831–840 of 1001 posts
Earlier quoted context omitted.
Couldn't they close their position and still have the short interest go up because of other investors opening new positions? If these institutions are going on record as closing their positions, when they actually havent, aren't they committing some sort of fraud?
Also the borrow fee for shorts is insane now, like 23%.
Earlier quoted context omitted.
> Hedge-fund cries foul. Doesn't like being beaten in it's own game. Have any of the hedge funds actually cried foul?
yeah - this is just a squeeze. they happen. any sophisticated player in the market will recognize this as a normal (though not common) thing. the weird and new part is that the people cornering the market are a horde of retail traders who are colluding in the open, but in a way regulators probably don't have tools to address.
random people post analysis and others decide if they agree. Even if there were people saying to buy to cause a short squeeze, that is also perfectly fine. Institutions trade on momentum all the time, that is basically the entire HFT sector. If anything, the people on reddit are even less egregious that wall street because they are doing it in a public forum, where institutions do it in secrecy during three martini lunches or "idea dinners"
Earlier quoted context omitted.
> Hedge-fund cries foul. Doesn't like being beaten in it's own game. Have any of the hedge funds actually cried foul?
Since no one replied with anything substantive yet, I looked around a bit to try and answer my own question. Nothing I've found from a hedge fund is even remotely close to crying foul... but here's a collection of quotes Citron research (not a hedge fund, but one of the parties that had a large short position) put out the following video generally supporting redditors and wsb: https://www.youtube.com/watch?v=yS4yPsma…
That sounds like the kind of thing a GM says a week before they can a couch. If you actually HAVE great confidence, you don't have to say you do. Actions speak.
Earlier quoted context omitted.
The second that the shorts have covered the price isn't going to drop to $90, it's going to drop back to $20 and most of the WSBers who were holding out for $2000 will lose their shirts. The shorts are going to lose, no doubt. But once they've lost, the stock price is probably $20. A lot of WSBers are going to be holding stock at that point, and possibly on margin. And that stock is going to be a crappy retail stock.…
I sold a GME call option with a strike price of $320 and expiration in July today for $200. A pump and dump by novices is easy money if you know how to play it. Everyone knows this is going to crash, the question is when?
Earlier quoted context omitted.
> 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. This is a common misconception, but fundamentally wrong. Every short sell has an equal but opposite buy. Therefore every share shorted creates a new synthetic long share. Alice owns 100 shares. Bob borrows 100 shares from Alice, then short sells them to Chuck. There are now 200 shar…
I'm curious, if this is the case, why doesn't the market realize this and short sell like crazy right now, given it's clear the price isn't sustainable. That would then generate more negative price pressure and generally keep the whole thing from happening in the first place, no?
Earlier quoted context omitted.
Since no one replied with anything substantive yet, I looked around a bit to try and answer my own question. Nothing I've found from a hedge fund is even remotely close to crying foul... but here's a collection of quotes Citron research (not a hedge fund, but one of the parties that had a large short position) put out the following video generally supporting redditors and wsb: https://www.youtube.com/watch?v=yS4yPsma…
> The only statement I can find from Citadel (hedge fund that invested in Melvin) is from their CEO, saying "Gabe Plotkin and team have delivered exceptional results over the history of Melvin. We have great confidence in Gabe and his team". That sounds like the kind of thing a GM says a week before they can a couch. If you actually HAVE great confidence, you don't have to say you do. Actions speak.
I mean, the action here was Griffin's company investing two billion dollars into Melvin, so that sort of lends credence to the idea that Griffin does have confidence in Gabe and his team.
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…
> 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. This is a common misconception, but fundamentally wrong. Every short sell has an equal but opposite buy. Therefore every share shorted creates a new synthetic long share. Alice owns 100 shares. Bob borrows 100 shares from Alice, then short sells them to Chuck. There are now 200 shar…
A cursory look at /r/WallStreetBets suggests this is statement is mostly wrong. You're suggesting the price is rising due to speculation/hype, but this phenomenon is fundamentally different. The reason for this rally is clearly activistic in nature, an attempt to bankrupt the hedge funds who engage in vulture capitalism.
Some might be greedy, but many aren't trying to make money and greed wasn't the cause of the rally. At the end of all this, there will absolutely be a redistribution of money, but even if the "diamond hands" investors walk home with a loss, they (hopefully) will have strangled a few hedge funds far greedier than the speculators who are taking advantage of this market dynamic.
This is far from a "classic bubble", driven by over exuberance, or a classic squeeze, driven by greed. This is an example of a new phenomenon that will change how hedge funds operate in the future.
Earlier quoted context omitted.
“In the short run, the market is a voting machine but in the long run, it is a weighing machine.” - Ben Graham This mostly holds true depending on you define 'long run.'
It seems "the long run" in the context of this quote is getting longer over the past 20 years (or more), with high multiples and companies that won't return the capital invested in them for many, many years, even in optimistic scenarios. Does that mean the weighing part is becoming less important, and the voting part more so?
Earlier quoted context omitted.
> 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. This is a common misconception, but fundamentally wrong. Every short sell has an equal but opposite buy. Therefore every share shorted creates a new synthetic long share. Alice owns 100 shares. Bob borrows 100 shares from Alice, then short sells them to Chuck. There are now 200 shar…
I understand how this short sale "chaining" can result in a stock being over 100% shorted without any illegal naked short selling taking place, but why wouldn't this chaining not result in a short squeeze and therefore bid up the price? I'll walk through an example and maybe someone can point out what I missed. Let's say we have a market for some stock. There are only 5 traders (Alice, Bob, Chuck, Dave, Eli) and 100…
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…
> 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. This is a common misconception, but fundamentally wrong. Every short sell has an equal but opposite buy. Therefore every share shorted creates a new synthetic long share. Alice owns 100 shares. Bob borrows 100 shares from Alice, then short sells them to Chuck. There are now 200 shar…
If only. This has no signs of being "classic". People on WSB realize that if many people purchase and hold on to GME stock for long periods of time, there will be an increase in stock price. If/when this occurs, this increases the annual cost for GME short sellers through increases in both Margin Interest and Stock Borrowing Costs, which is a direct percentage of the GME stock price. This depends on the short type, but either by a certain timeframe or if the lender desires, short sellers will be forced to buy back their GME stocks. Buying back GME can also be forced through a Margin Call. When this happens, you will see a short squeeze.