[Judgmentality]

> And so we see Gamestop story fall out of that. In a nutshell a bunch of retail investors (possibly with help from institutional insiders) decided to pump a small cap stock far beyond what the valuation of the company should be.

This completely ignores the fact that the stock was shorted over 100% of float, and people knew it was going to squeeze so they bought in hoping to ride the wave. And that did in fact happen, although timing is everything.

I could go on, but this philosophical piece is incredibly lazy with its historical accuracy.

[loeber]

Strong agree. This is a lazy polemic. Take, for instance, this one amazing part:

> Goldman Sachs, Citadel, Andersen Horrowitz those guys are making transaction fees

"Andersen Horrowitz"? Does the author have any idea who he is criticizing or what industry they're in?

> Failing microcap stock

GME is not a microcap stock, and it was not a microcap stock, even before this entire saga

> I make no pretense that I don’t despise the bitcoin philosophy

Erroneous double negative here, does he even proofread his own work?

Somewhere in here he states that "Bitcoin doesn't work". I've seen a lot of lazy criticisms of Bitcoin, but this one just falls flat -- of course it works. Say what you will, but the entire system works with continuous uptime, the ability to transact, etc. etc. That's why it's worth a trillion dollars.

Saying that you don't understand how bicycles stay upright doesn't make them fall over. And similarly, saying that Bitcoin doesn't work, well, doesn't make it stop working.

[illumin8]

> "Andersen Horrowitz"? Does the author have any idea who he is criticizing or what industry they're in?

Once I saw this obvious error and realized the author doesn't even understand that VCs are different from a stock exchange, and can't even spell their name properly, I realized how ridiculous this blog actually is. His Bitcoin argument cemented it.

I want the 5 minutes of my life back that I spent reading this drivel.

[Judgmentality]

> > I make no pretense that I don’t despise the bitcoin philosophy

> Erroneous double negative here, does he even proofread his own work?

I think he got this part right.

I make [no] pretense that I do [not] despise the bitcoin philosophy ---> I {admit} that I do despise the bitcoin philosophy.

Unfortunately, this is one of those weird English phrases where the more you look at it, the weirder it is. I'm actually less confident of this now having written it out and reread it multiple times.

[jtbayly]

You're right, he's right, but your analysis is not helpful, actually.

"I make no pretense..." means "I don't claim to..." For example, "I make no pretense at being an bitcoin expert" means "I don't claim to be a bitcoin expert."

So here's some more helpful analysis:

"I don't claim to despise BTC" means I like it.

"I don't claim to not despise BTC" means I don't like it.

Thus, "I make no pretense to not despise BTC" means I don't like it.

[timerol]

See my sibling comment's edit. "I make no pretense at being a bitcoin expert" can mean both "I don't claim to be a bitcoin expert" and "I am an authentic bitcoin expert" depending on context.

[jtbayly]

Yes. I see your edit. I'll only add that although second meaning is certainly allowed by the words, in practice the phrase is understood in the first sense.

[timerol]

I think you've got it backwards. I'm counting it as a quadruple negative when considering "despise" and "pretense" meaning deception. "Make no pretense" means the same thing as "admit", not the logical opposite. Some equivalent statements to the original:

I make no pretense that I respect the bitcoin philosophy.

Edit: I made an bad logical leap here. The statement can only be interpreted about how the author pretends, and not the author's actual position. So everything after this edit is suspect. All we can say is that the author does not pretend to like bitcoin. The statement doesn't say anything about the author's actual opinions of bitcoin, though that is very clear from the article.

I make a pretense that I despise the bitcoin philosophy.

I admit that I don't despise the bitcoin philosophy.

I admit that I respect the bitcoin philosophy.

[jtbayly]

(edit: the below was written before the parent's edit. Still useful for understanding how that phrase works, though, so I'm leaving it.)

Part of the problem with your analysis is that "I make no pretense" is itself a phrase actually is a single negative in use. It means "I don't claim."

"I make no pretense of liking BTC" could technically mean "I am not pretending to like Bitcoin" as in "I'm not pretending to like BTC. I really do like it." But that's not what it means in practice. It means "I don't like BTC, and I like it so little that I'm not even going to pretend to like it."

[mrkeen]

>> I make no pretense that I don’t despise the bitcoin philosophy

> Erroneous double negative here, does he even proofread his own work?

Do you? The double negative stands.

He has previously written extensively on his dislike of Bitcoin. Far from lazily.

[dragontamer]

> This completely ignores the fact that the stock was shorted over 100% of float, and people knew it was going to squeeze so they bought in hoping to ride the wave. And that did in fact happen, although timing is everything.

Except the squeeze failed at $400, and short interest was still above 100% as GME dropped below $50 by my understanding.

As such, the short-interest story seems to be a weak argument for anything. Clearly, short interest > 100% is meaningless: the stock can go up, or down, no matter what its short interest is.

[bargl]

No one knows. That's not public information.

It doesn't take into account that at 400 shorting GME became a much more appealing idea than even at 20/share. Everyone knew 400/share was unmaintainable.

[dragontamer]

> No one knows. That's not public information.

% Short float is public information. And based on the discussions I've had online, it seems people are confused between %short float and %short outstanding.

> Everyone knew 400/share was unmaintainable.

Clearly not. My friend was buying in at that time, despite me arguing with him that he shouldn't. There's also plenty of retail-buys that occurred at $300 to $400: millions and millions of shares bought.

So plenty of people were buying at $300 and $400. That's just a fact. Retail purchases and retail volume by the way, is also public information. (Along with other indicators of volume: open interest to options for example)

[bargl]

>% Short float is public information. And based on the discussions I've had online, it seems people are confused between %short float and %short outstanding.

My understanding of this is that it's released on a bi-monthly basis. So the active count is not reported. There are people who try to track it based on the outstanding shorts by watching the stock market and predicting what the current daily short percentage is, but I don't think they have verifiable data until the publication comes out. https://nasdaqtrader.com/Trader.aspx?id=ShortIntPubSch

Any short before the surge was probably shorting the price below 20/share. Say there are 100% shorts at 20/share. Then it goes up to 50/share and now it's 80% at 20/share (because 20% of those closed out) and 20% at 50/share.

When it was at 400/share, no one knows if those were shorts at 20/share, 50/share, or 400/share or when they expired. If I was a savvy investor who was being squeezed, I'd have cleared all my shorts at 20/share at a loss and then shorted the stock again at 400/share keeping the percentage around 100% of the market. I have no way of showing this and unfortunately very few people do (to my knowledge). If I'm wrong please show me I'd love to learn more, I find this incredibly interesting.

That's what I mean is not public information, no one knows what the breakdown of the short value is.

>Clearly not. My friend was buying in at that time, despite me arguing with him that he shouldn't. There's also plenty of retail-buys that occurred at $300 to $400: millions and millions of shares bought.

They thought it would go up to 1000. Which it might have, but they thought it would surge up and they could sell off at 1000.

That doesn't mean the price is maintainable. Everyone was passing around the last Short chart and it wasn't a maintainable boost. You can't even see the jump on a 5 year timeline of the market.

EDIT: Sorry I keep saying everyone. Everyone who was on WSB during the mania. I am sure there were individuals who didn't fit this. But I assume your friend thought the price would hit 1000/share and then they'd sell there. Or they were sold on buying the dip. Either way, they had an exit strategy (I assume) and it wasn't 10 years from now it was in a few days or weeks. Which is why I said isn't maintainable.

[tekdude]

> Except the squeeze failed at $400, and short interest was still above 100%

It's likely that as the price rose, the funds and investors that were shorting at the pre-squeeze prices were forced to close their positions at a loss. Then, they (or other investors) opened new short positions at the inflated higher prices, thus keeping the overall ratio high.

[bargl]

This. The stock was at around 20/share before the spike and was considered a WIN at that. It's now sitting at 40/share and is probably priced high.

It was shorted to below 2/share at some point which is imo insane given what we've seen EVERY SINGLE CONSOLE RELEASE EVER.

The media saw an opportunity to make this about populist rage, and we all bit it. But this was started as a short squeeze and a very effective one at that.

EDIT: Just to clarify. There was obviously a short squeeze. That short squeeze could have stopped at 20/share and been a GREAT short squeeze. I have friends who got off the ride at that point thinking the squeeze was over. The frenzy that happened that pushed the stock to 400 was insane, and wouldn't have happened if this stock didn't start trending. You don't have a subreddit go from 2m to 8m in 2 weeks unless there's some serious frenzy.

[0xy]

GameStop's margins are awful, and no amount of hypey releases will save them. Their website is still garbage. This is a flailing has-been physical retail business, propped up by Microsoft and Sony who see it as a billboard.

[bargl]

That's a valid argument, but they showed a ton of revenue lately and shouldn't be valued at 2/share.

I think the stock is between a 10/share and 30/share stock but I'm not a professional. Honestly the professionals aren't professionals and that's backed by some studies but I won't get into that right now.

The idea that you can cover this story without mentioning the short squeeze is lazy or dishonest. While it's an artificial boost to a stocks price it's a completely valid boost to that price too.

I use the PS5 as an example. How expensive is it? 500? Wrong. It's 500 if you put in time and energy, but if you value your time and energy over that of the retail price you can get one on ebay for 1000. Is it worth 1000? Only if you are impatient.

What's GME price? 2/share 15/share doesn't matter. If I have 1000 of something and I know that 1400 people MUST buy it by the end of the month, I can be sure that I'll make some money there. Was 400/share reasonable? I don't think so, that was mania and the fact that this short squeeze got mainstream and people had FOMO.

[TheCoelacanth]

You can't really count on that, though.

All 1400 buyers could be satisfied with just 1 share that gets resold 1400 times. At even 20/share, some of the people who loaned out their shares to short-sellers are going to sell their shares when they get them back to cash in on the 1000% gains.

They could even be satisfied with 0 shares if someone is willing to short-sell. At 400/share, there were certainly plenty of people willing to short-sell.