How do you short an IPO? Endeavor?

Are there any restrictions on shorting an IPO?  I tried shorting SNAP when if first came out (via TDAmeritrade) but I couldn't.  Can't remember the reason why at the moment.  Wondering if I can get in on shorting the Endeavor IPO.

Just read they're pulling the IPO, but if they were still going through with it, is it possible to short on 1st day of trading?

I'm stock market stupid, but if this is investing in them offering an IPO and it tanking, I'd bet on that. I know nothing, but I'd bet it tanks, climbs back to almost IPO price and then holds forever. 

 

Someone smart get in here err so I can possibly make extra money. 

There's a regulation that prevents underwriters from lending stocks to short sellers for 30 days, but investors can do it on the first day.

WikiTheWalrus -

There's a regulation that prevents underwriters from lending stocks to short sellers for 30 days, but investors can do it on the first day.

Explain please, like I'm a retard, because, well, I'm retarded. 

Also, the Zuffa purchase was a ridiculously horrible deal and Endeavor has been mismanaged for awhile. If Ari were truly making a solid content creation company, I would invest heavliy in it. But what he's doing isn't really working.

Since the UFC is really the driving force behind their revenue, he really needs to get the content into an exclusive distribution and then purchase the distribution. Zuffa tried to do it, and Endeavor is kind of doing it with ESPN+, but they really need the content creation and the distribution to accomplish what Ari is trying to do. They also need to get production on the other content going.

 

ABCTT_sakurabas ear -
WikiTheWalrus -

There's a regulation that prevents underwriters from lending stocks to short sellers for 30 days, but investors can do it on the first day.

Explain please, like I'm a retard, because, well, I'm retarded. 


Short selling needs a lender, the short seller, the buyer, and the seller. The lender owns the shares, lends them to the short seller, who sells them to the buyer at market price on Day 1 for X dollars. The short seller now has tp pay the lender the same amount of shares on Day 30 for Y dollars. On Day 30, short seller buys stocks from seller and repays them to lender. If the stock price on Day 30 is lower than Day 1, short seller made a profit (if x > Y, then X - Y = profit). If the price is higher, short seller lost money. (if X < Y, X - Y = loss).


For an IPO, the company enagges an underwriter who lines up investors to purchase the stocks in pre-IPO sales and in the IPO. That underwriter usually has the most available shares. There are usually shares that are already owned by early investors and then the shares that investors purchase once they are available on the market. Those investors can lend their shares for short selling, but the underwriter can't for 30 days. The underwriter has to sell them for that first 30.


It's a bit more complex, but this is the easiest way to explain it without getting into the weeds.

WikiTheWalrus - 
ABCTT_sakurabas ear -
WikiTheWalrus -

There's a regulation that prevents underwriters from lending stocks to short sellers for 30 days, but investors can do it on the first day.

Explain please, like I'm a retard, because, well, I'm retarded. 


Short selling needs a lender, the short seller, the buyer, and the seller. The lender owns the shares, lends them to the short seller, who sells them to the buyer at market price on Day 1 for X dollars. The short seller now has tp pay the lender the same amount of shares on Day 30 for Y dollars. On Day 30, short seller buys stocks from seller and repays them to lender. If the stock price on Day 30 is lower than Day 1, short seller made a profit (if x > Y, then X - Y = profit). If the price is higher, short seller lost money. (if X < Y, X - Y = loss).


For an IPO, the company enagges an underwriter who lines up investors to purchase the stocks in pre-IPO sales and in the IPO. That underwriter usually has the most available shares. There are usually shares that are already owned by early investors and then the shares that investors purchase once they are available on the market. Those investors can lend their shares for short selling, but the underwriter can't for 30 days. The underwriter has to sell them for that first 30.


It's a bit more complex, but this is the easiest way to explain it without getting into the weeds.




If I hadn't eaten 300mg of edibles an hour ago this might make sense.

angryinch -
WikiTheWalrus - 
ABCTT_sakurabas ear -
WikiTheWalrus -

There's a regulation that prevents underwriters from lending stocks to short sellers for 30 days, but investors can do it on the first day.

Explain please, like I'm a retard, because, well, I'm retarded. 


Short selling needs a lender, the short seller, the buyer, and the seller. The lender owns the shares, lends them to the short seller, who sells them to the buyer at market price on Day 1 for X dollars. The short seller now has tp pay the lender the same amount of shares on Day 30 for Y dollars. On Day 30, short seller buys stocks from seller and repays them to lender. If the stock price on Day 30 is lower than Day 1, short seller made a profit (if x > Y, then X - Y = profit). If the price is higher, short seller lost money. (if X < Y, X - Y = loss).


For an IPO, the company enagges an underwriter who lines up investors to purchase the stocks in pre-IPO sales and in the IPO. That underwriter usually has the most available shares. There are usually shares that are already owned by early investors and then the shares that investors purchase once they are available on the market. Those investors can lend their shares for short selling, but the underwriter can't for 30 days. The underwriter has to sell them for that first 30.


It's a bit more complex, but this is the easiest way to explain it without getting into the weeds.




If I hadn't eaten 300mg of edibles an hour ago this might make sense.

lol, you have to keep posting tonight. 


300mg? That's nuts. 

WikiTheWalrus -
ABCTT_sakurabas ear -
WikiTheWalrus -

There's a regulation that prevents underwriters from lending stocks to short sellers for 30 days, but investors can do it on the first day.

Explain please, like I'm a retard, because, well, I'm retarded. 


Short selling needs a lender, the short seller, the buyer, and the seller. The lender owns the shares, lends them to the short seller, who sells them to the buyer at market price on Day 1 for X dollars. The short seller now has tp pay the lender the same amount of shares on Day 30 for Y dollars. On Day 30, short seller buys stocks from seller and repays them to lender. If the stock price on Day 30 is lower than Day 1, short seller made a profit (if x > Y, then X - Y = profit). If the price is higher, short seller lost money. (if X < Y, X - Y = loss).


For an IPO, the company enagges an underwriter who lines up investors to purchase the stocks in pre-IPO sales and in the IPO. That underwriter usually has the most available shares. There are usually shares that are already owned by early investors and then the shares that investors purchase once they are available on the market. Those investors can lend their shares for short selling, but the underwriter can't for 30 days. The underwriter has to sell them for that first 30.


It's a bit more complex, but this is the easiest way to explain it without getting into the weeds.



Thank you, that makes sense, this controls market minipulation.  I had no idea how 'shorts' worked, seriously, thanks!

WikiTheWalrus -
angryinch -
WikiTheWalrus - 
ABCTT_sakurabas ear -
WikiTheWalrus -

There's a regulation that prevents underwriters from lending stocks to short sellers for 30 days, but investors can do it on the first day.

Explain please, like I'm a retard, because, well, I'm retarded. 


Short selling needs a lender, the short seller, the buyer, and the seller. The lender owns the shares, lends them to the short seller, who sells them to the buyer at market price on Day 1 for X dollars. The short seller now has tp pay the lender the same amount of shares on Day 30 for Y dollars. On Day 30, short seller buys stocks from seller and repays them to lender. If the stock price on Day 30 is lower than Day 1, short seller made a profit (if x > Y, then X - Y = profit). If the price is higher, short seller lost money. (if X < Y, X - Y = loss).


For an IPO, the company enagges an underwriter who lines up investors to purchase the stocks in pre-IPO sales and in the IPO. That underwriter usually has the most available shares. There are usually shares that are already owned by early investors and then the shares that investors purchase once they are available on the market. Those investors can lend their shares for short selling, but the underwriter can't for 30 days. The underwriter has to sell them for that first 30.


It's a bit more complex, but this is the easiest way to explain it without getting into the weeds.




If I hadn't eaten 300mg of edibles an hour ago this might make sense.

lol, you have to keep posting tonight. 


300mg? That's nuts. 



Oh Jesus. I just hit a preroll of top shelf, Kief, and wax. There's no way he's even close to as smart as me right now. 

angryinch -
WikiTheWalrus - 
ABCTT_sakurabas ear -
WikiTheWalrus -

There's a regulation that prevents underwriters from lending stocks to short sellers for 30 days, but investors can do it on the first day.

Explain please, like I'm a retard, because, well, I'm retarded. 


Short selling needs a lender, the short seller, the buyer, and the seller. The lender owns the shares, lends them to the short seller, who sells them to the buyer at market price on Day 1 for X dollars. The short seller now has tp pay the lender the same amount of shares on Day 30 for Y dollars. On Day 30, short seller buys stocks from seller and repays them to lender. If the stock price on Day 30 is lower than Day 1, short seller made a profit (if x > Y, then X - Y = profit). If the price is higher, short seller lost money. (if X < Y, X - Y = loss).


For an IPO, the company enagges an underwriter who lines up investors to purchase the stocks in pre-IPO sales and in the IPO. That underwriter usually has the most available shares. There are usually shares that are already owned by early investors and then the shares that investors purchase once they are available on the market. Those investors can lend their shares for short selling, but the underwriter can't for 30 days. The underwriter has to sell them for that first 30.


It's a bit more complex, but this is the easiest way to explain it without getting into the weeds.




If I hadn't eaten 300mg of edibles an hour ago this might make sense.

I respect you.

You guys should have some kind of debate or discussion here tonight. 

WikiTheWalrus -

Also, the Zuffa purchase was a ridiculously horrible deal and Endeavor has been mismanaged for awhile. If Ari were truly making a solid content creation company, I would invest heavliy in it. But what he's doing isn't really working.

Since the UFC is really the driving force behind their revenue, he really needs to get the content into an exclusive distribution and then purchase the distribution. Zuffa tried to do it, and Endeavor is kind of doing it with ESPN+, but they really need the content creation and the distribution to accomplish what Ari is trying to do. They also need to get production on the other content going.

 

In terms of purchasing the distribution, can they do that now with ESPN+?  I don't think ESPN would sell ESPN+.  Also didn't they have exclusive distribution and own it with FightPass?

WikiTheWalrus -

You guys should have some kind of debate or discussion here tonight. 

What about?

ELam -
ABCTT_sakurabas ear -
WikiTheWalrus -

There's a regulation that prevents underwriters from lending stocks to short sellers for 30 days, but investors can do it on the first day.

Explain please, like I'm a retard, because, well, I'm retarded. 


Before the first trading day, the IPO shares are already split between the underwriter (the investment bank(s) who helped price the shares and market them to investors), and by retail/institutional investors who have agreed to purchase shares at the IPO price.


The underwriter is not allowed to lend the shares for shorting as this could be considered a conflict of interest. Sometimes the underwriters agree to buy large blocks of shares themselves to later sell on the secondary market (each IPO is different).


HOWEVER, the institutional and retail investors are allowed to lend their shares to short sellers. The availability of shares will be determined by the number of shares sold to these investors and their willingness to lend them.


Sometimes a certain number of the institutional investors also make deals not to sell their shares for a certain period of time.



Underwriters usually include sale restrictions for 30-days in the their contracts and most investment banks who syndicate private capital ahead of IPOs do it as well. It's pretty standard and another reason why it's hard to short an IPO.

nek -
WikiTheWalrus -

Also, the Zuffa purchase was a ridiculously horrible deal and Endeavor has been mismanaged for awhile. If Ari were truly making a solid content creation company, I would invest heavliy in it. But what he's doing isn't really working.

Since the UFC is really the driving force behind their revenue, he really needs to get the content into an exclusive distribution and then purchase the distribution. Zuffa tried to do it, and Endeavor is kind of doing it with ESPN+, but they really need the content creation and the distribution to accomplish what Ari is trying to do. They also need to get production on the other content going.

 

In terms of purchasing the distribution, can they do that now with ESPN+?  I don't think ESPN would sell ESPN+.  Also didn't they have exclusive distribution and own it with FightPass?


Yeah, they owned Fight Pass, which is what I was referring to about Zuffa trying to own a distribution channel. The problem they had was they didn't do it fully. They should have switched all cable programming and the monthly PPVs to Fight Pass and had quarterly huge cards on standard PPV. They would take a hit with initial viewership and revenue, but without a means to grow the viewership, FIght Pass was never going to be anything anyway. Only hardcore fans will pay to see dark matches and older videos from other fight promotions. Better to lose some revenue in the beginning and win viewers with more original content. 


They probably can't purchase ESPN+, but they can get their viewers used to the idea of watching only on ESPN+, then switch to a homegrown distribution when the contract expires. They're hurting themselves trying to be this new school content creation company, but tying themselves to the old school content distrution deals.


They're also doing ti backwards, creating the content before the distribution channel. Netflix and Amazon had the distribution and crap content at first. Then they built the content and the channel thrived as a result. Endeavor is trying to buy premium content, which is going to create a lot of debt and expense without the distribution and viewership to support it. So, they rely on the old distribution model deals, which only locks them into the relationships instead of allowing them to build their own viewership.

1 Like

Short Dana to Bolivia 

WikiTheWalrus -
nek -
WikiTheWalrus -

Also, the Zuffa purchase was a ridiculously horrible deal and Endeavor has been mismanaged for awhile. If Ari were truly making a solid content creation company, I would invest heavliy in it. But what he's doing isn't really working.

Since the UFC is really the driving force behind their revenue, he really needs to get the content into an exclusive distribution and then purchase the distribution. Zuffa tried to do it, and Endeavor is kind of doing it with ESPN+, but they really need the content creation and the distribution to accomplish what Ari is trying to do. They also need to get production on the other content going.

 

In terms of purchasing the distribution, can they do that now with ESPN+?  I don't think ESPN would sell ESPN+.  Also didn't they have exclusive distribution and own it with FightPass?


Yeah, they owned Fight Pass, which is what I was referring to about Zuffa trying to own a distribution channel. The problem they had was they didn't do it fully. They should have switched all cable programming and the monthly PPVs to Fight Pass and had quarterly huge cards on standard PPV. They would take a hit with initial viewership and revenue, but without a means to grow the viewership, FIght Pass was never going to be anything anyway. Only hardcore fans will pay to see dark matches and older videos from other fight promotions. Better to lose some revenue in the beginning and win viewers with more original content. 


They probably can't purchase ESPN+, but they can get their viewers used to the idea of watching only on ESPN+, then switch to a homegrown distribution when the contract expires. They're hurting themselves trying to be this new school content creation company, but tying themselves to the old school content distrution deals.


They're also doing ti backwards, creating the content before the distribution channel. Netflix and Amazon had the distribution and crap content at first. Then they built the content and the channel thrived as a result. Endeavor is trying to buy premium content, which is going to create a lot of debt and expense without the distribution and viewership to support it. So, they rely on the old distribution model deals, which only locks them into the relationships instead of allowing them to build their own viewership.



Informative post.  Voted up.