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It really lifts the veil on how little research goes into some of these articles when you see the reporting on a topic you have closely followed. >The stock, w
by jimmydorry 5y ago
It really lifts the veil on how little research goes into some of these articles when you see the reporting on a topic you have closely followed.
>The stock, which peaked at $482.95 a share when hedge funds that had shorted GameStop were forced to buy at any price, has come back to earth. But it is still at about $112 a share, compared to less than $20 on Jan. 1, 2021.
This is a pretty basic error to make when the SEC investigated and even put out a report showing that the majority of that price movement was from non-short sellers (e.g. retail) and that as a proportion of volume, barely any of it was due to short sellers closing their positions.
The article also completely glossed over the fact that DFV was made fun of and derrided for taking such a large risk in GME. Especially when it was down (for a majority of the time since he started posting that position, if I recall corrected). It instead portrays him as making "consistent returns" and starting a movement to influence the price.
[1] https://www.sec.gov/files/staff-report-equity-options-market-struction-conditions-early-2021.pdf https://www.sec.gov/files/staff-report-equity-options-market... Page 28 if you want a nice graph to take a glance at.
- bigram 5y agoIt's not clear to me what you think the error is. That the majority of the price action was caused by retail and not short sellers covering their position doesn't negate the fact that shorts were forced to cover their positions and did so. The language and charts in the SEC report show as much.
- david927 5y agoThey did not cover. When enough people DRS their shares it will become clear.
- ahtihn 5y agoHow many shares need to be DRS'd?
- ABeeSea 5y agoThen how do you explain the massive drop in short interest in the graph in the sec report? Short interest can’t drop without shorts covering…
- david927 5y agoThere are many ways of hiding short positions like with ETFs. Look at the XRT (an ETF holding GME).
- ABeeSea 5y agoSo you are saying the SEC report is wrong about the short interest?
- david927 5y agoI didn't say that. I'm saying there are many ways of hiding short positions.
- ABeeSea 5y agoXRT has been highly shorted for well over a decade because pretty much all of the stocks in it are failing brick and mortars, including gamestop. What does that have to do with GameStop’s short position?
- nairboon 5y agoWhere exactly does the SEC state that the majority of all the short positions have been closed? I can't find this in that report.
- bigram 5y agoIn the section "Short Selling and Covering Short Positions" is a chart on page 27 that shows the short interest for GME. It shows the short interest dropping precipitously, meaning that the majority of positions were closed.
- rockshassa 5y agoyour account was created 5 hours ago, this was posted 6 hours ago. you seem to be quite opinionated about this topic. any reason why that is?
- andrewclunn 5y agoThat's because the point of this article is "Don't trust these scam artists!" because collective action motivated by hatred of elite rigging the system... is dangerous to those elite.
- adriancr 5y agoI would argue Michael Burry actually sparked GME, that and new CEO and some massive short selling. Burry has much more of a following on twitter then the 400 from Roaring Kitty, and him buying was a trigger for my interest in it. Now, he usually does proper analysis and did have reasons for stock to run up, it was fun to see his tweets about the mess of trying to track down the shares he bought - https://i.redd.it/utr5k9banpe81.jpg https://i.redd.it/utr5k9banpe81.jpg https://markets.businessinsider.com/news/stocks/big-short-investor-michael-burry-scion-gamestop-stock-price-frenzy-2021-2-1030050393 https://markets.businessinsider.com/news/stocks/big-short-in...
- openknot 5y agoThanks for the links that report on the story. I was curious to see more of the original Tweets too, but it’s too bad that Michael Burry deleted his Twitter account in April 2021 [0]. [0] https://www.marketwatch.com/amp/story/big-short-trader-michael-burry-quits-twitter-disappointing-his-legion-of-retail-trading-superfans-11617740647 https://www.marketwatch.com/amp/story/big-short-trader-micha...
- jamram82 5y agoThere is archive of his tweets https://twitter.com/burryarchive https://twitter.com/burryarchive
- nr2x 5y agoTwitter is irrelevant though, this was a Reddit op.
- mox1 5y agoSo I was very active on the Wall Street Bets Reddit forum shortly before and during all of this. I would agree that Roaring Kitty wasn't much of a catalyst (prior to the price exploding), but was an early proponent of GME. I do distinctly remember deciding to invest in GME around December 22nd of 2020, based on what I was reading on the Wall Street Bets forum (unfortunately only like 50 shares.) It was a major daily topic on there from mid December (or earlier) on. Michael Burry was rarely mentioned as a holder, he had bought into GME a lot earlier. The conversation mostly centered on short interest, fundamentals and future moves GME would do. So I would argue it was 'the collective' on WSB that was perhaps one of the larger catalysts.
- curiousgal 5y agoThe SEC uses ggplot? That's awesome, go R!
- tootie 5y agoThe article was about the guy and what he's doing now, not the nitty gritty of the stock value.
- JohnJamesRambo 5y agoI mean the article basically has no info at all in it. It could have been written by an AI. Can anyone update me on what the guy is doing now and how much money he made, when he sold, does he still hold any, etc.? The actual interesting part of the story.
- iso1210 5y agoThsi time last year he owned a lot of options -- the ability to buy thousands of shares at a low price (like $5 each, when the shares were selling at $200). Typically you can sell those options and take the cash, but you can simply pay for the shares instead. Each month he'd post an update which said he bought the shares instead. Obviously he could have faked the screenshots, but he also swore to congress when the price was c. $40 (after the initial $400 spike) that he would still buy Gamestop at $40. A few days later he posted another screenshot showing not only did he exercise his final options, but he bought even more at around $40. Now he could have sold most of his shares at any point in the last 9 months, which mostly bounced between $150 and $250, or he could have kept them just like the Gamestop board did (indeed I believe some of the board actually bought more shares at those overinflated (imo) prices. Nobody knows. I believe one way of making money without selling is to sell options -- you tell someone "I will guarantee to sell 100 shares for $150 a share on May 1st" for example. They will pay you $3 a share for that guarantee, and when the price on May 1st is $140 you just laugh. If the price is $160, you have to sell your shares for less than market price (but still more than you paid), and eat the loss.
- tinco 5y agoThe article didn't actually have any new information, as far as I'm aware no one knows what he has done since he went quiet.
- gandalfian 5y agoYup, Spoiler alert - They asked him what he was doing now. He didn't reply.
- bananapear 5y ago> It really lifts the veil on how little research goes into some of these articles when you see the reporting on a topic you have closely followed. Briefly stated, the Gell-Mann Amnesia effect is as follows. You open the newspaper to an article on some subject you know well. In Murray's case, physics. In mine, show business. You read the article and see the journalist has absolutely no understanding of either the facts or the issues. Often, the article is so wrong it actually presents the story backward—reversing cause and effect. I call these the "wet streets cause rain" stories. Paper's full of them. In any case, you read with exasperation or amusement the multiple errors in a story, and then turn the page to national or international affairs, and read as if the rest of the newspaper was somehow more accurate about Palestine than the baloney you just read. You turn the page, and forget what you know. https://en.wikipedia.org/wiki/Michael_Crichton#GellMannAmnesiaEffect https://en.wikipedia.org/wiki/Michael_Crichton#GellMannAmnes...
- LanceH 5y agoIt's more than this effect if it is deliberate.
- deleted 5y ago[deleted]
- jimmydorry 5y agoThanks, it's nice to have a name for this kind of feeling.
- shawabawa3 5y ago> the SEC investigated and even put out a report showing that the majority of that price movement was from non-short sellers (e.g. retail) and that as a proportion of volume, barely any of it was due to short sellers closing their positions. That's talking about the longer lasting effects (i.e. the reason GME stayed at $100+) but from p26: > particularly during the earlier rise from January 22 to 27 the price of GME rose as the short interest decreased. Staff also observed discrete periods of sharp price increases during which accounts held by firms known to the staff to be covering short interest in GME were actively buying large volumes of GME shares, in some cases accounting for very significant portions of the net buying pressure during a period The run up to $500 was almost certainly a short squeeze
- bo1024 5y agoDidn't it also say that retail was a small fraction of the market buying and selling shares? I thought I'd seen that.
- jimmydorry 5y agoI believe you are mistaken. Have a look at the report as it's definitely an interesting read. From what I understand, retail was the majority of the volume.
- RandomLensman 5y agoIt also says short covering was only small portion of overall buy volume, so while there might have been a short-squeeze that might not explain the full price dynamic (p27 and also figure 6).
- jimmydorry 5y ago>particularly during the earlier rise from January 22 to 27 the price of GME rose as the short interest decreased. Staff also observed discrete periods of sharp price increases during which accounts held by firms known to the staff to be covering short interest in GME were actively buying large volumes of GME shares, in some cases accounting for very significant portions of the net buying pressure during a period This is a deceptive way of putting it. Yes, if you fiddle with the window you are looking at, it is possible for the short sellers's volume to make a majority of volume (e.g. for a given 5 minute window). But a reasonable person would look at the graph in the report and come to a completely different conclusion [1]. If you look at that cumulative volume of short seller volume, it is not possible to close out the reported 122.97% short interest. Let alone the "unofficial" short interest of >200% that came out of the RobinHood hearings. The controversy surrounding the stock stems from this disconnect of short volume and retail volume, and an article that ignores this (especially when talking about the figure who rose to fame off the back figuring this out), speaks to how little research was actually done. Especially when they spin it as a clear cut "short squeeze" when it appears to be anything but. [1] https://i.imgur.com/K4ylLhk.png https://i.imgur.com/K4ylLhk.png
- subsubzero 5y agoDFV was a player but not the ringleader by any means. Basically a bunch of reddit users on r/wallstreetbets came up with a premise to buy into heavily shorted stocks to: A. Initiate a short squeeze in heavily shorted stocks by having retail traders pile into them by buying shares and.. B. Strike back at market manipulators like Andrew Left and Melvin Capitol by forcing them to buy back their short positions due to skyrocketing share prices of their shorted assets. On the wallstreetbets forum point B was touted as the reason to buy into these stock positions due to all the issues these wall street short sellers cause with traders and society in general. DFV was just lucky in that his trade was picked up by the crowd due to it being heavily shorted and eligible for point A.
- ABeeSea 5y agoShorts covering causes the initial run-up and then retail FOMO’d in causing the rest. The short interest graph and language starting on the bottom of page 26 make it clear that shorts covered.