*Really* bad week for SCO

[Ian Goldberg]

On Mon, Dec 08, 2003 at 05:33:16PM -0500, David J Patrick wrote:
> That begs the question; are there any investment wizards in the group
> who know how to "short" a stock and, thus" reap the reward for
> predicting SCOs (and soon enough M$s) swan dive ?

Shorting a stock is trivially easy.  Just go to your friendly online
broker website, and sell some.  [Note: not all stocks are allowed to be
shorted, but I don't think SCOX is one of them.]

Shorting is nothing more than owning a negative number of shares of a
stock.  [Technically, owing a number of shares of a stock to some
unspecified person, but you don't care who that person is.]  When you
sell 100 shares of SCOX at $15, you end up with $1500 and -100 shares of
SCOX.  If SCOX drops to $5, you buy back 100 shares of it for $500, and
you've made a $1000 profit (and now have 0 shares of SCOX).

But if instead, unbeknownst to everyone, SCOX has been using the lawsuit
as a smokescreen to hide its super-secret research efforts into
real-time widget operating systems, and announces the Best Thing Ever (TM),
its stock price may jump to $50, and if you hold -100 of them, you'll
now have to pay $5000 to close out your position, and you're in the hole big
time.

   - Ian
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