Discussion in 'Trading' started by rubberbird, Feb 11, 2005.
Please explain to me why I shouldn't be short GOOG right now with the lock-up expiring on monday??
Institution(s) have been selling short for the last week to cover all the employee sell orders that are coming in... They will absorb them on Monday in their own accounts and be flat.
Then they can run the market up and create a squeeze... Probably use a gap down open to absorb the orders at the lowest possible price and then tick up from there.
This actually has the virtue of keeping the price relatively stable...
I guess i'm on the wrong massage board. I thought there were stock traders around here. GOOG has been the BIGGEST story of the past year, and yet no one can muster an opinion with respect to the lock-up expiring??
This is my last thread on ET. You can find me with Hank Rollins in the future.
Thank you. Interesting thoughts.
I have a friend who helps run the desk that moves insider blocks at UBS. Typically, as I understand it, there are lots of methods to dispose of these blocks. An insider can drip shares into the market over time, they can put the block up for bid to the i-bank as a principal deal where the bank bids a discount to market to move the whole block. The bank then either hedges or perhaps their traders have been getting short in the days prior in anticipation of taking the block down. Additionally, the Venture firms who distribute these shares generally direct all their investors to the same i-bank to move the shares. The investor can either fill their order at that bank or have the shares moved to another broker.
Keep in mind the black out dates for trading for all inside employees. Also, since the founders tend to love Warren Buffet, perhaps they are predisposed to hold on to their shares, and since prospects look good for the company, perhaps employees will hold on as well.
So, in short, who knows? Maybe you'll see downward pressure, but maybe not. How much of an appetite do other institutions have for these shares? In any case I'd wait for a bounce and a failure at resistance to get short, but that's a personal style issue...just my 2 cents. Good luck.
Its really consolidating here and I think it could go either way, although I wouldn't doubt if it did head a little lower. You still have to be careful with a stock that trades in a $10+ range on a daily basis. It can take your account value down pretty quick if you're wrong.
As I laid out on another Goog thread before earnings the trade was get short on the open after earnings and hold until the end of Feb. That s what I did and I am comfortable going in to the weekend with a substantial goog short initiated on the open after earnings (which I added to in todayâs head fake). It is all about following the money on this one imo. The stock has been pumped and the weak shorts have been shaken at every possible opportunity but after the earnings reversal, the failure of the pump on analysts day and the head fake today it is pretty clear to me that someone has been trying to get very short in size.
My guess is that the selling will start with a trickle next week and will accelerate as the week progresses.
Then again I rarely trade stocks so what do I know. I put it down to beginners luck LOL!
I don't think I would do a short-term short, but GOOG will fall big sooner or later. Look at YHOO, it went strong when it first appeared, and held pretty good... Then it collapsed.
I trade the ES not stocks, but goog looks kinda scary to me.....i just thought of the irony in saying "I trade the ES, google is scary..." anyway....
I dont' know enough about it to say anything for sure but if I had to be in it I'd be short. Sentiment w/ a lock up ...I'm sure there are people either wanted to short it because of hte lock up...or people wanting to short it cause they know people will be wanting to short it because of the lock up.
And birds called a couple nice drops. Good luck bird.
I doubt all the shares will be dumped onto the market, but people will sell enough to meet some of there dreams. These guys are not splitting it kind of makes it harder to short since most funds cant gain that many shares.
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