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A comment on Discord bans r/WallStreetBets server, subreddit went private for a while. Parent comment

Re:Discord bans r/WallStreetBets server, subreddit went priv... by philistine on Thursday January 28, 2021 @08:07AM (#25941265)
With regards to number one, what will happen is exactly the reverse of what you’re saying. Hedge funds have shorted more of the stock than exists. That means that when they decide to buy back the stock to close their shorts, they will need to buy every single stock of the company, return it to the people who lent them their stock, and those people will have to now sell it, so they can buy it again to return it to other people.

It won’t happen in minutes either, it will take days for this to happen. That’s why everybody is going crazy about this. WSB saw a perfect situation and exploited it. This isn’t a case where the stock will drop in mere minutes.

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Re:Discord bans r/WallStreetBets server, subreddit went priv... by jariel on Thursday January 28, 2021 @10:23AM (#25943157)
No, the funds will take a haircut and move on, they likely already have.

The crash will be worse, and it will affect people personally - the plebes are going to lose a lot of money on this one in a few days when the market moves on.

That it will take days to unwind doesn't really matter - it will top out at some point, and it will go down. The timeframe is less relevant.

[ Parent | on HN ]