5 ms·

Its an imgur link I know, but this is the most succinct run-down I've seen so far: https://imgur.com/a/DCCpuZA https://imgur.com/a/DCCpuZA

AtlasBarfed 6y ago
That's fantastic. While I do think shorting is a valid counter to the perpetual sunshine inflation of the stock market, and I do agree that Nikola got what it deserved in shorting, I just love that Elon Musk probably destroyed a couple billion dollars of craven shorting with a single word tweet.
- deleted 6y ago
  [deleted]
achow 6y ago
This also explains nicely: https://i.redd.it/elrhw73gpwd61.jpg https://i.redd.it/elrhw73gpwd61.jpg
joubert 6y ago
> So they shorted Gamestop (GME) from $20, to $10, to $4. Their greed kept compounding. They kept doing it again, and again, for months. Making billions of dollars, and almost bankrupting this company. I haven’t followed the history. In what specific way did driving the share price itself down lead GameStop to near bankruptcy?
- emteycz 6y ago
  For example Gamestop could've issued and sold new shares, instead they were forced to wait or sell them for unrealistic price.
  - mcv 6y ago
    I really hope they issued some shares now.
hibbelig 6y ago
The part I don't understand is this: “Someone noted that these hedgefunds shorted 140% of all shares available.” How can you borrow a share that doesn't exist?
- emteycz 6y ago
  When you're in bed with regulators, everything is possible. Of course normal people can't do it (as it should be).
- aahortwwy 6y ago
  Borrow a share. Sell it. Borrow the same share. Sell it again.
  - mapster 6y ago
    Isn’t that manipulating the market by selling shares so the share price drops even more?
- miked85 6y ago
  Borrow a share, then let someone else borrow it from you.
- loandigger 6y ago
  Normally, when you short a share, your broker has to go find somebody who already owns it and they "borrow" it from there and allow you to "sell" it short. But if you can believe this, the very, very largest Wall Street firms, (Citadel, Sigma2, etc.) those with trillion dollar balance sheets got a special exemption from the SEC : rather than having to "find" shares to borrow, they can "manufacture" shares, using their massive balance sheets as collateral. This is how 140% of GameStonk can be shorted. It is this unfair playing field that r/wallstreetbets is fighting against. Since the short exceeds the float, it is possible that there could be an "infinite" short squeeze, that even if they took the company private by buying every available share, there would still be another 40% outstanding they would have to cover. HOLD!
  - 6y ago
mav3rick 6y ago
The most elegant explanation of shorting stocks.
farseer 6y ago
Nice explanation from nytimes: https://www.nytimes.com/2021/01/27/business/gamestop-wall-street-bets.html?action=click&module=Top%20Stories&pgtype=Homepage https://www.nytimes.com/2021/01/27/business/gamestop-wall-st...
obrit 6y ago
Nice explanation. Thanks for the link. How does someone recognize when stock (and 140% of it) is being shorted? i.e. how did they see this opportunity?
deleted 6y ago
[deleted]
kinow 6y ago
Great explanation! Thanks for the link!

AtlasBarfed 6y ago

That's fantastic. While I do think shorting is a valid counter to the perpetual sunshine inflation of the stock market, and I do agree that Nikola got what it deserved in shorting, I just love that Elon Musk probably destroyed a couple billion dollars of craven shorting with a single word tweet.

deleted 6y ago
[deleted]

achow 6y ago

This also explains nicely: https://i.redd.it/elrhw73gpwd61.jpg https://i.redd.it/elrhw73gpwd61.jpg

joubert 6y ago

> So they shorted Gamestop (GME) from $20, to $10, to $4. Their greed kept compounding. They kept doing it again, and again, for months. Making billions of dollars, and almost bankrupting this company. I haven’t followed the history. In what specific way did driving the share price itself down lead GameStop to near bankruptcy?

emteycz 6y ago
For example Gamestop could've issued and sold new shares, instead they were forced to wait or sell them for unrealistic price.
- mcv 6y ago
  I really hope they issued some shares now.

hibbelig 6y ago

The part I don't understand is this: “Someone noted that these hedgefunds shorted 140% of all shares available.” How can you borrow a share that doesn't exist?

emteycz 6y ago
When you're in bed with regulators, everything is possible. Of course normal people can't do it (as it should be).
aahortwwy 6y ago
Borrow a share. Sell it. Borrow the same share. Sell it again.
- mapster 6y ago
  Isn’t that manipulating the market by selling shares so the share price drops even more?
miked85 6y ago
Borrow a share, then let someone else borrow it from you.
loandigger 6y ago
Normally, when you short a share, your broker has to go find somebody who already owns it and they "borrow" it from there and allow you to "sell" it short. But if you can believe this, the very, very largest Wall Street firms, (Citadel, Sigma2, etc.) those with trillion dollar balance sheets got a special exemption from the SEC : rather than having to "find" shares to borrow, they can "manufacture" shares, using their massive balance sheets as collateral. This is how 140% of GameStonk can be shorted. It is this unfair playing field that r/wallstreetbets is fighting against. Since the short exceeds the float, it is possible that there could be an "infinite" short squeeze, that even if they took the company private by buying every available share, there would still be another 40% outstanding they would have to cover. HOLD!
- 6y ago

mav3rick 6y ago

The most elegant explanation of shorting stocks.

farseer 6y ago

Nice explanation from nytimes: https://www.nytimes.com/2021/01/27/business/gamestop-wall-street-bets.html?action=click&module=Top%20Stories&pgtype=Homepage https://www.nytimes.com/2021/01/27/business/gamestop-wall-st...

obrit 6y ago

Nice explanation. Thanks for the link. How does someone recognize when stock (and 140% of it) is being shorted? i.e. how did they see this opportunity?

deleted 6y ago

[deleted]

kinow 6y ago

Great explanation! Thanks for the link!