Shorting Facebook?

i think this might be a generally good idea, but i personally would still wait a little since i believe that stock prices may rise further in the (near) future

i think that the social media bubble will burst at around 2019/2020 coz most companies in this field are overvalued - just look at the snapchat IPO.
i even think snapchat has the chance to make a lot of investors aware of this bubble and to slowly start to make it burst - even though i expect the huge burst to happen at around 2019/20

>>1827605
just short it. you are not smart enough if you have to ask biz for advice on your puts

>>1827699
starting to short facebook now is kinda suicide

>>1827709
hell be ok :^)

>>1827699
I just thought puts seemed more attractive as my downside risk is capped and volatility is low at the moment...I mainly wanted to get anons opinions on what shape the business and share price would be come 2019 /2020

>>1827694
Thanks anon, definitely agree re:snapchat

Usually during the height of a bubble there is a corresponding spike in M&A and IPO activity - we are certainly seeing quite a lot of both recently in this sector

>>1827742
be aware with puts, if the stock price doesn't move in your direction they can fuck you pretty badly. i'd also suggest to just short the stock when it's time. this way you'd also be more flexible with your money/ other investments because shorting doesn't bind capital as much as put options do imo.

regarding the share price for 2019/2020 i don't really dare to make any predictions, but i think it will be significantly higher than it is now (like 30 to 50%)

i really can't see any change of business model/ implementation of new + important features for the future, but i might be wrong since i don't really know a lot about facebook's plans for the future and their financials

Snapchat is gone for sure. Facebook is harder to say.

>>1827717
maybe, but fortunately it looks like op is kinda reasonable and won't fuck himself up

>>1827799
just look how quickly myspace etc became obsolete after Facebook became popular, this can happen easily again, even if the size and relevance of social networks have changed since then.

>>1827807
I wasn't on Myspace but wasn't that mostly teenagers being stupid? Facebook is more than that. I see people talking to their grandmothers. I'm not sure what else they have got going on but it's definitely more than Snap.

>>1827903
i agree with you on snapchat and that Facebook is much more than myspace was, but considering how fast paced trends in the interner nowadays develop it may become sometime in the (near) future obsolete if there was some kind of cool, better social network becoming popular - however i agree that this is somehow hard to imagine and even unrealistic atm, but nevertheless and opportunity.

one should also look at how many people on this planet have internet access atm which is like less than half of the population so if the rest gets internet access we might see a shift in internet trends and other social networks emerge + become bigger than facebook - although this will probably take quite a little longer than OPs timeframe of shorting FB is.

nevertheless i think there really is a social media bubble and that it will burst in some time + hit FB's stock price pretty hard but it won't be killed by that but rather by the general development of internet trends as i pointed out

>>1827605
>>1827709
Shorting is bad. Long put is a solid choice. Keep in mind the premiums you will have to pay this far out though

>>1827797
It's not just "puts". It's specifically a long put options spread, which has the payoff OP posted in his pic

>>1827960
doesn't all that depend on the timeframe of the trade? if OP was certain that FB will drop soon shorting was better than a long put.

if OP had a longer timeframe then a long put would definitely be the better option even though the premiums could make the trade less profitable.

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>>1827960
>it's not just "puts"

Long puts will still get you a quick margin call from your broker if the underlying stock price starts climbing above where your puts are placed. They should really only be used in a portfolio where you hold the underlying equity in a net long position and also hold the long puts to hedge against exposure to downside risk (though you want to hold the puts for a extended period of time, hence "long puts," so you need sufficient capital to pay any fees that entails).

>>1827977
Timing and size of the downtick when the underlying stock price drops are the two most important factors in play here. You're correct in what you said in that OP should just short if he thinks the position will be profitable in the short term but if he's looking to a few quarters in the future for the decline in price he should deploy a series of long puts with strikes (a whole lot or just a little depending on your appetite for risk) below the current trading price.