I have to call bs on that. How do you sell shares that don’t exist? If you or I short a stock we are borrowing actual shares from an entity that owns them. So you are saying hedge funds don’t need to borrow shares? They can just pull a number out of the air?
GME is at $277 with about 30 minutes left to go in trading.
1. The company had hundreds of pieces of equipment all over the place. This included trucks, drilling rigs, lift equipment, tanks, etc.
2. As energy prices change and market conditions change, drilling operations are often forced to change fairly quickly.
3. When conditions changed, the company was often forced to make decisions about its equipment in certain locations. For example: “Should we move Equipment X from Texas to North Dakota, or lease it to another company in New Mexico and lease Equipment Y from a local outfit to do the same job in North Dakota?” The first option let them control their own resources, while the second option cost them less money.
4. As a result of this scenario playing out many times, the company ended up owning and leasing a mix of equipment that was getting increasingly difficult to track and manage.
5. It reached the point of absurdity around 2012 when they started a new operation in Pennsylvania and leased a drilling rig from a local outfit. It turned out it was THEIR OWN rig they were leasing. Over the course of 12-18 months it has changed hands several times. They leased it to Company A in Texas ... who then leased it to Company B in North Dakota ... who then moved it to Pennsylvania and leased it to Company C ... who needed it temporarily while they were waiting delivery of their new equipment ... who then leased it back to the original owner when their new equipment arrived and they didn’t need it anymore.
One piece of equipment ... multiple leases ... multiple lease holders ... multiple transactions.
That process was much more complicated because you’re dealing with a physical objects that had to be moved from one place to another. Imagine how much easier it is when you’re “leasing” electronic assets.