5 ms·

Is there any way for us to know for sure, other than them announcing their positions, or losses?

tempsy 6y ago
the reality is all of their major shorts are being squeezed not just Gamestop, but I agree I think their CNBC interview was just a distraction and doubt they could’ve closed out their entire short position overnight.
- VikingCoder 6y ago
  Dumb question - could the shorts actually negotiate with Gamestop directly to get them to issue new stocks? Wouldn't that be a win-win (and the retail loses, because a) the stock is diluted, and b) no one would be "forced" to buy from them)
  - tempsy 6y ago
    who knows but their market cap has become so bloated that any new issuance would probably not be that dilutive. i doubt that is what would trigger a crash.
  - dannyw 6y ago
    Sounds like a great way for management to get into a fiduciary duty lawsuit.
    - VikingCoder 6y ago
      If no one is selling GME, but someone is willing to buy GME, and GME actually gets to pocket the cash, that sounds like it would be in the long-term interest of GME shareholders to me. But like I've said elsewhere, I'm an idiot.
  - nceqs3 6y ago
    Related... Hedge funds have "asked" companies to PURPOSELY DEFAULT on their debt before. Great Matt Levine piece on this: https://www.bloombergquint.com/view/blackstone-may-do-its-cleverest-cds-trade-again https://www.bloombergquint.com/view/blackstone-may-do-its-cl...
  - jannes 6y ago
    I believe those shares would not be tradable for 6 months. But I am no expert.
  - challenger-derp 6y ago
    An associated qn is what price GME would issue new stock at if such a deal took place? higher/ lower/ current stock price? Suppose lower. Unlikely. Because a better price for GME to raise capital exists -- the current stock price. Suppose at (approx.) current stock price. Possible. But what's in it for GME to offer such a deal to shorts instead of offering it to stockholders? Suppose offer to stockholders, then shorts still have to cover and thus potential of short squeeze remains (which is beneficial to future capital raises). Now, suppose GME offered it to shorts, squeeze is extinguished, the rally fizzles, stockholders who propped up GME's price feel betrayed. At offer to raise capital at current stock prices seem better placed with stockholders than shorts. Suppose higher. Now we might be on to something. Without GME's offer, the shorts have to close out huge positions by buying from the secondary mkt -- short squeezing the price up and making future purchases to close remaining short positions increasingly costly. Shorts don't want this. Shorts would rather close by buying shares at a higher, _constant_ price (constant means not subject to squeeze). GME, if desperate for capital, could extend an olive branch to shorts with a deal that says, hey, I'm offering n stocks at a 75% premium to the current price of $400, wanna take it?
- deleted 6y ago
  [deleted]
zinclozenge 6y ago
This is the current short interest as of this morning https://www.reddit.com/gallery/l642ms https://www.reddit.com/gallery/l642ms
Kranar 6y ago
To know for sure? Not really unless they themselves announce it. Right now the announcement comes from a third party CNBC reporter, so it's not official and there's plenty of room to claim a misunderstanding. But there are ways to gain some insight based on how hard GME is to borrow and the shorting interest, and that hasn't changed much from yesterday. If Melvin did manage to get out of their short, they handed that short to another party almost share for share, or they found a way to hedge their position. At any rate, GME remains the most shorted stock on the market, which means another short squeeze is possible. This Friday when options expire is going to be an absolute circus.

the reality is all of their major shorts are being squeezed not just Gamestop, but I agree I think their CNBC interview was just a distraction and doubt they could’ve closed out their entire short position overnight.

VikingCoder 6y ago
Dumb question - could the shorts actually negotiate with Gamestop directly to get them to issue new stocks? Wouldn't that be a win-win (and the retail loses, because a) the stock is diluted, and b) no one would be "forced" to buy from them)
- tempsy 6y ago
  who knows but their market cap has become so bloated that any new issuance would probably not be that dilutive. i doubt that is what would trigger a crash.
- dannyw 6y ago
  Sounds like a great way for management to get into a fiduciary duty lawsuit.
  - VikingCoder 6y ago
    If no one is selling GME, but someone is willing to buy GME, and GME actually gets to pocket the cash, that sounds like it would be in the long-term interest of GME shareholders to me. But like I've said elsewhere, I'm an idiot.
- nceqs3 6y ago
  Related... Hedge funds have "asked" companies to PURPOSELY DEFAULT on their debt before. Great Matt Levine piece on this: https://www.bloombergquint.com/view/blackstone-may-do-its-cleverest-cds-trade-again https://www.bloombergquint.com/view/blackstone-may-do-its-cl...
- jannes 6y ago
  I believe those shares would not be tradable for 6 months. But I am no expert.
- challenger-derp 6y ago
  An associated qn is what price GME would issue new stock at if such a deal took place? higher/ lower/ current stock price? Suppose lower. Unlikely. Because a better price for GME to raise capital exists -- the current stock price. Suppose at (approx.) current stock price. Possible. But what's in it for GME to offer such a deal to shorts instead of offering it to stockholders? Suppose offer to stockholders, then shorts still have to cover and thus potential of short squeeze remains (which is beneficial to future capital raises). Now, suppose GME offered it to shorts, squeeze is extinguished, the rally fizzles, stockholders who propped up GME's price feel betrayed. At offer to raise capital at current stock prices seem better placed with stockholders than shorts. Suppose higher. Now we might be on to something. Without GME's offer, the shorts have to close out huge positions by buying from the secondary mkt -- short squeezing the price up and making future purchases to close remaining short positions increasingly costly. Shorts don't want this. Shorts would rather close by buying shares at a higher, _constant_ price (constant means not subject to squeeze). GME, if desperate for capital, could extend an olive branch to shorts with a deal that says, hey, I'm offering n stocks at a 75% premium to the current price of $400, wanna take it?
deleted 6y ago
[deleted]

zinclozenge 6y ago

This is the current short interest as of this morning https://www.reddit.com/gallery/l642ms https://www.reddit.com/gallery/l642ms

Kranar 6y ago

To know for sure? Not really unless they themselves announce it. Right now the announcement comes from a third party CNBC reporter, so it's not official and there's plenty of room to claim a misunderstanding. But there are ways to gain some insight based on how hard GME is to borrow and the shorting interest, and that hasn't changed much from yesterday. If Melvin did manage to get out of their short, they handed that short to another party almost share for share, or they found a way to hedge their position. At any rate, GME remains the most shorted stock on the market, which means another short squeeze is possible. This Friday when options expire is going to be an absolute circus.