Short-selling conspiracy documentary of the day

By Felix Salmon
August 13, 2009

Oh yes: there’s now a documentary, featuring a lot of talking heads wearing bluetooth headsets, all about people who bought stock in Sirius XM because it was going up and then lost money because it went down. Of course, it wasn’t their fault. Blame instead the evil short sellers! And do be sure to give the filmmakers $15.99 for their DVD. If they sell enough of these things, they might be able to recoup their losses!


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Isn’t Sirius XM one of the most shorted stocks in the market? That’s what the movie said. I thought it was well done. I did not know how short selling worked before hearing the Sirius XM story.

It seems from the trailer that this movie is more about the fact that today’s “prosumer” investor can’t read balance sheet information than it is about short sellers. I had a bunch of friends buy the stock because of Mel Karmazin and Howard Stern’s involvement. However when I looked at the cash flows, marketing dollars required to grow the subscribers and the debt load it was clear that this was a horrible *equity* investment. The idea that this company was taken down by short sellers is ludicrous. It was taken down by an overbearing capital structure. I’m sure the outrageous amounts they spent on content development didn’t help either.

Posted by Jake | Report as abusive

I hope you watch the entire movie

Richard, Narrator – Stock Shock