đź’¸ The big short squeeze

Reasonably serious discussion
1

@Polski_Filip referred to this earlier, but I reckon it deserves its own thread.

The basics from what I understand.

  • Investors can bet against stocks (see The Big Short)
  • They win big if the stocks fall, but have technically unlimited liability if the stock rises, commensurate with the rise of the stock.
  • These short sellers correctly thought GameStop might be in trouble, as no-one is going out and more people are buying games digitally.
  • A Reddit subforum disagrees, and starts a run on buying GameStop stocks.
  • GameStop stocks soar 1100%
  • Hedge fund goes under

There’s loads of other stuff that has gone on, but don’t want to do it all in the OP.

I think this is massive, because it’s a tactic that’ll work on any short selling position.

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2

A mate of mine has money in this , its superb sticking it to the man, I have Binance but haven’t put any money in crypto before and haven’t clue but apparently you can get doge via this and its really fucking up the short sellers ha ha! $70 Billion the short sellers were down at one point!

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Channel 4 piece here.

4

From what I understand is that some of these amatuers are absolutely resolute and they’re not selling now! All they have to do is hold the line and they’ll send quite a few of these firms to the wall, just don’t sell! You’re worse than the shorters if you do!

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5

Apparently the trading platforms have stopped selling short stock to “amateurs” now.

They were happy when they were making money off of them but now the shoe’s on the other foot…

6

Same as it ever was. These billionaire hedge fund managers are now calling for regulations because they are getting fucked.

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7

Thing is the damage is done.
Gamestop at $20 then hits $800.
Those who bought at $20 are making money as they dribble stocks out but the Hedge Funds have to buy & give back borrowed shares.
Obviously this late in the game anyone paying $800 to get in the game is just dumb.
Finding other shorts will be made harder but they will find ways.
Love it

8

And this is what has kicked it all off, they were continuing to sell to short sellers but not the reddit gang, all they have to do is not sell, I think the are though, dogecoin is down 50% from yesterday, this is the coin used to buy the shares mainly.

9

A combined effort and looking at what the short sellers are buying will still fuck them over, the game is up, this is massive it really is.
I am going to try and get onto the next one as it will happen, blackberry, US Airlines are mooted.
I may at looking buy £50 of one later just to see as if the shorters have already bought those they’ll be dumping very quickly ha ha!

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Interesting stuff in this
Robin hood limited purchases as it didnt have enough funds to pay the clearing house deposits

11

I think shorting is going to go out of fashion very quickly. If I could short it, I would :smiley:

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12

I think at one point there were more short positions than actual shares in issue

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13

I have mixed feelings about taking out hedge funds

Some of our pension money will be with them

14

The really crazy thing, ladies and gentlemen, is that this is your economy.

Fucking shit, init.

I do wonder how often firms are put out of business deliberately to satisfy short selling positions.

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It will make hedge funds think twice - you now have to figure in activist small shareholders fucking you

16

I absolutely hate the concept of short selling - it’s often a self fulfilling prophecy

It adds zero value and should be illegal

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17

I am stitching myself up but morally its the best thing to do.

18

I think the one thing I didn’t like about the movie The Big Short is that hey made out like the financial crisis was the first time a short had been invented.

Shorting has been going on for decades, hasn’t it?

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Think it was the first time the housing market had been shorted.

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Yep, for as long as there have been stock exchanges

The biggest issue in my opinion is that there are a lot more companies that are vulnerable to this kind of attack because of the amount of debt that is loaded into them. Doesn’t take too harder a push to put them over the edge.

Debenhams is a perfect example bought for ÂŁ300m when it was making ÂŁ150 m per year. All of the stores were sold and leased back at daft rents. The owners took ÂŁ1.2bn in dividends financed by debt and the proceeds of the store sale, they then floated it and ran off into the sunset ÂŁ900m better off - three years to wreck a decent company