0. https://www.highshortinterest.com/

I'm not sure why people expect the short interest to change at all. If shorts thought it was worth shorting at $15, they sure as hell would be shorting at $300 or $400.

So, we'll potentially see if that is indeed the case either tonight or on the 9th which I believe will have the most recent data as the one this evening will already be outdated.

Linky: https://www.finra.org/filing-reporting/regulatory-filing-sys...

How often are news stories promoted in paid-for ads on social media? Do you know? If you don't then you're basing a decision on one piece of data with no context.

2. bloomberg's (unofficial) estimates says it's below 100% https://www.bloomberg.com/news/articles/2021-02-01/gamestop-...

3. even if it's at > 100% shorts, it tells you nothing about what price those shorts entered at. if they entered at $300 they're not breaking a sweat.

Beyond that, it could go to 100%, 200%, or whatever people feel like. There's nothing special about 100% short interest at all.

Typically these stats are updated slowly.

Those that shorted it at the high, are minting greens right now.

WSB would need to convince people who are already burned to move to a broker like Fidelity and start it up again.

Edit: Not to mention that yes the short positions that exist now likely exist at a price point well above the original shorts.

The narrative on WSB was that you wouldn't be "late" buying in even late last week at $350, because the goal post was raised to $1000. Many people guessing it would go to $5000. Others saying $10,000. Followed by lots of rocket emojis.

Considering how people have witnessed the recent crypto rally generate insane returns, I can see how new / naive investors might think they're getting in early at $350. Especially when it was all over the news late last week and a giant billboard encouraging people to buy GME in time square just yesterday.

Edit: The timesquare billboard was actually last Friday. And only ran for 1 hour.

Everyone knows GME is over valued by an insane amount, who do people expect to be snapping up shares at $500?

(not saying this is indeed what would happen, just explaining the though process)

This is incorrect. Short sellers only need to close out their positions if:

1. They cannot maintain them. If they can raise funds ( which they did ) they can maintain the positions. In fact they are probably shorting more, short averaging up if they can get a locate. GME yesterday was on a hard to borrow not on non-borrowable list.

2. Their shares are called back.

GME looks like a crazy stock around 1998/1999 ADEP(?), I think, which went from sub 3 to over 75 two days before Thanksgiving peaking with a couple of trades over 97 followed by a quick crash into teens and a really slow side into pennies. Some of the short sellers covered by putting up classified ads buying stock certificates from the cause the short squeeze by asking to deliver the certificates crowd a few years later.

I will say though, price going up forcing short sellers to close out (due to margin calls, fear, whatever) is not some made up thing..it's called a short squeeze. I do not know what will happen with GME.

They do not need to close out their positions until the stock becomes non-borrowable, causing their position to be called in.

I think at this point for a lot of people its "hold until they can't maintain, this isn't about money it's about screwing over the man!!!!" - as they say the market can remain irrational longer than you can remain solvent.

Margin calls after today's close are going to be brutal.

The people they targeted borrowed liquidity and may have even short averaged up. To be honest, in the end, the net effect of this thing may be something similar to a pump and dump.

I feel bad for the retails that are really gonna take it on the chin. At the same time, I'm sticking to my guns. We have to let all the people who lose in this thing fail, or nothing will be learned. It will need to be painful for people to be more careful in the future.

That's true for when stock went from $4 to $350, but who are the "losers" when stock goes from $350 to, let's say $7?

Also, who are the "winners" on that $350 -> $7 journey?

Nonsavvy retail investors who believed in the hype and bought when the stock was significantly overpriced.

Sane retail investors who are about to enter a whole new world of requirements to get a margin account.

> Also, who are the "winners" on that $350 -> $7 journey?

The hedge funds who were willing to bet on the stock price dropping from $20 and who would've almost certainly increased those bets when the stock was in the $300s.

People will say that the hedge funds cheated somehow to come out whole, but the reality is that the attack was extremely poorly designed. (And that's being charitable and assuming that this was an attack and not simply an out and out pump and dump.)

> No, they didn't pitch it as a BTC or Tesla

It was a figure of speech, "we'll transform your $300 in $10000 in 2 weeks". People internally think about all the past opportunities they missed, we're talking about life changing money for a lot of people

Many banks control trillions of dollars. Hedge funds almost always have less than $50B, usually by one or two orders of magnitude. If a bank fails, it's actually a problem for the government. If a hedge fund fails, it's barely a blip. If the limited partner was smart, it will also only cause them a single digit percentage decrease in their portfolio.

Hedge funds can amplify a systemic risk, but they would not really be targets for a bailout, the banks would be.

Of course, as soon as it was covered by the news media, it draws people in who don't share that mindset and do stupid things. so... yeah

A company with declining revenues, but lots of cash on hand, is ripe for takeover and liquidation. That places GameStop right alongside the quintessential takeover target: New England Wire and Cable. That was a good movie. Whether from bankruptcy or takeover, this could be the last party for GameStop.

[1] https://www.youtube.com/watch?v=GZTr1-Gp74U

There is only 1 stock being traded here, but there are two loans (shorts) out on it with obligations to return it.

What's really fun is that Alice and Charlie may not even know that they've lent their stock. Their broker, having a substantial amount of the stock pooled across all accounts they manage, may lend it out and still let Alice and Charlie trade their "share" -- since if Alice wants to sell, the broker can always sell on of the other shares from their pool. As long as the broker keeps a decent amount of shares still in their possession, and as long as all accountholders don't try to liquidate at the same time, it's fine. Even if you DID try to liquidate your position and whoopsie, the broker actually lent out all their shares and there are none left for them to sell, the broker could buy your share obligation with cash and you wouldn't know the difference between that and selling it to another shareholder.

This is the type of thing that gets some people's back up. It all sounds very "precarious" as you say. There is a reaction that says, whoa, that's way too complicated and abstracted, this whole thing is a house of cards just waiting to collapse. But it's kind of like a long-lived piece of software, which accumulates complexity from the need to deal with a complex world. Only new programmers have the urge to tear it all down and start from scratch -- because old programmers have found that the "new" system ends up reinventing the complexity of the old as it discovers the same problems and missing features of the "simple" approach. Today you see this happening with cryptocurrency.

last i checked brokers _cannot_ just loan out random alice and charlie's shares.

only once you've got a margin account and you've gone into debt can they use your shares. if you've got a margin account and you didn't read the contract, well... god help you, nobody else can.

as i understand it, loaned shares generally come from large institutional investors. the folks managing your index funds make extra money by loaning the underlying shares. (maybe that's what you meant? but the prospectuses for index funds make it clear that they do this sort of thing.)

On some brokers it's an opt-in thing and you get to reap the rewards (interest) of lending out your shares. A friend of mine has been doing this with QuantumScape stock and collected a sizeable amount just from lending it through its December run-up, in addition to the direct gains.

My impression is that the zero-fee brokers like RH are the ones more likely to do this without your opt-in consent (of course you do agree to it across the board in their terms), but I'm not an expert.

As I read my customer agreement with ETrade, they are allowed to loan out my shares, even if I do not have a current margin balance. (It reads to me that they are pledged as collateral at all times, but I am not a lawyer.) It seems unlikely and inefficient that if I paid or traded my margin balance down to zero that ETrade would demand delivery of any shares I'd previously lent.

From this comment: https://news.ycombinator.com/item?id=25946012

> On their current trajectory they will go bankrupt

...what?

this whole thing started because some high-profile redditors were bullish on GME, and then it turned into an anti-1% movement once the short positions were discovered.

so, there are two activities: speculation and investing. the whole problem here is that unwitting retailers were tricked, thinking they were investing when really they were "speculating" (more accurately called a pump and dump scheme). now its morphing into this "jail the oligarchs" nonsense because the people that lost money think they were wronged, when really it was their own damn fault the whole time.

> > On their current trajectory they will go bankrupt

> ...what?

This doesn't seem hard to reconcile.

If I leave Seattle driving east my current trajectory takes me to New York. But I'm not yet near New York.

Roaring Kitty (Deep fing value)'s first video from 6 months ago on $GME answers your questions. It started as legitimate investing with some memes on the side, and then turned in memes with some legitimate investing on the side.

https://www.bloomberg.com/news/audio/2021-01-29/how-to-make-...

But for other shorted stocks like AMC, Blackberry or Nokia I'm not sure if the squeeze ever happened and I feel sorry for the people who are still clinging on to those stocks. It could take months, or maybe years to sell them with a break even price.

Break even price? Through what, innovation? Currency inflation?

Loosing a bet doesn't make you a not-smart investor. High risk ventures can be part of any portfolio. In a game of high risk and high returns most bets don't work out. I don't think any less of hedge fund people who "lost their shirts" on this. That is a normal part of the game.

People who never traded in their life and bought GME at $350 because reddit promised them big returns (I know a few in my friend circle) aren't smart investors taking part in a risky venture, they just suffer from fomo and have no idea of the risks

People who bought a few weeks ago may have made a risky calculated move though, I'm not denying that.

People who bought a long time ago and fomented the whole thing for a massive profit are definitely the only one I'd call smart, low risk, perfect execution, comfortable exit.

No one will make me believe that the people who bought at $350 are just as smart and taking the same risks as the people who bought at $5. They're not playing the same "game" you're talking about. Head or tails isn't the same as "guess the number I chose between 1 and 5000"

I don't know if "being the subject of an impending SEC investigation for market manipulation" makes for a low risk, perfectly executed, comfortable exit ;)

That's not to call their position indefensible, but I suspect some of the people who fomented the thing will have to defend it.

I'm not sure what's left that is "good".

This is not a normal part of the game.

The e-commerce business is valued at 10x in QE-infinity terms, on adjusted EBITDA, which means it's not far fetched for the story to become $888/share right now.

The only thing missing is a constant parade of upgrades from the analysts.

That business model could really be worth $20B. It would be huge. Like what Netflix did to BlockBuster, but for video games.

For example GME was wildly overpriced at $100 relative to basically every metric and yet it would have been an incredible buy.

I'm not advocating that anyone actually do this, I'm just saying that you are over simplifying by only acknowledging the value side of the equation.

Can confirm.

Most of them bought in highly concentrated margin accounts. They will be force sold by the broker as a result of a margin call.

With Robinhood everyone gets a margin account and the brokerage clearly can't support it with the tiny balances so many of their users carry. Their business model has forced other brokers to follow by offering free trades and everyone is on a margin account. This is a poor practice.

I'd support requirements like ensuring balances of at least $10k or more to qualify for margin. Robinhood is purposely designed to encourage day trading and other margin trades many users don't understand or that the infrastructure (not just RH, but the clearing houses, etc) can't and shouldn't support.

There's going to be a whole new world of pump and dumps like never before as so many people are hungry for quick money now and taking risks with their rent money they shouldn't be.

For what it's worth, the original guy betting on GME had a smart and well researched hypothesis and I hope he made his fortune. But the lemmings following have no business in this kind of thing.

Just because GME-as-ownership-unit may be overvalued, does not necessarily mean it is overvalued for GME-as-contract-closure-instrument.

If you want to focus on GME-as-ownership-unit, as a share in a retail business, that's perfectly valid. But that's not the only perspective.

- https://newrepublic.com/article/161182/bought-tens-thousands...