of governments and regulatory environments.

thenewnewguy 2mo ago

While I agree with you in general, usernametaken29 made a specific prediction about OpenAI's IPO which is an event that will very likely happen in the next year or so. That said, OpenAI isn't public, so you can't directly short it easily. I guess you could short Microsoft but I don't know if that gives you enough exposure to truly be worth it, even if you do genuinely believe what OOP claims.

jerf 2mo ago
IPOs experiencing significant drops after their IPO is not a crazy theory, it's pretty much the norm: https://potomacwealthmanagementllc.com/2026/03/04/underperforming-ipo-stocks/ https://potomacwealthmanagementllc.com/2026/03/04/underperfo... Not guaranteed, but the norm. I've never tried to buy PUTs on a big IPO but I wouldn't be surprised that there's a premium on them, if options trading is even available.
- fadesibert 2mo ago
  Your instinct is correct. Options markets are wide following an IPO (ie there is a significant difference between the price at which a dealer will sell a specific option at a specific strike for a specific time). That tends to settle down ~60 days after trading, with seasonsed order flow, a realized volatility pattern, Observed volumes, open interest, liquidity in the stock (eg hedging becomes cheaper) and naturally - competition between market makers. Wide spreads are profitable for options dealers (and you need that profit to absorb losses where risk is misjudged or the stock is unpredictable) - but if two dealers are making excess profits offering wide markets in an option, a 3rd will join and undercut them. Source - I was a quant at a large investment bank, with ~5 years facing the Equity markets / 13 years across many desks and teams. Here's a chart of the last 20 IPOs with their Relative Spread (Bid + Offer / Midpoint) on each successive day of trading to show the tightening of spreads over time. https://drive.google.com/file/d/1-bLekd5OonnrlEZyjRPNQYZmvnGZXigt/view https://drive.google.com/file/d/1-bLekd5OonnrlEZyjRPNQYZmvnG...
  - jerf 2mo ago
    Oh wow, thank you for that chart. That is fantastic. The premium is huge. And for good reasons.

tencentshill 2mo ago

For good or bad, no one else is doing what they're doing. That capability (and lack of safety concern) is just not present on any other car you can buy today, and certainly not back in 2015. I do wonder how they've gotten away with it through such a wide variety of governments and regulatory environments.