Traders are increasingly betting against SpaceX just weeks after IPO(www.ft.com)
32 pointsby ethanhawksley4 hours ago7 comments
  • lokar3 hours ago
    Seems odd that they don't discuss a common reason to short a stock: you expect it to go down, without any real opinion on the business. In this case there is going to be a ton of new float fairly soon. It's a pretty safe bet that this will depress the price. So the natural trade is to sell now (short), and buy later (cover the short). That effectively moves the future price drop to "now", which is likely what we see. This is just one way (of many) in which the market factors future events into today's price, which is sort of the whole point.
    • brazukadevan hour ago
      > Seems odd that they don't discuss a common reason to short a stock

      this was extensively discussed BEFORE the IPO. That is why it was overpriced.

      > This is just one way (of many) in which the market factors future events into today's price, which is sort of the whole point.

      nope. the market transferred $80B to Elon Musk from the people that got scammed.

      • lokaran hour ago
        That’s an odd non sequitur. I’m simply describing why a lot of the short positions are not from people who have any opinion on the value of the stock. They are engaged in an almost mechanical arbitrage like trade.

        People tend to imagine that all short sellers have some fundamental disagreement with the current value of the security, or are trying to manipulate to the value for some reason. It’s useful to understand there is a lot of volume that does not really care about the value debate one way or another.

  • jorgeBanana3 hours ago
    They expect locked up shares to hit the market in August and tank the price
    • l0ng1nu52 hours ago
      They also see one of the most ridiculously overvalued stocks of all time and want to collect easy money.
    • da-x3 hours ago
      That could happen, but should also consider that it's often the case with lockups release that they do not inflict much change on the stock price, but only if there's already enough trading volume on the stock due to other market conditions.
      • tronfx69692 hours ago
        you clearly over-analyze the problems ! The right question should be answered is: after the investor who participated in the spcx pre-sale, receive the lockup shares, what will they do ? And what makes them do that ? Under which conditions ?
  • da-x2 hours ago
    On one hand, I sense that the same people who were in the shorts crowd of the Tesla 'boom or bust' Model 3 era ($TSLQQ) are now piling up against SPCX (e.g. Ed Zitron). Betting again Elon is very risky. And on the other, boy that huge valuation is scary.

    The situation could be that there are two intertwined bubbles: an AI-tech-bubble and AI-financial-bubble, both at the same time and only one of them is going to really burst and affect valuations. If that happens, we can only guess the period of time it takes for the S&P 500 to recover.

  • ChrisArchitectan hour ago
    [dupe]

    SPCX is now Wall Street's most shorted new stock

    https://news.ycombinator.com/item?id=48938001

    Short sellers notch $8.7B profit as SpaceX shares dip to IPO price

    https://news.ycombinator.com/item?id=48948435

  • 2 hours ago
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  • kingstnap3 hours ago
    "Just weeks"

    Weeks is an enormous amount of time now actually. The majority of plays in what people do with stocks is actually very short term. People aren't the kind of Berkshire buy and hold-ers anymore.

    If you look it up 60% of options volumes on the S&P 500 is 0 days to expiry. Literally gambling if it goes up and down this day.

    Btw its not just the US that's like this. South Koreas 2x single stock ETF debacle and India's Janestreet options story are somehow even more degenerate.

    • da-x3 hours ago
      And on the other hand, there's a whole movement (in niche terms, though) of people going "just add to an S&P 500 ETF for 50 years and forget about everything else".
      • mfro2 hours ago
        Would have been an amazing idea 10 years ago. Not sure anymore.
    • lokar2 hours ago
      A lot of the short dated options are market makers and index arbs hedging.
      • kingstnapan hour ago
        It's about 50/50 retail to institutions.