alt Hacker NewsSeems 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.
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I give you a common reason to short it: you had a 5% of the company float IPO, in a few months you will have 40% of the company or more on the public market . Not to mention the “special” changes to index funds etc just to keep its valuation high (some would say artificially). On top of that the valuation metric for its stock price are not earth-ish…
> 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.
> 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.
The reverse is true for meme stocks as well. You can buy a stock because you expect it to go up without any real opinion on the business.
Though we all know the opinion on the business. Great science project, bad business.