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Yeah. I find it hard to believe that any serious money is shorting anything remotely close to a meme stock right now. Who the hell would want to risk their care

Yeah. I find it hard to believe that any serious money is shorting anything remotely close to a meme stock right now. Who the hell would want to risk their career on a trade with infinite downside when it seems like the prevailing market sentiment is crush the shorts? Don’t forget that this is a market where most people believe TSLA is vastly overvalued.

dcow 6y ago
There hasn't been enough volume for the shorts to be closed.
- NovemberWhiskey 6y ago
  Why do you say that? The total free float is about 47M shares; I understand short interest was about 150% of float but volume on GME last week was over 500M, wasn't it?
  - Rastonbury 6y ago
    Shorts covering is expected to move the price way more that it has. That 500m vol is people/algos trying to profit of intraday movements keeping the price relatively stable (for GME)
    - NovemberWhiskey 6y ago
      You have literally no way of knowing that. A hedge fund covering a short pays exactly the same price in the market as a meme-following Redditor or an intraday trading algorithm.
sidibe 6y ago
On the contrary, as the gap between the current price and the range everyone knows it will fall to eventually grows, the stock is becoming more and more attractive to short to people with "serious money" and a little appetite for risk. Meme stock just makes it look more like a huge opportunity on both sides and in the long run everyone knows which direction it goes from here so the opportunity is clearly more on the short side if they size their position so they can hold it long term. Even if there is the chance for further squeeze, I'm sure enough people will still feel this is a huge shorting opportunity that short interest will not go down much from here, and the higher it goes the more people will feel that way.
- londons_explore 6y ago
  The share capital of the company isn't fixed... The company could issue more shares, and invest the money raised, turning the business around. That wasn't a possibility before, but it is now. Given that, I don't think "the range everyone knows it will fall to eventually" is a foregone conclusion.
  - sidibe 6y ago
    They're not in a promising sector and there's nothing to suggest raising a bunch of money is going to allow them to turn into the kind of company a market cap of $20 billion suggests.
    - londons_explore 6y ago
      But if they could raise $1 Billion by selling 5% more shares, they could pivot into an entirely new sector using some of their existing assets. For example, they could make an online gaming platform using their relationships with game studios, or they could move into 'gaming cafes' using their retail space, or start designing games themselves using their storefronts for marketing.
      - sidibe 6y ago
        Sure that could happen, but it's just as likely as giving anyone a billion dollars and expecting them to become a company that justifies a $20 billion valuation very quickly. The timing is important too because at the end of a mania like this that is entirely based on a quickly rising price, as soon as enough people decide this isn't going to continue rocketing up, there will be a rush to take their profits or to stop their losses.
      - astrange 6y ago
        Considering how unpleasant it is to talk to a GameStop employee (they upsell you on like 5 different things a purchase), starting a business where people stay longer and talk to them more doesn’t sound appealing for the customer.
toast0 6y ago
I mean, I'm not willing to risk my money on a short (and I wouldn't recommend anyone else to either), but I would be intensely surprised if the stock is not below $50 at the end or February. If the current price is north of $300, and holding costs on a short for a month aren't too bad, there's like $200+ of movement there to capture. Pump and dump is going to dump at some point. The market can stay irrational for a long time etc, but I suspect that's less true when everyone knows it's being irrational. I'll just leave everything in my three-fund portfolio though, cause boring is the right fit for me.

dcow 6y ago

There hasn't been enough volume for the shorts to be closed.

NovemberWhiskey 6y ago
Why do you say that? The total free float is about 47M shares; I understand short interest was about 150% of float but volume on GME last week was over 500M, wasn't it?
- Rastonbury 6y ago
  Shorts covering is expected to move the price way more that it has. That 500m vol is people/algos trying to profit of intraday movements keeping the price relatively stable (for GME)
  - NovemberWhiskey 6y ago
    You have literally no way of knowing that. A hedge fund covering a short pays exactly the same price in the market as a meme-following Redditor or an intraday trading algorithm.

sidibe 6y ago

On the contrary, as the gap between the current price and the range everyone knows it will fall to eventually grows, the stock is becoming more and more attractive to short to people with "serious money" and a little appetite for risk. Meme stock just makes it look more like a huge opportunity on both sides and in the long run everyone knows which direction it goes from here so the opportunity is clearly more on the short side if they size their position so they can hold it long term. Even if there is the chance for further squeeze, I'm sure enough people will still feel this is a huge shorting opportunity that short interest will not go down much from here, and the higher it goes the more people will feel that way.

londons_explore 6y ago
The share capital of the company isn't fixed... The company could issue more shares, and invest the money raised, turning the business around. That wasn't a possibility before, but it is now. Given that, I don't think "the range everyone knows it will fall to eventually" is a foregone conclusion.
- sidibe 6y ago
  They're not in a promising sector and there's nothing to suggest raising a bunch of money is going to allow them to turn into the kind of company a market cap of $20 billion suggests.
  - londons_explore 6y ago
    But if they could raise $1 Billion by selling 5% more shares, they could pivot into an entirely new sector using some of their existing assets. For example, they could make an online gaming platform using their relationships with game studios, or they could move into 'gaming cafes' using their retail space, or start designing games themselves using their storefronts for marketing.
    - sidibe 6y ago
      Sure that could happen, but it's just as likely as giving anyone a billion dollars and expecting them to become a company that justifies a $20 billion valuation very quickly. The timing is important too because at the end of a mania like this that is entirely based on a quickly rising price, as soon as enough people decide this isn't going to continue rocketing up, there will be a rush to take their profits or to stop their losses.
    - astrange 6y ago
      Considering how unpleasant it is to talk to a GameStop employee (they upsell you on like 5 different things a purchase), starting a business where people stay longer and talk to them more doesn’t sound appealing for the customer.

toast0 6y ago

I mean, I'm not willing to risk my money on a short (and I wouldn't recommend anyone else to either), but I would be intensely surprised if the stock is not below $50 at the end or February. If the current price is north of $300, and holding costs on a short for a month aren't too bad, there's like $200+ of movement there to capture. Pump and dump is going to dump at some point. The market can stay irrational for a long time etc, but I suspect that's less true when everyone knows it's being irrational. I'll just leave everything in my three-fund portfolio though, cause boring is the right fit for me.