41–50 of 312 posts
Earlier quoted context omitted.
I think the more interesting part of the story (if I'm reading it right) is he paid $5000 to completely own a company with millions in assets.
Not sure about this case, but owning all trading shares doesn't mean owning the company. A company may have only 2% of its value as public shares and the rest owned by the company itself.
A stock can have short interest greater than 100% without any naked shorting.
How is this possible? The textbook definition of a "short sale" is that someone borrows stock and then, literally, sells it short. The buyer of the stock is free and clear to do whatever they want with the stock, including re-lend it for another short sale. Wikipedia has a good primer on how this works: https://en.wikipedia.org/wiki/Short_(finance)
This has created a lot of confusion on WallstreetBets, where many participants have come to believe that Gamestop's short interest of 113% means that there are 13% more shares shorted than long positions to cover. It's not true, though, because the long interest is always greater than the short interest.
With GME there isn’t evidence of naked shorting. There are legitimate ways for shorts to be greater than the float. See https://seekingalpha.com/instablog/6850771-bachhandel/554975... for an explanation
Note: Shorting more than 100% of shares outstanding does not imply that there is naked shorting happening. You can re-borrowing the shares someone shorted and it happens.
Although, I think you'd be hard pressed to define the gray area of (possibly infinite) fractional share ownership and naked short selling.
Block chain type code can prevent the excess being issued.
Basic rule of thumb is any company where the management is whining about shorts, and about naked shorts in particular, is garbage. The reason companies get shorted over 100% of outstanding shares is because everybody agrees they are garbage. Not a conspiracy. Go look at the stock of the absurd company in question after you read this article.
Summary: Every so often, someone gets very steamed about short selling, often with no real reason. Back in 2005, someone got very steamed about short selling, and then got a journalist to write a somewhat confused article about it. It's not clear anything was actually wrong then, but in any case, the rules have been changed a few times since then, so there doesn't seem to be any obvious relevance to current times. It…
Earlier quoted context omitted.
Fractional reserve banking in the real economy is utterly irrelevant thanks to the FDIC backstopping a run. In the last [edit: 88] years nobody had lost a single penny to a bank run or default including 2008s WaMu default thanks to the FDIC. Crypto fractional reserve like tether has no backstop and that’s a completely different beast. It’s what exacerbated the Great Depression. As with all blockchain unless the state…
Short-selling shares is basically a form of fractional reserve banking. A short squeeze is essentially equivalent to a bank run. Where is the FDIC helping to backstop a run on shares?
Wow, how has nobody noticed this before? This looks seriously rotten: > Michigan-based entrepreneur Robert Simpson decided to see what would happen if he bought the entire stock of one company. Using a single broker, within a couple of days Simpson had paid a little over $5,000 for 1,285,050 shares in OTC bulletin board property-development company Global Links. According to Simpson, these shares were delivered into…
Basic rule of thumb is any company where the management is whining about shorts, and about naked shorts in particular, is garbage. The reason companies get shorted over 100% of outstanding shares is because everybody agrees they are garbage. Not a conspiracy. Go look at the stock of the absurd company in question after you read this article.
How can you legitimately short a company for more than 100% of all shares in the market? The short has to be covered by a real share.