3 ms·

No, it's not real economics. It's the little guys coming together to fight the big guys at their own game.

ceejayoz 6y ago
A lot of little guys are gonna be left holding the bag at the end, though. The stock was probably overvalued at $10. It's definitely overvalued at $400.
- vsareto 6y ago
  Based on how people acted during the pandemic, these people will be more than willing to be bagholders, constantly deny they are bagholders, and constantly deny anyone else is a bagholder.
- criddell 6y ago
  People were shorting this stock when it was an order of magnitude less expensive. Isn't it an even more attractive short target now?
  - ceejayoz 6y ago
    Yes, but there's a fairly hefty risk of it rocketing up again before collapsing, which could wipe out such short positions. (Again!) Not a move I'd make with my retirement funds.
    - FabHK 6y ago
      Not a move you should make highly leveraged. Perfectly legitimate move to make if you have a sufficient capital cushion. (yes, I now, shorts carry unlimited risk in theory, but in practice the risk is limited. Regulators will (correctly) step in when the market cap of some retailer during the pandemic eclipses the market cap of, dunno, Apple and Tesla or whatever.)
  - milesvp 6y ago
    Maybe. Part of the problem currently, is there are too many short positions compared to the total issued shares. It’s what makes this a short squeeze. If you try to short now you’ll help elleviate the squeeze, though you may have problems finding people to lend the stock to short. But what makes shorting even scarier right now is the price is based on the marginal willingness to sell right now, vs the marginal willingness to buy + the forced buying due to margin calls. There is a major assymmetry that is driving the stock to positive infinity. And while we both know the price can’t go to infinity, we can’t be sure that a short right now won’t have it’s margin called due to all the margin calls before triggering a margin call on the stock just shorted. So risk is very real for a short at the moment, and you need a lot of cash reserves to try to weather the current situation.

A lot of little guys are gonna be left holding the bag at the end, though. The stock was probably overvalued at $10. It's definitely overvalued at $400.

vsareto 6y ago
Based on how people acted during the pandemic, these people will be more than willing to be bagholders, constantly deny they are bagholders, and constantly deny anyone else is a bagholder.
criddell 6y ago
People were shorting this stock when it was an order of magnitude less expensive. Isn't it an even more attractive short target now?
- ceejayoz 6y ago
  Yes, but there's a fairly hefty risk of it rocketing up again before collapsing, which could wipe out such short positions. (Again!) Not a move I'd make with my retirement funds.
  - FabHK 6y ago
    Not a move you should make highly leveraged. Perfectly legitimate move to make if you have a sufficient capital cushion. (yes, I now, shorts carry unlimited risk in theory, but in practice the risk is limited. Regulators will (correctly) step in when the market cap of some retailer during the pandemic eclipses the market cap of, dunno, Apple and Tesla or whatever.)
- milesvp 6y ago
  Maybe. Part of the problem currently, is there are too many short positions compared to the total issued shares. It’s what makes this a short squeeze. If you try to short now you’ll help elleviate the squeeze, though you may have problems finding people to lend the stock to short. But what makes shorting even scarier right now is the price is based on the marginal willingness to sell right now, vs the marginal willingness to buy + the forced buying due to margin calls. There is a major assymmetry that is driving the stock to positive infinity. And while we both know the price can’t go to infinity, we can’t be sure that a short right now won’t have it’s margin called due to all the margin calls before triggering a margin call on the stock just shorted. So risk is very real for a short at the moment, and you need a lot of cash reserves to try to weather the current situation.