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Correct me if I'm wrong but isn't the hypothesis that if there are enough people holding (clearing price + X), you can trigger a cascading buying frenzy (the sh

Correct me if I'm wrong but isn't the hypothesis that if there are enough people holding (clearing price + X), you can trigger a cascading buying frenzy (the short squeeze) as those who are clearly underwater and/or margin called try to get out at ever increasing prices? And while the little guy narrative gets everyone in the feels, undoubtedly there are some Big Swinging D**s on Wall St who are also hodling to inflict financial ruin upon their competition. There are a few billionaires who've shown up to the party, after all.

PragmaticPulp 6y ago
Short squeezes aren't just theoretical. They're very real. However, consider this: If this short squeeze was as easy as WSB wants you to believe, why didn't a well-capitalized hedge fund cash in on it already? It's not like WSB planned this in secret. It was literally headline news on a top-10 website for weeks. As you said, the hedge funds are certainly making a lot of money here. Early investors are making a lot of money. However, we don't actually know how many of the short positions entered at $2 or $200 or even $400. Smart hedge funds will make a lot of money by taking short positions on this stock, selling their borrowed shares to Redditors looking to get rich, and profiting by exiting their short positions when this finally crashes. Those shorts will cause the "short interest" number to stay high, or even increase, as this situation goes on.
- ric2b 6y ago
  > why didn't a well-capitalized hedge fund cash in on it already? I would be surprised if there aren't already multiple hedge funds doing just that.