3 ms·
Following up, there was a random theory on WSB that since hedge funds were short over %130 of Gamestop's stock, there is a real risk that this will cause a liqu
by motohagiography 6y ago
Following up, there was a random theory on WSB that since hedge funds were short over %130 of Gamestop's stock, there is a real risk that this will cause a liquidity crunch where there is literally no available stock to cover their positions.
As in there does not exist the stock to cover those positions, which means institutions are going to be in a race to avoid bankruptcy and have to outbid each other to acquire the remaining stock held by all these retail investors who know what they have. This is why WSB posters are saying $5000 is a conceivable price.
This is what would cause regulatory intervention, and certainly sets up the means/motive/opportunity for interrupting trading. Like the Fed steps in and buys it out or something. This looks like an LTCM level event.