It’s Time for Real Time Settlement

Re:It’s Time for Real Time Settlement by mattnewton on Tuesday February 02, 2021 @07:04PM (#26008847)

The shorts don’t take money from the company, they take money from people unfortunate enough to invest in a failing company. In some cases that money could have helped the company land, in others it was going towards something doomed and possibly fraudulent, but either way it doesn’t come from the companies coffers directly unless the company does a buyback from the shorts. The people losing money are other investors.

What if smart money had to bet on a competitor or growing some other investment instead?

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Re:It’s Time for Real Time Settlement by kasey_junk on Tuesday February 02, 2021 @07:06PM (#26008881)

That’s a fine position to take so long as you recognize the vast majority of long money also doesn’t go to the companies coffers unless the do another offering.

Your argument isn’t a moral one.

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Re:It’s Time for Real Time Settlement by mattnewton on Tuesday February 02, 2021 @07:18PM (#26008994)

Much long money is absolutely used by the company indirectly; they can use their stock like a currency to raise funds with debt, pay employees, acquire companies with stock, etc. Thats hopefully a virtuous cycle where people do more stuff that creates value.

I don’t mean to make a moral argument, just question the need for short positions. If the company is truly bad their shares should deflate as demand deflates, no short seller position necessary. I think, from the perspective of the needs of society, punishing bad investors who fail shouldn’t be as rewarding as finding the right investments to grow.

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Re:It’s Time for Real Time Settlement by kasey_junk on Tuesday February 02, 2021 @07:28PM (#26009073)

That debt, acquisition and paying of employees is fraud. You are just pushing the risk onto those other entities with poor price discovery.

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Re:It’s Time for Real Time Settlement by mattnewton on Wednesday February 03, 2021 @12:54PM (#26016634)

Am I correct in reading that you think stock based acquisitions or employee compensation is all fraud?

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Re:It’s Time for Real Time Settlement by kasey_junk on Friday February 05, 2021 @12:12AM (#26033369)

If it exists in a market with illegalized downside pressure.

The sentiment that shorting isn’t necessary is particularly pernicious in the places where companies trade cash compensation for stock.

Employee long positions derived from stock grants are already boosts to the optimistic view of a company.

If there is no short position to determine fair pricing companies can use their already outsized advantage to take advantage of workers.

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