4 ms·
You are not wrong, but you are also missing the part where risk management departments will forcibly unwind shorts of institutional investors, option gamma crea
by phyalow 6y ago
You are not wrong, but you are also missing the part where risk management departments will forcibly unwind shorts of institutional investors, option gamma creating massive amounts of reflexivity and the Weaponized autism of /r/WSB and the viral network effects of its memes encouraging even more reflexivity.
I have no doubt this will end in tears for investors on both sides.
GME's management would be wise to issue 1-200% of new equity at a substantial discount to present market value to short holders (this lets them cover at a lower loss) and sit on the cash to transform their businesses strategic outlook.
- Clewza313 6y agoExcept that would potentially make GME complicit in activity that regulators are already making threatening "market manipulation" noises about. Also, if they were to issue more shares, the mere news of this would likely pop the bubble hard before they would realize any gains.
- jaredmosley 6y agoGME doesn't care if they pop the bubble though. They know their shares aren't actually worth $350 and they're not making strategic decisions based on them being worth that much. They'd much rather issue more shares, take the increase they get, and get back to their own business.
- abfan1127 6y agois that fair to say? certainly some of them are buying at $350 now? Some people are selling now and others are buying, setting the market price. From a selfish standpoint, it makes sense to sell now, if for nothing else, to take those profits to manipulate some other poor company, no?