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Problem is that stock prices are set by the marginal buyer - the one that is buying right now. If the WSB crowd (and hangers on) runs out of money, then sudden

Problem is that stock prices are set by the marginal buyer - the one that is buying right now. If the WSB crowd (and hangers on) runs out of money, then suddenly the buyers left in the general public might think the stock is worth $10 rather than $300 and adjust their orders accordingly. The result will be no buyers left, plus a lot of retail traders that bought at $250-325 hoping to ride it to the moon and desperate to get out before the price reverses. Shorts cover easily, at whatever price they name, and longs lose their shirt. I'm hearing borrow fees are at about 80-100% annualized now. That works out to around 0.2-0.3% daily, so carrying a $10K position costs you $20-30/day, a $1M position costs $2-3K, etc. Someone with enough money to stomach that kind of risk can easily afford that.

awillen 6y ago
That works until there aren't any more marginal buyers. Just because some people out there are willing to sell the stock for $10 (which no rational person is when it's trading in the hundreds, by the way... the idea that there are marginal buyers who are somehow willing to vastly underprice their sales relative to the market value isn't a valid one) doesn't matter as long as large swaths of it are held by people who won't sell at that price.