Short facebook. On Nov 14th, it will be trading under $10

1/2 billion+ shares available for sale,
doesn't necessarily mean they will [all] be sold

average daily volume is 50+ million

some will be sold, but no one knows how many
lots of unknowns, it seems

marc
:confused:
 
10$ is an overstament . Lowest price is 17.73$ .

My feeling is that its going down but if i could sell it today i would close my position at 18 .

I see itlower but no lower than 15

PS I personally believe that Facebook is overpriced at any price
 
The $20 Nov monthly put at $.40 ask price may be the better bet as I see plenty of support at both $19.50 and around $19.00.

Certainly it's far more expensive than the 0.05 $16 put but I believe it offers a much greater chance of making money.

There may be plenty of institutional buying support to keep this stock propped up.
 
Quote from peilthetraveler:

You are long facebook, arent you? :)

And I think you missed the whole point of my post. I've said this is a sort of long shot type bet, but I believe the odds are better than normal of hitting this lottery ticket because of the expiration of lockups which is greater than the amount of shares that were originally sold during the IPO. Basically what I am saying is, that there is the POTENTIAL that Nov 14th will look like facebooks IPO day if they didnt have any newbie buyers that day.


As far as the further out options are concerned, what I meant was you get 7 times less options if you get the further out months. (leads me to assume you are new at this) :):cool:
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No, no position in FB beyond some prop bets with degens. You seem to be implying that there is some maths not "in the mkt" by your "odds are better than normal". You have absolutely nothing to back-up that statement. There are no short restrictions. The synthetic trades at spot. There is no down and out skew.

So what do we win when you're wrong? You'll stop talking your book, right?
 
Yeah, I decided to buy the $19 puts at .20. If it goes to $10, then I make 60% less money than if I bought the $16s at .05. If it only goes to $15 I make about the same money. If it only goes to $17 or $16, then I at least get a few bucks out of the deal and didn't lose anything.
 
If anyone is interested in why I changed my bet from the $16 puts to the $19 puts, here is the reason. Math.

When the lockups expired in Aug (271 million shares) the stock dropped 6.3%.

When the lockups that expired in Oct(234 million shares) the stock dropped 5.02%.

1.2 billion shares will expire on the 14th. Subtract 60 million (Have to take zuckerbergs word that he wont sell) you have 1.14 billion shares.

1.14 billion/271 million = 4.2 times 6.3 = 26.5%
1.14 billion/234 million =4.87 times 5.02=24.45%

Of course, this is all things being equal which they never are. We dont know how many will panic if they see the stock drop 25% in the first 5 minutes of trading, nor do we know how many will start scooping up shares if they see the stock drop 25% in the first few minutes, but all things being equal, there is a reasonable probability that we can see around a 25% drop in FB stock on the 14th.

If FB stays at its current price of $21 until the 13th, we can expect the stock to probably drop to around the high $15s, low $16 range.
 
Quote from peilthetraveler:

If anyone is interested in why I changed my bet from the $16 puts to the $19 puts, here is the reason. Math.

When the lockups expired in Aug (271 million shares) the stock dropped 6.3%.

When the lockups that expired in Oct(234 million shares) the stock dropped 5.02%.

1.2 billion shares will expire on the 14th. Subtract 60 million (Have to take zuckerbergs word that he wont sell) you have 1.14 billion shares.

1.14 billion/271 million = 4.2 times 6.3 = 26.5%
1.14 billion/234 million =4.87 times 5.02=24.45%

Of course, this is all things being equal which they never are. We dont know how many will panic if they see the stock drop 25% in the first 5 minutes of trading, nor do we know how many will start scooping up shares if they see the stock drop 25% in the first few minutes, but all things being equal, there is a reasonable probability that we can see around a 25% drop in FB stock on the 14th.

If FB stays at its current price of $21 until the 13th, we can expect the stock to probably drop to around the high $15s, low $16 range.
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And it's not dropping in anticipation?!
 
Why do you only subtract 60 million? I've read from multiple sources that 777M are being unlocked next week, not 1.2B, so they must be subtracting most/all of Zuckerberg's 504M shares/options.
 
Quote from nillionaire:

Why do you only subtract 60 million? I've read from multiple sources that 777M are being unlocked next week, not 1.2B, so they must be subtracting most/all of Zuckerberg's 504M shares/options.
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I have seen a site that said it was 777 million and I think the article has some misinformation. I think they are assuming 1.2 billion shares were locked up this year TOTAL, so they are doing 1.2 billion minus the other lockups, but here is an article from bloomberg in august that says an ADDITIONAL 1.44 billion shares will be freed up thru november, so thats the 1.2 billion in Nov, plus the 234 million in Oct.

http://www.bloomberg.com/news/2012-...s-brace-for-more-shares-coming-to-market.html
 
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