weirdness happening in US company

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Forums › Finance and wealth management › weirdness happening in US company

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#2644702 31-Jan-2021 13:18

eracode:
I have seen several news stories where commentators have reportedly said ‘there’s no reason to believe/no evidence of anything illegal has happened here’.

If “Everythig goes back to how it was (share price under $50)” then a lot of people must have lost a lot of money at that point. Like Dutch tulip bulbs.

What the mainstream media is struggling to portray is that many of the retail investor's don't care about losing money.

At this point is is crazy to put in more than you are willing to loose. People are either viewing it as a super high risk yolo investment or money spent on activism.

There is a screenshot of one investor with a usd33m gain on a $700k investment. They didn't liquidate at that point. I think it is fair to say that any rational, profit driven retail investor would take their gains at or before that point.

BlinkyBill

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#2644706 31-Jan-2021 13:25

Short selling where shorted stock exceeds all available stock (or where the shorted stock can’t be reasonably accessed on close) is known as ‘naked short selling’; and is covered by an SEC regulation called, from memory, ‘Regulation SHO’ - that’s the name of the regulation. Shorting requires the broker to locate the stock he is shorting. Please educate me as to how 140% of all of a company’s stock can be so located? 40%, sure; but 140% seems somewhat implausible.

References to the naked short on GME have been called out by the SEC as needing investigation, as well as by members of Congress on both sides, and by academics in the field of equities legislation. It can’t be held illegal until the investigations are completed I guess.

References to “commentators have reportedly said ‘there’s no reason to believe/no evidence of anything illegal has happened here’” are I believe referring to the collusive efforts of Wallstreetbets to pump up the price of GME stock to mitigate specifically the efforts of Melvin Capital in shorting GME, and not to the shorting of GME.

Scott3

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#2644708 31-Jan-2021 13:28

eracode:
By ‘facing charges’ do you mean charges in the legal sense? If it’s correct that nothing illegal has gone on, not sure what the charges could be. Maybe some regulatory repercussions.

Yes I do. I'm talking about possible future illegal actions. I.e: collusion between the short position holding hedge funds, bribing regulator's, bribing GME executives. Bribeing media to push false narrative etc.

vexxxboy

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#2644709 31-Jan-2021 13:28

BlinkyBill:

vexxxboy:

so far 20 billion has been lost since it started.

Got a source? I imagine this is all from calls on the short options, but I had thought that only a small percentage of these options had come due. I haven’t had a chance to check the end of trading status on Friday.

https://www.cnbc.com/2021/01/29/gamestop-short-sellers-are-still-not-surrendering-despite-nearly-20-billion-in-losses-this-year.html

Common sense is not as common as you think.

BlinkyBill

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#2644710 31-Jan-2021 13:28

BTW there are already lawsuits lodged against trading platforms who restricted trades; and I’m 100% confident charges will come for Melvin when the SEC gets around to it.

eracode

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#2644738 31-Jan-2021 13:50

Kyanar:

eracode:

@BlinkyBill If you’re prepared to contradict, how about responding when asked to justify your assertion? I’m genuinely interested in how or why my understanding of all this may be flawed.

You've missed that over 100% of the stocks are shorted. Over 100%. The music literally cannot stop until the entirety of the float is in the hands of the hedge funds stupid enough to have shorted more stocks than even existed. They were basically banking on GameStop going bankrupt and tens of thousands of employees being consigned to the unemployment line in several countries, just so they'd never have to pay the piper.

Which, incidentally, is exactly the sort of thing these people find abhorrent, and are railing against.

Rather than saying ‘Well, you’ve got that wrong’ - I’ll say maybe you have misinterpreted a stat that relates to the shorting of shares. I think you’re talking about the term ‘short interest’ which is the number of shares that have been sold short but have not yet been covered or closed out - an indication of market sentiment and in shorting those shares.

Mid-week the short interest in GME was 140% - but that doesn’t mean that 140% of those shares had been shorted. By the end the week, it was down to 120%.

Sometimes I just sit and think. Other times I just sit.

eracode

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#2644740 31-Jan-2021 13:55

Scott3:
eracode:

By ‘facing charges’ do you mean charges in the legal sense? If it’s correct that nothing illegal has gone on, not sure what the charges could be. Maybe some regulatory repercussions.

Yes I do. I'm talking about possible future illegal actions. I.e: collusion between the short position holding hedge funds, bribing regulator's, bribing GME executives. Bribeing media to push false narrative etc.

Yep - get that. That might bring forth stuff that’s been going on for years and never seen daylight before.

Sometimes I just sit and think. Other times I just sit.

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Fred99

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#2644748 31-Jan-2021 14:34

eracode:

Rather than saying ‘Well, you’ve got that wrong’ - I’ll say maybe you have misinterpreted a stat that relates to the shorting of shares. I think you’re talking about the term ‘short interest’ which is the number of shares that have been sold short but have not yet been covered or closed out - an indication of market sentiment and in shorting those shares.

Mid-week the short interest in GME was 140% - but that doesn’t mean that 140% of those shares had been shorted. By the end the week, it was down to 120%.

Yes it does. Mid week the number of short positions exceeded the *total float by ~40%, shorted shares had been re-lent and shorted again.

*the number of shares available to be publicly traded.

eracode

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#2644750 31-Jan-2021 14:46

Fred99:

eracode:

Rather than saying ‘Well, you’ve got that wrong’ - I’ll say maybe you have misinterpreted a stat that relates to the shorting of shares. I think you’re talking about the term ‘short interest’ which is the number of shares that have been sold short but have not yet been covered or closed out - an indication of market sentiment and in shorting those shares.

Mid-week the short interest in GME was 140% - but that doesn’t mean that 140% of those shares had been shorted. By the end the week, it was down to 120%.

Yes it does. Mid week the number of short positions exceeded the *total float by ~40%, shorted shares had been re-lent and shorted again.

*the number of shares available to be publicly traded.

Okay - thanks - I’ll re-phrase what I meant: “That doesn’t mean that 140% of GME shares on issue had been shorted” - which is what I understood @Kyanar meant.

A page about GameStop on Wikipedia is potentially misleading because it says: “Approximately 140 percent of GameStop shares had been sold short ....”

https://en.wikipedia.org/wiki/GameStop_short_squeeze

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Scott3

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#2645612 2-Feb-2021 01:32

FYI, It is widely expected for Silver ETF's (and physical silver) to be hyped hard tomorrow in various media.

It is understood to be a artificial hedge fund driven effort to attract attention away form other highly shorted stock.

Disclaimer: Long GME. Buy order for AMC placed.

Wakrak

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#2645630 2-Feb-2021 08:23

Scott3:

FYI, It is widely expected for Silver ETF's (and physical silver) to be hyped hard tomorrow in various media.

It is understood to be a artificial hedge fund driven effort to attract attention away form other highly shorted stock.

Disclaimer: Long GME. Buy order for AMC placed.

Quite unreal the amount of effort these media outlets are putting in to try and sway interest away from GME, and not just in America.

And then you consider the fact that Citadel owns quite a few shares in 18+ different companies/ETF's associated with SLV

Disclaimer: shares in GME, AMC, BB

Fred99

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#2645651 2-Feb-2021 09:00

Wakrak:

Quite unreal the amount of effort these media outlets are putting in to try and sway interest away from GME, and not just in America.

The trillion dollar question is "are they doing this as charitable/good advice - to try to persuade retail investors to save themselves from themselves" - or are they doing it because "greed" and freeing up trade so they can continue to short and cover losses whilst getting revenge on the punters at WSB etc?

It seems that for every "qualified" opinion, there's an equally qualified counter-opinion.

Scott3

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#2645653 2-Feb-2021 09:03

^^^^

There has got to be some major ethical failings going on which the media. A simple 5 sec look at the either r/wallstreetbets or the reddit homepage will show that Reddit is not keen to target silver.

Kyanar

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#2645707 2-Feb-2021 10:53

Scott3: Re the above I have just fixed an error in my previous post. I am long GME, but have no interest in AMC.

I am aware anouther of the meme stocks has done a capital raise (cruise industry?). Essentially giving them the funds to ride out the long, cold, covid impacted winter.

Something that was not viable prior to the activism movement, partially thanks to institutional investors betting on their failure and dragging their share price down via short selling. Something of a self fulfilling prophecy.

You named the other company that cap raised - AMC.

eracode:

Okay - thanks - I’ll re-phrase what I meant: “That doesn’t mean that 140% of GME shares on issue had been shorted” - which is what I understood @Kyanar meant.

A page about GameStop on Wikipedia is potentially misleading because it says: “Approximately 140 percent of GameStop shares had been sold short ....”

https://en.wikipedia.org/wiki/GameStop_short_squeeze

I never said "on issue", and specifically referred to the float. I'm well aware that combined, RC Ventures and BlackRock Capital hold around ~25%-35% of the total on issue which significantly reduces the float.

Kyanar

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#2646068 2-Feb-2021 17:51

It gets even more interesting - SEC filings seem to indicate that institutions (Vanguard, BlackRock, pension funds, etc) may own 162% of the company!

GME Institutional Ownership - GameStop Corp. Stock (fintel.io)

If this is not a miscalculation (it doesn't appear so - the last annual report said there was 87m shares of stock on issue, and no sign of a share issue in that timeline) then something very illegal has occurred, and since the float is then a negative number - the stock interest may be even worse than originally thought!

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