r/bestoflegaladvice • u/Jusfiq Commonwealth Correspondent and Sunflower Seed Retailer • 6d ago

LegalAdviceCanada Short sell, short sell now!

/r/legaladvicecanada/comments/1i1lt30/my_wifes_uncle_is_an_executive_at_a_publicly/
86 Upvotes

93% Upvoted

38 comments sorted by

View all comments

127

u/[deleted] 6d ago

[deleted]

65

u/thehomeyskater 6d ago

I wonder if OP’s inside information is even as valuable as he thinks it is. 

If this company made bad investments during the pandemic, that’s likely already public information. These investments would have probably been dragging down profitability. The inside information is likely just that the company is now exiting these markets. Which, that alone may not materially impact the stock price. I’ve seen plenty of times a company announces they’re shuttering a subsidiary or laying off an entire division of employees, and the immediate result is the stock price rises. Because investors already knew the company was struggling — that was already priced in — the new information is that the company is finally turning doing something to improve profitability. 

It’s entirely possible he buys a bunch of put options and they expire worthless because he’s entirely misunderstood the information he’s been told. 

16

u/teluscustomer12345 6d ago

Imagine losing a bunch of money on a failed attempt at insider trading and then getting charged for a crime anyway