My damn etrade account won’t let me short LNKD. So far I’ve participated through put options. What gives? Surely, their post IPO grace period is over by now? Etrade says the shares are “not availble” to short.
It’s available if you can find it. Small float out there so it’s hard to come by. Be sure to check the costs too. When you can find it, LNKD is one of the most expensive stocks to short.
What’s your rationale for wanting to short vs. buying puts in the first place? Are you that convicted that valuation is blown out right now? I think it would be take some guts to short something that could have as much volatility of LNKD especially when considering how the broader markets are moving, i.e. all over the place. Anyway, curious to hear how you’re thinking about things.
Well, I’m not ready to short yet for exactly the reasons you said. But I wanted to check on the pricing of the order etc, and Etrade just flat out says, “we can’t borrow the shares.” So I am more just puzzled why not. Separately, my rationale, and this is just an idea, for shorting LNKD is that I only see it succeeding with its current valuation if it manages to become a really strong recruiting website. And they would have to be dominant, the way Google is dominant in their field, for this to happen. Even if LNKD does manage to accomplish that who the Hell is going to pay for such services in this environment? I do not think in the near term there will be any demand. These two contingent probabilities do not add up to an 8.6 billion dollar company with a PE of 2000 something.
I hate e-trade. Worst, most frustrating, most deceptive brokerage I’ve used.
Yeah, but now you’re talking about having to be short LNKD for a long time. The fees will kill you.
ChickenTikka, I think you have to work through the numbers and see what your scenarios look like. Otherwise I think you may have a mistaken idea of what your margin of safety is like, and I also agree with Sweep the Leg that it would take a lot of time for that thesis to play out. Personally, I wouldn’t think of shorting LNKD; buying puts perhaps.
Yep, all good points. The thing is the put options are already quite expensive as well.
I would think put options are very expensive right now because of volatility. So it wouldn’t be a bad idea to short if you can do it. Perhaps there is a spread combination that can lower the cost to you. Short the stock and long a call would give you a similar payoff and let you get premium, but of course, that presumes you could short the stock in the first place.
Yeah, that’s the idea I was thinking. I think I’m well positioned for Monday though. I decided to pull the trigger on NFLX on Thursday and short that.
Well bchadwick, sweep the leg, and numi, Thanks for telling me not to short lnkd in. You owe me 20 percent. The good news is that I went further short Nflx and BAC instead. Hmm Scott, your tears are delicious.
If you had gone UltraShort any of the major indices (as I did), you could have made that same amount with a lower risk profile.
Hey, I’m not actually bitter, and you are absolutely correct. I don’t think I’ve ever timed the market so well (though purely by chance as it was).