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The idea that the shorts are for sure going to pay a higher price is super misleading and is the fuel for this ponzi. Everyone already knows the value of Gamest
by sidibe 6y ago
The idea that the shorts are for sure going to pay a higher price is super misleading and is the fuel for this ponzi. Everyone already knows the value of Gamestop is a tiny fraction of its price, so even if some shorts have to close, others will open short positions. To the people who believe they won't be the bag holders because of high short interest, this basically means the stock will always go up, and when enough people realize that's not true, the party is over and the ones opening short positions or closing long positions recently will be the only ones walking away with actual money.
- beagle3 6y agoYes, but that’s not more ponzi than e.g. Snapchat which expected to never make money in its filing. When you buy it, you expect to sell it to a bigger fool, or for a miracle. GameStop is the same; they are both doomed, and will be worth 0 sooner or later unless a miracle happens. The only reasonable valuation for either is (assets-liabilities), or liquidation value. All other value is based on a belief something will happen. In GameStop, it’s the belief that there are buyers of last resort who would pay almost any price - which is likely true for some of the shorts. Whether it is 1% or 10% or 100% is what these people are betting on. And the call from industry to pause trading to regroup against Reddit indicates it’s likely a lot more than 1%