[newacct583]

That's actually not how it works. "Holding" a share doesn't, by definition, do anything to its price. The price is determined by trades. That's what a trade is. You can be sitting on 99% of a company, but as long as that 1% of shares is active in a market it will determine what gets reported as the share price.

And yes, someone with infinite resources can absolutely push a share price down. Borrow every share you can and sell it at $1, for example. Obviously no one does this because it's a terrible investment decision, but it's certainly possible.

[elihu]

I suppose that's true, but kind of beside the point. The "official" price isn't really the price if any random person can't actually buy shares at that price. (Kind of like the Raspberry pi zero that can buy for $10 or so but you can't actually buy in volume at that price.) And supposing that you're sitting on 101% of the stock and people are still buying and selling, then what in the world is going on?

(I don't know if that's really what's happening with Gamestop.)

Anyways, even if the price is artificially low because of some artificial trades driving it down, that doesn't really matter in the sense of the shorts being able to unwind their positions. If the people who hold most of the stock aren't willing to sell for less than a certain amount, then that's what the shorts will have to pay if there aren't any other available shares. That requires the people with the stock to hold out for a good price (even if some infinitely wealthy person is borrowing real or imaginary shares and selling them for $1), but if they do they "win". At least, that's my (possibly inaccurate) understanding of the situation.

One aspect of this whole thing I don't understand is what happens in a "failure to deliver" situation? If the shorts just can't or don't want to pay the market price for a share, what's the penalty? Do they get sued? Declare bankruptcy? Is the exchange or brokerage liable for their debts?

[newacct583]

> If the people who hold most of the stock aren't willing to sell for less than a certain amount, then that's what the shorts will have to pay

But that presupposes not that WSB was big enough to trigger a short squeeze (something that everyone accepts), but that they are big enough to hold the bulk of the capitalization of (at this moment) a $18B company. Needless to say they aren't remotely that big. This isn't happening.

[elihu]

Sure, there's more going on than just some WSB people holding stock. Probably a lot of other people have gotten onto the bandwagon, and maybe even some hedge funds or bored billionaires. And some of the high prices lately may have more to do with short sellers covering their positions than retail investors buying at those prices.

At the same time, it's worth noting that a lot of the WSB people got in early, and were able to buy a lot more shares at a lower price. That WSB could scrape together 1.8 billion when the stock was worth one tenth what it is now is still a bit far-fetched, but closer to the realm of possibility than 18 billion.