4 ms·

SEC Data Shows $359M of GameStop Shares Failed to Deliver

• totalZero 6y ago
  The component of this that the general public doesn't yet understand is that exchanges obligate market-makers to post continuous, two-sided quotations. That puts them in a position where they are pressured to offer stock even when they have no inventory (ie, sell short). And if that happens when there's no available borrow in the market, it's permitted because of a loophole in the regulations; market-makers can sell short even when they cannot locate the shares that they are selling. Citadel Securities is a market-maker. Presumably, they were lifted short by all the buying from Robinhood. It'd be very interesting to know how much GME stock their firm failed to deliver every day. My big worry is that the long holders think they own the stock after T+2, and possibly even start loaning the shares that haven't yet been delivered. This would falsely create borrow in the stock loan market. And if a market-maker can sell short when there's no borrowable inventory to sell, it can maliciously depress the price without ostensibly violating the law.
  • bcrl 6y ago
    Doesn't this essentially make stocks have no meaning by treating them like fiat? Sounds like fraud to me.
• hbcondo714 6y ago
  Here's the original article on Bloomberg with links: https://www.bloomberg.com/news/articles/2021-02-17/sec-data-show-359-million-of-gamestop-shares-failed-to-deliver https://www.bloomberg.com/news/articles/2021-02-17/sec-data-... They are using the SEC's Fails-to-Deliver datasets to get to this number: https://www.sec.gov/data/foiadocsfailsdatahtm https://www.sec.gov/data/foiadocsfailsdatahtm
  • frombody 6y ago
    One problem is the SEC only reporting this data twice a month. This information should be reported daily.