Ask HN: What the heck is happening with GameStop? • Hacker News Board

Re: Ask HN: What the heck is happening with GameStop?

#21

Post by emteycz » Thu, Jan 28, 2021, 9:14 AM UTC

joubert wrote: post #14

King-Aaron wrote: post #3

Its an imgur link I know, but this is the most succinct run-down I've seen so far: https://imgur.com/a/DCCpuZA

> So they shorted Gamestop (GME) from $20, to $10, to $4. Their greed kept compounding. They kept doing it again, and again, for months. Making billions of dollars, and almost bankrupting this company. I haven’t followed the history. In what specific way did driving the share price itself down lead GameStop to near bankruptcy?

For example Gamestop could've issued and sold new shares, instead they were forced to wait or sell them for unrealistic price.

Re: Ask HN: What the heck is happening with GameStop?

#22

Post by mav3rick » Thu, Jan 28, 2021, 9:42 AM UTC

King-Aaron wrote: post #3

Its an imgur link I know, but this is the most succinct run-down I've seen so far: https://imgur.com/a/DCCpuZA

The most elegant explanation of shorting stocks.

Re: Ask HN: What the heck is happening with GameStop?

#23

Post by aahortwwy » Thu, Jan 28, 2021, 9:45 AM UTC

hibbelig wrote: post #19

King-Aaron wrote: post #3

Its an imgur link I know, but this is the most succinct run-down I've seen so far: https://imgur.com/a/DCCpuZA

The part I don't understand is this: “Someone noted that these hedgefunds shorted 140% of all shares available.” How can you borrow a share that doesn't exist?

Borrow a share. Sell it. Borrow the same share. Sell it again.

Re: Ask HN: What the heck is happening with GameStop?

#24

Post by miked85 » Thu, Jan 28, 2021, 9:51 AM UTC

hibbelig wrote: post #19

King-Aaron wrote: post #3

Its an imgur link I know, but this is the most succinct run-down I've seen so far: https://imgur.com/a/DCCpuZA

The part I don't understand is this: “Someone noted that these hedgefunds shorted 140% of all shares available.” How can you borrow a share that doesn't exist?

Borrow a share, then let someone else borrow it from you.

Re: Ask HN: What the heck is happening with GameStop?

#25

Post by ChrisRR » Thu, Jan 28, 2021, 10:19 AM UTC

Here's the best explanation I've found https://www.youtube.com/watch?v=4EUbJcGoYQ4

From what I understand, investors shorted 150% of stocks, so when people start buying the shares and the share prices, the investors are forced to sell their shorts, thus increasing the price and the whole things snowballs

Re: Ask HN: What the heck is happening with GameStop?

#26

Post by theklub » Thu, Jan 28, 2021, 11:20 AM UTC

perl4ever wrote: post #5

I don't know, but this is not it: https://www.cnn.com/2021/01/27/politics/gamestop-stock-surge...

So I guess this is the future. Anything cnn doesn’t like they’ll compare to trump somehow?

Re: Ask HN: What the heck is happening with GameStop?

#27

Post by farseer » Thu, Jan 28, 2021, 11:26 AM UTC

King-Aaron wrote: post #3

Its an imgur link I know, but this is the most succinct run-down I've seen so far: https://imgur.com/a/DCCpuZA

Nice explanation from nytimes:

https://www.nytimes.com/2021/01/27/business/gamestop-wall-st...

Re: Ask HN: What the heck is happening with GameStop?

#28

Post by mrkramer » Thu, Jan 28, 2021, 11:52 AM UTC

Pump and dump that's what's happening.

Re: Ask HN: What the heck is happening with GameStop?

#29

Post by obrit » Thu, Jan 28, 2021, 11:56 AM UTC

King-Aaron wrote: post #3

Its an imgur link I know, but this is the most succinct run-down I've seen so far: https://imgur.com/a/DCCpuZA

Nice explanation. Thanks for the link. How does someone recognize when stock (and 140% of it) is being shorted? i.e. how did they see this opportunity?

Re: Ask HN: What the heck is happening with GameStop?

#30

Post by [deleted] » Thu, Jan 28, 2021, 12:24 PM UTC

AtlasBarfed wrote: post #11

King-Aaron wrote: post #3

Its an imgur link I know, but this is the most succinct run-down I've seen so far: https://imgur.com/a/DCCpuZA

That's fantastic. While I do think shorting is a valid counter to the perpetual sunshine inflation of the stock market, and I do agree that Nikola got what it deserved in shorting, I just love that Elon Musk probably destroyed a couple billion dollars of craven shorting with a single word tweet.

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