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What I don't get is that, if this trade (140% short) was really so obviously wrong. Could a wealthy hedge fund not simply have made the same bet as the million

What I don't get is that, if this trade (140% short) was really so obviously wrong. Could a wealthy hedge fund not simply have made the same bet as the million strong WSB army, but even more pronounced? Why isn't a Carl Icahn short squeezing these guys if it's so easy and obvious? Simply buying calls and buying stocks and forcing a short squeeze, could a bigger established fund have made this bet? I think the general answer would be no, because at the end this fund would be a bagholder of $350 stock that's worth about $30, and when trying to get rid of it the price would crash down. My question then is, how are we somehow thinking that WSB doesn't have the same problem? The only issue is that the bagholders will be retail. It's being played off like some giant win to WSB. When really, those who have closed their positions have won, probably a select few. There's probably a lot more that are bagholders who're yet to feel the pain, which inevitably comes as everyone agrees that outside of the temporary short squeeze, this stock is not worth much more than $30.

Ataraxy 6y ago
They realistically are. It's pure media fiction (and scapegoating) that a bunch of regular people are somehow moving markets. In practice they're just the smoke screen for the actual wealth making plays against their peers that screwed up in this scenario.
- jdjfktkrnj 6y ago
  Retail is 25% of the market these days. Google it.
- ericmay 6y ago
  This, 100%. Even if WSB users and other retail holders held like, 30%, Burry holders 3%, and Cohen holds 10%, there is still more than 50% out there which may be bought by others. There aren’t enough interested Americans to buy the rest of the company. Other hedge funds and big investors are in on the action. These shorts got caught in a bad spot and now they are paying for it. Once all the retail traders get screwed in the media, others on Wall Street will quietly take their bonuses and go out for drinks or a new car. Nobody will report how much money they made. Why would they?
  - biql 6y ago
    Not sure how reliable it is but according to SA, 78% is owned by institutions https://seekingalpha.com/symbol/GME https://seekingalpha.com/symbol/GME, the part owned by retail should be truly small. How this narrative of retail being in control is being pushed by the media is indeed very strange.
wolfretcrap 6y ago
>I think the general answer would be no, because at the end this fund would be a bagholder of $350 stock that's worth about $30, and when trying to get rid of it the price would crash down Explain why they'll be holding $350 stock when the hedge fund who was shorting the stock has obligation to return all the stock that it borrowed. All these stocks will leave them, so why it matters if the stock is $350
- syrrim 6y ago
  Granting that I'm not really familiar with these things, it seems like the short sellers simply don't have the money to cover their positions at $350/share. They could try to buy back all the stocks, but they would run out of money long before they finished. Given that, they would most likely skip the crap and jump straight to declaring bankruptcy. So it doesn't seem like they really need to buy the stock at $350. At a lower price, where they could feasibly pay for it all, they might give it a go, but as it stands there is no chance. I haven't seen anyone else saying this, but I also don't see any way around it.

Ataraxy 6y ago

They realistically are. It's pure media fiction (and scapegoating) that a bunch of regular people are somehow moving markets. In practice they're just the smoke screen for the actual wealth making plays against their peers that screwed up in this scenario.

jdjfktkrnj 6y ago
Retail is 25% of the market these days. Google it.
ericmay 6y ago
This, 100%. Even if WSB users and other retail holders held like, 30%, Burry holders 3%, and Cohen holds 10%, there is still more than 50% out there which may be bought by others. There aren’t enough interested Americans to buy the rest of the company. Other hedge funds and big investors are in on the action. These shorts got caught in a bad spot and now they are paying for it. Once all the retail traders get screwed in the media, others on Wall Street will quietly take their bonuses and go out for drinks or a new car. Nobody will report how much money they made. Why would they?
- biql 6y ago
  Not sure how reliable it is but according to SA, 78% is owned by institutions https://seekingalpha.com/symbol/GME https://seekingalpha.com/symbol/GME, the part owned by retail should be truly small. How this narrative of retail being in control is being pushed by the media is indeed very strange.

wolfretcrap 6y ago

>I think the general answer would be no, because at the end this fund would be a bagholder of $350 stock that's worth about $30, and when trying to get rid of it the price would crash down Explain why they'll be holding $350 stock when the hedge fund who was shorting the stock has obligation to return all the stock that it borrowed. All these stocks will leave them, so why it matters if the stock is $350

syrrim 6y ago
Granting that I'm not really familiar with these things, it seems like the short sellers simply don't have the money to cover their positions at $350/share. They could try to buy back all the stocks, but they would run out of money long before they finished. Given that, they would most likely skip the crap and jump straight to declaring bankruptcy. So it doesn't seem like they really need to buy the stock at $350. At a lower price, where they could feasibly pay for it all, they might give it a go, but as it stands there is no chance. I haven't seen anyone else saying this, but I also don't see any way around it.