Here's a recent financial story I had completely missed.

Looks like a treasury company shitcoin graph!

Background story is two hedge funds owned 69% (108% via swaps, derivatives etc) of the story... and short sellers shorted about half the outstanding supply... somehow. (I can't get the math to math up, but fiat rehypothecated shares and adjacent instruments are a little wacky anyway.)

Price went bananas. At the peak, you'd think
a) the owners would sell,
b) Avis itself would print shares like crazy, in a process we're familiar with from Bitcoin treasury land. #1292636

TURNS OUT regulatory barriers prevented basically the only people who could sell shares:

Avis was in a blackout period: Its quarter ended March 31, it announced earnings this morning, and for the entire short squeeze it had material nonpublic information and could not legally trade.
SRS, which owns about 49% of Avis and has a board seat, was in the same boat: It had inside information about the quarter, and has an agreement with Avis not to trade during Avis’s blackout periods.
Pentwater is not exactly an insider — no board seat, just a big outside shareholder — and so could theoretically sell. But a different sort of insider trading law constrains Pentwater, the “Section 16 short-swing profit rules.” Section 16(b) of the Securities Exchange Act restricts stock trading by certain “insiders,” including not just directors and officers but also 10% shareholders, which Pentwater is.

The latter dudes were less honest. Traded anyway... juicy prices, who could resist?! #1480191

Here are Pentwater’s disclosures from yesterday. (There are six of them: a lot of trades.) It did sell a ton of stock, [3] largely late last week, at prices in the $200s to $700s; Avis seems right to conclude that Pentwater’s selling is what popped the balloon. “I have not gone through all the math extensively,” noted an analyst on the earnings call, “but it does look like this is an incredible trade; they may have made $1 billion of profit or something like that.” 

"But they have to give it back. Or, rather, they have to give some of it back.""But they have to give it back. Or, rather, they have to give some of it back."

SEC Section 16 states they have to give the profits back... somehow. But the company says it was a separate entity of itself, since it "manages various funds and separate managed accounts."

You have the odd situation that Pentwater bought some Avis stock in some of its funds, the stock ripped up, and then Pentwater sold Avis stock out of its other funds. The investors in the selling funds (who got as much as $700 per share) must be thrilled; the investors in the buying funds (who presumably still own the stock at like $182) might be less thrilled.

Great Trade!Great Trade!

ALSO, book publishing story. #1479890

You just issue shares in your book?!

The way books work is roughly that a publisher gives an author some money (an “advance”) for the rights to publish a book, and then the publisher tries to sell as many copies of the book as possible, and the publisher and the author split the profits from those sales. That is: The book is a business with a speculative stream of future cash flows, and the publisher invests cash in that business in exchange for a claim on those cash flows. The book is like a securitization, or at least a security. The book is a startup, the author is an entrepreneur and the publisher is a venture investor; if it works out then both the entrepreneur and the publisher get rich.

obviously:

if you really wanted to you could imagine applying, you know, the whole apparatus of finance. Syndicated investment rounds in which a dozen publishers take stakes in the book. A liquid secondary market for book stakes. The New York Book Exchange Individual investors buying stakes in books they like. Short selling. Zero-day options. Index funds. Whatever, man.

yeah, beautiful

If I ever get around to write a book, I'll definitely do this. (@TotallyHumanWriter and @realBitcoinDog will keep me honest)

"Selling shares to retail is not a perfect replacement for the publishing industry, but it is fun to think about.""Selling shares to retail is not a perfect replacement for the publishing industry, but it is fun to think about."

Hashtag, in fiatland we securitize everything.

newsletterhunt: https://newsletterhunt.com/emails/295160