GME stock halted trading after +103% daily | Hacker News Reader

GME stock halted trading after +103% daily

finance.yahoo.com

69 pointsalpb29 comments

They never covered their shorts. It's only a matter of time before it goes ballistic and, frankly, threatens to take down the entire stock market. It's a ticking time bomb -- and now it's smoking.

> and, frankly, threatens to take down the entire stock market

Could you expand on that?

GME shorts have essentially written a blank check to the market. They don't have shares to cover their shorts. When it's time to cover, they'll have to pay whatever price the market demands. In order to cover, they'll have to liquidate their other holdings. Liquidating large holdings in a market like this could cause all kinds of problems.

How do we know that there are shorts and the amount of them?

SEC numbers and a few other sources. I read somewhere that currently the estimated number of shorts is 4x actual number of actual shares. Not sure if it's true though.

Some speculation regarding short laundering: https://www.reddit.com/r/GME/comments/lr33yp/etfs_containing...

GME just hit $170/share after hours, having closed around 90 an hour ago.

Edit: $180/share

Edit 2: $200/share

Edit: "smoking" --> "on fire"

https://isthesqueezesquoze.com/

> They don't have shares to cover their shorts.

Once you cover a short it isn’t really a short anymore. The whole point is to speculate.

> When it's time to cover

That isn't how shorts work. You pay interest on the loan. It isn't like at day X suddenly you owe the share back or else you go to prison.

Credit isn’t limitless.. margin calls do happen

They do, but not in bulk. The idea that suddenly, all at once, the people short GME will instantly need to buy shares to cover their shorts is just not how it works.

It's a "gamma short" and it can happen.

shareholders can call back shares at which point shorts have to find other shares or buy at market value.

I think we're already seeing shares called back since likely gme wants to do a stock offering on a good valuation.

There's also not many shares left to short... so it is going to be interesting.

This is nonsensical. Just because the stock is super high doesnt mean anyone is going to actually accept it as collateral for funding. Way to volitile

Whats nonsensical?

I'm a shareholder. I can call back my shares if I want and refuse to lend them. This is what Michael Burry did when he bought a stake.

The rest is assumptions.

> Just because the stock is super high doesnt mean anyone is going to actually accept it as collateral for funding.

if they issue direcly on the market it is going to get bought...

Shorts aren’t timed. What could happen is that holders call for shares back. However, that didn’t happen at GME@$500 so I doubt it will happen here.

It was at $168 at the close of extended hours... who knows where it'll go tomorrow.

The implication being that the handful of parties who hold shorts in GME are "singlehandedly" responsible for propping up the value of the entire stock market? Seems unlikely...

That's a narrative meant to push a bailout of hedgefunds - translated - "they're too big to fail, market will crash"

A deer jumping in front of your car and totaling it doesn't imply that the deer is keeping the car running.

That said, I'm all for what's happening with $GME. They've been cheating the public for years and now the public has turned a cheat (naked shorts) around and is going to get rich off of it. Fair play.

Which leads to interesting questions like "How much would it cost to implode the market?", "Are there non-monetary incentives for doing so?", and "Are there any prediction markets where I can trade on the chance the stock market will implode?"

Yes, you could buy put options on S&P500 or the Nasdaq 100.

Is that a guess? Or does reporting data still indicate there is a lot short? Because my understanding was that much of the shorts had covered according to the drop in reported short interest.

To answer my own question. It appears that short interest went from 120% back when the first spike hit to around 40% now.

It's not like GME is a fixed supply. Can someone explain why at some point GME wouldn't just issue more shares and capture the short squeeze themselves? Basically you buyback if you're undervalued and you sell (and issue if necessarily) if you're overvalued.

Timing and legal obligations mostly. Share issues require a lengthy process to get approved. GME actually had one pre-approved, but they still couldn't use it, as they may not legally do so while the executives have material information the public does not. GME had an earnings announcement that was unforunately timed.

https://www.bloomberg.com/opinion/articles/2021-02-11/why-ga...

Because its value hasn't actually increased people just started calling her hot. It’s still an empty shell on the inside financially

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