
Heavy Ion Fusion and Insider Trading - kgwgk
https://www.bloomberg.com/view/articles/2016-08-16/heavy-ion-fusion-and-insider-trading
======
chollida1
Interesting article linked about drop box going public next year. I wonder if
they were waiting for the public to forget about Box, a competitor who went
public and whose stock has, well, under performed since.

[https://www.bloomberg.com/news/articles/2016-08-15/dropbox-s...](https://www.bloomberg.com/news/articles/2016-08-15/dropbox-
said-to-discuss-possible-2017-ipo-in-talks-with-advisers)

As to Neuromama, some people speculated yesterday that the owners were trying
to make money via a short squeeze. I can't say this is wrong but I'd be
surprised if that was their game.

For one, any decent short seller will lock in their borrow before they short.
This means that the owner can't call back their shares for the agreed upon
duration.

Secondly there haven't really been any large transactions in the stock. So
maybe there is a short seller out there holding 1000 shares short but that's
not really going to make the owners any real money.

Thirdly, the short interest is very small, not even a day's worth of
liquidity, which says something when the stock hardly trades at all.

Fourthly, and perhaps this is the least compelling point, its an OTC stock. ie
its a scummy stock, many brokerages wont' let the average person short this
stock and most professionals won't touch it as the downside from shorting just
isn't there. I mean every short seller knows that a stock can only go down to
zero but in the short term almost any stock can shoot up.

See KBIO for horror stories of what can happen when people who shouldn't be
shorting decide to short stocks, hint Martin Shkreli is involved.

------
rayiner
Nice point about prosecutorial discretion in insider trading. Some advice
(life advice, not legal advice): if you're doing something questionably legal,
don't sound like a criminal while doing it. The recent HSBC currency exchange
prosecutions are a good example. That never would have gotten prosecuted if
the executives' emails didn't make it seem like _they thought_ they were doing
something shady.

------
xeniak
See also:
[https://news.ycombinator.com/item?id=12294193](https://news.ycombinator.com/item?id=12294193)

------
GreaterFool
Matt Levine is my favorite writer on Bloomberg View!

------
overcast
Do people involved in these rackets REALLY think they won't get caught in the
end? I don't get it.

~~~
pc86
Part of me thinks they plan to make "enough" (however many zeros that happens
to be) and then just disappear, and the ones we hear about are the ones who
had too many zeros in their definition of "enough" or whose actual definition
of "enough" is really "more."

~~~
overcast
A lot of the setups are so blatant though, that I think they are in it for the
live fast, die young attitude. Make a shit ton of money, go crazy for a few
years, get caught, do your time, repeat.

~~~
gaius
I first read that as "startups" and it's no less true.

~~~
Ericson2314
Amen

