On: It’s Time for Real Time Settlement

[mattnewton]

Much long money is absolutely used by the company indirectly; they can use their stock like a currency to raise funds with debt, pay employees, acquire companies with stock, etc. Thats hopefully a virtuous cycle where people do more stuff that creates value.

I don’t mean to make a moral argument, just question the need for short positions. If the company is truly bad their shares should deflate as demand deflates, no short seller position necessary. I think, from the perspective of the needs of society, punishing bad investors who fail shouldn’t be as rewarding as finding the right investments to grow.

[kasey_junk → mattnewton]

That debt, acquisition and paying of employees is fraud. You are just pushing the risk onto those other entities with poor price discovery.

[mattnewton → kasey_junk]

Am I correct in reading that you think stock based acquisitions or employee compensation is all fraud?

[kasey_junk → mattnewton]

If it exists in a market with illegalized downside pressure.

The sentiment that shorting isn’t necessary is particularly pernicious in the places where companies trade cash compensation for stock.

Employee long positions derived from stock grants are already boosts to the optimistic view of a company.

If there is no short position to determine fair pricing companies can use their already outsized advantage to take advantage of workers.