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GameStop Is Rage Against the Financial Machine

bloomberg.com

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Re: GameStop Is Rage Against the Financial Machine

#681

Post by majormajor »

noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

Isn't this more like "10000 people each buy a fraction of the 100 cows" and you need all 10,000 of them to coordinate extremely well to manage it?

Would even getting 1 cow from someone breaking with the big group let you break the pressure if the person you initially borrowed the cows from isn't part of the group trying to squeeze you? Return them 1 cow first, then buy it back, then return it again as the second cow you borrowed, etc? You're gonna lose on this trade, but so is everyone else, then?

Re: GameStop Is Rage Against the Financial Machine

#682

Post by gpm »

noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

> Hedge-fund cries foul. Doesn't like being beaten in it's own game.

Have any of the hedge funds actually cried foul?

Re: GameStop Is Rage Against the Financial Machine

#683

Post by thenanyu »

wolverine876 wrote: post #666
noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

Can you provide some factual basis for these claims? We can type out claims without foundation endlessly; the Internet demonstrates that well; what we need is real knowledge and facts.

the only thing resembling a "claim" is greater than 100% short interest on the security. This information is public https://www.marketbeat.com/stocks/NYSE/GME/short-interest/

As of this comment, it's 134%. So, 134 cows are borrowed from a base of 100.

Re: GameStop Is Rage Against the Financial Machine

#684

Post by sfilargi »

wolverine876 wrote: post #666
noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

Can you provide some factual basis for these claims? We can type out claims without foundation endlessly; the Internet demonstrates that well; what we need is real knowledge and facts.

Just google "GME Short Float". I would also suggest not using so strong language and almost accuse someone, without at least googling the info.

Re: GameStop Is Rage Against the Financial Machine

#685

Post by User23 »

yudlejoza wrote: post #677
noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

Thanks. Great explanation. I don't get the over 100 percent part though. Is it required to squeeze the short (i.e., beat hedge-fund at this game)? Wouldn't hedge-fund still need to purchase 100 cows even if they only borrowed once? Because as I understand, the way it works is that: - You borrow 100 cows. - You sell them immediately. - You wait for the cow price to drop. - Now you buy 100 cows, netting a profit. (but…

Well over 100% of GME’s float was short.

Re: GameStop Is Rage Against the Financial Machine

#686

Post by AlexCoventry »

wolverine876 wrote: post #666
noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

Can you provide some factual basis for these claims? We can type out claims without foundation endlessly; the Internet demonstrates that well; what we need is real knowledge and facts.

The cows are GME shares. The repeated sale of cows corresponds to short interest in GME greater than the number of available shares.

Hope that answers your question. To me, that's the central claim of the OP.

https://www.bloomberg.com/news/articles/2021-01-25/gamestop-...

Re: GameStop Is Rage Against the Financial Machine

#687

Post by thenanyu »

yudlejoza wrote: post #677
noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

Thanks. Great explanation. I don't get the over 100 percent part though. Is it required to squeeze the short (i.e., beat hedge-fund at this game)? Wouldn't hedge-fund still need to purchase 100 cows even if they only borrowed once? Because as I understand, the way it works is that: - You borrow 100 cows. - You sell them immediately. - You wait for the cow price to drop. - Now you buy 100 cows, netting a profit. (but…

You don't need to borrow more than 100 cows, the short squeeze of Porsche/VW had a much lower short interest because the shares were all tied up in institutional holdings.

Re: GameStop Is Rage Against the Financial Machine

#688

Post by User23 »

admax88q wrote: post #315
AdmiralAsshat wrote: post #20

> These points doubtless make me appear to be a complacent shill for the financial industry, talking down to the rubes. For the record, I’m still angry about the way workers were ripped off in Britain more than three decades ago, and about the way the little guy ended up bearing the brunt for the financial implosions of 2000 and 2008. But it looks horribly to me as though the same thing is going to happen again — and…

> The "little guy" refers to the Reddit traders that are making a killing right now, with the expectation that eventually the stock price will crash again. The reddit traders are only making a killing if they're selling these inflated positions. At some point somebody will be left holding the bag, odds are it will be a bunch of people from wallstreetbets and other retail investors that are late to the party. There's…

The short sellers are the ones holding the bag. Granted the last wave of fools to join the party won’t do so well either, but this is a wealth transfer from institutional to retail investors.

Re: GameStop Is Rage Against the Financial Machine

#689

Post by boringg »

User23 wrote: post #685
yudlejoza wrote: post #677

Earlier quoted context omitted.

Thanks. Great explanation. I don't get the over 100 percent part though. Is it required to squeeze the short (i.e., beat hedge-fund at this game)? Wouldn't hedge-fund still need to purchase 100 cows even if they only borrowed once? Because as I understand, the way it works is that: - You borrow 100 cows. - You sell them immediately. - You wait for the cow price to drop. - Now you buy 100 cows, netting a profit. (but…

Well over 100% of GME’s float was short.

150%

Re: GameStop Is Rage Against the Financial Machine

#690

Post by dheera »

noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

> Then they borrow them again, and sell them once more for 90c

IANAL but I believe this is actually illegal and if so the hedge funds are in the red for doing this

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