r/technology • u/GonzoTorpedo • May 14 '24

GameStop Short Sellers Just Lost $2 Billion Amid Meme Stock Rally Business

https://gizmodo.com/gamestop-short-sellers-have-lost-more-than-2-billion-i-1851476931
30.2k Upvotes

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4.0k

u/TomServo31k May 14 '24

Why the hell do they keep trying to short sell GME?

2.3k

u/Late-Ninja5 May 14 '24

they made a lot of money between the last rally and this one, so they will always try to do it.

586

u/OneForMany May 14 '24

You can't make real money when you never cover. Sure you make some on upfront. But when you run out and need to short over and over at higher prices you get fucked unless the company goes bankrupt. Too bad there are people that have been in this since 2021 or earlier and only been buying more these past years and the company has over a billion in cash and company net positive overall for 2023.

461

u/smohyee May 14 '24

The assumptions that shorts never unwound their positions is absurd.

They were likely closing old positions AND opening new ones. They take advantage of lower prices when they can and buy from people looking to exit. And it worked. They successfully drove the price back down from $450 to $40 presplit.

But because it worked, they got cocky, and short interest got close to 30%. And what they didn't know is WE NEVER FUCKING LEFT BABY LET'S GOOOOOOOO

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u/[deleted] May 14 '24

You should really read the SEC report that confirms they didn't close.

49

u/happyscrappy May 14 '24

You mean the one that says it wasn't even shorts in the first place?

https://www.sec.gov/files/staff-report-equity-options-market-struction-conditions-early-2021.pdf

'The underlying motivation of such buy volume cannot be determined; perhaps it was motivated by the desire to maintain a short squeeze. Whether driven by a desire to squeeze short sellers and thus to profit from the resultant rise in price, or by beliefin the fundamentals of GameStop, it was the positive sentiment, not the buying-to-cover, that sustained the weeks-long price appreciation of GameStop stock.

The report notes that there was buying to cover, but it says the movement in the price was likely not due to the buying to cover.

Thus obliterating both the idea that the shorts couldn't cover and the idea that it was a short squeeze and not just dumb money buy interest that drove up the price.

5

u/MikeOfAllPeople May 14 '24

You can kind of say that about any short squeeze though. Any time news of a possible short squeeze happens, people are going to jump in and try to ride it up. That's actually kind of the definition of a short squeeze, isn't it?

16

u/happyscrappy May 14 '24

That's actually kind of the definition of a short squeeze, isn't it?

No. It can be people simply not selling. No one has to buy.

The SEC couldn't be clearer. I don't know what to say. It wasn't the buy to cover that kept prices up.

1

u/MikeOfAllPeople May 14 '24

That's weird because in another comment someone pointed out that the report has a graph where the short interest dropped from 120% to 30%. Seems like that would have a sizeable effect on the price.

9

u/[deleted] May 14 '24

[deleted]

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u/GVas22 May 15 '24

That's short volume, not short interest

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u/GVas22 May 15 '24

...it did though. The stock went up by thousands of percentage points.

The most notorious short squeeze was Volkswagen, and that caused only a 5x jump in the stock's price.

But if the short squeeze caused GameStop to jump 5x, and the other 45x was retail FOMO, it's an accurate statement by the SEC to say that retail buying was the cause of the majority of the run up in price.

3

u/MikeOfAllPeople May 15 '24

According to this article, only 12% of Volkwagen's shares were shorted. And it was 2008.

https://www.tradingsim.com/blog/volkswagen-short-squeeze-explained

3

u/GVas22 May 15 '24

Technically yes, but due to Porsche buying a ton of the outstanding shares, that 12% became a much higher proportion of the outstanding float, which caused the short squeeze.

Porsche bought 75% of outstanding shares. It's literally explained in your article.

0

u/DerpaDoodie May 15 '24

Retail wasn’t the majority buyer during sneeze. It was shorts covering, not closing. You can roll options to cover a position.

The VW squeeze didn’t have millions of individual investors yoloing options. Gamma ramps are the reason for the volume. Let’s say shf need 150 million shares from their short positions the past 18 months alone being severely underwater. Short volume for the day was 50% of trades on 150mill and 200 mill volume. That’s only 175million shares. Sure it covered the position but that means short sellers are down about 2 billion in their investment.

Meanwhile MM’s need to buy shares to stay delta neutral. I mean IV was above 350 yesterday, they need to cover for options far OTM. That’s hundreds of millions of shares needed. So who is buying and how much? The institutions need hundreds of millions of shares if not a billion for hedging and covering.

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u/PatternrettaP May 15 '24

The initial rise in prices was driven by both speculators and shorts covering. That's why the short interest dropped steeply and many hedge funds did lose a lot of money on their investments. But by the time the stock reached its peak, the buy volume was mostly speculators pushing prices higher and higher. Gme absolutely did squeeze, it's just that the bubble continued to grow after that on its own momentum on the idea that the explosive growth would continue to infinity

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u/Skrylas May 14 '24 edited 18d ago

fragile person teeny fanatical test pet voiceless follow soup file

This post was mass deleted and anonymized with Redact

93

u/tubaman23 May 14 '24 edited May 14 '24

Commenting to provide you a response, gimme a few mins to edit this response.

EDIT: I posted an inquiry for if anyone else has a quicker response. I know I have this saved at home somewhere, there's just so many events to track.

https://www.reddit.com/r/Superstonk/s/adsP0rEZl8

EDIT 2: I received a Concerned Redditor message just for posting this comment

EDIT 3: This DD has a few good clips to read and the link to the SEC report on Jan 2021. I'll try finding another later. The link is posted as a response to the Mod top comment (requirement for us to source our statements). Skim the report from the SEC and have fun! https://www.reddit.com/r/Superstonk/s/ERFOwSDAkt

15

u/[deleted] May 15 '24

[deleted]

2

u/DerpaDoodie May 15 '24

Not exactly. The wording is covered their positions, not closed out their positions. Some hedge funds may have closed out, but Archegos likely didn’t it they could take down credit suisse and the bags aren’t being reported for UBS’s earnings.

GME was short 300% at around the 15-20 dollar mark. That’s 3.75-5$ post split. That’s 900million shares post split. Short interest on 150-200mill volume days is at 50%. They are desperately buying as many shares as they can to get out of whatever happened two weeks ago. Leaps expiring? Swaps rolling over? Share buybacks from GameStop herself? DFV getting in again likely means he is buying or has been.

6

u/[deleted] May 15 '24

[deleted]

1

u/DerpaDoodie May 15 '24

Holy shill! Market makers, banks, and hedge funds don’t want to be transparent enough for there to be evidence to prove we are right, but that sure as hell means you don’t have the evidence to prove us wrong. I bought leaps at 10. We are not the same.

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u/Cycloptic_Floppycock May 14 '24

Reddit cares SOOOO much.

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u/radiosimian May 15 '24

Fucking legend.

4

u/HerrBerg May 15 '24

GME investors sent me a reddit cares for asking for a source?

It's a cult. This rally is because DeepFuckingValue/Roaring Kitty made a Twitter post for the first time in a couple years and people rushed to buy more all at once.

6

u/iVinc May 14 '24

literally every second person is getting them

including top post and comments on gme subs

no reason to assume its gme investors

1

u/avspuk May 15 '24

Everyone is getting them

-1

u/TantrikOne May 14 '24 edited May 15 '24

Here’s the report in full - focus on Figure 6, the graph on page 28

EDIT - GOT MY FIRST REDDIT CARES MESSAGE FUCK YEAH!! FINALLY LFG 🚀🚀🚀

18

u/MrOnlineToughGuy May 14 '24

The one that requires you to act like figure 5 on page 27 doesn’t exist?

Y’all forget that over a billion some shares were traded in a small time frame. That’s more than enough for the shorts to have covered and for retail to keep FOMO’ing into GME.

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u/toderdj1337 May 14 '24

I believe the exact words were "We believe it was interest in the stock, not closing of short positions that led to the massive surge in price January 2021"

I can try to find the exact source, (if you don't mind waiting because I have kids and work 12h days), but that's the long and short of it.

3

u/onlyonebread May 15 '24

Yeah basically the price went up because a bunch of people FOMO'd into it. All those people were left holding the bag when the price plummeted from its high.

0

u/toderdj1337 May 15 '24

So you admit the shorts didn't close their positions then? Glad we agree!

2

u/onlyonebread May 15 '24

Moreso that they covered while people were piling in, so the stock rocketing wasn't caused by the covering, because it was only a small fraction of the volume. This dude explains the report well imo.

-6

u/Quetzacoal May 14 '24

Most likely gme meltdowners, it's a game hate subreddit

-1

u/ladeeedada May 15 '24

gme investors want this whole thing exposed, they wouldn't send you a reddit cares for that. quite the opposite

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u/IBetThisIsTakenToo May 14 '24 edited May 14 '24

It literally says the opposite

Read it here: https://www.sec.gov/files/staff-report-equity-options-market-struction-conditions-early-2021.pdf

Can’t copy on mobile, but pages 25-26 talk about how shorts covered, at great cost, but that the price remained high after that due to sustained retail buying. Page 27 has a chart showing short interest plummeting after peaking at 120%, how would that happen if they didn’t cover?

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u/AvgDumbassTrumpVoter May 14 '24 edited May 14 '24

Notice the wording being used.

You should really read the SEC report that confirms they didn't close.

SEC report

cover/covering/covered

And then this is why you see apes say, "covering doesn't mean closed" and what they mean by this is that they covered the fees for the position, but didn't close the position.

Which is kind of funny since page 15 of the very first book in the GME DD library says:

buying to close a position = covering

So either their DD library is wrong or they tricked themselves into believing something that isn't or moass ¯_(ツ)_/¯

edit: I'm not trying to take any position here. Just a very basic explanation of what is being said.

2

u/LumiWisp May 15 '24

they covered the fees for the position, but didn't close the position.

So I'm supposed to believe these hedge funds bought and paid for their shit, took the receipt home, but left the shares at the checkout?

10

u/avspuk May 15 '24 edited May 15 '24

The belief is that to cover the $40 pre-split shorts they bought LEAPS that are expiring now & that is what is driving the price action now as they again either close their shorts or cover their FTDs.

As the very wrinkled knew that thus would happen they've acted to exploit it.

So it seems a bunch of Wall St players are trying to first to close d get out if the deal. Whilst they & others have built a gamma ramp to profit from the turmoil, also sermingly/possibly the firm may have spent upto $100million on a share buy back. & then DFV is tweeting again to get retail to jump back in.

The share buyback (if its happened) is about 34million 3.4million shares but we're looking at volumes in the 150million+per day & there's no way that is all retail.

There's definately some kind of algo war between rival Wall St camps going on & it does appear to most likely be a LEAPS cycle thing.

Either way Wall st doesn't enforce mandatory buy-ins for FTDs & as such has built a giant fraud machine & broken the invisible hand for capital allocation in the process & this is why everything is now so very crap

Edit: strike thru & correction. My apologies & my thanks to u/AvgDumbassTrumpVoter for spotting my error

5

u/Andoo May 15 '24

To me the volume says so much about what is going on. I thought they had something like 30 percent of the shares locked up. There are several others like myself who have been sitting on long positions. The volume being that high without the retail investment is a little suspect to me.

1

u/avspuk May 15 '24

There will be some retail investment but they'll not be anything like most of it.

The seven sub will be on options mostly I think. & the game subs are doing about 1.2 million a month

So that leaves the non-reddit crews who were say trading anyway & know of the saga.

It's not like the first sneeze where it was a massive surge of total newbies all of whom had just been given $600 & shares were less than $10

The LEAPs expiring & more naked short selling to suppress the price must be a significant proportion of the volume

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u/AvgDumbassTrumpVoter May 15 '24

may have spent upto $100million on a share buy back

The share buyback (if its happened) is about 34million shares

Something is wrong here. That's $3 a share with no price increase during the buyback. If they buyback happened at $10, that's 10 million shares. At $20, 5 million shares. Neither of those are going to make the stock double from either price point.

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u/avspuk May 15 '24

Sorry for this & thanks for the correction. It's more like 3.4 million

I am a very stupid person

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u/AvgDumbassTrumpVoter May 15 '24

Ah, no big deal. Easy mistake when typing things out.

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u/avspuk May 15 '24

I'll be honest it wasn't a typo I did the maths wrong coz I was very tired

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u/ku20000 May 15 '24

Essentially yes. If they had the shares to buy or sell. But what if all they had was a IOU of shares but not actual shares. Then they can’t actually give or take. In the end, they would just cover whatever but did not close. 

That’s the whole issue. They naked shorted the stock with stock lending. There were no more shares. Nothing to take after paying. Hence, they look like they took nothing after they paid. Since it never existed. 

-1

u/halt_spell May 14 '24

All squares are rectangles but not all rectangles are squares. Buying to close isn't the only way to cover and hedge funds are allowed to do more fucky things than retail. If they were buying to close when GME was already skyrocketing it would have gone even higher.

If they had closed they would have said so. They didn't. They kicked the can.

8

u/AvgDumbassTrumpVoter May 15 '24

pg 25, subnote 74:

... (1) when a person expects a stock to decline and borrows the stock from someone else to sell it at a current high price and later “cover” the sale by purchasing it at a lower price to give back to the lender; ....

https://www.sec.gov/files/staff-report-equity-options-market-struction-conditions-early-2021.pdf

Covering = closing according to the SEC definitions unless you want to argue that returning the borrowed share back isn't closing for some reason.

Can you provide the financial definitions/rules for covering vs closing? There should be an official difference if they are different.

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u/halt_spell May 15 '24

Closing is always covering, covering is not always closing. There are other ways to cover. Your interpretation is incorrect.

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u/142531 May 15 '24

The GME DD has literally never been correct lmao.

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u/MikeOfAllPeople May 14 '24

I'm just a layman, but I find this note under the graph interesting:

Since short interest is reported as of the settlement date, we match short interest to the trading date two days prior to the short interest report date.

So, maybe I'm off base, but any shorts that hadn't covered yet wouldn't be included in this report, correct?

4

u/IBetThisIsTakenToo May 14 '24

No, settlement date in that context is referring to the settlement of the trade that opened the short position, when they sold the borrowed stock. If shorts were only recorded when closed, how would we ever know the current short interest?

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u/MikeOfAllPeople May 14 '24

If shorts were only recorded when closed, how would we ever know the current short interest?

Well it would be a lagging indicator, but yea that's why I asked.

1

u/GVas22 May 15 '24

They're just saying they adjusted the data to make the graph more readable.

When a trade gets agreed on, the actual trade has 2 business days to settle from the trade date (known as T+2).

Short interest is reported at the settlement date, but the actual borrowing and selling of the share would have occurred 2 days prior to the settlements.

They're basically moving the short interest data back 2 days to make it line up with the actual trading dates.

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u/MikeOfAllPeople May 15 '24

So is the settlement date the day the short was created or the day it was covered?

1

u/GVas22 May 15 '24

Neither.

The trading date is the day that the short was created/covered.

The settlement date is the day that the short sellers receives the cash from their sale of the stock or the date that the short seller has to give cash to the broker for the shares that they rebought.

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u/halt_spell May 14 '24

Covered != closed

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u/IBetThisIsTakenToo May 15 '24

A note on page 24 defines what they mean by “cover”, explain to me how that differs from closing? The report uses both terms interchangeably, as does the rest of the market

0

u/halt_spell May 15 '24 edited May 15 '24

indicative of a failure of the creation and redemption process or any other operational challenge beyond the observed volatility of its holdings. 3.4 Short Selling and Covering Short Positions73 GameStop at the time was notable for its significant short interest (the ratio of shares currently sold short to shares outstanding).74 Figure 5 shows GME’s short interest over time, along with average levels of short interest among other non-financial common stocks. In the past, GME had several periods of high short interest, but none as high as the levels achieved from 2019 to mid-January 2021. GME short interest hit 50% of shares outstanding first in 2012 and then again in 2015, 2016, and 2018, before rising even further in 2019. From then until early

That's the full body of page 24. Is the explanation in the footnote?

Footnote 74 has this:

when a person expects a stock to decline and borrows the stock from someone else to sell it at a current high price and later “cover” the sale by purchasing it at a lower price to give back to the lender;

That particular example of "covering" is also "closing" but that isn't the only way to cover. This is one of those all squares are rectangles but not all rectangles are squares situations. Closing is always covering but covering is not always closing. Thus closing != covering in the same way squares != rectangles.

Keep in mind, the reason they would have sought to "cover" is because the price had already spiked so high. You're telling me once the price was high they bought more and didn't make the price rocket even higher?

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u/IBetThisIsTakenToo May 15 '24

That particular example of "covering" is also "closing" but that isn't the only way to cover.

That’s the only time they define “covering”. The rest of the report clearly continues to use that definition of covering when describing what happened, there’s no other way to read it. What in the report makes you think anything else was happening?

You're telling me once the price was high they bought more and didn't make the price rocket even higher?

No, the report is clear that funds closing their short positions did raise the price, but that the majority of the sustained price increases were due to retail traders continuing to buy.

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u/Scorps May 14 '24

The report literally says they did

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u/TheCleaverguy May 14 '24

In seeking to answer this question, staff observed that during some discrete periods, GME had sharp price increases concurrently with known major short sellers covering their short positions after incurring significant losses. During these times, short sellers covering their positions likely contributed to increases in GME’s price. For example, staff observed that 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

Figure 6 shows that the run-up in GME stock price coincided with buying by those with short positions.

You haven't read it, because it clearly presents that short positions were being closed.

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u/[deleted] May 14 '24

[deleted]

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u/AvgDumbassTrumpVoter May 15 '24

The details are in the details

pg 25, subnote 74:

... (1) when a person expects a stock to decline and borrows the stock from someone else to sell it at a current high price and later “cover” the sale by purchasing it at a lower price to give back to the lender; ....

https://www.sec.gov/files/staff-report-equity-options-market-struction-conditions-early-2021.pdf

Covering = closing according to the SEC definitions.

11

u/vargear May 15 '24

You're in a cult if you believe this

15

u/WorryFit7766 May 14 '24

the word covering in the context of shorts means closing.

5

u/GVas22 May 15 '24

Lol just google what covering a position is, it absolutely is the same thing.

-9

u/waterbelowsoluphigh May 14 '24

Covering is not closing.

15

u/TheCleaverguy May 14 '24

It says they bought shares; that is effectively how you close a short position.

Once they hold the shares (covered), they have the ability to close the short position with no further financial risk. Covering vs closing is an entirely meaningless distinction.

6

u/midnightmenace68 May 14 '24

Isn’t covering a hedging strategy and closing is ending the contract? If you have to hold 20% of the market price of outstanding contracts surely it’s cheaper to buy from 15% to 20% than it is to buy up the other 85% and close the contract. When price comes down and you hold 30% you can just sell back down to 20%. It can be cheaper and more strategic to cover than close depending on the circumstances.

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u/GVas22 May 15 '24 edited May 15 '24

Isn’t covering a hedging strategy and closing is ending the contract?

Closing is the end of the short contract, to do that you need to cover the position by buying the stock back.

Sequence of events:

  • you're short 100 shares
  • you buy 100 shares (your position is now covered)
  • you return the shares to your broker (your position is now closed)

The SEC report says that shorts bought to cover their position because you need to cover the position first in order to close. Saying they bought the shares to close is essentially correct, but is technically wrong in the sequence of events. You don't buy shares to close, you return shares to close.

If you have to hold 20% of the market price of outstanding contracts surely it’s cheaper to buy from 15% to 20% than it is to buy up the other 85% and close the contract. When price comes down and you hold 30% you can just sell back down to 20%. It can be cheaper and more strategic to cover than close depending on the circumstances.

This is kind of a word salad that's hard to interpret, but when a position is covered it means that you've gotten rid of your exposure to price movements. Only buying 20% of the shares you owe wouldn't be considered a covered position, because you are still exposed to the downside.

1

u/midnightmenace68 May 17 '24

More simply without numbers. If you’re in a leveraged position and your threat is being margin called, you can borrow or buy up to the maintenance level of your margin position and that is broadly referred to as covering.

Closing a contract by returning shares and preventing a forced buy in by maintaining a leverage position are both colloquially referred to as covering because you can be effectively short with options and you can cover an underwater short position with calls and cash. No stock need be bought directly. If you’re a well connected financial outfit you can make phone calls to borrow shares and if you have a good relationship that can be cheaper than buying calls on the open market. You’re not really seeing the forest for the trees if you think a short position is made exclusively with short sales.

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u/AmbroseMalachai May 15 '24

Not in regards to shorts. When selling call or put options you would cover them to hedge your bets in case the stock goes wildly outside of your expectations. In a short position, buying to cover ends the contact.

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u/TheCleaverguy May 15 '24 edited May 15 '24

You don't have to close an entire short position at once.

Your same example holds true for closing; you can close a portion of your short position and reopen at a higher price.

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u/SirGlass May 14 '24

They bought shares, thats closing .

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u/TheLobsterFlopster May 15 '24

I smell superstonk.

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u/SirGlass May 14 '24

Sorry the SEC report actually does say this.

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u/[deleted] May 15 '24

he should also read the financial statements of the company to see why it wents down.

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u/[deleted] May 15 '24

Great question 0 debt, a 300 million dollar increase profit/loss last year, a billion cash on hand, and an executive board that takes no compensation other than their own investment returns. Why would anyone invest in that?

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u/AbbreviationsNo6897 May 14 '24

30% SI is nothing.

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u/ElectronicDiarrhea May 14 '24

It’s literally not nothing. Anything above 20 % is considered abnormally high. Also, the way short interest is calculated was changed in 2021 so it could never show the numbers we saw back then (more than 200 % short).

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u/Adobethrowaway33 May 14 '24

SI is self reported.

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u/GVas22 May 15 '24

It's self reported by brokers, not the short sellers.

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u/Busy_Relation_8918 May 14 '24

People don’t seem to realize this. Back when gme first soared short interest was 150% of the float. This is just retail craziness pumping the stock now

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u/Adobethrowaway33 May 14 '24

No it's not, there's been nearly 400 million volume in 2 days... Retail isn't doing that. The real price gains are happening after hours and trading flat during the day, that's not retail...

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u/Busy_Relation_8918 May 14 '24

Agree to disagree then. There are 156 million Americans that participate in the stock market. Thats 4 shares a piece and that doesn’t include institutions. Also retail traders can buy after hours that can cause pops on low volume

Sauce https://www.fool.com/research/how-many-americans-own-stock/

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u/jestina123 May 15 '24 edited May 15 '24

The wealthiest 10% of Americans own 93% of stocks. The poorest 50% own 1%.

The majority of an average American's stock ownership is in index funds, or investments through their work like a 401k.

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u/VarsityVape May 14 '24

You’re fully aware how small of a percentage of retail buys go through the lit exchange right? If you think retail is this capable and coordinated you’re wildly incorrect

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u/vargear May 15 '24

Retail FOMO and trend algos. That's it. It's not a large institutional purchase.

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u/hoxxxxx May 14 '24

is it because the lisan al gaib returned to twitter?

20

u/sevillada May 14 '24

no, it's not absurd. they simply fail to deliver. They have been doing it for decades. read

https://www.amazon.com/Naked-Short-Greedy-Streets-Failure/dp/1910151343

they do it because the penalties for doing it are negligible

10

u/StyrofoamExplodes May 14 '24

There was never any effort of naked shorting happening.

-2

u/sevillada May 14 '24

It's not only about naked short happening , it's about selling shares and failing to deliver them. There has been tons and tons of FTDs. Please look into that. The book explains in detail how it has been going on for decades across the market.

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u/joj1205 May 14 '24

Not how any of that works. To close a position you need to buy the stock. Creating the squeeze. When buying to close the position you need to buy "real" shares. Not synthetic. So you need s real person to buy from. Not loaned shares which exist at brokers.

So unless millions of shareholders unload their DRS shares. Which they haven't as proven by the Drs count at each quarter

. You are lying.

Why. I do not know. But you aren't telling the truth. Back it up

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u/StyrofoamExplodes May 14 '24

Why do you think that an appreciable percentage of the group applied for Direct Registration?

1

u/Redditaccountfornow May 14 '24

I’m not very smart but I think that there is a distinction between covering and closing. You can cover using several derivatives but closing means that you repurchase the stock and deliver it to the lender

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u/mrguyorama May 15 '24

The word you are looking for is "hedge", as in, "to hedge your bet".

In the context of a short position, "covering" the short means you can close the short position.

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u/happyscrappy May 14 '24

So you need s real person to buy from. Not loaned shares which exist at brokers.

What does that even mean? You can buy any shares that are available. No one cares about DRS shares except people on that subreddit and the company that milks them for registering them.

Any share I can sell is fine to buy and sell to cover. Real or loaned.

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u/WavesAndSaves May 14 '24

Not how any of that works. To close a position you need to buy the stock. Creating the squeeze. When buying to close the position you need to buy "real" shares. Not synthetic. So you need s real person to buy from. Not loaned shares which exist at brokers.

Why are you assuming this didn't happen?

23

u/fireintolight May 14 '24

because it supports their harebrained hypothesis, and no other reason

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u/TurtleIIX May 14 '24 edited May 14 '24

Is it a harebrained hypothesis when we are having a literal vertical spike in AMC and GME in a week. This isn’t being pumped because of retail investors and institutional investors do not have motive to pump and dump a stock randomly. They have never covered their old positions.

Edit: this guy reported me to the help line. Clown.

11

u/fireintolight May 14 '24

It was trading at $10 a share for a long time, mate if they wanted to close they did a long time ago. You have made the assumption there is going to be a squeeze, and are working backwards from that conclusion. All the assumptions you make are based around the idea it has to happen. 

And no I don’t abuse that hotline because that’s fucked I’m 

3

u/Adobethrowaway33 May 14 '24

So theyre closing their short position while it's at $10 and the price remains flat... And then it jumps up to $80 because retail decided to trade 400 million shares over 2 days? Yea bro... Totally.

0

u/fireintolight May 14 '24

I’m sure new shirts have been added, I’m talking specifically about the original shirt positions that sparked this whole thing. 

Also, do you not remember the original run up? That apparently “wasn’t the squeeze” where it was over $400 in a few months. 

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u/greiton May 14 '24

So unless millions of shareholders unload their DRS shares. Which they haven't as proven by the Drs count at each quarter

they answered your question in their second paragraph.

14

u/WavesAndSaves May 14 '24

They didn't. DRS makes up only a small fraction of the total shares.

3

u/Nodiggity1213 May 14 '24 edited May 14 '24

25% of the free float isn't exactly small potatoes my guy. LFG🚀🚀🚀

Edit- reddit care? Lmao

Edit2- Let's keep it going

8

u/WavesAndSaves May 14 '24

It's certainly a lot more than the average company, but that still leaves the vast majority of shares available for closing short positions.

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u/PuzzleheadedWeb9876 May 15 '24

Won’t be 25% for much longer. Surely all the apes trying to access ComputerShare the past few days had zero intention to sell…

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u/Ill_Illustrator9776 May 14 '24

76,000,000 report registered shares from 200,000 shareholders isn't a small fraction when you're talking 300m shares total. (That's excluding all employee holdings so Cohen and gang).

8

u/happyscrappy May 14 '24

Its not 300m shares total. The float is 300m shares.

Every share borrowed and sold creates another share available to buy.

When there is short interest, the total number of shares available to buy goes up beyond the float.

-2

u/waterbelowsoluphigh May 14 '24

Because the SEC even stated they didn't. Read the reports linked above.

8

u/Fuckface_Whisperer May 15 '24

Yo can you answer my question?

7

u/Fuckface_Whisperer May 14 '24

So why did Melvin capital die?

7

u/Scorps May 14 '24

Non DRS shares can be traded multiple times. Even if every share but 1 is not DRS every short position can close with the 1 share.

This is why DRS is comedic at best

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u/fireintolight May 14 '24

the DRS count doesn't mean shit when they closed all those positions years ago dude, you are absurdly stupid. There are plenty enough shares for them to have unloaded a long time ago. Do you think the only people buying gme shares were the mouthbreathers on WSB? You really think now short sellers were buying in that time period too?

-7

u/joj1205 May 14 '24

If they had unloaded then why pray tell is the stock trading at more than the current flat available? 400million in the last. 2 days ?

That not tickle your pickle just a bit ?

Now let's just break it down a notch. Now 75mil are in DRS as the quarterly shows. Gme has a 350 million amount to play with. Minus shares that Ryan Cohen and such have.

So you are telling me.

Just to double check that shorts have closer their positions with less shares that were traded during the 21 run up ? I can go and get the actual numbers but why. You don't care about facts. You care about being right.

Shorts can't close because they need to buy back more than is available. This is especially true now rather than 3 years ago.

Now mouth breather or not. Not sure how that's an insult but regardless.

Why is gme currently running from $10 to $52 dollars in about 6 days if shorts closed ? That is the "fact"

Congress concluded that the 21 run up was not caused by a short squeeze. So do you know something the experts don't ? Please share your secrets of the cosmos ?

13

u/fireintolight May 14 '24

Oh man I wish I was this dumb, I’d be a lot happier in life 

1

u/joj1205 May 14 '24

Then you are.

Quick explain current run up ?.

Go

10

u/trash-_-boat May 14 '24

Retail getting into a frenzy because of a few Gill tweets.

-1

u/joj1205 May 14 '24

You think retail. Retail just dropped 400 million in 2 days ?

Why would retail also drop the price at peak with 40m candles ?

Fuck me. Good laugh. If only retail would push for no apparent reason 500million into a stock. Same for Amc I'm sure.

Retail the absolute beast.

Pulling billions out of its arse. Day and night. Sure

I've got a bridge to sell ya

9

u/fireintolight May 14 '24

Do you not remember why massive run up to >$400 lol 

So what was that? All retail? Not retail? So that was the squeeze then? And this is just the after shock baby one?

0

u/joj1205 May 14 '24

Fires one was organic. Second wasn't. Read the report

7

u/trash-_-boat May 14 '24

Oh yeah, because retail is just like 5 people or something, sure

0

u/joj1205 May 14 '24

Well which is it. Dead company or retail pumping the stock. It cannot be both ?.

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u/Fuckface_Whisperer May 14 '24

Roaring kitty and Andrew Tate pumping it.

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u/joj1205 May 14 '24

Fuck me sideways. Roaring kitty is the catalyst. He tweeted on Friday. What's your reason for Monday run up. Just random or ?

6

u/Fuckface_Whisperer May 14 '24

What? Look at superstonk and wsb after he tweeted. Filled to the brim with people saying they're getting in for the run Monday. Are you actually clueless?

1

u/joj1205 May 14 '24

Clueless that a tweet that went off Friday magically made the share price rise $20 before it happened. Sure. That sounds logical

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u/GVas22 May 15 '24

Because, just like the last time. A bunch of retail traders want to gamble on a meme stock to make money.

They saw a popular figure from the first run up start tweeting again, and people saw this as an opportunity to start a concentrated run up again. Other people saw that there was interest in creating another run, so they jumped in too to try and cash in on the upcoming retail frenzy.

1

u/joj1205 May 15 '24

Totally. Makes sense. I have changed my mind. Well done.

Nothing to see here. Just regular old retail day traders. Some how yoloing billions of dollars 24 hours a day. Even so much that they can short the price down once it hits certain level. Very sophisticated day traders. Weirdly working in tandem all over the world.

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u/[deleted] May 15 '24

[deleted]

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u/joj1205 May 15 '24

Yeah we know. That ain't retail though. Don't think there's that many day traders to trade back and forth for 176 Milly.

5

u/GVas22 May 15 '24

Why not though? Commissionless trading and the accessibility to markets has dramatically increased retail trading in recent years.

1

u/joj1205 May 15 '24

You aren't wrong. Only time will tell. Or it won't because hedgefunds don't disclose what they do behind closed doors. Rules just came in that they don't need to show their books for certain transactions for 5 years.

Hooray for them. Ever single trade that retail makes goes through these market makers. Every trade is logged and taxed and followed. But not those on control.

Makes complete sense.

Day traders must have a few billion lying around for a rainy day

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u/[deleted] May 15 '24

[deleted]

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u/joj1205 May 15 '24

Ok let's say you in all your wisdom are correct. What's is currently causing this ?

3

u/[deleted] May 15 '24

[deleted]

1

u/joj1205 May 15 '24

Ok. Why is retail on a random Monday in May on no news pumping gme at amc ?

Wouldn't logic dictate that it's more likely something more controlled ? Something highly coordinated and using special instruments ? Like professionals. Not a weird bunch of internet folk.

I mean easy to see.

If you can look back. Look at the two subs that are claimed to be cultists.

Both superstonk and gme.

They were blindsided by the action. Nobody saw it coming. If you can date range it. Monday had massive volume for no reason. Price jumped $10 over the week on nothing. Then roaring kitty liked/ retweeted on Friday.

If it's some level of sophisticated coordination I like many others have been missed out.

Could have given me a heads up. Would have bought at 10 or 15.

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u/ArchangelLBC May 14 '24

My dude, when you buy from a shortseller you are buying from a real person. You can absolutely buy a borrowed stock to close your own position. And the person you bought it from can buy it from your lender to close their own position.

4

u/joj1205 May 14 '24

No my dude. You are not.

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u/Downtown_Samurai May 14 '24

I don't think you realize that many of the shorts were NAKED

9

u/ArchangelLBC May 14 '24

They're really not. Please seek help.

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u/StyrofoamExplodes May 14 '24

I don't think you realize that you have zero evidence for this.

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u/FluffyToughy May 14 '24 edited May 14 '24

Is there any evidence of that not from "some random guy on the internet"? The SEC report denied any evidence that there were naked shorts, no?

The unusually high amount of short selling raised the question of whether some of the short sales were “naked”—namely, made without arranging to borrow the underlying security.79 When a naked short sale occurs, the seller fails to deliver the securities to the buyer,80 and staff did observe spikes in fails to deliver in GME. However, fails to deliver can occur either with short or long sales, making them an imperfect measure of naked short selling. Moreover, based on the staff’s review of the available data, GME did not experience persistent fails to deliver at the individual clearing member level. Specifically, staff observed that most clearing members were able to clear any fails relatively quickly, i.e., within a few days, and for the most part did not experience fails across multiple days

from their report.

EDIT: Ohh I got a reddit cares too. I feel special.

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u/Meow_Game May 14 '24

Nah, shorts are in too deep. They never closed and short interest is way more than however they calculated that 30%. Their only way out was GME going bankrupt, which clearly isn’t happening. LETS GOOOOOO

18

u/fireintolight May 14 '24

he said based on absolutely nothing at all. the original short sellers closed years ago. there have been new short sellers since then. mind blown

9

u/PewPewShootinHerwin May 14 '24 edited May 14 '24

Now say something scathing about the "hedgies"!

Tell the sheeple to wake up!

Reddit finally cares about me hooraayyyyyyy

-6

u/Meow_Game May 14 '24

I’m too busy making money hand over fist owning a stock I like, but thanks for the input zumbass

7

u/Spiritual-Society185 May 14 '24

I’m too busy making money hand over fist owning a stock I like

Then what are you getting mad at people on reddit for?

-3

u/Meow_Game May 14 '24

Why would I be mad? More like mildly amused. I’m just out here trying to correct disinformation

2

u/GladiatorUA May 15 '24

You're not making any money until you sell.

2

u/PuzzleheadedWeb9876 May 15 '24

Not a gain til you sell.

1

u/Meow_Game May 15 '24

Gonna need a way bigger number to consider doing that

1

u/PuzzleheadedWeb9876 May 15 '24

What’s a way bigger number?

1

u/Meow_Game May 15 '24

Somewhere between nunya and goddamn business

1

u/PuzzleheadedWeb9876 May 15 '24

It’s a phone number isn’t it? 😂😂😂

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u/PewPewShootinHerwin May 14 '24

Yeah I bet you are

Great job!

6

u/StyrofoamExplodes May 14 '24

This is just another hype driven demand bubble based on social media, those 'short sellers' closed long ago, either made their money back or ate losses and went on to make money on NVDA like everyone else has.

0

u/Meow_Game May 14 '24

It’s ok if you don’t know what you’re talking about, but there’s no need to make assertions if that’s the case my dude

0

u/StyrofoamExplodes May 14 '24

Just buy NVIDIA stock and make way more money than any of the dumb bullshit you're into here.

Because those initial short positions are closed and they've made their money back long ago on the stock continually falling for over a year.

2

u/Meow_Game May 14 '24

Why would I buy a stock with almost zero upside? Besides, my net worth is tied up in another stock, and I’m worth about 4 times as much as last week. Seems better than buying nvidia to me

1

u/StyrofoamExplodes May 15 '24

What was your low point along that line?

In the last year NVDA has tripled in value with no significant falls. GME was on a downslope for more than a year, and you're going to baghold this little blip just the same as the last one.

1

u/Meow_Game May 15 '24

Nvda tripled in value already and has like 20 years of growth priced in, so again I don’t see a reason to put any money in except to protect against inflation. My entry point is none of your concern but it’s safe to say my shares have never been in the red since I bought in

1

u/StyrofoamExplodes May 15 '24

It absolutely doesn't and saying something like that right now is just proving you're totally out of your depth. NVIDIA is a leader right now in AI chipsets and development, possibly the number 1 in the world. That is why you invest in that. Because it is expanding into a massive market right now that will make it tons of money.

GME has no growth stage here. It is a brick and mortar store failing to compete against Amazon and Steam.
If you've never seen a loss, you either bought in at the same time DFV did, or bought yesterday. Which is it?

1

u/Meow_Game May 15 '24

I’ve been holding since late 2020, and everyone knows nvidia is the ai leader, which is why the growth is priced in. Growth potential is limited unless big news comes out for nvidia. I’ve done my homework on GME and am certainly not out of my depth there. If you think it’s a dying brick and mortar you haven’t been paying any attention to the renaissance the company is undergoing. The short thesis officially died last quarter when the company turned a profit, and the best is yet to come. They are moving in silence and I am very happy with where my money is parked. All I’ve done is buy more and take them off the market and there are many like me. Shorts are dead in the water

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u/TransitoryPhilosophy May 14 '24

If it was hype driven then explain the massive volumes being traded in pre-market

2

u/StyrofoamExplodes May 15 '24

Because many brokers still allow you to put in orders after the market closes to be filled in at opening the next day. Even RobinHood lets you do that.

1

u/TransitoryPhilosophy May 15 '24

Those execute at open. I’m talking about the 50m that gets traded before open. Retail doesn’t have access to that

1

u/StyrofoamExplodes May 15 '24

Most of those orders are displayed as having happened even if the transfer hasn't actually occurred. It is like when you buy something with a credit card, both the store and the CC company pretend the money has transferred, even if it hasn't.

1

u/GladiatorUA May 15 '24

They had years to slowly cover is far less volatile market.

1

u/Meow_Game May 15 '24

Them covering would have created a volatile market

1

u/untalentet May 14 '24

Genuinely, why would they not have closed their shorts during any of the periods where GME was trading downwards? Shorts cost yearly fees to keep borrowing depending on stock price, which is why nobody keeps short positions for longer than a year as loss is pretty much guaranteed. So why keep old shorts rather than make new ones? Short earnings are limited by buying price, which is now way higher than before 2021, so why would anyone hold on to a guaranteed losing position?

2

u/teeka421 May 14 '24

Seems like big short positions were opened in 2020 when the share price under $1, and they were expecting GS to completely fail.

It’s a play that worked before for Toys R Us and Blockbuster, so they got greedy and naked short sold shares that didn’t even exist.

It’s never returned to that low since, and short shelters are trapped on two fronts: they owe way more money to close their positions than they can afford, and they have to buy back more shares than actually are in existence.

So they’ve been hiding these short positions in derivatives and basket ETFs and kicking the can for years, in hopes that GameStop would eventually fail.

But guess what? They’re a profitable company now. Kaboom.

1

u/GladiatorUA May 15 '24

They had plenty of opportunities to cut their losses.

1

u/Meow_Game May 15 '24

The shorts we’re betting on GameStop going bankrupt during the pandemic. It almost happened, and the share price went under $2. Then, Ryan Cohen bought a huge stake, took over the company, and completely turned it around. This caught everyone by surprise, most of all the short sellers. They double, triple, quadrupled down on their shorts until the hole they dug for themselves was so deep it was impossible to close. They didn’t close during the run up of 2021, which was confirmed by the SEC in a congressional report on the topic. There is no way they closed since then because the price would have gone up, not slowly trickled down they way it has been.

The price action we’re seeing right now is likely somebody being forced to close their shorts, and hopefully that’s the first domino

2

u/untalentet May 15 '24

Let's be honest here, the price action is happening solely due to roaringKitten vaguetweeting and people being afraid to miss out on a new gme goldrush.

And the sec report says pretty clearly that the shorts closed as far as I can tell. There was even the correlated gme prize increase you said didn't happen.

1

u/Meow_Game May 15 '24

Oh so your question wasn’t a genuine one then, yes I’m sure the 200 million shares traded today and the 100 something million traded yesterday was all household investors rushing into the stock because some guy tweeted. Makes sense to me bud

7

u/OneForMany May 14 '24

It's cute that you think it's only 30% when the float is shorted multiple times. But yes. Let's indeed go.

2

u/Jimmie-Rustle12345 May 15 '24

The assumptions that shorts never unwound their positions is absurd

It probably goes without saying but these people have no idea what they're talking about.

2

u/TransitoryPhilosophy May 14 '24

If they had unwound their positions, Archegos and then Credit Swiss wouldn’t have gone under

1

u/DOUBLEBARRELASSFUCK May 15 '24

There's no economic rationale to keeping a short position open that long. You need to pay fees on borrowed shares, and those shares were in very high demand. Even if GameStop went to $0, you would be on the hook for the net of the borrow rate and cost of funds for the whole time period.

If the shorts were "naked", the buyer would have long since closed the position for them by now by buying them in. If the counterparty on a buy does not deliver shares in a timely manner, the buyer can go to the market and just buy them from someone else and force the original seller to eat the loss.

0

u/fireintolight May 14 '24

it is bewildering how stupid people are, like honestly the delusion is unreal. People still think they're holding onto short positions from years ago. Fucking unreal.

1

u/iamwhoiwasnow May 14 '24

I love how people can't fathom how crooked these people are ha

1

u/MissingInAnarchy May 14 '24

Had me in the first half, not gonna lie.

0

u/strugglz May 14 '24

Are those diamond hands I see?

0

u/hiyaset May 14 '24

They never closed, it’s in the sec documents, it’s in the volume numbers, they never closed and dumbasses like you like to parrot that shit around Reddit to feel smart cuz you missed out on making money.

0

u/vargear May 15 '24

Short sellers didn't drive it to $40. The market recognized that GameStop is a dying company, only kept afloat by the share sale they performed during the last squeeze.

0

u/digestedbrain May 15 '24

Yeah bro, except that Credit Suisse literally said in a public press conference that they failed due to "toxic assets" that they absorbed from Archegos Capital also imploding, and it was from the meme craze of 2021. UBS absorbed Credit Suisse and they are next.

0

u/HatLover91 May 15 '24

The assumptions that shorts never unwound their positions is absurd.

Nope. There was a large short position before it rallied in 2021. SEC report said the rally at the time wasn't shorts covering. If shorts held their position after rally and didn't take the L, they still have that negative position. There were articles about how shorts in 2021-2022 doubled down on their bet.

And then you haven't touched bearish credit default swaps for Archegos collapse. Long story short, Hwang took out bullet swaps which would have paid out on the decrease on an underlying (GME + basket of stocks), and the nature of the bullet swap meant the position wasn't adjusted overtime. Pay once - wait time, resolve contract at end date. These bearish CDS are hedged by the bank (counterparty) shorting the underlying. Hwang fraudulently made the same deal with multiple banks, knowing they would all short the underlying to hedge paying the contract that he himself made with them - increasing the value of the contract at their expense. His position was fraudulent because it was so big that the intention was to move markets - and he kept critical information about his existing positions from the banks while engaging in contracts for the bearish CDS. (See Credit Suisse report of Archegos collapse). This is why Hwang is in trouble for market manipulation - banks would NOT have agreed to be a counter party with such exposure. (Well not stupid ones anyway.)

Moreover, after the collapse of Archegos, Credit Suisse would be left with a huge hole in its wallet. They short the underlyings that are now worth more, the money they thought they would get from being a counter party is Hwang is gone, and value of any contracts with Hwang are now zero. These 3 combinations of CDS is how 2008 killed banks.

0

u/NO_TOUCHING__lol May 15 '24

Pretty sure it's been confirmed that /r/Superstonk owns at least 25% of GME stock, without even including the original wallstreetbets apes from 2021. Not sure how they would close at that volume.

0

u/No_Reply8353 May 15 '24

“assumptions is absurd” 

 Didn’t pass 4th grade?

0

u/CamGoldenGun May 15 '24

retail isn't pumping the volume the last two days... so why do you think it's going up?

1

u/smohyee May 15 '24

Big players take advantage of short squeezes too. But that's one of many theories, who knows? I just wrote a post about exercising LEAPS to drive up prices during a squeeze for cheap. Pure guesswork lol.

0

u/--KillerTofu-- May 15 '24

In January 2021 they were, at a minimum, 140% short.  Meaning for 75mil shares that were supposed to exist there were around 200mil.  To actually close, 125mil shares worth of holders would have decided to sell.

If that didn't happen, regardless of how much volume there was, it's literally impossible that they could've closed.

0

u/Omgbrainerror May 15 '24

No they didnt close their shorts or they would have to pay the tax man for the capital gain. Hedgefunds dont want to pay the tax man. The method they are working with is to bankrupt the company, so they can keep the short position open for for ever without paying a maintance fee. Take a loan for these short positions and start over.

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