I’ve been trying on a couple places. So this is what is going on with GME and a couple other stocks.
Hedge fund shorted a stock. What this means is that they borrowed a share from someone who owns it and sold it at the current price expecting that it would drop in price and they could buy it back at a lower price and make a profit. That is a short sell.
However, what the Reddit and Robin Hood folks saw was that the stock was shorted by 150% of the shares available - which means that they either did a naked short (without a share available) or sold the same share twice - both of these are illegal by the way.
So when the short is that significant then if you can get enough buyers to jump in - (which in this case the reddit group is about 2M people strong) the price will rise. However the shorts have to cover if it goes up too much because there is NO limit to how much they can use - so the brokerages will call in the short if the amount goes to high against their accounts. The higher the price the more that these hedge funds stand to lose. The kicker is that when they start to try closing out their short position - which they MUST do by Friday (or whenever their brokerage makes the call on their account) their own demand will force the price even higher - especially IF no one is willing to sell their position.
This is a “short squeeze”. Some call it a Gamma short squeeze. As long as the holders of the stock don’t sell enmasse then the price must go up because the short seller HAVE to close their short positions by buying the stock. Since they OVER shorted it they are in a terrible position and the stock holders hold all the cards because there aren’t enough shares available for the hedge fund to close out their short position... unless the reddit/Robin Hood holder sell. Their target is $1000 by Friday.
There is a chance the SEC will step in to force a cap - but this would be against the market forces and basically a bailout by the regulatory agency. If that happens it means the markets - as well as the government are proving that there is a two-tiered system because they will not be allowing the market to set the price. Gonna be a helluva two days.
Other stocks are in play as well - though not oversold as much as GME. AMC theaters, Blackberry, and a few others range from 70-125% short stakes. The hedges made a bet they can’t cash and the retail traders have pooled together to hand them their backsides in a significant way legally.
I’m reading stories of college loans paid off, medical bills for family being paid, retirements funded, etc.... they are cashing small amounts to pay this stuff while holding onto the massive quantities need to prevent the shorts from closing. It’s amazing!
There are no better memes on the internet right now than WSB. Discuss. pic.twitter.com/ItfcbFIKso— José Luis Ricón Fernández de la Puente (@ArtirKel) January 26, 2021
Thanks. And add to that the Fed was moved into the Treasury.
but, can anyone join these reddits?....
LOL. Anyone arrogant and stupid enough to do naked shorts desires what they get. 🤣🤣🤣🤣🤣🤣
Amazingly easy to understand explanation of GME, etc. Thank you for words. Very interesting. Way to go Reddit and Robin Hood guys. Will Yellen the Squeaker interfere?
ThankQ for that excellent explanation & I’ll add one additional factor being that this impacts the rest of the market because there are other funds + baskets, ETFs, indices, etc. that have to maintain positions as well.
The "Retards" on wallstreetbets--reddit seem to have reached the conclusion that: "The election was stolen; all votes are not equal; BUT. all dollars are equal in the market!"
So, ironically, amidst the great socialist takeover of America, we're seeing a resurgence of free-market capitalism.
At least for now. There are forces that want to kill it.
CHINAVIRUS DATA:
1. United States CHINAVIRUS Confirmed Cases through about mid-June
2. Highly (and Deliberately) Contaminated Data from mid-June Forward
(contaminated with antibody-test, duplicates, false positives and dubious "Probables")
3. Another Layer of Fraud in both deaths and Cases was added 7/28
4. Election Noise of massive FALSE POSITIVES started ramping Labor Day,
5. The "Election" phase of "exponential" growth ended 2 weeks after election.
6. The "PEAK" in "New" cases appears to have been around the Jan 6th FF PSYOP.
7. Conservative blogs reported WHO changed rules on Jan 20th to slash FALSE POSITIVES.
Date New Total Daily
Cases Cases Deaths
Actual + FAKE Actual + FAKE
1/1/2021 171,692 20,617,346 2,230
1/2/2021 287,355 20,904,701 2,237
1/3/2021 208,827 21,113,528 1,396
1/4/2021 239,523 21,353,051 1,935
1/5/2021 225,555 21,578,606 3,607
1/6/2021 279,010 21,857,616 4,370
1/7/2021 274,429 22,132,045 4,134
1/8/2021 324,857 22,456,902 4,025
1/9/2021 243,036 22,699,938 3,331
1/10/2021 217,396 22,917,334 1,795
1/11/2021 225,863 23,143,197 1,974
1/12/2021 225,028 23,368,225 4,350
1/13/2021 248,120 23,616,345 4,329
1/14/2021 232,065 23,848,410 4,066
1/15/2021 254,019 24,102,429 3,862
1/16/2021 203,614 24,306,043 3,405
1/17/2021 176,007 24,482,050 1,941
1/18/2021 144,326 24,626,376 1,418
1/19/2021 180,588 24,806,964 2,866
1/20/2021 192,011 24,998,975 3,279
1/21/2021 197,111 25,196,086 3,297
1/22/2021 193,956 25,390,042 3,288
1/23/2021 176,747 25,566,789 3,297
1/24/2021 135,336 25,702,125 3,301
1/25/2021 159,472 25,861,597 3,296
1/26/2021 149,625 26,011,222 3,275
1/27/2021 154,979 26,166,201 3,256
Are the guys who shorted in threat of bankruptcy? Will the big banks be on the hook?
Ok so what the redditors have done is put the squeeze on the big players?