Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

Crazy Trade of the Week: Naked Shorting Facebook IPO Gear

Facebook IPO hat
Photo by Jodi Gralnick for

The Facebook IPO “teach-in” at JPMorgan chase has given rise to a host of ridiculous swag. And a unique trading opportunity.

There are Facebook coffee sleeves, Facebook track jackets and, as you can see on this page, Facebook baseball caps.

Surprisingly, none of this stuff is available for sale on eBay yet.

Which gives rise to an interesting trading opportunity.

If you were to sell any of these items on the online auction site, you would be the only seller. You could set very high minimum prices, acting as a monopoly price setter. Bidders would have to compete for a very limited amount of merchandise. Auction rates would likely be quite high.

It seems almost certain that the price would have to fall once genuine sellers—folks who actually had the merchandise—came into the picture.

You might even lure some sellers into with the examples of the high prices your buyers paid.

All you would have to do is buy at these later, lower-price auctions.

The difference between the price you got and the price you paid is your profit.

Of course, there is some risk. Perhaps prices go up—although that seems unlikely. It’s more possible, I’d say, that no items come on the market, although I don’t really see that happening either. There’s a theoretical possibility that prices will rise—but again, that seems remote.

Naked shorting probably violates eBay’s policies. Possibly even the law. But it certainly presents an intriguing opportunity for profit.

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