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  • My Not So Short Story on GME


    Eastwood

     

      

    On 1/25/2021 at 10:18 AM, Storm the Field said:

    GME at 9:10 $88.60

    9:50 $144.42

    10:10 $88.09

    What in the hell was that all about?

     

    On 1/25/2021 at 10:38 AM, Eastwood said:

    I'll post a recap of everything when the dust settles on this. It's been an interesting ride and it has caused me some concerns over contagion in the broader market.

    I'm not a financial advisor. This is not financial advise. I don't work in finance. I do not have a degree in finance. Actually, I have a BA and I'm bad at math past Cal I. I won't apologize for the length because this post is me spiking the football and other than banter about the moves GME makes in the future, this is the last time I ever dig into the fundamentals of the GME trade.

    What we saw today was covering either due to what is called a gamma squeeze or a short squeeze. Maybe a mix of both. We won't really know until later, possibly at the end of close Wednesday when brokerages like TD update their short interest. A gamma squeeze occurs as the price moves up, crossing the thresholds of strike prices of calls that will soon be expiring. Market Makers use the Delta of an option to determine how many shares of a stock they should purchase in preparation of possibly covering the calls when they are exercised, either by the buyer of the call or upon expiring in the money. As the share price goes up, combined with the days getting closer to expiry, up goes the Delta, up goes the amount of shares the MMs buy. Last Friday, every call on the board for GME was in the money at expiry. I'll repeat: EVERY CALL ON THE BOARD WAS ITM AT EXPIRY. I don't know if that's ever happened in the history of the market. That means that if every call was exercised, 11.7 million shares would need to be transferred over to the new owners today and tomorrow. Now, as the Delta on a lot of the lower strikes were already at 1 and the shares already (hopefully for the call seller) purchased, it shouldn't be a big deal. However, the big pop happened ON Friday, not before. That caused a mad scramble in the after hours Friday, today, and possibly tomorrow for those who are gambling on the price decreasing further before they fill those calls. So, that's a gamma squeeze. Price creeps up, MMs who sell calls end up buying shares to cover, causing the price to climb higher, and then creating essentially a feedback loop spiking the price when combined with buying from retail or pops on positive news.

    What is happening, and may continue to happen, is the result of hedge funds and possibly Bank of America rampantly shorting GME over the course of a year hoping that it goes zero and they then get to pocket everything and give nothing back. The short float on December 31st was 140% and the institutional ownership was 117%. But how is such a thing possible? They borrowed shares to either 1.) sell, never intending to buy them back and return them because they were hell bent on bankrupting GME, or 2.) lent out those already borrowed shares that they never intended to give back anyway to collect the premium, creating a borrowed share of a borrowed share. They would also buy dips incrementally, amassing large positions, sell calls and buy puts with a quick expiry, then dump all of the shares they accumulated at once while simultaneously shorting to tank the price and pocket the premiums on the options they bought and sold. Then, when that wasn't enough, they sold naked shorts. They sold shares they didn't even have or even exist. They injected "synthetic shares" into the market. Synthetic, fugazi, fogazi. It's a wazi, it's a woozi. They're fairy dust. They don't exist. They're not fucking real.

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    But the people and institutional investors they sold them to bought the right to own the shares. And those banks and hedge funds are obligated to deliver them. But now there aren't enough shares to go around. There's an infinite demand for shares, but a finite supply. In a total share recall event, the lenders of the shorted shares could recall every share on borrow and still be 21 MILLION shares short of demand. The banks and hedge funds that created that SHOULD be on the hook. It SHOULD be illegal. Think of how depressed the price was because of it. Think of the loss of market cap, which led to lowered credit ratings, which led to higher interest rates and less borrowing power, and the layoffs and store closures that followed. Awful. The price should go to infinity because the demand the banks and hedge funds created will become infinity.

    Boomers can bitch and moan about RH and college kids dumping their stimmy into GME all they want, but the reality is that a bunch of boomer bankers and hedge funds created a situation that should be legally, economically, and financially impossible. Boomers want to call what retail investors are doing "market manipulation." However, anyone who dug into the situation enough saw the writing on the wall. Honest to goodness due diligence combined with simple supply/demand economics combined with paying attention to the new market trend of retail investors told anyone interested all they needed to know.

    This was me back in September:

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    I know for the bulk of you guys in here that it is too much of a leap of faith to go long on GME, but there is profit to be made on it in the last quarter, being console launch and holiday season. Especially if it hits $10 and the Robinhood millionaires show up. Even more so if another round of direct stimulus is announced.

    The price hadn't even hit $10, yet, when I said that. The house of cards had already been built. A fan had been placed in front of it. And everyone told me that I was crazy for thinking the house of cards would fall over. It wasn't a secret. It was in plain fucking sight. And we are finding out it is everywhere. Wall Street and old guys in banking and finance can harumph all they want about how a bunch of dumb wage earners are gaming their system to make a buck, but I think the reality is that the curtain has started getting pulled back on Old Man Oz. Take me, for example. I've given a detailed breakdown and have proof in this very thread that I had produced this investment thesis MONTHS before it was mainstream and materialized. I gave my credentials above. Want to know how long I've been actively investing? Since March. Same as all the Robinhood punks. All it takes for a large chunk of the population to be competent in anything is 1. Time 2. Education/training, and 3. Financial resources. In March, there was the perfect storm of 1. COVID lockdowns, 2. The internet and educational resources on the various trading platforms, and 3. Stimulus - The ultimate Other People's Money. Millions of $3k hedge funds popped up all over the nation and had the time, education, and money to be just dangerous enough. I traded in a paper account on Think Or Swim for 30 days and was then off to the races. I developed a momentum trading strategy where I combined candlestick patterns, moving average patterns, the RSI, and the Elliot Wave. Not only that, I also voraciously consumed anything I could get my hands on about market history, valuations, and trends. I bought and sold stocks, bought options, and sold covered calls and generated a 10% return over the course of about a month. Then I stumbled on GME, halted all active trading, liquidated any outstanding options, sat on my KO, XOM, and PFE (which was my worst trade) shares and positioned myself into GME. My return is now over 1000%. Either I'm some kind of wonder boy who picked all this up quickly because I'm a high functioning autistic person...

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    Or maybe this shit just ain't as hard as Wall Street wants us to think it is. And maybe Wall Street was so habitually comfortable with how little people knew about their industry in the past that they didn't even bother concealing their moves because they didn't think retail investors would know how to play the other side. Well, the secret's out. This new batch of retail investors spent the last decade learning how to min/max various economic systems in video games. They are accustomed to dumping hours of time learning how to maximize returns on digital assets. They went from watching hours of YouTube videos on how to mine diamonds and make a Fortune 3 pick axe in Minecraft to watching hours of how to turn a couple grand into 5 figures. In some cases, 6 or 7 figures.

    As I stated earlier, I sold half of my position in GME today, but I still firmly believe in the trade I executed. I am now concerned about two things, one being specific to GME. I think the invisible hand of the free market is about to get absolutely doomfisted by either the government or big banks. I think a lot of institutions out there are shook. When GME hit $150 and other short squeezes were popping, a huge market sell-off occurred. I think funds were liquidating to cover their losses because margin calls were going out. In GME alone today, short sellers lost $1.6 billion according to Business Insider. Melvin Capital, supposedly the biggest short seller of GME out there, is down a whopping 30% for 2021, so far. They manage billions. We learned in 2008 that these banks and funds actually interweave into a structural support for the entire financial system. If a multi-billion dollar part of that support structure fails, it increases the strain on the others, and then another fails, and then we have a cascade failure. I think GME and the big shorts come together and negotiate a share purchase of newly issued shares under the condition that they are immediately transferred to the rightful owners to get the short float below 100%. This is actually extremely bullish for GME. They erase their remaining debt, buy out of all of their bad leases, and increase their cash long enough for the turn around. That's why I only sold half of my position. I'm long GME. In Ryan Cohen I trust. But I also think the government steps in and does something to try to fix the rest of the market. As history has shown us, this doesn't mean punishing the banks who created the situation in the first place. No, they're going to increase the regulations on the retail investors. That could also have grave, unintended consequences when retail cashes out all at once.

    So, I feel really good about today, but there may be grave consequences in future. I'll end with the cringiest thing possible: be a retail trader who uses a scene from The Big Short in one of his posts.

     

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    Just now, 52-80 said:

    but that's not up to you or any arbitrateur to decide, w.r.t. how the stock should be traded.

    the issued shares are a secondary instrument, "freely" (lol) traded on a secondary market.  if people buying and selling decide that the price is $350/share, even if the underlying company that the microfractionalequity ownership represents is totally shit, thats for them to decide, not you.

    What the underlying shares are trading for doesn’t trump the underlying financial fundamentals. The shares are trading high because people are buying for no other reason than to fuck the short sellers. GMEs TTM Ebitda was -590m. Even if they paid off all of their debt it doesn’t move the needle on EBITDA. 

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    1 minute ago, EuroHorn said:

    What were they going to change fundamentally with the $75 million. Selling games online?

    Actually, yes. GME has two decades of customer data, brand recognition, and a revenue sharing agreement with Microsoft where GME gets a share of the revenue from all products purchased online through XBoxes sold through them. It will actually go beyond online, however. I believe that their direct competition will actually be Steam. Anyone familiar with Steam knows that it is an online platform that not only allows a person to purchase games, it also has a social media element to it that allows friends to engage directly with each other in an incredibly streamlined fashion. Their ecommerce numbers have already gone about as parabolic as their stock price. All they need now is Cohen's customer heavy focus and online market touch to utilize the name recognition, which by the way has now been massively boosted further through all this, and run the customer data through similar algos that Chewy used. Additionally, their stores are already in the process of becoming PC building stations where customers come in, pick out parts, and build the PC in store with the assistance of GME staff.

    When this is all said and done, I think GME is going to be a very dangerous company in the video game space, which has exploded into a multi-hundred billion dollar industry. That's why I'm starting to look at selling some puts so I can get my shares back when the dust settles. Then I'm holding very long term.

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    3 minutes ago, EuroHorn said:

     

    What the underlying shares are trading for doesn’t trump the underlying financial fundamentals. The shares are trading high because people are buying for no other reason than to fuck the short sellers. GMEs TTM Ebitda was -590m. Even if they paid off all of their debt it doesn’t move the needle on EBITDA. 

    whats the underlying fundamental that makes this $50M, and who are you to tell discourage me from paying for it?

    edit: or, im only allowed to sell it to certain groups of people, but not others who truly want to buy it?

    Pollocl-convergence.jpg

     

    Edited by 52-80
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    1 minute ago, 52-80 said:

    whats the underlying fundamental that makes this $50M, and who are you to tell discourage me from paying for it?

     

    Pollocl-convergence.jpg

     

    Well I have one share stock certificate of Enron I can sell you (I actually do).  It’s worth millions !

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    4 minutes ago, Eastwood said:

    Actually, yes. GME has two decades of customer data, brand recognition, and a revenue sharing agreement with Microsoft where GME gets a share of the revenue from all products purchased online through XBoxes sold through them. It will actually go beyond online, however. I believe that their direct competition will actually be Steam. Anyone familiar with Steam knows that it is an online platform that not only allows a person to purchase games, it also has a social media element to it that allows friends to engage directly with each other in an incredibly streamlined fashion. Their ecommerce numbers have already gone about as parabolic as their stock price. All they need now is Cohen's customer heavy focus and online market touch to utilize the name recognition, which by the way has now been massively boosted further through all this, and run the customer data through similar algos that Chewy used. Additionally, their stores are already in the process of becoming PC building stations where customers come in, pick out parts, and build the PC in store with the assistance of GME staff.

    When this is all said and done, I think GME is going to be a very dangerous company in the video game space, which has exploded into a multi-hundred billion dollar industry. That's why I'm starting to look at selling some puts so I can get my shares back when the dust settles. Then I'm holding very long term.

    Well good luck.

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    1 minute ago, EuroHorn said:

    Well I have one share stock certificate of Enron I can sell you (I actually do).  It’s worth millions !

    i legitimately always wanted a paper stock certificate, as i saw occasionally referenced in tv and movies growing up

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    1 minute ago, 52-80 said:

    i legitimately always wanted a paper stock certificate, as i saw occasionally referenced in tv and movies growing up

    You could order one out.  It cost me $25 after i rode the stock almost all the way down. I figured I might as well get a souvenir 

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    What were they going to change fundamentally with the $75 million. Selling games online?  Their current business model will be nonexistent unless they reinvent themselves 

    Your argument is circular and fucking stupid.

    "Had the hedge funds not gotten caught breaking the law and manipulating the market illegally it totally would have worked!"

    Congrats on getting the point of the entire thing.
    b7f6ce4382c95672cd2468f1c0f46744.jpg
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    Lol. Yea euro horn is obvi a finance bro; but I also agree with him. GameStop is crap and this is the best thing that could have ever happened to them and they still screw it up. I’m bearish on them once this forest fire burns out. 

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    4 minutes ago, BradInATX said:


    Your argument is circular and fucking stupid.

    "Had the hedge funds not gotten caught breaking the law and manipulating the market illegally it totally would have worked!"

    Congrats on getting the point of the entire thing.
    b7f6ce4382c95672cd2468f1c0f46744.jpg

    Oh I didn’t know the hedge funds broke the law. Which one did they break?

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    5 minutes ago, Continental Op said:

    Which hedge fund that got torched by this does EuroHorn work for?

    No I actually think it’s funny what Reddit did. But the short selling was not going to force GameStop into bankruptcy. 

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    8 minutes ago, EuroHorn said:

    You could order one out.  It cost me $25 after i rode the stock almost all the way down. I figured I might as well get a souvenir 

    if i knew schwab did this, i wouldve gotten one from the last remaining piece of trash DSPP issue i received.

    over a decade participation and last year finally had to cut ties (from the plan, not the employer)

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    9 hours ago, TwiceHorn said:

    Naked shorts are already illegal, but happen on a fairly massive scale on the daily.

    There should be a reckoning.

    Shorting is necessary for "price discovery," I suppose, but it's a nasty business.

    Short sellers used to be the absolute best investors in the world because of the amount of risk it takes to sell stocks short.  We need a lot more guys like Jim Chanos in the investment world and a lot less Muddy Waters types.

    8 hours ago, crash_davis said:

    So is members of Congress making trades with private knowledge had from closed door congressional meeting.

    Yeah, that ain't illegal surprisingly enough.

     

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    shorting a stock naked:  that's when you short a stock without first preborrowing any shares.  whether or not you have to physically request shares to preborrow is up to your broker.  if your broker has a ton of long inventory of that stock, you probably don't have to request a preborrow before you short.  they'll already have a bunch set aside to short for anyone who wants to do so.  these are called Easy To Borrow stocks.  sometimes, inventory is low in some names so you have to request a preborrow and can only start shorting after you get an affirmative answer.  when you locate shares to preborrow in this manner each share you locate costs money.  anywhere between $.0025 to sometimes over $10 / share.  it all depends on your broker's inventory.  naked shorting is when you do not go through this process before shorting.  it has nothing to do with shorting > 100% of the float. 

     

    1 hour ago, Eastwood said:

    Actually, yes. GME has two decades of customer data, brand recognition, and a revenue sharing agreement with Microsoft where GME gets a share of the revenue from all products purchased online through XBoxes sold through them.

    that microsoft deal is relatively new.  i think they announced it back in december?  up til then, their business model had most everyone thinking they eventually were on the road to bankruptcy.  even with the microsoft deal there's a lot of skepticism as to whether or not it's going to be a bull case.  can they sell enough xboxes to survive?  i'm doutbful, but at least there's a way forward for them now.

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    1 hour ago, Fudge Nuggets said:

    Short sellers used to be the absolute best investors in the world because of the amount of risk it takes to sell stocks short.  We need a lot more guys like Jim Chanos in the investment world and a lot less Muddy Waters types.

    Yeah, that ain't illegal surprisingly enough.

     

    Good point.  There are good shorts that do the research and find the dogs and then quietly bide their time.

    Then there are assbags like Ackman that go public with their disparagement to make their predictions come true, and still eat their dick down to the balls.

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    3 minutes ago, gsoda3 said:

    naked shorting is when you do not go through this process before shorting.  it has nothing to do with shorting > 100% of the float.

    technically not. theres only 1 share in the world and you borrow it from steve to loan to bob, then borrow from bob to loan to mike.  SI = 200% of float.

    given the fact that there are multiple brokerages and the share ownership is spread out, to have >100% float, wouldnt it stand reasonably that they probably *didnt* locate all the shares to short. 

    afterall, its not like noone has ever broken SHO regulations.

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    4 minutes ago, 52-80 said:

    technically not. theres only 1 share in the world and you borrow it from steve to loan to bob, then borrow from bob to loan to mike.  SI = 200% of float.

    given the fact that there are multiple brokerages and the share ownership is spread out, to have >100% float, wouldnt it stand reasonably that they probably *didnt* locate all the shares to short. 

    afterall, its not like noone has ever broken SHO regulations.

    Trading is so chaotic that some shorts are going to end up naked, I'm sure, by accident.  But you have to think that 140% involved some pretty serious disregard of the availability of shares for short positions.

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    1 minute ago, 52-80 said:

    given the fact that there are multiple brokerages and the share ownership is spread out, to have >100% float, wouldnt it stand reasonably that they probably *didnt* locate all the shares to short.

    no, because all the brokerage sees when it comes to their long inventory is that they have it long.  there's no blockchain type info attached to each long position immediately detailing its origin.  but here's where it gets tricky.

     

    first off, trades take 3 days to settle (that is, the shares take 3 days before they actually hit, or in brokerage language "clear", your account at the brokerage):  the first day is the day you enter the trade, the second day is the day after, and the 3rd day is the 2nd day after you enter the trade.  because of this T+2 timing and due to the # of trades that occur each day, sometimes short shares are "called-in".  this happens when the brokerage is notified that there are too many shares preborrowed due to an increasing # of shorts being generated.  brokerages do their best to predict what % of their long inventory is "too much" to give up to pre-borrows, but it's an inexact science.  when your shares are called-in the brokerage usually automatically buys you back in immediately to keep the firm from being naked short.  the worst part of being bought in is it can happen at any time up to T+2.  this is a rare occurrence but it does happen. 

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    3 minutes ago, TwiceHorn said:

    Trading is so chaotic that some shorts are going to end up naked, I'm sure, by accident.  But you have to think that 140% involved some pretty serious disregard of the availability of shares for short positions.

    it's quite hard to get naked short on purpose.  i've never seen a trading platform allow it and i've had access to all kinds of professional platforms.  it happens by accident on occasion but when caught by ops or risk management is always closed out immediately.  that's street wide.  i've never heard anything different, which is why i don't think there was a disregard for preborrowing availability. 

     

    the 140% short has a quirk.  basically, there's more than one type of short share. along with the ones most are familiar with, there are also short shares created synthetically using options.  most services include both those types when calculating short % of float and frankly i value that # over the other #, which doesn't include the synthetic shorts. 

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    3 hours ago, EuroHorn said:

    Oh I didn’t know the hedge funds broke the law. Which one did they break?

    the law of common sense and greed. granted, they usually get away with it, but this time they got caught out. that's the most frustrating part of the analysis around this. gamestop and their business really has fuckall to do with it. what happened is the the hedge fund shorters got shorted by people going long. it is the business model of the hedge funds that is being weighed and measured. 

    we will see how it pans out but today was some prime wall street fuckery. 

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    Video game nerds have been making millions of dollars for the last 5 decades while people continue to think they know better. As a reformed finance fag, I’m done pretending I know better and will use my knowledge of these boomers to predict how they’ll react...... poorly and blame it on someone else

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    11 minutes ago, hayden_horn said:

    the law of common sense and greed. granted, they usually get away with it, but this time they got caught out. that's the most frustrating part of the analysis around this. gamestop and their business really has fuckall to do with it. what happened is the the hedge fund shorters got shorted by people going long. it is the business model of the hedge funds that is being weighed and measured. 

    we will see how it pans out but today was some prime wall street fuckery. 

    Willing to bet some hedge funds lost a lot. And others made a lot with the Reddit crowd 

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    the law of common sense and greed. granted, they usually get away with it, but this time they got caught out. that's the most frustrating part of the analysis around this. gamestop and their business really has fuckall to do with it. what happened is the the hedge fund shorters got shorted by people going long. it is the business model of the hedge funds that is being weighed and measured. 
    we will see how it pans out but today was some prime wall street fuckery. 
    There are many different types of hedge funds. Each is usually formed out of different strategies. Some win sometimes, some lose sometimes. There's no collective "they" if you try to group them by results. We all know about Melvin and their loss. I've heard rumblings of a couple majors with huge losses also. But I know many more funds that have crushed this event.
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    I'm not sure about hedge funds, but judging by GME's ownership %s a lot of mutual funds made a fucking killing. Anyone that held 5 million or more shares - which several funds did - is probably up at least $2 billion right now - just on their fucking game stop position. 

    This really is crazy. Im not great on financial history - has anything like this ever happened?

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    6 hours ago, gsoda3 said:

    no, because all the brokerage sees when it comes to their long inventory is that they have it long.  there's no blockchain type info attached to each long position immediately detailing its origin.  but here's where it gets tricky.

     

    first off, trades take 3 days to settle (that is, the shares take 3 days before they actually hit, or in brokerage language "clear", your account at the brokerage):  the first day is the day you enter the trade, the second day is the day after, and the 3rd day is the 2nd day after you enter the trade.  because of this T+2 timing and due to the # of trades that occur each day, sometimes short shares are "called-in".  this happens when the brokerage is notified that there are too many shares preborrowed due to an increasing # of shorts being generated.  brokerages do their best to predict what % of their long inventory is "too much" to give up to pre-borrows, but it's an inexact science.  when your shares are called-in the brokerage usually automatically buys you back in immediately to keep the firm from being naked short.  the worst part of being bought in is it can happen at any time up to T+2.  this is a rare occurrence but it does happen. 

    yes, quite understood on that mechanics and why SHO and related regulation had to be written and re-written to accomodate for these scenarios.

    what im saying is, what if these guys were callous enough to not care about about fully conforming to all of this "inexact science".

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    6 hours ago, gsoda3 said:

    it's quite hard to get naked short on purpose.  i've never seen a trading platform allow it and i've had access to all kinds of professional platforms.  it happens by accident on occasion but when caught by ops or risk management is always closed out immediately.  that's street wide.  i've never heard anything different, which is why i don't think there was a disregard for preborrowing availability.

     

    here is where i think this argument falls apart.  these funds put on shorts when SI% was at 60, 80, 100, 120, and stayed in at 140%, and where was risk management to ask, "maybe this is not such a good idea?" or "other guys drove up SI we should unwind our position to not be exposed to this concentration?"

    in Q3 Melvin alone held a massively bearish position on GME when it had already been beaten to a bloody pulp at $5/sh

    that speaks of immense recklessness and greed which is incompatible with the notion that they truly crossed their Ts and dotted their i's to ensure they wouldn't be naked short, whether on purpose or unintentionally.

     

    occam's razor and all.

     

    whether they composed the majority or just a (sizable) minority of the short in GME, what this episode also reveals is maybe WS/HF aren't that careful and sophisticated.

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    3 hours ago, 52-80 said:

    that speaks of immense recklessness and greed which is incompatible with the notion that they truly crossed their Ts and dotted their i's to ensure they wouldn't be naked short, whether on purpose or unintentionally.

    once you've located shares to preborrow, as long as you keep your capital requirements in line it's quite uncommon to have them called in.  other than not being short at all there's no way to dot your is and cross your ts to ensure you never get called in.  i'm not passing judgement on their strategy or motivation when i say this, just their procedural execution-  with the information that's come out so far they did everything right.  

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    7 hours ago, ztejas said:

    I'm not sure about hedge funds, but judging by GME's ownership %s a lot of mutual funds made a fucking killing. Anyone that held 5 million or more shares - which several funds did - is probably up at least $2 billion right now - just on their fucking game stop position. 

    This really is crazy. Im not great on financial history - has anything like this ever happened?

    Back in 2008 there was an epic short squeeze on Volkswagen shares.

    https://moxreports.com/vw-infinity-squeeze/

     

     

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    Is this Belgium tulip market shit or something else physiologically?  
    after reading this thread I’m more convinced than ever I’m a simpleton and will stick to my plan of buying and holding investment property houses and pay them off and have cash flow in my retirement in a real and tangible thing that I understand supply and demand and pricing on. 

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    12 hours ago, 52-80 said:

    muddy waters and wolfpack does pretty solid work from what ive seen

    Muddy Waters paid for my first Rolex when he put out a hit piece on a Chinese stock that was looking to go private.  The CEO had arranged financing through Morgan Stanley or Goldman Sachs to take the company private at $25 / share.  MW had been slamming this company as a fraud off and on for months so I bought a handful of shares after one piece dropped the price to about $12 / share.  As the time for going private drew near, MW put out another hit piece that sank shares down to $3 and I bought 1,000 shares.

    A week later the deal was finalized and the stock hit $24.50 or something to account for a little bit of arbitrage.  Took my money and headed down to the watch shop.

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    1 hour ago, ajax said:

     

     

    “What is the right thing to do to control this or stop this?”

    Why does it need to be stopped?  Tell the hedgies if they get too far over their skis then they are going to wipe out. Pretty damn simple. 

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    So we can't just have smaller investors aggregate efforts and capital to steer certain single-issue stocks in a long direction?  

    So what the fuck is a pension fund then?  

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    15 minutes ago, Fudge Nuggets said:

    “What is the right thing to do to control this or stop this?”

    Why does it need to be stopped?  Tell the hedgies if they get too far over their skis then they are going to wipe out. Pretty damn simple. 

    this is the biggest worry for me. i want to think that it could be a sea change in how hedge funds measure risk, but in the end, they'll probably just squash the little guy

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    5 hours ago, Wulaw Horn said:

    Is this Belgium tulip market shit or something else physiologically?  
    after reading this thread I’m more convinced than ever I’m a simpleton and will stick to my plan of buying and holding investment property houses and pay them off and have cash flow in my retirement in a real and tangible thing that I understand supply and demand and pricing on. 

    This was how I felt before all this went down, and reading about it just pushed me more that way. I will be happy though when my properties get profitable enough to hire a full time mgr so that I’m not the one taking the calls for leaking toilets on the weekend. 

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    So we can't just have smaller investors aggregate efforts and capital to steer certain single-issue stocks in a long direction?  
    So what the fuck is a pension fund then?  

    A pyramid scheme? One that hopes enough olds die and enough youth joins to support the few olds that live.
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    3 hours ago, Anastasis said:

    What’s funny in the video I posted which made in July, GME was trading at $4 a share. He expected it to double or maybe triple in price.  He also mentions around the 49 minute mark that it would be great if they could do a short squeeze. Lol. 

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    Just now, EuroHorn said:

    What’s funny in the video I posted which made in July, GME was trading at $4 a share. He expected it to double or maybe triple in price.  He also mentions around the 49 minute mark that it would be great if they could do a short squeeze. Lol. 

    Yeah. The squeeze wasn’t really core at all to his trade. 

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    Right now this whole thing is a pyramid scheme and the SEC will be forced to wade into it. I don't think they can make anything criminal stick (on either side), but can change the rules to make the "problem" for them go away.

    That aside, if I'm truly a GME long believer, GME absolutely must look to issue new shares asap. They could easily bank billions of dollars to move the company in any direction they choose.   

    I expect some of the shorts to convince them to do just that and pay then a nice premium to do so... say $500/share... they will add a bunch of longer option offerings to expand the market and try to force the buyers to in an attempt to wait them out. They won't be closing their short positions though, they will hold the long as a risk hedge knowing they can last longer and will be able to see and react much faster than the retail investor when this party comes crashing down.

     

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    I don’t understand why intervention is needed. Each side made a choice, let the market figure it out.

    I get that rh was over their heads and didn’t have enough to cover their volume and that needs to be looked at. Also seems 140% of shorts should be looked at as well. But otherwise let it play out. If hedge funds get bailed out I’ll be pissed. We know it will eventually tank and whoever hasn’t cashed out will lose but let the shorts lose first

    /I don’t know much about this but just my take

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    9 hours ago, Updawg said:

    I don’t understand why intervention is needed. Each side made a choice, let the market figure it out.

    I get that rh was over their heads and didn’t have enough to cover their volume and that needs to be looked at. Also seems 140% of shorts should be looked at as well. But otherwise let it play out. If hedge funds get bailed out I’ll be pissed. We know it will eventually tank and whoever hasn’t cashed out will lose but let the shorts lose first

    /I don’t know much about this but just my take

    There are still entities with short position who are stuck on the other side of the trade. Their loss potential are , in theory , unlimited. 
     

    if it was contained to 1 fund and they go insolvent*, fine. But if it spreads to more institutions, the entire market will need to be sold off. 

     

    *margin policies are supposed to contain risk to the account holder, but if account goes bust and the escalating losses are transferred over to the broker, then what?  
     

    at some point, some authority needs to make unprecedented, artificial measures to stop it. They force the company to make a gigantic stock offering to trigger a deflation in price? Even more gigantic class settlement   at some agreed price ? I.e. “yes you won the game and you BK’ed all these funds, will you accept xxx$ to walk away”

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