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(BusinessWeek)   The real losers in the Tesla review debacle are the short-sellers who bet against the company. Won't someone think of the short-sellers?   (businessweek.com) divider line 58
    More: Followup, Fisker, .fi, Model S, market capitalization, Consumer Reports, short sales  
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1858 clicks; posted to Business » on 15 May 2013 at 6:04 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



58 Comments   (+0 »)
   
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2013-05-15 02:59:05 PM  
I know it's just part of the system. But I hate when people bet on someone else losing. At least they are trying someone new!
 
2013-05-15 03:09:36 PM  

The Stealth Hippopotamus: I know it's just part of the system. But I hate when people bet on someone else losing. At least they are trying someone new!


As long as they bought the stock before they sold it.  I don't know their share structure, but I'd bet the majority of it is closely held by the principles.
 
2013-05-15 03:21:03 PM  

The Stealth Hippopotamus: I know it's just part of the system. But I hate when people bet on someone else losing. At least they are trying someone new!


True.

The short sellers are also trying to squeeze Blackberry now that they've finally gotten out a few new phone models.  (oh.. and these devices been recently approved by the DoD)
 
2013-05-15 03:36:58 PM  
no
 
2013-05-15 03:48:34 PM  
I believe the correct term is "Dwarf-treprenuer", Subby.
 
2013-05-15 04:14:46 PM  
I don't know why anyone still bets against Elon Musk.
 
2013-05-15 04:57:47 PM  
I bought a couple hundred shares of TSLA at around $42 about a month ago (less than half of what it closed at today), so I'm getting a real kick out of some of these comments.
 
2013-05-15 05:09:14 PM  
I like short selling. I believe in short selling. However betting against a company like Tesla strikes me as a bit idiotic and political.
 
2013-05-15 05:30:54 PM  
Short selling is essential to a functioning market.  Especially when dealing with an attractive investment.

Opposition to short-selling is one notch below anti-vaccine on the scale of contemptible beliefs.
 
2013-05-15 06:05:58 PM  

Because People in power are Stupid: I like short selling. I believe in short selling. However betting against a company like Tesla strikes me as a bit idiotic and political.


Should been Fiskar, right?
 
2013-05-15 06:06:55 PM  
Yeesh. "Shoulda"

/Can't believe I'm correcting my shiat colloquial grammar
 
2013-05-15 06:17:01 PM  

Marcus Aurelius: The Stealth Hippopotamus: I know it's just part of the system. But I hate when people bet on someone else losing. At least they are trying someone new!

As long as they bought the stock before they sold it.  I don't know their share structure, but I'd bet the majority of it is closely held by the principles.


That's not what a short sale is Marcus, that's what a normal stock buy/sell is.

In a short sale, you 'borrow' the shares at today's price and 'sell' them back at tomorrow price... that's why in the article the short sellers were racing to 'cover their short' or essentially purchase a stock at today's price that they 'borrowed' at yesterdays (or when they placed the short bet).

Marcus, much like with your political views, don't talk about something you do not know.  It only hurts the discussion.
 
2013-05-15 06:18:06 PM  

Because People in power are Stupid: I like short selling. I believe in short selling. However betting against a company like Tesla strikes me as a bit idiotic and political.


I take it you haven't been following AAPL for the past year.
 
2013-05-15 06:19:49 PM  

Captain Dan: Short selling is essential to a functioning market.  Especially when dealing with an attractive investment.

Opposition to short-selling is one notch below anti-vaccine on the scale of contemptible beliefs.


That might be one of the dumber opinions I've ever seen espoused...
 
2013-05-15 06:31:27 PM  

skozlaw: Captain Dan: Short selling is essential to a functioning market.  Especially when dealing with an attractive investment.

Opposition to short-selling is one notch below anti-vaccine on the scale of contemptible beliefs.

That might be one of the dumber opinions I've ever seen espoused...


If you understand how the market functions and the purpose of short selling, then it's not much different than a vaccine.
Short selling, like a well administered vaccine, allows for the introduction of a counter balance to exuberance.  In situations where companies are over-valued, it puts money on the bet that the market will resume equilibrium (parity).

Now, short selling can be used as a market manipulation technique, no different than a pump and dump, except in reverse.  For a case example of that, look into Overstock.com.  They had hedge funds load up on shorts (especially naked shorts) and then try to tank the company.
 
2013-05-15 06:32:35 PM  
I have no problem with short selling as long as the seller actually borrowed those shares from someone else first. It's only a problem when people sell shares that don't exist.
 
2013-05-15 06:32:52 PM  

skozlaw: That might be one of the dumber opinions I've ever seen espoused...


You must be new to Fark if that qualifies.

(You're also wrong, but that's less interesting.)
 
2013-05-15 06:36:04 PM  
Where's that Owl guy from one of last week's Tesla threads?  He was going all Jim Cramer on shorting the hell out of Tesla stock.
 
2013-05-15 06:37:53 PM  

NostroZ: [snip]


I didn't say I was overtly opposed, I just said his comment on it was stupid.

Captain Dan: You're also wrong


No, I'm not, it was a pretty stupid comparison.
 
2013-05-15 06:38:18 PM  

The Stealth Hippopotamus: I know it's just part of the system. But I hate when people bet on someone else losing. At least they are trying someone new!


For every short sale betting against the company that is a purchase betting on the company. Do you want to penalize those who bought shares but wouldn't have been able to without a short sale by someone else?
 
2013-05-15 06:41:45 PM  

skozlaw: No, I'm not, it was a pretty stupid comparison.


It's not.  Both beliefs are predicated on immense ignorance, are superficially attractive to people to know nothing, and if enough people start to believe either one, there's going to be catastrophic harm inflicted on innocent people.
 
2013-05-15 06:45:03 PM  

Ivo Shandor: I have no problem with short selling as long as the seller actually borrowed those shares from someone else first. It's only a problem when people sell shares that don't exist.


Right. Aka. Naked short selling...  it's not nice... it should be illegal... but lots of things about Wall Street should be illegal.
 
2013-05-15 06:45:07 PM  

Captain Dan: catastrophic harm inflicted on innocent people


That would be the stupid part.

You can argue all you want about it being beneficial to price finding efforts, but this crap where people act like it's some critical lynchpin is just silly.
 
2013-05-15 06:45:53 PM  

Marcus Aurelius: As long as they bought the stock before they sold it.  I don't know their share structure, but I'd bet the majority of it is closely held by the principles.


Isn't the whole point of "shorting" to sell stock you don't own yet, and buy it later?
 
2013-05-15 06:49:38 PM  

skozlaw: You can argue all you want about it being beneficial to price finding efforts, but this crap where people act like it's some critical lynchpin is just silly.


The word is linchpin.  And it absolutely is.

In a survey of top economists, literally zero of them disagreed: Link

Maybe every single economist is wrong, and you alone are right.  But I would short that bet.
 
2013-05-15 06:53:34 PM  

phamwaa: Because People in power are Stupid: I like short selling. I believe in short selling. However betting against a company like Tesla strikes me as a bit idiotic and political.

Should been Fiskar, right?


No way.  Their scissors rock!
 
2013-05-15 07:11:15 PM  
Bought on IPO day for $16 a share. Feeling pretty good about my purchase. If it keeps going up, maybe I'll be able to sell my stake and actually buy one!

Earlier today I snapped this shot of a Tesla showroom right in the middle of the mall - which is pretty cool:
fbcdn-sphotos-h-a.akamaihd.net

They also have a Tesla Supercharger at the mall parking lot now
www.shortarmguy.com
/along with 10 other EV charging stations!
 
2013-05-15 07:13:32 PM  
Short sellers help markets in two ways:  First, they allow people to hedge their bets, allowing them to make larger upside bets because they have part of the downside covered.  Second, and maybe more importantly, they help prevent market crashes because they step in to cover their shorts when stocks go down.  Without shorts, there's nobody to catch the market on the way down and you get panic.
 
2013-05-15 07:14:09 PM  
An American business is succeeding while bringing an environmentally-friendly option to our streets.  The horror.

/yet another reason to hate Wall Street
 
2013-05-15 07:21:59 PM  

JonZoidberg: phamwaa: Because People in power are Stupid: I like short selling. I believe in short selling. However betting against a company like Tesla strikes me as a bit idiotic and political.

Should been Fiskar, right?

No way.  Their scissors rock!


Great folding saws too
 
2013-05-15 07:34:23 PM  
CSB:
I had bought BP stock basically the day it bottomed out after the disaster. My conscience caught up with me and to offset my terrible, earth destroying stock, I bought Tesla stock.
Turned out the day I bought TSLA was November 26, 2010 - the day it peaked. I sat on it while it tanked and eventually did a stock dump and sold it. I sold it for a loss at around $27.
Dang it.
 
2013-05-15 08:13:41 PM  
Short sellers strike me as being worse than the people who bet the don't come line in craps
 
2013-05-15 08:26:04 PM  

Incontinent_dog_and_monkey_rodeo: Second, and maybe more importantly, they help prevent market crashes because they step in to cover their shorts when stocks go down. Without shorts, there's nobody to catch the market on the way down and you get panic.


Uh no.  Shorts make money when the market goes down.  They have no compunction about killing a company if they think they can drive the stock into the ground and add another digit to their net worth.
 
2013-05-15 08:28:36 PM  

ghall3: Short sellers strike me as being worse than the people who bet the don't come line in craps


I love to see short sellers take a bath.  Fark those scumbags.  Always get a kick out of a good short squeeze.
 
2013-05-15 08:55:21 PM  

tricycleracer: Where's that Owl guy from one of last week's Tesla threads?  He was going all Jim Cramer on shorting the hell out of Tesla stock.


I really doubt he actually shorted their stock. But I am going to assume he did and ask him how his TSLA shorts are doing every time I see him (got him farkied red). If he actually did short stocks that day, he's already down like 15 bucks a share.
 
2013-05-15 09:12:19 PM  

relaxitsjustme: Incontinent_dog_and_monkey_rodeo: Second, and maybe more importantly, they help prevent market crashes because they step in to cover their shorts when stocks go down. Without shorts, there's nobody to catch the market on the way down and you get panic.

Uh no.  Shorts make money when the market goes down.  They have no compunction about killing a company if they think they can drive the stock into the ground and add another digit to their net worth.


They don't actually "make" many money until they cover their short position.  Until they do that, its just as on-paper as somebody who is long on a position "makes" money when their stock goes up - they haven't made anything until they sell it.
 
2013-05-15 09:25:36 PM  

Hollie Maea: tricycleracer: Where's that Owl guy from one of last week's Tesla threads?  He was going all Jim Cramer on shorting the hell out of Tesla stock.

I really doubt he actually shorted their stock. But I am going to assume he did and ask him how his TSLA shorts are doing every time I see him (got him farkied red). If he actually did short stocks that day, he's already down like 15 bucks a share.


Luckily most people that say stuff like that are just talk.

If you don't have a really good idea of what you are doing short selling is an absolutely terrible idea (unlimited risk for a limited gain is not good). And as much as I would enjoy hearing about those people losing piles of money, it just isn't a good thing in the end.
 
2013-05-15 09:39:01 PM  

dywed88: Hollie Maea: tricycleracer: Where's that Owl guy from one of last week's Tesla threads?  He was going all Jim Cramer on shorting the hell out of Tesla stock.

I really doubt he actually shorted their stock. But I am going to assume he did and ask him how his TSLA shorts are doing every time I see him (got him farkied red). If he actually did short stocks that day, he's already down like 15 bucks a share.

Luckily most people that say stuff like that are just talk.

If you don't have a really good idea of what you are doing short selling is an absolutely terrible idea (unlimited risk for a limited gain is not good). And as much as I would enjoy hearing about those people losing piles of money, it just isn't a good thing in the end.


The biggest risk on short selling is that no matter how crappy a company is, somebody might come along and buy them out.  I almost bought a bunch of Dell puts at the beginning of the year, seeing how badly the PC business was doing.  I'm incredibly glad I stayed away, the buyout news would have blown me out.
 
2013-05-15 09:48:52 PM  
All of which has drubbed those who were betting against the Tesla story, now shaping up to be a case study in the dangers of short selling.

I bolded the important word.  Now quit your belly aching.
 
2013-05-15 10:23:37 PM  

GleeUnit: I don't know why anyone still bets against Elon Musk.


Probably because he sounds like a bad Star Wars one-off character.  You know, the character who has a three word line in a 5 second appearance in an unimportant part of the story, yet somehow has a grand and intricately detailed backstory that some twaffle wrote up.
 
2013-05-15 10:24:19 PM  

Honest Bender: All of which has drubbed those who were betting against the Tesla story, now shaping up to be a case study in the dangers of short selling.

I bolded the important word.  Now quit your belly aching.


This. Especially since Elon Musk warned them that he was coming after them. Even now he's readying a supercharger announcement for next week that is designed to be the final blow.
 
2013-05-15 10:24:28 PM  

Incontinent_dog_and_monkey_rodeo: dywed88: Hollie Maea: tricycleracer: Where's that Owl guy from one of last week's Tesla threads?  He was going all Jim Cramer on shorting the hell out of Tesla stock.

I really doubt he actually shorted their stock. But I am going to assume he did and ask him how his TSLA shorts are doing every time I see him (got him farkied red). If he actually did short stocks that day, he's already down like 15 bucks a share.

Luckily most people that say stuff like that are just talk.

If you don't have a really good idea of what you are doing short selling is an absolutely terrible idea (unlimited risk for a limited gain is not good). And as much as I would enjoy hearing about those people losing piles of money, it just isn't a good thing in the end.

The biggest risk on short selling is that no matter how crappy a company is, somebody might come along and buy them out.  I almost bought a bunch of Dell puts at the beginning of the year, seeing how badly the PC business was doing.  I'm incredibly glad I stayed away, the buyout news would have blown me out.


No, the biggest risks of short selling are
1) Liquidity issues due to margin calls
2) No matter how much you lose, you can always lose more. If I shorted TSLA on IPO, I would have a 350% accrued loss right now and the situation can continue to get worse (to the point that I can't cover a margin call and go bankrupt as worst case), and don't forget how often amateur traders (and even professionals) fall for escalation of commitment and the idea that "if I can just get back to break even". If I had taken a long position, the absolute worst case scenario is I lose 100% of my initial investment. For gains, it is the exact opposite, unlimited gain in long position, maximum 100% gain in short. Shorting breaks the cornerstone of investment, the risk-reward relationship, especially when dealing with new growth investments where dramatic shifts in stock prices aren't uncommon.
 
2013-05-15 10:28:22 PM  

Mister Peejay: GleeUnit: I don't know why anyone still bets against Elon Musk.

Probably because he sounds like a bad Star Wars one-off character.  You know, the character who has a three word line in a 5 second appearance in an unimportant part of the story, yet somehow has a grand and intricately detailed backstory that some twaffle wrote up.


The sound of some guy's name seems like a particularly bad basis for investment decisions.
 
2013-05-15 10:58:15 PM  
i.chzbgr.com
 
2013-05-15 10:58:16 PM  

Hollie Maea: Mister Peejay: GleeUnit: I don't know why anyone still bets against Elon Musk.

Probably because he sounds like a bad Star Wars one-off character.  You know, the character who has a three word line in a 5 second appearance in an unimportant part of the story, yet somehow has a grand and intricately detailed backstory that some twaffle wrote up.

The sound of some guy's name seems like a particularly bad basis for investment decisions.


I think we've all seen worse reasons for even bigger decisions.

/TSLA is now up 208% since I purchased shares
 
2013-05-15 11:23:20 PM  

anfrind: Hollie Maea: Mister Peejay: GleeUnit: I don't know why anyone still bets against Elon Musk.

Probably because he sounds like a bad Star Wars one-off character.  You know, the character who has a three word line in a 5 second appearance in an unimportant part of the story, yet somehow has a grand and intricately detailed backstory that some twaffle wrote up.

The sound of some guy's name seems like a particularly bad basis for investment decisions.

I think we've all seen worse reasons for even bigger decisions.

/TSLA is now up 208% since I purchased shares


Yeah that's true.

Wish I had bought some shares instead of just wasting my time arguing in their behalf on fark :)
 
2013-05-16 12:33:10 AM  
I bought some calls in January because my Republican 'friends' challenged me to since I commented Tesla was a success story. I am now asking them if there are any other companies they hate.
 
2013-05-16 12:43:44 AM  
Im tired of the anti-semitism.
 
2013-05-16 01:48:06 AM  

BalugaJoe: Im tired of the anti-semitism.


Yeah, goddamn Nazi electric cars.
 
2013-05-16 03:36:35 AM  
Curses - Foiled again on Tesla....I'll be back.

www.jesse-livermore.com
 
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