Posted on 01/29/2021 3:45:29 PM PST by TigerClaws
The astronomical rally in GameStop has imposed huge losses of nearly $20 billion for short sellers this month, but they are not budging.
Short-selling hedge funds have suffered a mark-to-market loss of $19.75 billion year to date in the brick-and-mortar video game retailer, including a nearly $8 billion loss on Friday as the stock kept ripping higher, according to data from S3 Partners.
Still, short sellers mostly are holding onto their bearish positions or they are being replaced by new hedge funds willing to bet against the stock. GameStop shares that have been borrowed and sold short have declined by just about 5 million over the last week, marking an 8% dip in the short interest, according to S3. Most of the short covering occurred on Thursday, when the stock fell for the first time in six days.
What to know about Robinhood’s emergency cash situation “I keep hearing that ‘most of the GME shorts have covered’ — totally untrue,” said Ihor Dusaniwsky, S3 managing director of predictive analytics. “In actuality the data shows that total net shares shorted hasn’t moved all that much.”
“While the ‘value shorts’ that were in GME earlier have been squeezed, most of the borrowed shares that were returned on the back of the buy to covers were shorted by new momentum shorts in the name,” Dusaniwsky added in an email.
Shares of GameStop, along with other heavily shorted stocks, spiked once again Friday, after Robinhood said it was resuming limited trading of previously restricted securities. The gain pushed GameStop’s rally this week to over 400% and this month to more than 1,600%.
The video game stock has been the star of the show on the WallStreetBets Reddit forum, whose membership has grown rapidly to over 5 million. A wave of day traders continued to encourage each other to pile into GameStop’s shares and call options, creating a massive short squeeze that inflicted pain for hedge funds betting against the stock.
The borrow fee on GameStop’s stock — or the cost-to-borrow shares for the purpose of selling them short — jumped to 29.32% on existing shorts and 50% on new short positions, S3 said.
“If most of the shorts had covered, we would not be seeing stock borrow rates at these high levels — by now you would be able to borrow GME stock at single digit levels due to an increase in the lendable stock loan supply due to borrowed shares being returned after all the ‘supposed’ buy-to-covers,” Dusaniwsky said.
GameStop remained the most-shorted name in the market as short interest as a percentage of shares available for trading stands at 113.31%, S3 said.
‘You’ve won’ — Cramer tells investors to take home run and sell GameStop Short selling is a strategy in which investors borrow shares of a stock at a certain price in expectations that the market value will fall below that level when it’s time to pay for the borrowed shares.
My 18 year old son took his $500 of Christmas money and made $10,000 on GameStop. No kidding
This is definitely a market acting very toppish
Hedge fund guy goes on a NSFW rant at work. Breaks chair. Lol.
https://m.youtube.com/watch?v=bitP1DHNogQ&feature=youtu.be
They know Biden has there back. Just like all other corruptocrats know.
Taxpayers (us) will make them whole.
Not hole, as they should become.
I think they hold on to argue it’ll tank all the markets and they need to shut down trading etc.
It’s the Capitol protest for the financial markets. Lots of people will be left with worthless screenshots of money they’ll never see.
Bleh. Started drinking again on day of lockdown.
Should be their.... old, senile, and now drinking is no way to go through life.
Or.... is it threw? 8>)
Most of the “retards” (new GME buyers) appear to be novice investors buying a few shares they can afford and holding them to ‘stick it to the man’. They are the hedge fund shorts’ worst nightmare. IOW “too retarded to sell for a profit” thereby inflicting PAIN on the shorts by making them hold and pay fees while not providing shares to cover. That’s hubris I guess -thinking the other side of your (short) trade is smart-like-you. But they’re “retards” lol.
What they’re missing is twofold: 1) These aren’t speculators looking to pump and dump. They’re not in it for the profit, they’re in it to destroy the hedge fund titans, no matter the cost. 2) They don’t yet realize how this attack on them is spreading internationally. Now, like-minded individuals around the world are jumping in to keep the stock propped up.
I think the populist army wins this, big time. All they have to do is sit on their positions, while the shorts have to keep coming up with cash to meet margin calls (or surrender their positions and take a nuclear hit). If the Reddit populists didn’t crack and start selling when the stock hit almost $500, they’re not going to do it now. It’s a really impressive and inspiring display of solidarity and sticking to principles.
Honestly, when I first saw this happen, I was semi certain it was the planned take down happening.
The reaction, much like Trumps win, tells me its grass roots, therefore, Verboten.
Really a time to short this stock
It’s very complicated
here is an interview
https://www.cnbc.com/2021/01/28/robinhood-ceo-says-it-limited-buying-in-gamestop-to-protect-the-firm-and-protect-our-customers.html
the other issue is companies like TD ameritrade loaned out stock for hedge funds to short. What happens if that fund goes belly up and now they can’t get the stock back
this is a cascading mess.
I decided to cash out and withdraw from Ameritrade and Interactive Brokers until this thing resolves. I don’t trust that Biden can deal with it. SEC asking Robinhood for the blue sheet trading data.
Hopefully this rights itself soon.
Boomers think it’s money.
It’s MAGA. It’s a big giant F you to the system.
They’ll hold until the system breaks. They’ll hold until the funds go broke because they really don’t care about the money. They’re in it for the game. For payback.
Boomers don’t understand it. That’s why they lost $20 billion will lose $100 billion before it’s over.
This is the Capitol riot online with Wall Street the target.
They won’t sell until it hits 1000 a share.
The big ripple effect was Robinhood and other trading houses restricting GME purchasing and even seizing and selling clients’ GME shares. That sent a confidence shock into the market which may precipitate a full on correction.
the clearing house that RH uses is demanding
100% collateral as opposed to the usual 5%.
that is why RH is declining trades
Good.
short sellers suck. May they all end up holding ‘will work for food’ signs
I was under the impression the entity shorting had to put up money to cover the purchase.
Hmmm ... what would happen if all these guys requested physical stock certificates?
As an owner you can do that for most companies. That way it’s a physical piece of instrument and can’t be loaned, forced sell etc.
Well the shorts will try to get their money back as the stocks slide back down to a normal range. This bubble won’t last for these stocks. The people buying into these stocks would be wise to sell and cash in their chits.
Speculation being engaged on both sides hoping to win a lottery or something.
I don’t have a Robinhood account. I read they self clear. So I looked it up and saw this
“In 2018, we launched Clearing by Robinhood, our in-house clearing platform. Before this conversion, customers’ trades were cleared by Apex Clearing. Since the conversion, customers’ trades have been cleared by Robinhood Securities.”
Margin
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.