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by minusSeven 1276 days ago
Thinking of buying shorts on twitter now with all the dumb ass news going around...
2 comments

Elon bought the company and took it public. Can't really buy traditional shorts on it anymore as it's a private company.
You can't buy shares or shorts of a company that is privately owned.

The best you could do is find a prediction market and bet against specific metrics.

The best you can do is find a correlated stock (Tesla) and short that instead. I think if Twitter goes bankrupt, you can expect Tesla to enter free-fall.
> I think if Twitter goes bankrupt, you can expect Tesla to enter free-fall.

I think a drop in Tesla share price would be likely, but I don't see why it would hit freefall?

Tesla's current share price is extremely inflated - the market has priced in Elon Musk's genius magic. If this genius magic turns out to be a total fraud, Tesla stock price should go down to levels reflecting the stock price of a similarly sized/revenue producing car company.

To give you an idea:

Tesla revenue: 74.86B

Toyota revenue: 260.13B

Tesla market cap: 498.56B

Toyota market cap: 234.96B

That's roughly a 7.4x difference in expectation vs. reality.

I would hazard that some of that expectation is due to Tesla's potential for growth due to expected growth of the EV market.

I also think that a lot of anti-Musk sentiment has already been priced in. While a Twitter bankruptcy would absolutely have some further impact on that sentiment, it doesn't seem immediately obvious that it would wipeout all of Musk's fanatical support.

Given that, an immediate drop to 13% of Tesla's current value seems like a significant overestimate if Tesla keeps hitting sales and production targets. If Twitter bankruptcy accompanies a significant reduction in Tesla sales, I could see a drop of that size or larger, but not from a Twitter bankruptcy alone.

If not for Musks genius magic, why do you think Tesla deserves to be priced 7x higher than Toyota? I can see an argument for 2x maybe? But 7x is a massive difference considering Toyota is a not a company run by frauds, it is a serious company with ability to pivot into EV market in due time.