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THE COMPLETE CROWD SHORTING GUIDE

A Hesitant Step Towards a Financial Avant-Garde

THE COMPLETE CROWD SHORTING GUIDE

The publication of this work was supported by Former West, Berlin. Short Stories Press Berlin, Germany. (cc) 2013 This text is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Unported License. By,  Alice Escher, Boaz Levin, Stefan Trger, Till Wittwer.

A Money on Monday production.

MoneyonMonday, L.P. (MoM) is a roughly assembled art collective which is in

the business of buying and selling securities and other financial instruments, as well as making, buying displaying and selling art. MoM currently has a short position in several art related firms, such as Sothebys Ltd. (Sothebys) common stock. We do not own any options on Sothebys common stock. MoM will profit if the average trading price of the slate Art Index declines and will lose money if the average trading price of common stock of within the slate art index increases. Mom may change its views about or its investment positions in art at any time, for any reason or no reason. But it shall no change its views regarding the art world, the art market, artists, and artistic practices. MoM may buy, sell, cover or otherwise change the form or substance of its Art world investment. MoM disclaims any obligation to notify the market of any such changes. The information and opinions expressed in this site (the Presenta tion) is based on publicly available information about the art world. MoM recognizes that there may be non-public information in the pos session of various actors within the art world or others that could lead Sothebys or others to disagree with Moms analyses, conclusions and opinions. This site includes forward-looking statements, estimates, projections and opinions, Such statements, estimates, projections and opinions may prove to be substantially inaccurate and are inherently subject to significant risks and uncertainties beyond MoMs control. Although MoM believes the site is substantially accurate in all material respects and does not omit to state material facts necessary to make the statements therein not misleading, MoM makes no representation or warranty, express or implied, as to the accuracy or completeness of the Presentation or any other written or oral communication it makes with respect to the art world, and MoM expressly disclaims any liability relating to the Presentation or such communications (or any inaccuracies or omissions therein). Thus, shareholders and others should conduct their own independent investigation and analysis of the Presentation and of Sothebys and other companies mentioned. The content of this site is not investment advice or a recommendation or solicitation to buy or sell any securities. Except where otherwise indicated, the Presentation speaks as of the date hereof, and MoM undertakes no obligation to correct, update or revise the Presentation or to otherwise provide any additional materials. MoM also undertakes no commitment to take or refrain from taking any action with respect to Sothebys or any other company. As used herein, except to the extent the context otherwise requires, MoM includes its affiliates and its and their respective partners, directors, officers and employees.

TABLE OF CONTENTS DISCLAIMER.................................................................7 A CRISIS IS A TERRIBLE THING TO WASTE...........8 THE WAY IT WORKS....................................................10 SHORT SOTHEBYS......................................................11 CROWD SHORTING.....................................................13

A crisis is a terrible thing to waste



Paul Romer

Normally, when investing in stock, one buys a specific product hoping it will rise in value. If the value rises and the stock is sold, a profit is made.

Shorting in a nutshell

If the value drops and the stock is sold, money is lost. Shorting inverts this logic, turning it on its head: If the value drops and the stock is sold, a profit is made.

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Betting against the market or against the value of a specific commodity.

When Shorting, one profits from the decrease in value of a stock.

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THE WAY IT WORKS


Shorting in five easy steps. 1. Borrow a stock from a broker. 2. Sell the stock you borrowed. 3. (Winning scenario) If the price of the stock falls, buy the same amount of shares back for less money, say, a day later. 4. Return the loan to the broker and score a profit. This is called to cover. 5. (Losing scenario) If the price of the stock rises, one is forced to cover at a loss.

But you cant short art, many of you might be thinking.

Youre right. One cannot have a short position in art, relating to specific artworks, but what one can do is short publicly traded art related companies.

Companies such as Sothebys or Artnet.

In other words, a successful short depends on the ability to predict, or speculate on, a fall in value.

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The company we want to short first is Sothebys.


Why go for this company first? Sothebys stock is extremely volatile and thus vulnerable. It serves as an indicator of market overconfidence in general and is indicative of forthcoming crisis in the art market. Sothebys plays a determinate role in the art markets ups and downs, and when its stock price drops it has an immediate effect on the rest of the market.

Our plan is to engage in an act of Crowd-Shorting.


The price for one share of Sothebys stock moves around $39 at the moment (March, 2013). Shorting can only be done in whole lots, that means we will have to borrow a number of stocks dividable by a hundred. If the smallest amount of stocks we would have to borrow in order to be able to short is 100, that means we need a minimum of $3.900 or roughly 3000.

Of course the more, the better.


Timeline of Sothebys stock development since 1989

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For more information please visit our website

shortingart.com
and our shop

shortingart.bigcartel.com
Folllow us on @shortingstories

(2013) SHORTINGART.COM After El Lissitzky