[therobots927]

This is an anon account so I feel safe to admit this. I used to buy into all of that stuff. Basically the (conspiracy) theory is that market makers sold shares in GameStop that didn’t exist. There’s an element of truth to this, at least during 2021 it was confirmed that market makers had collectively sold more call options than they could possibly hedge with shares. But regardless, in order to prove this everyone in superstore started registering their shares with a transfer agent. The number of shares registered was reported by GameStop every quarter. Throughout 2022 I think the number of shares registered linearly before it plateaued at about 25% of the public number of total shares of GameStop. I might be conspiracy oriented but I’m also a believer in science and to me this cast a significant amount of doubt on the theory. Anyways, it’s definitely not a parody and I feel sorry for people who didn’t wake up like I did. I think something like 200,000 people registered their shares, that number also plateaued. I don’t think the GME craze was good for anyone but the company itself and roaring kitty.

[DANmode]

That all shareholders did not register on ComputerShare or whatever is what leads you to no longer buy into...what, precisely?

[therobots927]

The idea that the stock was being sold short with fake shares.

[CrazyStat]

Selling call options is not short selling though.

[therobots927]

If you’re not hedging by buying enough shares to provide when they exercise it might as well be.

[DANmode]

I followed that wrinkle pretty closely.

I was surprised to hear how high the number stated was (25%).

I do not see the connection between that movement achieving <100%,

and there being no fraud committed in claimed assets in the finance world.

Especially in that case.

And I can’t, frankly, see how you drew that connection either.

[therobots927]

Absence of evidence is not evidence of absence sure.

But it sure ain’t proof of anything either. If you’re going to make an outrageous claim you need to prove it.

[DANmode]

There were more shares being claimed than were owned.

What more is there to prove? It's not even unusual to do.

Explainer: How were more than 100% of GameStop’s shares shorted?

NEW YORK, Feb 18 (Reuters) - One area of focus from a U.S. House of Representatives panel on Thursday will likely be on the role short selling played in the GameStop (GME.N), opens new tab market mayhem. Executives from trading platform Robinhood and hedge funds Melvin Capital and Citadel will be grilled following the retail-driven trading frenzy that sparked wild gyrations in GameStop and other heavily shorted stocks. Short selling, details of which are included in the memorandum, opens new tab about the hearing, can be a positive move, as it can be used in hedging positions, more accurately valuing prices of stocks and exposing frauds, like Enron and Theranos. But Vlad Tenev, broker Robinhood's chief executive officer, recently pointed out that some of the stocks involved in the "meme stock" rally were more than 100% shorted, implying that more shares were shorted than were available to trade. "I just think that's pathological," he said on the All-In Podcast, opens new tab late last Friday. "You end up with this situation that could destabilize the financial markets." HOW DOES SHORT SELLING WORK? Advertisement · Scroll to continue Typically, shorting a stock is a bet that the share price is going to fall. Short sellers borrow shares from brokers and then sell them into the market, with the agreement that they will buy the shares back and return them to the lender at an agreed upon time. The shares can come from the brokers' own inventories, or from customers that have allowed the brokers to lend out their shares. When it's time to return the shares, if the stock price has fallen, the short seller can buy the shares back at a lower price than they originally paid for them, locking in a profit.

If the price has risen, the short seller must buy back the shares at the higher price, incurring a loss. In the meantime, the short seller pays the lender interest on the value of the stock, giving the lender extra income. IS IT RISKY TO LEND OUT SHARES? Not really. The borrower posts collateral, typically, opens new tab 102% of the prior day's settlement price. The borrower can also request the shares back at any time. Advertisement · Scroll to continue HOW CAN MORE THAN 100% OF A COMPANY'S SHARES BE SHORTED? Once the short seller borrows the shares from the lender and then sells them back into the market, the new owner of the shares is free to lend them out, just as the previous owner did, and have no idea they are on the other side of a short sale. Settlement time is two days after the transaction. In that time, the same shares can be lent out again, and again. This makes it possible, on paper, for more than 100% of the float of a stock to be shorted. According to financial analytics firm S3, GameStop's peak short interest was 141.8% of its float on Jan. 4.

S3 argued in a recent research note that the traditional method of calculating the percentage of float is flawed because it uses stale data. U.S. investors are required to mark their shares shorted and regulators report these figures twice a month, with a 10-day delay, S3 said. There have been calls since the GameStop saga to improve transparency around short selling through more frequent reporting.

[JimothyPhtevens]

Maybe I missed something, but I think you agree with the other person more than you think. The second to last paragraph in particular explains why.

"HOW CAN MORE THAN 100% OF A COMPANY'S SHARES BE SHORTED? Once the short seller borrows the shares from the lender and then sells them back into the market, the new owner of the shares is free to lend them out, just as the previous owner did, and have no idea they are on the other side of a short sale. Settlement time is two days after the transaction."