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by dsauerbrun
1968 days ago
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yes, and today those greater fools are the hedge funds. Look up what a "short squeeze" is. There is indeed a coherent argument for why GME's current price is so high. It doesn't have to do with the company itself but rather the current conditions of the stock. There are 69.75 million gamestop stocks. Short sellers have borrowed roughly 97.65 million stocks. There are literally fewer stocks available than are needed. Supply is low, demand will be high when short sellers are forced to cover their losses. Think of the stock as an item you are purchasing as opposed to something the correlates to the value of a business and it'll make more sense. I don't think this is what the intention of the stock market is, but the system allows for it to happen. The system needs to be fixed. You shouldn't be able to short more stock than exists. |
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why? the margin calls will materialize losses when theres no more demand for shorts. what does that have to do with the magnitude of aggregate short position relative to stock?