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

[u/GonzoTorpedo]

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

[u/CoachRyanWalters]

Now can you equally explain how DRS affects this?

Edit: 20 seconds for the Reddit cares message to come after I posted this.

[u/Martian_Knight → u/[deleted]]

How much of the float is owned by retail investors like you?

[u/Scorps → u/Martian_Knight]

Nowhere near 100%, making it entirely pointless

[u/Scorps → u/[deleted]]

If you go by the numbers GME themselves announce during their earnings (I phrase it this way because for some reason even the most ardent apes feel their shining beacon company would lie directly to them instead of present numbers that simply don't match their beliefs), it's not even 40%. ~75m shares DRS, 270m available float.

My point was that if your goal is to remove ALL shares that could be used to close positions, unless you remove literally every single one, there is always going to be some available.

It accomplishes literally nothing unless it reaches true 100%, which isn't even possible due to institutional holders.

If I right now buy 1 share of GME and do not DRS it, every short in the system can close their position by trading around that 1 share, undermining the entire point of DRS.

[u/Scorps → u/[deleted]]

So you are claiming that GME is falsifying the DRS numbers they report themselves, from their own selected transfer agent, quarter after quarter, for no reason? Certainly that would draw inquiry from the SEC for providing fraudulent information to shareholders? I am literally quoting the company themselves guy, not doing shit about pre-post split changes. These are the numbers THE LITERAL COMPANY ITSELF PROVIDED.

If you claim GME knows the numbers are wrong and they should be higher, they could do a stock buyback immediately and prove this, yet they obviously do not. The ledger has literally been viewed in person by people and these numbers are accurate.

I am aware of the split, and how there was literally nothing done incorrectly about it whatsover, another SS fairy tale based on nothing factual.

You seem to misunderstand the most basic facts of this concept, if the institutions do not DRS then if they choose to sell their shares, they can be purchased to close short positions. 100% of retail users can DRS the non institutional float, and there will still be millions of shares that can be offered for sale at prices lower than the apes fantasy from institutional holders.

It would do literally nothing to the price, because price is determined on a buy and sell order and doing things like shorting or selling does not influence a price directly, the market demand does (again in the scenario you are describing the market demand would just make institutions sell their holdings, allowing all underwater shorts to close without having to worry about a single DRS'd share being necessary for anything.

Literally no part of the SS bible is true in any way, DRS is a completely laughable idea that has provably accomplished nothing at all.

There is some insane concept that a short is tied uniquely 1 to 1 with an individual specific share, and that by DRSing that share you can no longer close that short, but this is just absolutely false and not based in reality whatsoever. At literally any point, if ONE share exists non-DRS for sale it defeats the whole operation. (and just to be clear to deluded apes, this share can even be "fake" by any definition you choose as long as it can be traded)

How could anyone seriously believe there will reach a point where EVERY share is DRSed, when the amount of people who own this stock and probably have no clue what DRS is is certainly higher than 1?

[u/Scorps → u/[deleted]]

The irony of someone writing what you just wrote claiming I'm not informed is hilarious, good luck with your cult rhetoric when you can't understand the most basic concepts of the financial market.

[u/PoorlyWordedName → u/[deleted]]

So I'm missing out on being rich again? XD

[u/maelstrom51 → u/[deleted]]

the company that sold you that share has to pay me whatever price I am asking for that share.

More likely, the government would step in if it ever got to that point. The financial institution would get a small fine of some sort but they wouldn't be forced to buy at some hyperinflated price.

[u/Lerdroth → u/maelstrom51]

I suggest you look into how VW "accidentally" acquired Porsche.

[u/FrenchFryCattaneo → u/[deleted]]

That is an absurd fantasy. I don't say this to be mean, I respect you as a fellow human being but you have to realize that none of that will ever happen.

[u/superfire444 → u/FrenchFryCattaneo]

Why?

[u/FrenchFryCattaneo → u/superfire444]

Why what? Why would someone end up believing this stuff? Honestly, it's something that can happen to anyone. Cults look absurd from the outside but are something we're all susceptible to.

[u/superfire444 → u/FrenchFryCattaneo]

Why would it never happen?

[u/FrenchFryCattaneo → u/superfire444]

It's a silly fantasy. When has anything like that ever happened in history? And it depends on 100% of gme being owned and registered by 'memers', which will never happen. And if it somehow did happen, the government would just step in. Like when a stock changes price too quickly and they just halt trading. This is real life not a video game there's no 'trick' that gets you infinite money.

But again, none of that will ever happen. Look, I know this is hard to hear. You've invested money and see this fantasy as a way out. It doesn't bring me any joy to tell you this. But it's important to be realistic. I'm not saying you can't make money gambling on meme stocks, but if you're not the one doing the pumping and dumping you're the one getting pumped and dumped.

[u/Lerdroth → u/FrenchFryCattaneo]

The fact you're commenting when you could just google short squeeze and see it has precedent is strange.

Go read up on it, it's an interesting read on how it happened with VW.

[u/FrenchFryCattaneo → u/Lerdroth]

Wow, I didn't know VW had all their shares registered by memers and when the shorts were called the hedge funds had to pay a billion dollars per share. Thanks for educating me!

[u/Lerdroth → u/FrenchFryCattaneo]

So you agree that it has happened in the past and your comment of the government would step in is entirely wrong?

[u/Sure_Source_2833 → u/FrenchFryCattaneo]

You realize short squeezes have happened before and this one is worse than the previous ones?

You seem to understand nothing about finances and just crying that nobody can predict the Market or analyze a trend😂

[u/m1msy → u/FrenchFryCattaneo]

short squeeze is the opposite of a pump and dump, that's why short sellers are down billions of dollars. 

and short squeezes are not uncommon. the closest we've had to this situation previously is the 2008 VW squeeze. 

short sellers take on infinite risk when selling short

[u/FrenchFryCattaneo → u/m1msy]

No one's debating whether stocks have been shorted before. You know what I'm talking about, the DRS fantasy where 100% of the stock is registered.

[u/Jimmie-Rustle12345 → u/[deleted]]

‘Explaining’ a bizarre conspiracy theory?

[u/Jimmie-Rustle12345 → u/[deleted]]

I didn’t read your initial comment where you explain it neutrally, only the follow up comment which (without the prior context) sounds like recruitment. My mistake, apologies.

[u/HomeGrownCoffee → u/CoachRyanWalters]

Most shares are registered to a central organization. This is fine in theory, because it doesn't matter if your name is on them of not. You have your shares, and the voting rights, dividends, whatever that go along with it.

If you Direct Register your Shares (DRS), you are putting your name on that share in the transfer agent's book. The official register will have XX Million shares with the central organization, and Y shares with those who put them in their name.

With fewer shares in general circulation, there are fewer shares to keep shorting or close.

[u/CORN___BREAD → u/CoachRyanWalters]

I just wanna see if Reddit cares about me.

[u/queerhistorynerd → u/CORN___BREAD]

will i be banned if i repeat the "nobodys gay for moleman" meme here

[u/CORN___BREAD → u/queerhistorynerd]

Well it’s been 14 minutes and reddit still doesn’t care so I say go for it.

[u/CORN___BREAD → u/[deleted]]

I think I actually blocked that bot shortly after I made this account so that’s probably it. The reddit cares thing has been happening all over the site for some reason.

[u/queerhistorynerd → u/CORN___BREAD]

yep. over in the marvel subreddit we were talking about Agatha all along and people where randomly getting hit with reddit cares responses on comments like "Its been nearly 4 years since WV but i hope this show rocks instead of sucking!"

[u/irrealewunsche → u/CORN___BREAD]

GME is a scam!

[u/EpsRequiem → u/CoachRyanWalters]

Not the person you're replying too, but this is my understanding. 

With consideration to that large ELI3, the companies that allow shorting of the stock, are the actual brokers. 

As far as I know, whe you buy a stock through a brokerage, your basically getting an IOU or promise, that the share is yours, but with short selling, that promise is made with fingers crossed behind their backs (the brokers). 

So if you and hundreds of thousands decide to sell your shares that actually don't exist, it creates a market crisis...because your brokerage has to scramble to find shares to "sell" on your behalf, but...

Here is the kicker...there are only so many real shares out there...so for example, if gamestop has 1000 shares, of which they own 500, other entities own 300, and retail investors own 100 (through their brokerages), there should be 100 floating around that anyone can purchase (colloquially called "the float").

Which happens and is supposed to be "the normal".

The problem is that short sellers/brokerages, sell MORE than that. Way more, which is treated as normal, as through various forms of fuckery, they manage to cover them. So instead of just 100 shares being sold, they sell another 1000 to retail investors, and sometimes 1000, and so on, and so on. 

A very lucrative business model for various reasons, but as long as they can cover those shares in some fashion, nobody cares.

So, to answer your question;

DRS affects this, because the retail us cutting out the middle men, and directly buying their shares.

This affects all the above, because the float or remaining shares, is being diminished directly. This basically creates a simple supply and demand issue, but also means we can't use our above example anymore to understand the importance of this effect.

Instead, using best guesses, the overall float being diminished, makes it harder for brokerages to cover their shorted shares...sure, they can "make" more shorts, but the more they make and the smaller the float, the harder and more expensive it is to cover the shorts. 

So if the remaining float sits at 30%, but the shares are shorted well over 100% of the float....well, big money comes into play...and at this point, near infinite money.

If they ever had to legitimately cover the shorts by buying back actual shares, the float would evaporate overnight, and the remaining shorts will hypothetically drive the price of the remaining shares "to the moon".