The higher the price goes, the more incentive for new people to buy short, who aren't subject to the same pressure to get out fast that the ones who've been there longer were.
Doing this all in such a publicly-coordinated way on Reddit means you're wide open to people trying to directly play against your goals.
So much of the "proof" of things around this seems to be making big assumptions about who is on the other side that the aggregate numbers don't seem to indicate one way or another.
> How have they exited their short position when the short interest is still ~130% though?
Lots of people are short? I know at least half a dozen people who bought puts over the last few days. Those puts hedge into shorting the same way calls turn into buying.
Hmm. There seems to be a lot of unknowns right now. Do you think the information about how this all went down will come out once it's over?
I'd say most of the wallstreetbets traders still believe Melvin has their position, but you're saying otherwise. Though the still extremely high short interested doesn't seem to make sense if the big losers already exited...
> Do you think the information about how this all went down will come out once it's over?
I do. This will make partners out of a solid suite of securities lawyers around the country. But we won't have clear answers for at least another 6 months.
High short interests make a lot of sense right now, you have a shitty company with a market cap above 50% of the S and P 500 trading at multiples higher than IP rich tech companies like Apple. The stock is overvalued many times over regardless of whether you use sentiment or NPV’s. The more overpriced a stock becomes the more bears will join the marketplace, that’s inevitable. Most hedge funds take losses once the price goes about 30% over their position, most early bears definitely went above this but there is little chance they are still holding. That means that these new shorts are likely to have set prices in the $250 plus range, where the potential returns are astronomical and the little guys trying to stick it to the man are likely to foot the vast majority of the Bill whilst making the man and a small number of early buyers a shit load of money
If the early bears have already exited I would have expected the price to jump higher though.
Also, from what people are saying on WSB, there's no liquidity left in the market which is why some platforms halted trading for $GME.
If the early shorts were all out I wouldn't expect a lack of liquidity, since more recent short positions wouldn't be under as much pressure.
I'm a complete noob, but it seems like literally no one can agree on what's happening and why even though there seem to be valid arguments on all sides.
But also possible the underlying data was collected by EOD the day prior. Point is it's not a very clear data source IMO. Would be nice if real time short interest was public info.
How is it legal for it _not_ to be? Keeping that information hidden drastically incentivizes naked short selling -- and there is an exploit for naked shorts that will be incredibly difficult to prevent going forward ... no -- the exploit does not really rely on collective action -- it relies on the perception of collective action -- which is definitely fake able in an automated way with current technologies.
Naked shorts at this scale are gonna have to go away and no one will have more incentive to reach that goal than main street wall street ... ideally they can and should do this in a way that simply involves making more information public ...
> There isn't enough stock for them to close their position
Tens of billions of dollars of GameStop have been bought and sold over the past few days. If you can buy GameStop to go long, you can buy it to cover a short.
Note that there isn't a limit on rehypothecation. A share sold short by Bob can be used by Anna to cover her pre-existing short.
Yes, even if it's the same share that Anna sold to Bob short in the first place. That's how you get short interest > 100%. The market doesn't care, it only cares that a share was sold from Anna to Bob and then from Bob to Anna. The individual shares are completely fungible. (They don't actually exist, they're just numbers in a contract.)
Doing this all in such a publicly-coordinated way on Reddit means you're wide open to people trying to directly play against your goals.
So much of the "proof" of things around this seems to be making big assumptions about who is on the other side that the aggregate numbers don't seem to indicate one way or another.