HN user

lokar

6,246 karma
Posts9
Comments2,544
View on HN

The US (and EU/UK) subsidies defense, but imo that’s different. First, it’s more understandable to want domestic arms production. Second, they are not seeking to subsidize to undercut foreign suppliers and drive them out of business.

The US is not pushing subsidized F35 fighters all over the world to drive other producers under.

Two main reasons. It requires taking a lot of freedom / agency away from individuals, and redirecting much of the profits of successful enterprises to subsidies (and suppressing individual consumption and standard of living).

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.

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.