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Stock guru's, ? on shorting

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  • #1

    Stock guru's, ? on shorting

    What happens if say someone shorts a stock, say 4 months ago at $20.
    Today, the company is going private, at a price of $24.

    Would whomever shorted the stock 4 months ago have to cover the short today before the company no longer has shares available, or would they just have made a cool chunk of change and have to do nothing?

    * I have not shorted any stocks, just wondering as the company I work for is going private today, and the stock is trading at a price higher than what the buyout amount was.
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  • #2
    Originally posted by yellowstang View Post
    What happens if say someone shorts a stock, say 4 months ago at $20.
    Today, the company is going private, at a price of $24.

    Would whomever shorted the stock 4 months ago have to cover the short today before the company no longer has shares available, or would they just have made a cool chunk of change and have to do nothing?

    * I have not shorted any stocks, just wondering as the company I work for is going private today, and the stock is trading at a price higher than what the buyout amount was.
    How do you figure they made money? They shorted a stock and it went up.
    Originally posted by davbrucas
    I want to like Slow99 since people I know say he's a good guy, but just about everything he posts is condescending and passive aggressive.

    Most people I talk to have nothing but good things to say about you, but you sure come across as a condescending prick. Do you have an inferiority complex you've attempted to overcome through overachievement? Or were you fondled as a child?

    You and slow99 should date. You both have passive aggressiveness down pat.

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    • #3
      That's what I'm asking, if they covered today, yes they would loose money. What if they did not ever cover it tho, is that legal, or would the broker cover it automatically at Market Price at EOD, and they owe the broker if they did not have funds in their account to cover the purchase.

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      • #4
        Originally posted by yellowstang View Post
        That's what I'm asking, if they covered today, yes they would loose money. What if they did not ever cover it tho, is that legal, or would the broker cover it automatically at Market Price at EOD, and they owe the broker if they did not have funds in their account to cover the purchase.
        Deals take months to close. How are they acquiring the company, with cash or shares? Cash, you'd have to buy back whenever the deal closes. Shares, you could probably have them converted at the conversion ratio to a short position in the new shares.

        Edit, sounds like the shares are just going away. The shares would just be closed out and you owe money.
        Originally posted by davbrucas
        I want to like Slow99 since people I know say he's a good guy, but just about everything he posts is condescending and passive aggressive.

        Most people I talk to have nothing but good things to say about you, but you sure come across as a condescending prick. Do you have an inferiority complex you've attempted to overcome through overachievement? Or were you fondled as a child?

        You and slow99 should date. You both have passive aggressiveness down pat.

        Comment

        • #5
          Originally posted by slow99 View Post
          Deals take months to close. How are they acquiring the company, with cash or shares? Cash, you'd have to buy back whenever the deal closes. Shares, you could probably have them converted at the conversion ratio to a short position in the new shares.
          Cash buyout. Deal closes today. The announcement has already been made public.

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