Shortin SIRI? Bad Move!!
I was reading this blog posting this morning about SIRI getting shorted in anticipation that the merger will not go through (which I disagree with). I might be missing something here, but shorting a stock that's $3 doesn't seem to be worth the risk.
So fine, if the merger doesn't happen and SIRI crumbles ... yay, you get at max 3 points gain on your end. Unless the SEC changes the rules and starts allowing negative stock prices, you know exactly how much you can possibly make. There's no infinite growth beyond 3 points. Boring.
On the other side of the dice, if the merger goes through and Wall Street rallies this sucker to the moon, the level of 'screwing' you (Mr. Shorter) will take is unbounded. Not worth the risk given the reward.
So fine, if the merger doesn't happen and SIRI crumbles ... yay, you get at max 3 points gain on your end. Unless the SEC changes the rules and starts allowing negative stock prices, you know exactly how much you can possibly make. There's no infinite growth beyond 3 points. Boring.
On the other side of the dice, if the merger goes through and Wall Street rallies this sucker to the moon, the level of 'screwing' you (Mr. Shorter) will take is unbounded. Not worth the risk given the reward.
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