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Does not seem far fetched. Killing the business means maximum profit for the shorters. Having a short interest of about 140% is also a good indicator that they
by fileeditview 6y ago
Does not seem far fetched. Killing the business means maximum profit for the shorters.
Having a short interest of about 140% is also a good indicator that they would have loved to see GME bankrupt.
In the end a short means a future buy and 140% of shares bought in the future means the price will go up eventually..
- llampx 6y agoIf the share price goes to 0 because of bankruptcy, shares don't have to be bought back/returned. That was the outcome Melvin Capital was going for.
- fileeditview 6y agoThat's what I hinted at with my third sentence.
- leetcrew 6y agoshorts get a bad rap for being one of the more transparent cases of profiting from the misfortune of others in finance. and yes, it does create incentives to do other stuff to kill the company, but similar incentives exist with a long position (one way for a symbol to go up is for competitors to fail). so far I haven't read anything suggesting these hedge funds did anything other than take a large short position in $GME.
- PeterisP 6y agoWhile the business dying means maximum profit for the shorters, the act of shorting isn't killing the business in any way; the price of shares does not affect the revenues of GME nor their workers jobs, it has some impact on the bonuses of the top managers and that's it. The shorters are predicting that the business will fail (and hoping for their predictions to come true), but they aren't causing the failure, so it's misleading to say that they are trying to kill the business as long as the only thing they're doing is shorting the stock. There's a very big gap between hoping that a rich uncle dies because you'd get some inheritance and actually trying to kill him.