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If they issue a few million shares at the current price, shorts still have to cover at an absurdly high price compared to their entry which will cost them in th
by pb7 6y ago
If they issue a few million shares at the current price, shorts still have to cover at an absurdly high price compared to their entry which will cost them in the single to low double digit billions. It may screw over retail investors but bankruptcy is inevitable.
- whatever1 6y agoPardon my ignorance, I have no expertise in the field. When you issue new shares, do they have a fixed price or are they sold at market value (whatever market decides the price to be)? If the latter happens, I expect that the price of the [edit:GME] stock will collapse immediately.
- pb7 6y agoIssuing shares is a move done to raise money. It would then follow that GameStop would want to get the most money possible for these shares so they would try to sell them for the highest price possible, somewhere around the current going price. I’m not 100% on whether they have to release them all at once but I’m guessing dumping multiple million shares all at once would crash the price which isn’t good for anyone in normal circumstances so it’s probably not done that way. Regardless, there are like 50-60M shares currently shorted — there’s no chance GameStop would issue that many.
- samename 6y agoI’m new to this as well - how do you know how many shares that have shorted? I heard that even the number of shares shorted isn’t guaranteed to be accurate.
- pb7 6y agoYou can find it on many finance websites[0] but yes, the accurate numbers are only released twice a month. There are companies that specialize in estimating the short interest on a daily basis. It’s likely to be accurate enough to draw the same conclusions. [0] https://www.marketbeat.com/stocks/NYSE/GME/short-interest/ https://www.marketbeat.com/stocks/NYSE/GME/short-interest/