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Comment by kahrl | Hacker News Reader

Short sellers illegally borrowed more stock that actually existed. They are the criminals here. Not the people discovering this and taking the criminals for everything they have.

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Correct.

GME was heavily shorted at ~148% and the institutional shorts got too greedy and /r/wallstreetbets caught them as they failed to close their shorts.

Now they are forced to buy back the stock to cover their positions whist everyone is buying and holding GME as the stock price goes higher; rinse and repeat.

If anything, the hedge-funds over-shorting these stocks are the criminals which have manipulated them (GME) for years with other hedge-funds bailing them out and the media covering their asses for their illegal activities; as usual.

Then they cry and lie with the media: 'ThiS is mAnIpulAtIOn' to /r/wallstreetbets.

All I can say is: /r/wallstreetbets is literally robinhood.

It's entirely possible for short sellers to have legally borrowed more stock than is actually outstanding. There is no evidence that I've seen that they've done so illegally.

Can you explain how it's possible to borrow more stock than is outstanding?

I have one stock in GME, and borrow it to you. You then sell it on the market to somebody. That somebody can subsequently borrow it again to a short seller who will again sell it on the market. Repeat.

If a shorter lends his one borrowed stock to another shorter there will be a chain of shorters for the one stock. Isn't that what happened?

Is it actually illegal to do this (not should it be, is it)?

Not at all.

Wrong. https://en.m.wikipedia.org/wiki/Naked_short_selling

I understood “this” to mean “borrowing [more stock that actually existed] and shorting”.

As your link explains “Naked short selling, or naked shorting, is the practice of short-selling a tradable asset of any kind without first borrowing [...]”

After someone has setup a covered short, the stock they borrowed and sold is again on the open market, is it not? And thus could be lent out by the new owner, enabling a second covered short?

Yes. It’s called naked short selling. It’s been illegal since 2008. https://en.m.wikipedia.org/wiki/Naked_short_selling

No, your link is about selling shares you didn’t borrow first. What’s going on here is perfectly legal, as explained in that very same link:

https://en.m.wikipedia.org/wiki/Naked_short_selling#%22Norma...

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