![]() ![]() Short positions of greater than 50% (that is, where more than half of a company’s tradable shares have been sold short and aren’t covered or closed out) are unusual. If #Gamestop $GME runs tomorrow here is a list of other stocks being heavily shorted /Mcxb2QjshM- Esloh Trades January 25, 2021 (AMC Theatres, Blackberry, and Bed Bath & Beyond have become primary targets for WallStreetBets users hoping to force similar gains.) Moreover, they’re turning their attention to other shorted stocks where they can hurt investment bankers and hedge funds. ![]() While some people would make a lot of money, and others would lose big, the stock would return to a more normal reflection of the company’s true value and health.īut the “meme stock” punters of Reddit are refusing pretty much every offer. Usually, a share price would reach a too-good-to-refuse level, and there would be a run to cash in on it. Short squeezes are a risk of short selling and one that institutional investors are prepared to face, but their assumptions are based on normal investor behavior, and what’s happening right now is anything but normal. And the Redditors are holding onto their shares with reckless, YOLO glee, promising to see the stock price soar to the moon, Mars, or other celestial ports of call. GameStop’s Cohen is, by definition, in this for the long haul - he bought in to shape the company’s direction, and would lose that power if he sold out. Realizing these gains, of course, would require someone to liquidate their shares. WallStreetBets Redditors, however, have bragged that their portfolios have skyrocketed into seven-figure territory. How much money have people made?īear in mind that this is paper wealth (and it’s fluctuating wildly), but the trading on GameStop - by the way, on Tuesday it was the most-traded security in the world - has created about $2 billion in wealth, most of it for Cohen and the company’s two other biggest shareholders. Gabe Plotkin, Melvin’s manager, told CNBC that speculation the hedge fund would file for bankruptcy is false. But Melvin Capital, the fund in question, did take a huge loss when it closed out its short position (i.e., paid its bet and left the table), CNBC reported on Wednesday.ĬNBC could not confirm the size of the loss Melvin Capital actually took, but noted that the company took on a $2.75 billion cash infusion from two investment banks to keep itself solvent. Did a billion-dollar hedge fund actually go out of business over GameStop? Investment banks thought their amateur counterparts were due for a bath, and bet accordingly. Little-guy traders loved it, viewing Cohen as a savior. This caused the initial jump in GameStop’s share price, as Cohen in November wrote a scathing, get-your-shit-together letter to the company’s board. On the same day, however, GameStop announced that Ryan Cohen, a well-known investor who bought a 10% stake in the company last fall, had joined the board of directors, along with two of his allies. 11 report on its 2020 holiday sales results (total sales down 3.1% from 2019, for those counting). The company’s last communication with investors was a Jan. Does GameStop itself have anything to do with this? In other words, the longer the folks at r/WallStreetBets hold onto their GameStop stock, the higher the price goes. They’re only going to be buying back their shorted shares which, since they are above 100%, there is no way to do that, unless institutions sell off everything they own into the open market.” There is no way that can get themselves out of it. “ shares that you, me, and own are a shorted share. “There is likely not an original GameStop-issued share left on the market,” the user wrote. This means that the number of “shorted shares” - that is, the shares loaned to investors that must be eventually returned - was actually greater than the number of shares available to trade. Last week, one of them realized that GameStop was in a “negative float” position. The “group of apes” in this situation is a chaotic group of investors organized under the r/WallStreetBets subreddit, which counts more than 2 million subscribers. Credit the group /0vyyg9lsnJ- Tashi Tsenkyap January 26, 2021 ![]()
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