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> Why not? If I think Tesla is a good buy and you think it's a bad buy, you can borrow a share (go short) and sell it to me at the current market price. We both

> Why not? If I think Tesla is a good buy and you think it's a bad buy, you can borrow a share (go short) and sell it to me at the current market price. We both win; you get to place your bet and I get to purchase the stock without distorting the market as much, since I'm buying a borrowed share. This is a pretty naive analysis. As we saw with GME, and other stocks in the recent years, that's not at all what's happening. What's happening is that hedge funds are shorting the entire float of a company multiple times over. If you borrow a single stock and sell it to me, that's probably fine. If you borrow 50 million shares, and flood the market with them, the stock price crashes because supply vastly outstrips demand. That's what's happening right now, and the hedge funds are doing it without even borrowing the stock. They're just like "Yeah, trust us, we actually have 50 million shares over here -- oh, you're asking about our failures to deliver? Don't worry about that, we paid the $10k fine and banked a $200M profit on it!" They're literally flooding the market with shares that don't exist. How is that allowed? https://wherearetheshares.com/ https://wherearetheshares.com/

incrudible 6y ago
> They're literally flooding the market with shares that don't exist. Almost certainly not, more likely it's just a story they want you to believe so they can pump-and-dump Gamestop. > How is that allowed? Read this: https://www.sec.gov/investor/pubs/regsho.htm https://www.sec.gov/investor/pubs/regsho.htm It covers all the concerns. Failure to deliver or percentage of float shared above 100% is not evidence of naked short selling. Even if it was, naked short selling is not necessarily illegal. Even if it was illegal, it is not necessarily bad. You can't destroy a good company with short selling. If some hedge fund shorts your company below intrinsic value my hedge fund will buy your shares and squeeze those short sellers out. Many retail traders don't realize that other hedge funds made hundreds of millions from the Gamestop squeeze. The "take it from the rich" narrative is complete nonsense. If your company is on its way to bankruptcy and constantly needs new cash through stock sales, I honestly don't care if somebody makes a little bit of money on your way out. You had it coming. Gamestop had it coming. It's curious how the same company that would give you $15 in store credit on a trade-in of a new game is now the darling of retail traders.
- viklove 6y ago
  I'm not sure if you responded to the wrong comment, but you're talking about a whole bunch of stuff that's not relevant to my comment at all: > Failure to deliver or percentage of float shared above 100% is not evidence of naked short selling. I never said it was. > The "take it from the rich" narrative is complete nonsense. I never mentioned this. > I honestly don't care if somebody makes a little bit of money on your way out. No one made money on my way out, I've made about a 20% return on GME. > You had it coming. Gamestop had it coming. You sound angry and spiteful for some reason, not sure where that's coming from. > It's curious how the same company that would give you $15 in store credit on a trade-in of a new game is now the darling of retail traders. Ok, what are you talking about? There is one relevant thing you said at least: > Almost certainly not, more likely it's just a story they want you to believe so they can pump-and-dump Gamestop. Almost certainly not? GME was shorted 140%. They absolutely certainly shorted more shares than actually exist. How can you short 100% of the float, then continue shorting more? I never said it had to be naked, I said they shorted more shares than exist. That's unequivocally true, no one is even trying to argue otherwise (except you, for some reason, maybe because you lost money shorting GME?).
  - incrudible 6y ago
    > I'm not sure if you responded to the wrong comment, but you're talking about a whole bunch of stuff that's not relevant to my comment It's all relevant to the broader argument. The link you posted mentions failure-to-deliver. > No one made money on my way out, I've made about a 20% return on GME. Good for you, but I'm talking about the general practice shorting a company that is about to go bankrupt. If you're willing to take the (apparently not insignificant) risk of going short on such a company, I'm fine with you taking those profits. I don't consider that "immoral". > You sound angry and spiteful for some reason, not sure where that's coming from. I'm not angry, but I do have some spite about Gamestop. The company sucks. Everybody always agreed the company sucks. Now a lot of people - perhaps not you - are acting as if the company is somehow good, that it can be turned around, that they "like the stock". That's all bullshit. If people were just honest about being in a casino and betting on "squeeze", that'd be totally fine. > Almost certainly not? GME was shorted 140%. They absolutely certainly shorted more shares than actually exist. How can you short 100% of the float, then continue shorting more? There is one number calculated in a particular way that reported short interest as 140%. So far so good. Everything else is an interpretation of that number that is not necessarily reflecting reality. https://www.fool.com/investing/2021/01/28/yes-a-stock-can-have-short-interest-over-100-heres/ https://www.fool.com/investing/2021/01/28/yes-a-stock-can-ha... If you take synthetic longs out of the equation, the number drops to well below 100%: https://twitter.com/ihors3/status/1354847896173240322 https://twitter.com/ihors3/status/1354847896173240322 Still good enough for a major short squeeze, of course. In fact, all of the "most shorted" stocks in the S&P experienced a short squeeze alongside with Gamestop. FYI, I pretty much never open a short position in the hopes of turning a profit, I only use it to hedge other positions. You know, like a proper hedge fund.

incrudible 6y ago

> They're literally flooding the market with shares that don't exist. Almost certainly not, more likely it's just a story they want you to believe so they can pump-and-dump Gamestop. > How is that allowed? Read this: https://www.sec.gov/investor/pubs/regsho.htm https://www.sec.gov/investor/pubs/regsho.htm It covers all the concerns. Failure to deliver or percentage of float shared above 100% is not evidence of naked short selling. Even if it was, naked short selling is not necessarily illegal. Even if it was illegal, it is not necessarily bad. You can't destroy a good company with short selling. If some hedge fund shorts your company below intrinsic value my hedge fund will buy your shares and squeeze those short sellers out. Many retail traders don't realize that other hedge funds made hundreds of millions from the Gamestop squeeze. The "take it from the rich" narrative is complete nonsense. If your company is on its way to bankruptcy and constantly needs new cash through stock sales, I honestly don't care if somebody makes a little bit of money on your way out. You had it coming. Gamestop had it coming. It's curious how the same company that would give you $15 in store credit on a trade-in of a new game is now the darling of retail traders.

viklove 6y ago
I'm not sure if you responded to the wrong comment, but you're talking about a whole bunch of stuff that's not relevant to my comment at all: > Failure to deliver or percentage of float shared above 100% is not evidence of naked short selling. I never said it was. > The "take it from the rich" narrative is complete nonsense. I never mentioned this. > I honestly don't care if somebody makes a little bit of money on your way out. No one made money on my way out, I've made about a 20% return on GME. > You had it coming. Gamestop had it coming. You sound angry and spiteful for some reason, not sure where that's coming from. > It's curious how the same company that would give you $15 in store credit on a trade-in of a new game is now the darling of retail traders. Ok, what are you talking about? There is one relevant thing you said at least: > Almost certainly not, more likely it's just a story they want you to believe so they can pump-and-dump Gamestop. Almost certainly not? GME was shorted 140%. They absolutely certainly shorted more shares than actually exist. How can you short 100% of the float, then continue shorting more? I never said it had to be naked, I said they shorted more shares than exist. That's unequivocally true, no one is even trying to argue otherwise (except you, for some reason, maybe because you lost money shorting GME?).
- incrudible 6y ago
  > I'm not sure if you responded to the wrong comment, but you're talking about a whole bunch of stuff that's not relevant to my comment It's all relevant to the broader argument. The link you posted mentions failure-to-deliver. > No one made money on my way out, I've made about a 20% return on GME. Good for you, but I'm talking about the general practice shorting a company that is about to go bankrupt. If you're willing to take the (apparently not insignificant) risk of going short on such a company, I'm fine with you taking those profits. I don't consider that "immoral". > You sound angry and spiteful for some reason, not sure where that's coming from. I'm not angry, but I do have some spite about Gamestop. The company sucks. Everybody always agreed the company sucks. Now a lot of people - perhaps not you - are acting as if the company is somehow good, that it can be turned around, that they "like the stock". That's all bullshit. If people were just honest about being in a casino and betting on "squeeze", that'd be totally fine. > Almost certainly not? GME was shorted 140%. They absolutely certainly shorted more shares than actually exist. How can you short 100% of the float, then continue shorting more? There is one number calculated in a particular way that reported short interest as 140%. So far so good. Everything else is an interpretation of that number that is not necessarily reflecting reality. https://www.fool.com/investing/2021/01/28/yes-a-stock-can-have-short-interest-over-100-heres/ https://www.fool.com/investing/2021/01/28/yes-a-stock-can-ha... If you take synthetic longs out of the equation, the number drops to well below 100%: https://twitter.com/ihors3/status/1354847896173240322 https://twitter.com/ihors3/status/1354847896173240322 Still good enough for a major short squeeze, of course. In fact, all of the "most shorted" stocks in the S&P experienced a short squeeze alongside with Gamestop. FYI, I pretty much never open a short position in the hopes of turning a profit, I only use it to hedge other positions. You know, like a proper hedge fund.