Being Short and Right Can Be Bad

Longfin.

Longfin Corp. is a company that emitted some nonsensical noises about cryptocurrencies and blockchain and thereby briefly became worth than $6 billion. There were two critical bits of luck or skill that allowed Longfin to get that valuation. First, it emitted its noises about blockchain at exactly the time when everyone wanted to hear noises about blockchain (last December, when it went public). Second, it had (and has) an extremely limited public float: It has 74.5 million shares outstanding but sold only 1.14 million of them in its initial public offering, though it was also allegedly doing some illegal unregistered share sales which I guess, technically, would increase the float. But the point is, people wanted to buy Longfin shares because they were seduced by the blockchain noises, and there weren't that many shares to buy so the price of those shares went up a lot, and then you had to multiply that price by the much larger number of Longfin shares that weren't available to buy to get its comically inflated market capitalization.