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Comment by M3L0NM4N | Hacker News Reader

> No, you're working very hard to miss the point.

It seems the opposite is true here.

> [Shorts] literally can't be made, unless there was someone in the market who thinks that at the short price, the stock is a good investment opportunity. Every trade is proof that the market thinks the stock is a good investment at that price.

Again, this isn't true. The spot price has to decrease from the point where short-selling is happening for there to be a willing buyer, unless there is a new bid. Yes, transactions happen at one singular price, but if you're only saying that every seller has a buyer and every buyer has a seller, then the guy that you replied to is correct. What you're essentially saying is that "every gallon of milk is sold to a person". This is not useful information.

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> What you're essentially saying is that "every gallon of milk is sold to a person". This is not useful information.

Only because you're ignoring the other option, that the gallon of milk DIDN'T sell. It tells you that there was demand for the milk you had to sell. If there was no customer, the milk would have spoiled. There are still people who want to drink milk. There are still people who believe you're not selling poison, that milk is a worthy thing to buy from you. That is useful information.

Yes, but they don’t want to drink milk the at the same price. Price drives demand equally as much as demand drives price. That’s the point you’re missing.

I'm not missing it at all. Whatever the damn price is (of course it fluctuates) the only way you can make a bet that the price will go down further, is if someone else thinks it's going to go up. Therefore for every single short, WHATEVER THE PRICE, there's an exact same amount of optimism and pessimism. It's the only way a sale is made.

So you can focus on the pessimism if you want. But the point you're missing, is it's exactly offset by an equal amount of optimism (based on that price). One side is betting it will go down further, the other side is betting it will go up.

It turns out there's soon going to be a 20% to 30% increase in the number of stocks available to be traded, and people are betting that those holders will cash out now that they're vesting. So this is all more about market factors than intrinsic company fundamentals anyway.

But people want to always focus on the negative, and get too hung up on the fluctuations of a stock price like it's a message from God or something.

Anyway, it's been enjoyable talking with you and others, it seems we're not going to have a meeting of the minds on this one.

I would bet a large number of the shorts are people holding restricted stock, synthetically selling their position before their lockup period ends.

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