Second, the WSB consensus is starting to build around sacrificially holding stocks through the short squeeze and subsequent decline to ensure bandwagoning retail investors are able to get back out and extract the profits from short sellers covering.
Of course it does, since the stock is ridiculously overvalued. What does the WSB crystal ball have to say about when the squeeze will happen? How would we be able to tell when it has happened?
> sacrificially holding stocks through the short squeeze and subsequent decline
This is a noble goal. It will be interesting to see if it works out, tragedy of the commons and all. If everyone else holds, nobody will mind if I sell my shares, I do so need that Ferrari...
Well. $GME closed at -100 dollars (-31%) yesterday, and it's currently down another ~95 dollars from that in the pre-market. I guess we will not go to space today.
This really has nothing to do with it.
I believe it when I see it. Isn't the majority of shares hold by the heavy pros anyway? I doubt the other Hedgefonds and Yolon Musks will sacrifice shit.
They don't need to. It's mathematically impossible for shorts to cover, because they've shorted more than the entire float.
Alice owns one GME. Bob borrows the share and sells it to John. John doesn't know this is borrowed stock and borrows it to Lisa. This way way you got two borrows on one stock.
As you can see, the hedgefonds likely already recovered some stocks from 140% down to 113%.
Their intention was to speculate on Gamespots bankruptcy and there for not even have to buy back any shares. That's why they overshot like this and also why they are human scum needing to bleed for their sins.
I honestly don't know what it means for the short squeeze, if they reach <100%. I assume at that point it becomes less of an we against them, and increasingly more of an everyone against everyone, again.
This is fully in the open and all information is public. Pump and dump schemes are usually the reverse of this.
What evidence do you have that "all" information is public? If shady people did manipulate WSB into a frenzy to create a bubble, you'd expect them to create the appearance of a public process, wouldn't you?
I'd like to schedule an appointment with the crystal ball that generated this insight, on which the whole article is predicated.
The only connections are: if a company does a buyback if it's share price gets low and can afford it off of existing revenue, if a company needs to raise cash and does a dilutatory raise, if the company exits the market via merger, acquisition, or bankruptcy, or if it's a dividend stock. All of these events are relatively rare.
https://markets.businessinsider.com/news/stocks/tesla-stock-...
It is no question whether this event will have far reaching consequences. With the SEC reacting to actions directed by common people something has changed fundamentally.
> And if you were lucky enough to get into GameStop days or weeks ago, you should seriously consider selling. At a minimum, sell enough to recoup your initial investment. Because not everyone who made big paper profits will see those gains realized.
That could if I was a conspiracy theorist, serve the interests of the firms, but if individuals put in money they can't afford to lose and are up multiples, selling just enough to cover the initial buy seems very sensible advice.
What the article doesn't cover is the revolution that many small fish that are coordinated can outweigh the decisions made by the few sitting at a proverbial table. Even those with deep pockets discovered that they are not in control and reached levels of risk they couldn't weather.
How disconnected from reality of using the stock market as money making vehicles rather than investing in the success of underlying companies is what's on display and needs to be shaken up.
It is. However, I think the situation right now is a prisoner's dilemma where this type of "snitching" means most people will lose. If nobody sells, a lot of people will win and the hedgefonds will lose.
The hedgefonds are very much trying to provoke "sensible" decisions at all costs right now. They need people to be predictable and afraid.
> How disconnected from reality of using the stock market as money making vehicles rather than investing in the success of underlying companies is what's on display and needs to be shaken up.
This. WSB isn't the problem, they just highlight it. The naked shortselling is the malicious part. The hedgefonds weren't just speculating against GME, they were inducing Gamespot bankruptcy. That is fucked up. That shouldn't be allowed. Nobody should be allowed to bet on someone losing, especially if they got all-powerful money at their hands. I think most people just don't realize how much a billion dollars really is: More than 1,600,000 stimulus checks. And they game with it like it's nothing.
Could you elaborate on how this was supposed to happen?
No, the active thesis on WSB is that while a few shorts closed their positions, active shorts are still >100% of float. The short squeeze has yet to happen. Thus the reason they're all holding - shorts are paying huge amounts of interest every day, so the point is to hold until they're forced to give up on their positions, which will lead to the short squeeze.
The squeeze hasn't been squoze yet.
Ultimately the big winners are those who bought @10 and sold @300, or those who shorted @300 and cover @10. Everybody in between gets rekt. That's going to include a bunch of retail buyers and a few shorts as well.
I'm hearing borrow fees are at about 80-100% annualized now. That works out to around 0.2-0.3% daily, so carrying a $10K position costs you $20-30/day, a $1M position costs $2-3K, etc. Someone with enough money to stomach that kind of risk can easily afford that.
GME is just a meme stock that people buy to get involved in a movement.
Isn't part of the issue not pure short positions, but short dated options? you can only hold those until expiration. If the bubble lasts longer..
If this is what passes for explanation from tech "journalists" these days, then it's a good indication of why I've stopped reading a lot of it. It's usually BS, from the condescending think piece headlines to the simplistic and ignorant but still highly know-it-all attitude.
No, Ars Technica doesn't actually publish much quality work anymore.
I get much more enjoyment and enlightenment from the much more interesting Jon Stokes on Twitter.[2] He was one of the Ars' founders before they became a typical 6th Avenue publication with a 6th Avenue editorial stance, that is, the journalistic equivalent of neutron degenerate matter, the kind of shop that tells you to sell, but pretends not to offer financial advice (not that anyone would prosecute anyway).
Yeah, no thanks.
[1] https://www.bloomberg.com/opinion/articles/2021-01-25/the-ga...
