High Short Interest Stocks • Hacker News Board

Re: High Short Interest Stocks

#131

Post by dclowd9901 » Fri, Jan 29, 2021, 5:01 AM UTC

plaidfuji wrote: post #24

torben-friis wrote: post #6

Earlier quoted context omitted.

I actually saw that and wondered what are the chances that I wake up tomorrow with that stock high as hell as a redirection from gme buyers...

The current candidates being floated by WSB are Nokia, AMC, Ericsson and Blackberry. Even though Virgin Galactic is second on this list, my impression of the WSB crowd is that they look for companies that are both high-short-interest and some nostalgic notion of being “worthy of saving”... Virgin would probably not fit their MO given the high-profile billionaire owner...

> and some nostalgic notion of being “worthy of saving”

This is the biggest aspect I don't understand. People _hate_ Gamestop, the store. But to hear them talk about it on WSB, it's like they were best friends the entire time.

Re: High Short Interest Stocks

#132

Post by mike00632 » Fri, Jan 29, 2021, 5:01 AM UTC

konjin wrote: post #83

apaprocki wrote: post #63

Earlier quoted context omitted.

Re: 100%, yes for companies with a reasonable minimum market cap. The one thing not really being explained enough is that short interest as reported through the exchanges is reported bi-monthly. You can imagine that with current events that is an eternity to wait for the next update.

Also worth noting is that these are the official channels, there are plenty of dark pools where there are no rules but all sorts of exotic instruments are being traded in volumes that boggle the mind. I worked at one quite some years back.

The way you describe it sounds super exciting. It's like a trading speakeasy.

Re: High Short Interest Stocks

#133

Post by mike00632 » Fri, Jan 29, 2021, 5:06 AM UTC

akira2501 wrote: post #62

supernova87a wrote: post #33

But the question is, how do you mobilize enough people to act on something that causes market movement? As I understand it, the new thing wasn't lots of short positions, it was that a bunch of people coordinated to make something dramatic happen. Isn't that the problem?

> Isn't that the problem? Shorts have finite payoff for infinite risk. If you buy into shorts when the interest is above 100%, you _immediately_ open the door for this type of counter position to become rational. Is it really a problem that a bunch of people on a message board collectively decided to act on a rational position?

The thought of GameStop stock going up to infinity (and never coming down) doesn't seem rational.

Re: High Short Interest Stocks

#134

Post by option » Fri, Jan 29, 2021, 5:09 AM UTC

mike00632 wrote: post #128

optimiz3 wrote: post #123

Earlier quoted context omitted.

Works until it doesn't. Exhibit TSLA.

Give it a few years. I'm still skeptical that Tesla should be worth more than all the other auto companies combined.

In addition to making cars people want, Tesla also makes their own software, chips for AI inference and training, batteries, charging network, home energy solutions (solar+ battery). All of these not just related products but a cohesive strategy with sum much equal to its parts.

Which other automaker does that?

Edit: Having said that, I bought them long ago at their IPO price and sold long ago when they were around 300 pre-splits. The current valuation is indeed a little risky.

Re: High Short Interest Stocks

#135

Post by thrwn_frthr_awy » Fri, Jan 29, 2021, 5:09 AM UTC

dcolkitt wrote: post #108

Fair warning. Buying stocks with high short interest is, over the long run, a terrible investment strategy. Mountains of academic research has consistently found the most heavily shorted stocks to significantly underperform the market[1] (to the order of 10% per year). Heavily shorted stocks tend to be the companies with the most negative cash flow shocks[2], low quality earnings statements[3], negative earnings revi…

It turns out an online community can stay irrational longer than a hedge can solvent.

Re: High Short Interest Stocks

#136

Post by mike00632 » Fri, Jan 29, 2021, 5:19 AM UTC

IG_Semmelweiss wrote: post #100

jeffbee wrote: post #28

Earlier quoted context omitted.

The articles of incorporation dictate what a company needs to do to issue shares. GameStop, for example, requires a vote of the majority of voting shares (of which there are 50 billion votes among the preferred shareholders and 300 million votes among the common shareholders). That said GameStop is authorized for 300 million common shares and there are only 70 million outstanding according to this table so if their c…

If they wished a quick way to bankruptcy, that would certainly be it. Make enemies and robbing both your customers and your investors in 1 single move. I don't think there has been anything as foul in history, has there?

Having a high stock price does altogether nothing for the company if they can't sell stock. Similarly, having a low stock price doesn't bankrupt a company.

Re: High Short Interest Stocks

#137

Post by ahepp » Fri, Jan 29, 2021, 5:22 AM UTC

agar wrote: post #114

ahepp wrote: post #81

Earlier quoted context omitted.

FT reported it as well. Not bulletproof, but I think they have a bit more reputation than CNBC. Perhaps I'm naïve, but I think to lie about such a thing would pretty clearly fall afoul of the law?

An official statement would run afoul of the law, yes. A concerted effort to whisper to many people in an effort to manipulate the market would be fairly easy for the SEC to uncover in an investigation. A single false statement or two, said to a reporter as a confidential source, would be much more difficult to prosecute. The reporter might not willingly give up their source, and the company could deny everything, fi…

FT has Citron on the record saying the position is closed. Muddy Waters is on the record saying the position is greatly reduced. Melvin has "people familiar with the matter".

Re: High Short Interest Stocks

#138

Post by lxbky » Fri, Jan 29, 2021, 5:29 AM UTC

dcolkitt wrote: post #108

Fair warning. Buying stocks with high short interest is, over the long run, a terrible investment strategy. Mountains of academic research has consistently found the most heavily shorted stocks to significantly underperform the market[1] (to the order of 10% per year). Heavily shorted stocks tend to be the companies with the most negative cash flow shocks[2], low quality earnings statements[3], negative earnings revi…

[deleted]

Re: High Short Interest Stocks

#139

Post by Triv888 » Fri, Jan 29, 2021, 5:32 AM UTC

lxbky wrote: post #138

dcolkitt wrote: post #108

Fair warning. Buying stocks with high short interest is, over the long run, a terrible investment strategy. Mountains of academic research has consistently found the most heavily shorted stocks to significantly underperform the market[1] (to the order of 10% per year). Heavily shorted stocks tend to be the companies with the most negative cash flow shocks[2], low quality earnings statements[3], negative earnings revi…

[deleted]

Don't put all of your eggs in the same basket.

I have no clue how anyone, especially edge funds, could get majorly impacted by just one stock moving the wrong way.

I have stocks in my portfolio that move 25 to 50% the wrong way almost everyday and I still get about 1% overall gain daily in this bull market (which is probably not great in this economy).

Re: High Short Interest Stocks

#140

Post by blondie9x » Fri, Jan 29, 2021, 5:32 AM UTC

Why the hell would iRobot have 40% short interest? I love my iRobot. I swear to you if they make these things talk or take commands like Siri iRobot will be the ultimate consumer electronic item.