GME and AMC stock action (out of main)

[$Billyall]

Hi gang, UP over $10grand on GME positions, still have a few shares I'm gonna hold onto until we see at least $600-800.

apologies if this has been covered earlier but anybody else concerned about $GME contagion spreading? If so add me to that list. IF all the de-risking by large funds that are affected continues, seems obvious that selling is going to spread and spiral faster and faster. Also I would think that if Robinhood cant keep the capital coming in with all the transfers out and cash leaving that could spill over and cause more panic if they somehow have to shutdown or turn the lights off completely eve if just temporarily, not just for buying of 50 stocks. Interactive brokers would also seem to be susceptible. I started to buy some SPY QQQ XLF puts this month and added to them all Friday and added to my vix calls. Always have some protection on but don't have anywhere near enough to cover major losses. Having been through 07-09 with a big chuck of money at risk hard not to be worried about black swan contagion. Still couldn't pull myself to sell common TSLA though I do have some old OTM put butterflies where I bought to close the middle strikes. but they are way down near $570 so not a whole lotta protection on in between. Anyway Ill read back through the thread a few pages and see if this has been discussed here. Feel free to share thoughts if you have some.

 

[Sudre]

List of countries by the number of millionaires - Wikipedia

There are 46 million millionaires in the world. For 99% of the people on Earth, a million in US$ is an unfathomable amount of wealth. No, there actually are "plenty" of rich people.

I only disagreed because I disagree that a millionaire is the 1%. OBVIOUSLY if there are that many millionaires they are not the 1%. Heck, my financial advisor called me on the day I became a millionaire to congratulate me a few years ago.... then reminded me that I could not retire because it was not enough money for a 40something to live off of for their whole life expectancy.

The 1% are not simply millionaires.

 

[MXWing]

Chamath already took a position and traded out of it for a profit. He donated the proceeds but it would have been better if he had held his shares.

He didn't buy shares. He spent 0.001% of his money to mess around buying calls which he flipped like a day later.

Not a criticism just a fact.

He's done and will continue to do a lot to give a voice for the little guys.

Chamath for California Governor!

 

[UnknownSoldier]

I only disagreed because I disagree that a millionaire is the 1%. OBVIOUSLY if there are that many millionaires they are not the 1%. Heck, my financial advisor called me on the day I became a millionaire to congratulate me a few ears ago.... then reminded me that I could not retire because it was not enough money for a 40something to live off of for their whole life expectancy.

The 1% are not simply millionaires.

I appreciate your explanation, but I will also state that while a million US$ isn't much in the US for sure, you could live like a prince with a million US$ in Thailand. I think a lot of Americans aren't necessarily aware of just how wealthy their nation is, or how much everything costs to compensate for that. If you have a million US$ you are in the 1% of Thailand or some place like that for sure. The real question is if you are willing to move to Thailand to save on your living costs during your retirement. Many people are, like Elon's infamous Pedo Guy.

 

[Sudre]

I appreciate your explanation, but I will also state that while a million US$ isn't much in the US for sure, you could live like a prince with a million US$ in Thailand. I think a lot of Americans aren't necessarily aware of just how wealthy their nation is, or how much everything costs to compensate for that. If you have a million US$ you are in the 1% of Thailand or some place like that for sure. The real question is if you are willing to move to Thailand to save on your living costs during your retirement. Many people are, like Elon's infamous Pedo Guy.

SSHHHH!! My wife is reading this over my shoulder and already wants to move out of the US to retire.

 

[EVCollies]

Finally, someone made sense from this fiasco.

 

[Matias]

Good answer, but too detailed

TL;DR: When you buy or sell a stock, you have two days to settle. ie. I buy GME today, but I don't have to pay for it until two days from now. The broker is on the hook to make sure you pay..

When I buy, the money is immediately withdrawn from by trading account (even though the actual settlement is t+2). So where is the risk for the broker? Broker already has my money.

 

[Matias]

Final note this morning. How can a stock be shorted more than 100% of float? Easy and it isn't naked short selling:

Company founders and executives will typically hold "unregistered" shares of the company. Elon's TSLA shares, for instance, are unregistered. He can't sell his shares until he files a form 144 with the SEC registering them (it's a formality, but read on).

A company's "float" does NOT include these unregistered shares. So something like 20% of TSLA shares help by Elon are not included in the "float" number.

BUT, these unregistered shares can still be loaned out to short sellers. Yep, a company's founders unregistered shares not included in the float number can be used by the stock broker where they are held to be lent out to short sellers. Now, the share owners or their broker can request that their shares not be lent out, but whether that happens all depends on the integrity of the broker and the wherewithal of the founder.

But how is it possible to close all the short positions, when there are more shorted shares than float?

 

[corduroy]

Not sure if this has been posted yet, but here's the fearless leader himself: deepvalue

(Paywalled)
WSJ News Exclusive | Keith Gill Drove the GameStop Reddit Mania. He Talked to the Journal.

 

[Yuri_G]

I only disagreed because I disagree that a millionaire is the 1%. OBVIOUSLY if there are that many millionaires they are not the 1%. Heck, my financial advisor called me on the day I became a millionaire to congratulate me a few years ago.... then reminded me that I could not retire because it was not enough money for a 40something to live off of for their whole life expectancy.

The 1% are not simply millionaires.

Divide 46 million by 8 billion...

 

[Paul_SF]

from r/wallstreetbets, of course

 

[Paul_SF]

But how is it possible to close all the short positions, when there are more shorted shares than float?

I guess we will see how that “magic” can happen. There’s a first for everything they say.

 

[Prunesquallor]

https://www.washingtonpost.com/opin...gamestop-story-its-hedge-funds-short-sellers/

Opinion: The good guys in the GameStop story? It’s the hedge funds and short sellers.
WaPo

As one might expect, the comments to this story were about 99.9% in disagreement.

 

[Cosmacelf]

But how is it possible to close all the short positions, when there are more shorted shares than float?

Well, that's the point, the shorters and the brokers who facilitated them screwed themselves. Bailouts in 3, 2, 1 ...

I wonder how good Biden's little guy image will hold up when his administration bails out the stock market "to keep the system from imploding" (Hmmm, where did I hear that before? 2008 maybe?).

 

[Cosmacelf]

When I buy, the money is immediately withdrawn from by trading account (even though the actual settlement is t+2). So where is the risk for the broker? Broker already has my money.

Not in my account. Money leaves in t+2 days. Depends on your account. I've actually used that feature. Bought shares for my kid's accounts on December 31st. And then funded the kid's accounts on January 2nd so that the gifting occurred in the new year.

 

[Runarbt]

But how is it possible to close all the short positions, when there are more shorted shares than float?

Not magic, but they need to get everyone to sell their shares? Every share has a real owner, and they have to buy some shares twice. Just do the reverse of when they shorted?

..or they can hope new shorts generating more synthetic shares they can buy from.. but then the short squeeze might it never end.

 

[printf42]

Robinhood is going to have to cancel their IPO. Within weeks they are going to hemorrhage users and if they aren't careful they'll be insolvent soon afterwards. For them, the situation was impossible, if it's true they had drawn every credit line they had just to let their users buy GME and were forced to restrict trading to survive, they were already dead. No brokerage firm should be this incompetent at managing it's basic function, which is brokering stock trades. And now that all the other big brokers have moved to free trades, the main reason they even existed was largely annulled and the big brokers seem to be able to manage their basic functions well enough to have continued allowed trading of GME and the like.

Agree if they halt trading of certain tickers because they can not handle the volume, it looks even worse, and more dangerous than just corrupt.

It means when you need them the most, they are going to be there screwing you up.

 

[Cosmacelf]

https://www.washingtonpost.com/opin...gamestop-story-its-hedge-funds-short-sellers/

Opinion: The good guys in the GameStop story? It’s the hedge funds and short sellers.
WaPo

As one might expect, the comments to this story were about 99.9% in disagreement.

OMG! What a horrible article! Paywalled, of course, so I'll just paste some choice excerpts. And no, I'm not cherry picking. The whole article is atrocious.

"Financial markets are usually stabilized by rational investors: If the crazies drive stocks to an absurd height, thoughtful people take the other side of the trade until prices reconnect with reality. The correction can be late and messy — it’s hard to be thoughtful when markets are wild — but at least our culture generally applauds the partisans of rationality. After the subprime bubble popped, the plucky minority that called out the excess became minor folk heroes. There was even a movie about them.

So far, this time is different. The GameStop speculators are not merely in a frenzy about one stock. Their goal is to destroy the traders who link stock prices to fair value. To suggest a political analogy, they are not just blindly devoted to their candidate; they deny the legitimacy of the opposition party. They are not just acting within the system; they want to overthrow the system. It’s as though — just imagine — a rabble gripped by conspiracy theories were to attack the rules of democracy itself."

[Actually no, the goal was to make money off the hedge funds. What a re-writing of history. Also, hyperbole much?]

"a hedge fund is a small-to-medium-size company that makes money by choosing smart investments. There is nothing nefarious about this."

[Other than they are leveraged 30-1 and can destabilize the financial system]

"What about short sellers? These are specialists who research stocks that might go down, sometimes because bosses are illegally covering up bad news about their companies. When short sellers identify a case of fraud or similar, they borrow and sell the stock, hoping to buy it back at a lower price later. Again, there is nothing evil about this. To the contrary, it’s a way of keeping prices honest. A market without short sellers is like a political system without investigative journalists."

[Wow, so much integrity! They would never lie about the companies they are trying to destroy, like Tesla, right?]

"The worry is that the GameStoppers will now target others. Short sellers operate in the open: You can check short-selling volumes for any given stock on Yahoo. By whipping up frenzied buying of a heavily shorted company, speculators can cost the shorts billions and maybe put them out of business."

[That's the worry? That hedge funds might be put out of business? Not that legit companies like Tesla, SolarCity and Gamestop could be put out of business???]

"Already, GameStoppers are buying other beaten-down companies, such as cinema giant AMC."

[The horror!]

"Hedge funders and short sellers are out to get rich: They are certainly not angels. But there is a difference between trading based on evidence and research and trading based on conspiracy theories and mob tactics. Over the past week, it’s been tempting to celebrate the colorful rebels — they represent the democratization of finance, the revenge against the fat cats. Now it is time to remember that truth matters."

[OMG! The mob! We wouldn't want the mob to get rich, only hedge funds are allowed to do that! If I hadn't looked into this idiot's bio, I might have thought this was a troll or a parody. Nope, this guy has written BOOKS glowingly praising hedge funds. Excuse me, I need to sit down while my nausea passes.]

 

[UnknownSoldier]

But how is it possible to close all the short positions, when there are more shorted shares than float?

It is currently mathematically impossible to close all the short positions on GME, which is why we're all here.

 

[Prunesquallor]

OMG! What a horrible article! Paywalled, of course, so I'll just paste some choice excerpts. And no, I'm not cherry picking. The whole article is atrocious.

"Financial markets are usually stabilized by rational investors: If the crazies drive stocks to an absurd height, thoughtful people take the other side of the trade until prices reconnect with reality. The correction can be late and messy — it’s hard to be thoughtful when markets are wild — but at least our culture generally applauds the partisans of rationality. After the subprime bubble popped, the plucky minority that called out the excess became minor folk heroes. There was even a movie about them.

So far, this time is different. The GameStop speculators are not merely in a frenzy about one stock. Their goal is to destroy the traders who link stock prices to fair value. To suggest a political analogy, they are not just blindly devoted to their candidate; they deny the legitimacy of the opposition party. They are not just acting within the system; they want to overthrow the system. It’s as though — just imagine — a rabble gripped by conspiracy theories were to attack the rules of democracy itself."

[Actually no, the goal was to make money off the hedge funds. What a re-writing of history. Also, hyperbole much?]

"a hedge fund is a small-to-medium-size company that makes money by choosing smart investments. There is nothing nefarious about this."

[Other than they are leveraged 30-1 and can destabilize the financial system]

"What about short sellers? These are specialists who research stocks that might go down, sometimes because bosses are illegally covering up bad news about their companies. When short sellers identify a case of fraud or similar, they borrow and sell the stock, hoping to buy it back at a lower price later. Again, there is nothing evil about this. To the contrary, it’s a way of keeping prices honest. A market without short sellers is like a political system without investigative journalists."

[Wow, so much integrity! They would never lie about the companies they are trying to destroy, like Tesla, right?]

"The worry is that the GameStoppers will now target others. Short sellers operate in the open: You can check short-selling volumes for any given stock on Yahoo. By whipping up frenzied buying of a heavily shorted company, speculators can cost the shorts billions and maybe put them out of business."

[That's the worry? That hedge funds might be put out of business? Not that legit companies like Tesla, SolarCity and Gamestop could be put out of business???]

"Already, GameStoppers are buying other beaten-down companies, such as cinema giant AMC."

[The horror!]

"Hedge funders and short sellers are out to get rich: They are certainly not angels. But there is a difference between trading based on evidence and research and trading based on conspiracy theories and mob tactics. Over the past week, it’s been tempting to celebrate the colorful rebels — they represent the democratization of finance, the revenge against the fat cats. Now it is time to remember that truth matters."

[OMG! The mob! We wouldn't want to mob to get rich, only hedge funds are allowed to do that! If I hadn't looked into this idiot's bio, I might have thought this was a troll or a parody. Nope, this guy has written BOOKS glowingly praising hedge funds. Excuse me, I need to sit down while my nausea passes.]

https://twitter.com/garyblack00/status/1355636089214611458?s=21

Gary Black has link to this article on Twitter as “Here's the Other side”. Not going well.