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High Short Interest Stocks

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Re: High Short Interest Stocks

#91

Post by paxys »

jeffbee wrote: post #21
nateberkopec wrote: post #16

What's the reason for all the shorting on Fubo? You would think that a streaming business would be attracting far more long interest right now.

Well let's see: they lost $250 million on revenue of only $61 million, their most recent quarter had their largest loss ever, their most recent year had their largest loss ever, there's no prospect that this business will ever turn a profit again. On paper it appears to be among the worst businesses of all time.

So sounds like..an average multi-billion dollar silicon valley startup.

Re: High Short Interest Stocks

#92

Post by Jkvngt »

alasdair_ wrote: post #70
epistasis wrote: post #65

Earlier quoted context omitted.

And further, these were large sophisticated investors that should have known when to get out and take their losses (as Melvin eventually did). For us small time folks we can do a limit short so that our risk exposure is limited.

Is there proof Melvin actually got out? All I saw was a “source” on CNBC. EDIT: This is the story: https://www.cnbc.com/video/2021/01/27/melvin-capital-sells-o... It's full of plausible deniability phrases like "from what I understand" and it's very much a game of telephone. They could easily say "when I meant we were out of the stock, I meant that we had covered some of our positions" or similar. I can't find a non-…

There is no actual proof that Melvin got out. No.

Re: High Short Interest Stocks

#93

Post by paxys »

xwdv wrote: post #10

I’m surprised this sort of attack has never be carried out before. Is it just because no one ever thought there’d be a crazy army of retail investors that could be so coordinated and so irrational and large enough to matter?

Short squeezes and similar battles happen all the time. Normally it is one Wall Street behemoth vs another, and the winner gets lauded as being a genius. The Herbalife saga is a good recent example. The only difference this time around is that there is a completely new and unknown outside entity involved. The average retail investors and consumers, social media, mainstream news etc. have all just never been this deeply involved.

Re: High Short Interest Stocks

#95

Post by imim03 »

ironSkillet wrote: post #80
smalter wrote: post #76

a new app where you can trade high short interest stocks as a fund https://sqze.trydoji.com/

If they actually explained what their exit strategy was I would be more inclined to consider investing. But interesting idea.

product is super early so lacking features, but sounds like getting a one pager from the fund creator would be useful?

Re: High Short Interest Stocks

#96

Post by bo1024 »

faizshah wrote: post #66
myroon5 wrote: post #7

Finviz also has this information in addition to many other metrics: https://finviz.com/screener.ashx?v=131&o=-shortinterestshare

There’s also this list where they correct for “synthetic longs” and show that some of these have dramatically lower short int %: https://mobile.twitter.com/S3Partners/status/135485118653339... I won’t pretend to fully understand this but the analyst answered a lot of FAQs on this data on his Twitter: https://mobile.twitter.com/ihors3 What differs in this data: “S3 data is shares shorted, our competition's data is bro…

I'm no analyst, but this still looks really bad to me.

If you buy a random share, there's a 55% chance that share is currently loaned out and a short-seller has to buy it and give it back. There's a 55% chance that share the short-seller buys is currently loaned out... A single share purchase cascades into 2.2 purchases on average.

If any sizable fraction of shares held are committed not to sell, that math gets way worse.

Re: High Short Interest Stocks

#97

Post by bluGill »

epistasis wrote: post #64
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?

It is fairly rare for stocks to be so heavily shorted. It doesn't necessarily take a bunch of people to make the price move up, but it does take a lot of money, enough to capture most of the floating shares of stock. And in particular these folks banded together to use call options to amplify their money (and risk) as they purchased stock to drive the price up. The only thing new is that rather than a few dozen wealt…

Note that for banks the law limits how much of a company you are allowed to own. For us little guys that isnisn't a problem, but for the big guys it is.

Re: High Short Interest Stocks

#98

Post by bo1024 »

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?

My understanding is that GameStop was the perfect storm.

- huge amounts of short positions at like $5 (months and months ago)

- some people disagreed and went long

- good luck #1 for game stop: some big investors (also months ago)

- good luck #2: activist investor joins board, overhaul seems likely (this month)

- shorts refuse to close position, stock at $15-20 (early this month)

- at this point, short squeeze is apparently likely and the momentum begins.

- 2 weeks later, the escalation catches attention outside wallstreetbets

A lot of long term background that seems key to how things have unfolded in that case.

Re: High Short Interest Stocks

#99

Post by bluGill »

epistasis wrote: post #65
akira2501 wrote: post #62

Earlier quoted context omitted.

> 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?

And further, these were large sophisticated investors that should have known when to get out and take their losses (as Melvin eventually did). For us small time folks we can do a limit short so that our risk exposure is limited.

Unless the big guys are convinced that they are right and have the money to not worry about a margin call. In that case they should be shorting more. If GameStop is really worthless then they win when the company finally files bankruptcy.

Re: High Short Interest Stocks

#100

Post by IG_Semmelweiss »

jeffbee wrote: post #28
thrill wrote: post #26

Earlier quoted context omitted.

Their boards authorize it. It takes a phone call to have a board meeting. A company could do a board meeting by tweeting each other if they wanted. Filing that a private placement (to the short holders) has occurred is followup paperwork. A company that gets immensely overvalued is doing their shareholders a disservice by not capturing that valuation.

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?

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