3 ms·

So the idea is everyone who buys late can sell high and jump off the ship at the same time? Maybe I'm missing something, but if a whole bunch of people offload

by allenu 6y ago

So the idea is everyone who buys late can sell high and jump off the ship at the same time? Maybe I'm missing something, but if a whole bunch of people offload a stock, wouldn't that drive the price down, meaning a lot of people outside of the original short-sellers would still lose money?

icelancer 6y ago
The idea is the short sellers have to cover first due to margin calls at a huge loss, then the retail investors unload.
- MSM 6y ago
  Again though, the retail investors unload to who? Everyone knows GME is over valued by an insane amount, who do people expect to be snapping up shares at $500?
  - thebean11 6y ago
    The short sellers. They are short so they must buy the stock to close out their positions. (not saying this is indeed what would happen, just explaining the though process)
    - notyourday 6y ago
      > The short sellers. They are short so they must buy the stock to close out their positions. This is incorrect. Short sellers only need to close out their positions if: 1. They cannot maintain them. If they can raise funds ( which they did ) they can maintain the positions. In fact they are probably shorting more, short averaging up if they can get a locate. GME yesterday was on a hard to borrow not on non-borrowable list. 2. Their shares are called back. GME looks like a crazy stock around 1998/1999 ADEP(?), I think, which went from sub 3 to over 75 two days before Thanksgiving peaking with a couple of trades over 97 followed by a quick crash into teens and a really slow side into pennies. Some of the short sellers covered by putting up classified ads buying stock certificates from the cause the short squeeze by asking to deliver the certificates crowd a few years later.
      - thebean11 6y ago
        I think you misinterpreted what I said. Rephrased: "in order to close out their positions, they must buy the stock". I didn't intend to state that they would close them. I will say though, price going up forcing short sellers to close out (due to margin calls, fear, whatever) is not some made up thing..it's called a short squeeze. I do not know what will happen with GME.
        notyourday 6y ago
        > I think you misinterpreted what I said. Rephrased: "in order to close out their positions, they must buy the stock". I didn't intend to state that they would close them. They do not need to close out their positions until the stock becomes non-borrowable, causing their position to be called in.
        deleted 6y ago
        [deleted]
      - katbyte 6y ago
        > They cannot maintain them. If they can raise funds ( which they did ) they can maintain the positions I think at this point for a lot of people its "hold until they can't maintain, this isn't about money it's about screwing over the man!!!!" - as they say the market can remain irrational longer than you can remain solvent.
        notyourday 6y ago
        "The man" is much more liquid and much more capable of raising funds to maintain its positions compared to the WSB buyers of last several days. Margin calls after today's close are going to be brutal.
        sokoloff 6y ago
        Two days ago, the view (of some) was "WSB can remain irrational longer than short-sellers can remain solvent..."
cj 6y ago
> everyone who buys late [...] Maybe I'm missing something The narrative on WSB was that you wouldn't be "late" buying in even late last week at $350, because the goal post was raised to $1000. Many people guessing it would go to $5000. Others saying $10,000. Followed by lots of rocket emojis. Considering how people have witnessed the recent crypto rally generate insane returns, I can see how new / naive investors might think they're getting in early at $350. Especially when it was all over the news late last week and a giant billboard encouraging people to buy GME in time square just yesterday. Edit: The timesquare billboard was actually last Friday. And only ran for 1 hour.
- decafninja 6y ago
  With cries of TO THE MOON! HODL! TO VALHALLA!
- redisman 6y ago
  Cryptos at least have (somewhat theoretical) use cases with many unknowns that Gamestop Stock does not. In the end you will own stock in a dying retail game company and a pump and dump isn't going to keep its value up very long.

by allenu 6y ago

icelancer 6y ago

The idea is the short sellers have to cover first due to margin calls at a huge loss, then the retail investors unload.

MSM 6y ago
Again though, the retail investors unload to who? Everyone knows GME is over valued by an insane amount, who do people expect to be snapping up shares at $500?
- thebean11 6y ago
  The short sellers. They are short so they must buy the stock to close out their positions. (not saying this is indeed what would happen, just explaining the though process)
  - notyourday 6y ago
    > The short sellers. They are short so they must buy the stock to close out their positions. This is incorrect. Short sellers only need to close out their positions if: 1. They cannot maintain them. If they can raise funds ( which they did ) they can maintain the positions. In fact they are probably shorting more, short averaging up if they can get a locate. GME yesterday was on a hard to borrow not on non-borrowable list. 2. Their shares are called back. GME looks like a crazy stock around 1998/1999 ADEP(?), I think, which went from sub 3 to over 75 two days before Thanksgiving peaking with a couple of trades over 97 followed by a quick crash into teens and a really slow side into pennies. Some of the short sellers covered by putting up classified ads buying stock certificates from the cause the short squeeze by asking to deliver the certificates crowd a few years later.
    - thebean11 6y ago
      I think you misinterpreted what I said. Rephrased: "in order to close out their positions, they must buy the stock". I didn't intend to state that they would close them. I will say though, price going up forcing short sellers to close out (due to margin calls, fear, whatever) is not some made up thing..it's called a short squeeze. I do not know what will happen with GME.
      - notyourday 6y ago
        > I think you misinterpreted what I said. Rephrased: "in order to close out their positions, they must buy the stock". I didn't intend to state that they would close them. They do not need to close out their positions until the stock becomes non-borrowable, causing their position to be called in.
        deleted 6y ago
        [deleted]
    - katbyte 6y ago
      > They cannot maintain them. If they can raise funds ( which they did ) they can maintain the positions I think at this point for a lot of people its "hold until they can't maintain, this isn't about money it's about screwing over the man!!!!" - as they say the market can remain irrational longer than you can remain solvent.
      - notyourday 6y ago
        "The man" is much more liquid and much more capable of raising funds to maintain its positions compared to the WSB buyers of last several days. Margin calls after today's close are going to be brutal.
      - sokoloff 6y ago
        Two days ago, the view (of some) was "WSB can remain irrational longer than short-sellers can remain solvent..."

cj 6y ago

> everyone who buys late [...] Maybe I'm missing something The narrative on WSB was that you wouldn't be "late" buying in even late last week at $350, because the goal post was raised to $1000. Many people guessing it would go to $5000. Others saying $10,000. Followed by lots of rocket emojis. Considering how people have witnessed the recent crypto rally generate insane returns, I can see how new / naive investors might think they're getting in early at $350. Especially when it was all over the news late last week and a giant billboard encouraging people to buy GME in time square just yesterday. Edit: The timesquare billboard was actually last Friday. And only ran for 1 hour.

decafninja 6y ago
With cries of TO THE MOON! HODL! TO VALHALLA!
redisman 6y ago
Cryptos at least have (somewhat theoretical) use cases with many unknowns that Gamestop Stock does not. In the end you will own stock in a dying retail game company and a pump and dump isn't going to keep its value up very long.