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Comment by dcolkitt | Hacker News Reader

Fair warning. Buying stocks with high short interest is, over the long run, a terrible investment strategy. Mountains of academic research has consistently found the most heavily shorted stocks to significantly underperform the market[1] (to the order of 10% per year).

Heavily shorted stocks tend to be the companies with the most negative cash flow shocks[2], low quality earnings statements[3], negative earnings revisions, and future bad news[4]. In other words, when a company is heavily shorted it's almost always for a good reason. (Like being a brick and mortar video game retailer, that's losing mountains of cash with no turnaround plan.) High short interest is a tell-tale warning of a bad investment.

This shouldn't be surprising. Research has consistently found that short-sellers are the most sophisticated and well-informed investors in the market[5]. There activity strongly predicts soon-to-be released negative public announcements[6]. Short sellers are exactly the type of trader, you do not want to be on the other side of.

[1]https://onlinelibrary.wiley.com/doi/abs/10.1111/0022-1082.00... [2]https://www.sciencedirect.com/science/article/abs/pii/S03044... [3]https://link.springer.com/article/10.1007/s11142-006-6396-x [4]https://onlinelibrary.wiley.com/doi/abs/10.1111/fima.12144 [6]https://www.newyorkfed.org/medialibrary/media/research/confe... [5]https://onlinelibrary.wiley.com/doi/abs/10.1111/jfir.12121

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It turns out an online community can stay irrational longer than a hedge can solvent.

This was one scenario were the shorts really did have it wrong. GameStop's financials were and are pretty solid. There was no reason to short the stock so heavily, which is why they're in the trouble that they're in right now.

You should watch Roaring Kitty's video from June 2019 I believe (maybe its 2020?) on YouTube about this. He goes into great detail, with something like an hour of analysis on why $GME is a reasonable investment.

Remember also, Dr. Michael Burry was buying into $GME (it was 5% of his fund in fact). Other big institutional investors like BlackRock, etc. had major positions as well.

BlackRock own a large position in basically every US equity. The reason is that their funds generally want to be exposed to the entire market or some large subsets of it. They aren’t stating some opinion about the value of GameStop by owning 10% of it as they own about 10% of the entire stock market.

If you see regularly someone’s name on the front page of the New York Times you might infer something about them. If you see someone’s name in the phonebook that is less interesting as (ok, not actually true but hopefully you get the point) everyone is in the phonebook. BlackRock is the phonebook.

I read this a lot on yahoo finance, reddit and other investing related discussions, that somehow Blackrock or Vanguard having a big position means they know something and is a positive sign for a stock. There are a ton of articles and documentaries about Blackrock being some secretive bank that "secretly" owns a big chunk of worldwide assets, which fuels this belief in my opinion. And while it's true that they own a lot of assets, they don't own it directly and are actually a rather boring business. They are completely passive most of the time.

Someone explained to me (perhaps incorrectly) that GMEs market cap was less than the value of it's real-estate holdings. Now GameStop isn't a great company but it's not bleeding as badly as you would expect and it has a turnaround plan that's it's executing.

It never should've been shorted as much as it was without hedging the other side of the bet. What was Melvin going to do if GameStop found a way to be wildly profitable in e-commerce?

This is fundamentally terrible risk management coming back to bite people in the ass. This time it was a Reddit internet mob but it could've been anything.

Right. GME market cap was $250 million at a time when the company had literally $1 billion in assets.

For people wondering, "Well why didn't some behemoth like Sequoia Capital or BlackRock just swoop in and load up?" When purchasing such large blocks of a company, 5%, 10%, 15%, etc., there's a lot of paperwork involved.

Retail investors don't have to file with the SEC when they YOLO $200,000 on GameStop at $4 a share. They can shrug and say, "We like the stock."

>This was one scenario were the shorts really did have it wrong. GameStop's financials were and are pretty solid.

Honest question: do you really think that rational analysis of the viability of a stock is relevant at this point?

It seems to me that gme just happened to end up being the battlefield in which the wsb people acted

The rational analysis was the basis. What's happening the last weeks is just the noise of WSB once it came through. Now it's a lot of noise and a lot of money that's going to be lost by people wanting to get in on this -- far too late.

A rational forum would be everyone marvelling at what was already pulled off, not this free-for-all where everyone's pretending there's a big battle going on right now and pretending there is anything to gain left.

> GameStop's financials were and are pretty solid.

But aren't stock prices almost entirely about future performance? So will GME's business model work tomorrow?

I think the answer is yes. They're the best option for buying used peripherals that I've found. I can get it right away, can exchange easily if a problem and can see the item before I buy (or at least when I pickup).

I've just wasted too much time trying to see through the Amazon reviews gaming, do what feels like national security background checks on eBay sellers or go through the hassle of FB marketplace.

Maybe it's just me, but as a casual gamer and fan of legacy consoles, I like shopping at Gamestop. Whether online with "at the door" pickup or in the store. The locations around me have employees that seem genuinely happy. Maybe they're good at hiding their misery.

If Gamestop would expand into more hobby shop items, it could really take off. Board games, miniatures, etc. And why don't they stock energy drinks (my locations don't anyway)? Post-pandemic add small cafes with rentable game systems. I think people will be desperate for actual human interaction once that's possible again.

Finally, with this ongoing retail apocalypse maybe their leases will get cheaper.

> But aren't stock prices almost entirely about future performance? So will GME's business model work tomorrow?

Yes, and that's sort of Roaring Kitty's point in that video. He interpreted the negativity about it as being way too extreme for the financials of the company. It was basically saying the company was going to fail tomorrow, whereas his analysis said to him that it still had several reasonable years ahead of it which the share price didn't reflect.

> But aren't stock prices almost entirely about future performance?

This depends on what kind of investor you are. Do you believe the market is entirely rational and depends on the underlying fundamentals of a company? Or do you believe that the stock market is ultimately irrational and trades solely on hope and fear?

Frankly, I don't see how anyone can disagree that the market is entirely irrational and solely emotionally based, and the reason is because humans are irrational and emotionally based. We rationalize our positions after we've taken them, not before, I'm totally convinced of this, mostly thanks to Sam Harris, and to a lesser degree, Richard Dawkins.

We want to believe that we logically poured over the facts and figures and we arrived at the only inescapable conclusion possible. Were that true, everyone would arrive at similar conclusions. Despite what some people have said the past several years, there are no such thing as "alternative facts". A thing is either true, false, or unknown.

Smarter people than I have made cases on both sides of this argument, but for me, I see it happen every day, all the time, all around me. I watch it happen in finance. I watch it happen in book publishing. I watch it happen in development. I, for one, am a believe in what I call the "emotional market hypothesis". Hell, Tesla is a perfect example. There's absolutely no reason for a stock to be trading at 1660 times its earnings, but Tesla is. That's its Price-To-Earnings ratio right now. The stock is fueled by hope. Elon is the personification of that hope, for better or worse.

> You should watch Roaring Kitty's video

It's from 2020. I just want to add that he's humble about his analysis too. He explains his case in a lot of great detail and still writes "bullish on gamestop, perhaps foolishly so".

Tend to agree with this. People seem to be pushing this as the moment the little people took control.

This is a flash in the pan.

And don't get me wrong, I almost always support the underdog.

and Tesla

These situations tend to blow Up both sides, more or less.

A few lucky Redditors will get out with profits. Most of the late entries are going to take steep losses. Those losing Redditors will be paying the winning Redditors.

The narrative that this is hedge funds losing to Redditors isn’t fully accurate.

Hedge funds are down $70 billion over this, so I'm pretty sure there's some accuracy. And no, its not all GameStop, but $GME is a driver.

https://www.reuters.com/article/us-retail-trading-shortbets-...

This is very much reminding me of 2008. If you keep blowing up financial institutions, eventually you're going to hit a Lehman and the counterparty risk spreads to the rest of the system.

The zeitgeist seems to be “screw ‘em; they’re jackals”.

Yes, I'm aware of that. Do we actually want to rerun 2008 again, though? Are people expecting it to have a different, better outcome and not a different, worse outcome or just the bailout again?

The hedge funds aren't structurally important. Brokerages start to be. Retail banks definitely are.

They probably don’t understand. If they do understand, they don’t seem to care.

There are a lot of people under the age of forty who don’t feel like they are benefiting from our current system. When the Boomers hit age 35, they owned approx. 21 percent of the nation’s wealth. Gen X plummeted down to 9 percent. Millennials are on track to own about 3-4 percent. This is according to the Fed.

They make less, own less, don’t see themselves or their interests represented at the highest levels of our government, and are fed up.

So, yes, the young would suffer more than the wealthy, the elderly, and the connected in an economic collapse, but they don’t seem to care.

Well said. And these people under forty (to reduce everything to simple terms) divide themselves into roughly equal camps. Some see the problems as fatcats/gov not doing enough to help the poor. The other side sees the fatcats/gov not doing enough to help citizens as opposed to certain elites and all here because of illegal entry.

Both are right to a large extent, and both are slandered as evil/racist/etc. by the other side.

> When you got nothing, you got nothing to lose!

If there is a systematic risk.. surely better to catch it earlier than let it keep inflating

If you only add up the estimated short positions, and you assume they didn't hold any winning long positions, and you assume short positions are only held by hedge funds, and you assume the hedge funds didn't hedge with other contracts, that estimate might come close.

That's a lot of assumptions, though.

Some hedge funds are going to make bank on this.

Isn't that fairly misleading?

> Ortex said the figures are based on the change in trading prices between the start of January to Wednesday’s close, and the number of short positions.

The shorts might be down 70 billions, but won't most hedge funds hedge their position with something more complex than just a short?

The motive I've seen most prominently displayed is “buy to hurt hedges, expect 100% loss”. Of course, many individuals will be upset at the results, but this wasn't touted as anything other than a risky bubble, even by those who believe in gme.

As some one else said the WSB concert party has all the signs of a boiler room scam.

I bet there are some much more experienced reditors behind this and a lot of the useful idiots will lose $$

It's far simpler than that. There was no scam, just a long steady accretion around those that pointed out the fundamental mispricing of gme, and the explosive nature of any expected correction given it's extremely high short ratio. The rest is just piling on, and even less understandable than most reddit piling-on given the volume and technical nature of the issue.

I'm sure there are some hedge funds that are killing it right now.

You're assuming that people on r/wallstreetbets are exactly the same as people on wall street who literally only care about money. The redditors buying don't want to make money, they just want to kill the hedge fund. By wasting a few hundred dollars they are making a larger dent in wall street than congress has made for the last few decades.

There might even be some overlap, wall street using wallstreetbets to manipulate.

That's the future defense against this kind of short squeeze. Funds will engage these subs (or hire people) and deflect interest from the stocks they're shorting and maybe steer it towards competitor's.

I doubt any defense will be needed. Capital for this kind of risk will never be available again.

Good one. They also call themselves Autists and Retards.

I read a suggestion that it’s not the price of the stock that scared the hedge fund. But the borrowing costs, where the interest rates might have gone as high as 80%!

That’s quite an expensive credit card there to be shorting stocks with.

This is why r/wallstreetbets uses "hold" as a rallying cry. The interest continues to accrue with each day they hold out.

An obviously that's only to a point. If you get into this late you are definitely more likely to get burned. But it's clear some of these people genuinely seem to care about "wrecking hedge funds" as much as anything else.

Its important to note for the sake of comparison, that average borrowing costs in a stock , to understand how out of whack 80% really is.

I believe in normal circunstances it tends to be less than 1%

I've received upwards of 30 for short periods in hard to borrow issues (we're talking american certificates of canadian mining stocks, etc). I've never heard of 80.

So currently some hedge Fonds are bleeding money, true? So who is the counter party who currently gets this money (can't be the community since they hold)

Whoever has been selling into the funds which needed to cover shorts has been doing very well. As have those who were lending out the shares for the shorting.

Probably some of the early WSB pumpers have quietly sold while yelling at the community to hold, too.

However, we should always be careful with unrealized gains and losses. Those aren't confirmed until people exit their positions.

They’re bleeding because others are holding, no? There are premiums at play.

That would be virtual bleeding (which could be the case though), but if you bleed real money then somebody else has to receive it. If you hold a stock money doesn't come to you (except as annual profit distribution but that is a different issue). I read the fees for borrowing a stock for shorting are coupled to the market price (not sure). So if you fund lost a few billion real money (so they have to sell other assets to pay that) then somebody else has to get these billions now.

The stocks they are borrowing for their shorts have really high interest now. They are bleeding money just paying interest. And now that goes for a couple of hundred percent of the stock float.

Who specifically get this interest now? Maybe it is not know, but maybe somebody knows here?

Depends on the broker. They publish their fees and the amount of those fees they share with the stock owner. Not all have loan fee share programs mind you.

Correct. Unsung winners are counterparties to hedgefunds in trouble

The troubled melvins and maples are exiting succesful positions to be liquid and cover for the black hole that is GME.

So that's basically wall street winning again (different house number though..)

margin calls

Does that make them rational again?

It sounds like in the case of Melvin, their aggressive and continued short-selling likely drove down the price. It sounds like powerful and aggressive short-sellers can parasitically drive a company's value down and then make a killing at the bottom.

If that's the case then yes, you don't want to be on the other side, because they're manufacturing their desired outcome.

Yea, but you know what a lot of these studies fail to grasp that the WSB exposed? The human factor. Namely, predatory humans.

Yes, a lot of the companies who get heavily shorted stumbled. But then, to guarantee a profit, the shorting hedge funds knee cap the company. Then they short them again and again. The current fiasco also shows the widespread influence these firms have to enact their will on the market.

If you look at the stock market as independent number generator, you'll always use statistics to explain what's going on. If you realize there are humans behind those numbers, you see it more like a crime scene rather than a math problem.

> Mountains of academic research has consistently found ...

"Past performance does not guarantee future returns", and vice-versa.

That's a somewhat trite statement (albeit technically true), but it's particularly relevant here where people are betting on disruption. The "concept" behind this movement is that one can influence stock performance through collective action by taking decisions that would not have been taken in the past (for very obvious industry reasons, like those given in your comment).

It's a high-risk bet for some, but noone is going into this hoping for a return based on traditional market performance.

Works until it doesn't. Exhibit TSLA.

I'm old enough to remember people saying the exact same thing in 1999. The four most dangerous words in investing are: "This time is different"

"This time isn't different" too.

Back in 1999, people weren't very hot on Amazon.

https://www.thestreet.com/opinion/net-stock-horror-stories-r...

I'm fairly confident it's going to be a while before a stock is shorted over 100% again, barring some big regulatory overreach. As soon as it happens, we'll meme it again.

Are you sure? Won't markets get more efficient and the squeeze start earlier (before it gets to 100% short interest)? Surely there will be more caution on the shorters' side (and perhaps earlier exits) and faster uptake on the squeezers' side? I think this GME thing is not only unprecedented, there won't be followed by anything similar (for maybe 100 years...the Piggly Wiggly short squeeze happened almost exactly 100 years ago...)

Piggly Wiggly short squeeze story: https://twitter.com/dollarsanddata/status/135456144478064640...

Give it a few years. I'm still skeptical that Tesla should be worth more than all the other auto companies combined.

In addition to making cars people want, Tesla also makes their own software, chips for AI inference and training, batteries, charging network, home energy solutions (solar+ battery). All of these not just related products but a cohesive strategy with sum much equal to its parts.

Which other automaker does that?

Edit: Having said that, I bought them long ago at their IPO price and sold long ago when they were around 300 pre-splits. The current valuation is indeed a little risky.

I agree. I even own Tesla stock. But Tesla

1) still has a lot of scaling to get through before they reach anything close to the sales volume of their competition. Elon talks a lot about scaling but Tesla is still microscopic compared to other manufacturers. The business operations of a much larger company will present challenges in communication, structure, quality assurance, legal liabilities in various jurisdictions, not to mention the struggle of sourcing battery components. Tesla scaling is not as easy as spinning up additional Kubernetes pods.

2) The competition WILL electrify. Tesla is not likely to have more than 6 models in the coming years yet they will compete with hundreds of models from different companies that cater to different niches. Any company that offers an electric vehicle with physical buttons instead of a touchscreen has my attention.

3) Tesla workers will unionize and/or mature away from the company. I grew up around Detroit and witnessed a lot of labor dynamics with the UAW. Assuming Tesla succeeds in preventing a union the workers will eventually cash out their stock and leave for better offers at other automotive companies or spin off their services into tier automotive groups. Why write software for Tesla robots when the robot company will hire you to write software for all auto companies?

The competition has electrified. America is just behind the trend.

https://twitter.com/asymco/status/1352335793025650695?s=20

Regardless, it should definitely be worth more than the $8 per share that it was in 2013, or the $45 per share that it was in 2014. Short sellers were clamoring very loudly then too. Lots of people preached "the market can stay irrational longer than you can stay solvent".

Eventually, of course, if a security keeps only going up, this mantra will become true. The point is that sometimes, a bet that seems like a sure thing will blow up spectacularly. And that not everyone who takes such a bet is obviously wrong.

Why should it be worth $8 a share? Do you really want GameStop in your retirement portfolio? It's pretty clear to me that it will, and should, be worth $0 eventually.

You mean their market value right? Tesla's enterprise value (EV) is pretty high thanks to their market value, but they have a ways to go before they surpass the EV of everyone else combined.

Also, they're an energy company too, which means at least some of their speculative valuation is in energy, which is a totally different market.

Depends if they can have profit margins a lot higher than other auto companies. They probably can't, but higher profit margins are one way to justify a valuation.

Really, it's priced higher because people like the brand, even if it's run by someone easily distracted who used shareholder money to bail out his cousin's solar business who goes around making 420 tweets, and that's when he's not calling people pedophiles. Oh, and their hubris kills people.

> Oh, and their hubris kills people.

Killing people comes with manufacturing automobiles. Takata airbags and other "cost cutting" disasters, selling cars that can go 300+ km/h which can't be legally driven at that speed anywhere except race tracks and German autobahns, making safety features such as seat belts, side mirrors, traction control etc. optional until the government regulators have had enough deaths and mandate it...

I suspect the profit margin for a $50k gas guzzling truck is pretty high.

And yet the car companies make very little

'Fundamentals' and all that is a bs excuse used to scapegoat driving stocks they or their friends don't like to the ground.

Let me ask this.

How in the world can an 'analyst' know more about tech than the people that work all their lives in bleeding edge research and technology?

They don't. They don't know more than Jim Keller whose primary task was development of Zen architecture at AMD - which traded at $5 before he joined and until after he was done.

Why do I mention Jim Keller? Because a certain class of people can not only turn around a company, but whole industries even if only due to being famous and drawing unknown talents.

In the case of TSLA; Andrej Karpathy leads the AI division.

My argument is that 'analysts' know nothing of tech and they are in no position to act as the judges.

People who know tech often don't know how to find their way out of a paper bag. Business is a fundamentally social thing. People who want to understand tech businesses must understand both tech and business; neither alone is sufficient.

Many analysts do. Some don't. They all tend to cover several names, and each name has some analysts who are more influential than others. The influential ones aren't exclusively found at prestigious investment banks, either. One of the most influential analysts for AAPL, Dan Ives, works at Wedbush.

Technology experts are often clueless to a fault and don't have some kind of "third eye" for business, any more than business experts have a "third eye" for technology.

It's also a mistake to think that just because a person is familiar with one technology, he/she understands the demand for that technology -- let alone other, weakly related technologies.

> 'Fundamentals' and all that is a bs excuse used to scapegoat driving stocks they or their friends don't like to the ground.

I agree with this in the case of GME and AMC, but in other situations fundamental analysis can help a person to understand valuations. It seems like BS until you actually find yourself carrying risk and trying to figure out how much a stock should be worth.

Fundamentals shouldn't play much of a role for valuing companies that are at risk of default or bankruptcy, because the stock prices the long-term EV of a binary outcome: either the equity value approaches zero or it doesn't. People who think they know what GME stock is worth, but haven't sold any shares short, are just pontificating and they should either put their money where their mouths are or sit on the sidelines and watch with fascination like the rest of us.

“Our goal is, and I feel pretty good about this goal, that we’ll be able to do a demonstration drive of full autonomy all the way from LA to New York, from home in LA to let’s say dropping you off in Time Square in New York, and then having the car go park itself, by the end of next year,” [Musk] said on a press call [in October 2016]. “Without the need for a single touch, including the charger.”

How much did you need to know about tech to realize that wasn't going to happen?

Consider the following, everyone claimed reusing rockets was physically impossible. Well here we are now.

Sure 'end of next year' may be impossible, but doing it at some point is not necessarily impossible given certain conditions.

Nothing to do with targets, everything to do with values. And a company is more than what it produces, it is also the patents they own and the brains they wield.

PS: I do research in ML.

The patents expire. The brains have legs.

A valuation of 20 times revenue - and thousands of times earnings - is not justified by saying "a company is more than what it produces".

Edit: put otherwise, how does your comment relate to the fact that Tesla was trading at 5-10% of the current price in 2019? Aren't the patents and brains the same? Why are Tesla's patents and brains worth now almost as much as those of Apple or Microsoft?

I don't know anyone who claimed that reusing rockets was physically impossible. The Space Shuttle SRBs were reusable. To paraphrase you, "here we were then."

IIRC the boosters were not reusable.

You don't recall correctly.

"At an altitude of approximately 45 km (24 nautical miles), the boosters separate from the orbiter/external tank, descend on parachutes, and land in the Atlantic Ocean. ... They are recovered by ships, returned to land, and refurbished for reuse."

https://www.nasa.gov/returntoflight/system/system_SRB.html

Those analysts are incredibly specialised. The rank and file developer ‘at the bleeding edge’ spends their day buried deep in a single codebase. The analyst spends their day carefully picking through industry trends.

You say short sellers are using fundamentals as an ‘excuse’ to short stocks ‘they don’t like’. If not from careful analysis of the business, where should the opinions come from?

How about potential and understanding of underlying tech? Nvidia was an obvious play in 2013 with the precursor of AlexNet, AMD was an obvious play when Jim Keller was done.

I don't think Nvidia was a particularly obvious play at the time. GPU bitcoin mining had taken off and GPUs were in high demand, but I don't think many people realised GPU compute would take off the way it did: everyone I knew in ML was still using clusters and most of them were using Matlab.

Even if you took it for granted that GPU-powered deep learning was the next big thing, it wasn't obvious that NVIDIA would be the dominant player. CUDA made GPGPU programming easy at the time, but any other manufacturer could have released something better. It just didn't play out that way.

Alexnet was 2012 by the way. Shortly after Nvidia stock tanked!

Was thinking 11 with Schmidhuber's student.

Many stocks grow into it over time: AMZN

Is it not also possible that the shorting itself influences the direction of the stock/performance of the company? I'm not sure you can make a statement like you're making. There, to me, is not a direct cause/effect relationship here.

How would short selling cause a company's next quarterly earnings to be disappointing?

I sometimes wonder how much the share price affects management's opinion of its own performance. If valuation is viewed as a report card of sorts, then management is likely to seek financing and damage control when shares are cheap. Doubt of that nature could have a negative effect on their ability to perform. Not to mention that share price likely plays a role in their personal wealth.

Stock price affects regular engineers/developers, if they have stock options for example.

It influences the direction of the stock price perhaps, but why the fundamentals?

The easiest part - cut workforce to improve bottom line (and share prices, as management gets their own stock options), kill R&D.

Engineers* quit as part of their remuneration packages are stock options.

Overall perception and morale, hard to acquire new talents, etc.

Companies can and do leverage the capital provided by their stock value, so just there would be an influence (less value = less capital = less ability to make market moves), but beyond that, I think, as others had mentioned, it could have an outsize negative psychological affect on the workforce. Plus, it could cause a feedback loop of sorts, as other investors might look at the short and jump in on the chance that someone knows something they don't, causing it to further decline, causing a multiplication on the above issues.

[deleted]

Long time investor doesn't mean good trader, and shorting is trading.

Only fools stay short for a long time. Fees, theta, and margin interest will eat you alive.

Plus there's the near infinite downside if you're wrong.

Fantastic thread on shorting:

https://twitter.com/HedgeDirty/status/1254767346784313344

That was entertaining to read. Thanks for the lolz.

Don't put all of your eggs in the same basket.

I have no clue how anyone, especially edge funds, could get majorly impacted by just one stock moving the wrong way.

I have stocks in my portfolio that move 25 to 50% the wrong way almost everyday and I still get about 1% overall gain daily in this bull market (which is probably not great in this economy).

Shorts are a little unique in that the risk is technically infinite. Stocks you own can only lose whatever value you bought them for. Stocks youve promised to buy later from someone else, though, can lose you however much money they decide to charge you when you have to buy. They could have thousands of profitable positions and lose 2 billion off one very unlucky short call because of a meme.

Good point. Maybe they will learn something?

Not a chance. The human mind generally isn't built to correctly assess the impact of unlikely, catastrophic events. Maybe they'll steer clear of excessive short selling for a while, but you can be sure they'll forget it eventually. In the meantime, they'll find some other pitfall to step in.

Well, I can't imagine we'll see any stocks shorted to 128% for a very long time. Probably not much else

Well, your dad decided to side with one or more large, faceless hedge fund managers known for burning down several companies to the ground. He bet against the retailers and be bet against GameStop company. There will always be losers and winners but at least you should own your position/side. I guess loosing on the wrong side of the fence feels even worse.

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