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by thefounder
1966 days ago
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>> Is your underlying theory that with no intervention the stock would have no choice but to go to the moon? If the retailers hold the line they will squeeze the shorters. They already did it but the bulk of the juice is still there. VW is not the only example. Tesla is a more recent one. Of course GME could issue new stock. Many executives liquidated/sold their positions. AMC already issued new stock. These are different issues. Restrict the buying of any given stock(i.e Tesla), halt it intermitently and then announce that you are banning it because it's too volatile and speculative. What's the expected result? I could bet its goes down and that's the whole point I'm making: the brokers and hedge fund managers collude to the drive the price down. They decided what the stock is worth or better said what the price should be at the expense of the buy side/retail investors. This is a predatory environment not a free market. Imagine if the brokers would suddenly liquidate the hedge funds shorts due the volatility. |
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As long as there's liquidity (and it seems like there is, the entire float is trading every day), sure some short position might give up because they lost their bet (assuming they're not hedged anyway), but there's always going to be someone else shorting at a higher and higher level, and in the end the shorts will inevitably win.
Even without any trading halt, it would end up like all pump and dump, with a few winners (those who dump or short at the top).
And in any case there's probably only a handful of hedge funds playing (and some will lose, other will win), and those being neutral in it (eg market makers) will win as well with all the trades.