Shorting TWTR

[Pekelo]

There is this fairly low risk play of shorting TWTR at 50. The risk is only 8% if the purchase goes through and Elon pays the $54 purchase price. But as we know our fav tantrum child, he is most likely still trying to get out of the deal (using security clearance this time, or whatever he can come up), so there is a fairly good chance the deal going bust.

And if that happens TWTR will drop back to low 40s. Come on Elon, we know you don't really want TWTR!

 

[newwurldmn]

The deal closes on Friday or goes to trial.

the only out is if Biden employs CFUIS to investigate the deal. That has far reaching ramifications which I’m sure legal scholars are pondering this weekend.

 

[FreeGoldRush]

The correct context is that the market has priced the risk of the deal not closing at X. If you think the market is wrong then you can certainly place your bet. "low risk" is a phrase that provides no value here. The risk as priced by the market simply is. We don't know if it is low or high. That's how markets work.

 

[Pekelo]

"low risk" is a phrase that provides no value here. The risk as priced by the market simply is. We don't know if it is low or high.

We know it is 8%, that is much lower than shorting anything that could double in price. So yes, in the shorting game 8% max. loss is very low risk...

 

[earth_imperator]

Elon knows how to finance it by bringing the price down and up again. Of course profiting big each time from all moves... Voila! The financing is done...

 

[Pekelo]

Elon never wanted to buy it, he was just mouthing off, as usual. Also he needed an excuse to cash some of the Tesla stocks without scaring the market. He is gonna trying to weasel himself out of the deal, even though he said he was committed.

So this short play is a bet on the Muskrat's weaseling ability...

 

[FreeGoldRush]

We know it is 8%, that is much lower than shorting anything that could double in price. So yes, in the shorting game 8% max. loss is very low risk...

8% is not a measure of risk. That's just a measure of your likely max loss. What you really want to know is the risk that your trading strategy has not put the odds in your favor because in the end that's what will eat away at your wealth if not managed very carefully.

 

[FreeGoldRush]

Elon never wanted to buy it...

Except that he signed a contract doing exactly that. He doesn't always tell you the truth but he's probably not dumb enough to sign agreements when he doesn't mean it.

 

[Pekelo]

Except that he signed a contract doing exactly that.

Contracts, schmontracts. Would he sign a contract that let's him sell shitload of Tesla stocks if he thinks he can get out of the contract? You betcha!

Describing the situation:

https://slate.com/technology/2022/10/elon-musk-twitter-national-security-shenanigans.html

Extra whipping cream on the pie:

"Biden administration officials are considering subjecting the Twitter deal to a national security probe, due in large part to Muskian weirdness around the Russia-Ukraine conflict."

I trust Elon's weaseling ability.

 

[SoyUnGanador]

8% is not a measure of risk. That's just a measure of your likely max loss. What you really want to know is the risk that your trading strategy has not put the odds in your favor because in the end that's what will eat away at your wealth if not managed very carefully.

This, 8% is not you risk LOL.