[hans1729]

I would love to know what events exactly took place during the hype, people and hedges bought in at 60 and sold at 300? And now there is immense uncertainty on wether the squeeze already happened?

I don't see GME falling below 40 anytime soon, the core group that started all of this should be holding if anything said until a week ago had any meaning or sincerity at all. Just the people who hold should suffice to keep the stock above 50. How did it drop to 40 Euros yesterday?

And whats going on over at wsb? There's astroturfing, trolls, people who bought in at 300, the core that pushed the hold-narrative - who's to be believed? The post on r/stocks about the second squeeze? Man, what a ride.

[WA]

Holding doesn't make the price. You gotta buy if you want to push the price. And nobody got any money for that anymore. The narrative is dead.

[hans1729]

But the buyers were supposed to be the hedges, desperate to get rid of their short positions. Which is just another dimension: they surely bought more shorts at 300. But can they possibly have covered the majority of their positions? Because if not, this should go above 100 again, right?

[itronitron]

A lot of people are saying that the hedge funds bought new shorts at 300 but if that is the case then who would have sold them at that price?

[kungito]

My thoughts exactly. There is 0 chance they could buy a substantial amount of shorts from small players and anyone with a serious enough pile of cash would be insane to sell a short then. It really sounds like someone without basic understanding parroting a narrative

[WA]

Why? If I'm short GME, I'd just wait. Sure, I have to pay borrowing fees, but it doesn't matter if I hold for a week or a few months, if I'm sure it collapses 90% within a year.

Of course, I'm oversimplifying stuff like risk management, margin calls etc. but generally speaking, what forces a hedge fund to liquidate its short position?

[DSingularity]

Where do they get their shares from? They borrow it from people who don’t own it. Those people may want to sell — especially in the event that the share price grows. And when that happens in sufficient volume time to put up because the exchange is not going to fail to deliver.

[WA]

A lot of assumptions you're making here. Maybe many didn't do naked short selling. Maybe the lender didn't want to sell for whatever reason. You just assume that MOST shorts were forced to cover and I don't see why this should be the case.

[DSingularity]

If they are borrowing a share then how is it naked short selling?

To understand the scenario where a short is forced to cover imagine you are the exchange. You don’t own shares. You just match orders and move money around and so on. One of the things you do, for margin players, is lend short-sellers shares that others bought on margin from the exchange. You bought it on margin to sell it and the other guy bought it margin to hold it. If the price spikes and the other guy wants to sell it what will you do?

[a254613e]

I'm not an expert, so someone please correct me if I'm wrong, but nothing forces them.

The theory was that if they have to spend $X per week, and that number is higher than what they would gain if they waited Y months, then they'll be "forced" to do it.