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cwill
Member since Jan 2005
44681 posts

re: NKLA down 11% today to $51/share
99%+ of people posting on MT have no fricking idea how the financial world works.


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Upperdecker
LSU Fan
St. George, LA
Member since Nov 2014
22638 posts

re: NKLA down 11% today to $51/share
Lol Hindenburg literally shorts a stock then releases their short case, then profits off the tumbling stock price. They usually win too bc they do a good job of researching this stuff. Citron does the same and brought Jumia down from $25 to $5

Anyway I bought puts on this thing last week and they’re doing pretty well. It might turn out that Hindenburg and Citron are bullshiteting. But the stock will plummet for a while and I’ll make money
This post was edited on 9/15 at 7:39 pm


buckeye_vol
Ohio State Fan
Member since Jul 2014
33508 posts

re: NKLA down 11% today to $51/share
quote:

Well they're shirt sellers , that's what they do
Do they sell these shirts on their website, because I can't find them?

In all seriousness, Hindenburg explicitly stated that they took a short position. But I don't see why people take such a big issue with short-sellers who provide detailed and well-researched reports to justify their positions, assuming the research isn't fraudulent itself, which is not any different than a firm providing research as to why they are "long" a stock.

In fact, a well-researched (whether good or bad for the company) is a good thing, and it's a self-correcting mechanism for the market. Of course the Bill Ackman's of the world create a bad name for the rest of them, but at least we figure that out sooner or later usually.

Regardless, at the end of the day, if Nikola (or whomever) isn't actually a scam, then they'll likely prove that eventually. And if someone is long on Nikola, then they'll should eventually reap the benefits, and now they have an opportunity to buy at a discount.

That said, I don't think being long is a good play in this case, especially with both the SEC AND DOJ looking into them. And the details of their GM deal (at least what has been reported), which was first perceived as a positive, looks to be quite the opposite. Well it may be for GM though as it appears to be really low risk (reputation harm aside, which I don't think is much of a risk) and high reward.
This post was edited on 9/16 at 3:10 pm


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buckeye_vol
Ohio State Fan
Member since Jul 2014
33508 posts

re: NKLA down 11% today to $51/share
quote:

But the stock will plummet for a while and I’ll make money
Probably (I would hope) but the disturbing part of this is that this isn't as much of a sure bet as it should be (depending on the details of the options contract). It's still outrageously valued without the allegations and news of both an SEC and DOJ investigation as a result.

That said, I want to take my side consulting work public because with a 277,000+ price to sales ratio like Nikola's puts the valuations into the tens of billions of dollars so I'll gladly value it at a fraction of that.


Jag_Warrior
Virginia Fan
Virginia
Member since May 2015
1739 posts

re: NKLA down 11% today to $51/share
quote:

the disturbing part of this is that this isn't as much of a sure bet as it should be (depending on the details of the options contract).


Correct. And the hang up here is that you’re buying options on an underlying which has an IV (implied volatility score) of 227%. For comparison, the IV on DKNG is 95%. On MSFT it’s 41%. All that to say, you have to pay through the nose to buy options (especially puts) on NKLA - which is why I’ve been selling options against it.

I’m certainly not saying that one can’t make money buying options on this (or anything else). Just that you have to be right on the direction, magnitude of the directional move and also the time frame (because theta/time decay will eat into the option’s value). I just have to be right on the maximum range and the time frame. But as has been seen on here, both strategies can work simultaneously. My initial basket of naked puts expires tomorrow. I’ll likely open some more positions tomorrow or maybe Monday (to avoid headline risk over the weekend).


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