It is a very risky stock, the reason all this started was that for some reason a few hedge funds had been shorting the hell out of it. It's still currently at 120% short volume. The rising value of stock caused a big loss for Melvin Capital. — fdrake

Is there a way to see if any other stock has a > 100% short volume?

I think it remains the case that brokerages stopped people from being able to buy GME even with all their own money up front. But they allowed people simultaneously to sell it. Robinhood and Etoro definitely did that - a couple of friends tried to buy the stocks with their own money and couldn't. But it was fine to sell the stock! — fdrake

Yes, that is correct, the alternative was asking even more margin (above 100%) but that has the risk of causing a fire sale because it quickly reduces (potential) yield to the point where you're better off taking your money elsewhere. Upping margin requirements from 50% to 80% is different, while losing leverage also reduces potential yield it also lowers the risk you run so can be considered an acceptable trade off. Posting margin above 100% no longer lowers your risk (as a trader).

Short positions of certain sizes have to be reported to the competent authorities in EU. Don't know about the US: https://www.afm.nl/en/professionals/registers/meldingenregisters/netto-shortposities-actueel

So quite frankly, I think the outrage is totally misplaced. — Benkei

The outrage as I understand it is not that normal risk measures were applied but that brokers banned purchase of stocks to ensure those stocks could be wilfully devalued by those betting against them, i.e. the apparent collaboration between hedge fund managers like Melvin and brokers like Robinhood to manufacture a particular market outcome. If brokers were simply following normal procedure, the outrage would be misplaced. It depends how justified you think the paranoia is, I guess.

What pisses me of is that big hedge fund investors tried to destroy this company, and profit from putting people out of work in the real economy. They sold short over 100% of the stock, and got caught with their pants down when the stock went up in value. Now they don't want to pay? Tough shit you disaster capitalist pricks! Pay up! Gamestop workers would have paid with their livelihoods had the hedge fund's market manipulation worked.

Is there a way to see if any other stock has a > 100% short volume? — Michael

I'd guess yahoo finance has a database somewhere? I had a look for a bit there but couldn't find a list.

Found this. https://financhill.com/most-heavily-shorted-stocks-today . Nothing greater than 100%, not even GME anymore.

↪Michael Short positions of certain sizes have to be reported to the competent authorities in EU. Don't know about the US: https://www.afm.nl/en/professionals/registers/meldingenregisters/netto-shortposities-actueel — Benkei

I think the short volume/interest of a stock is different from whether a portfolio is net short? As I understand it short interest in a stock says how often a share is short sold compared to its number of available shares. It doesn't care about who's short selling it and what % of their portfolio is devoted to shorting. If I've read it right, you've linked a registry of companies whose portfolios are above a certain % of short position, not a list of companies whose stocks are shorted at a really high volume?

LGND looks like it's getting squeezed too.

If there's something shitty about shorting a struggling brick and mortar retailer during a pandemic, then there's something much shittier about removing the people's ability to support that retailer/buy that stock in order to help out your boys over at Melvin.

Nothing greater than 100%, not even GME anymore. — Michael

Apparently the whole stock exchange is spooked.

https://www.theguardian.com/business/live/2021/jan/29/stocks-slump-gamestop-trading-frenzy-spook-investors-reddit-wall-street-pound-brexit-inflation-gdp-business-live

Ummm... Whoops!

Ummm... Whoops! — Kenosha Kid

Just conjecture, I am a noob.

Can you imagine what the operational leverage of your average investment firm is after the covid bailouts went to the financial industry? Debt fueling speculation.

And how much that gets multiplied when trading short like this? One firm already lost 3 billion USD and had to be bailed out by its friends. Debt fueling debt fueling debt multiplying debt fueling debt...

This is how the elites govern now - by means of 'structural power', where they close ranks and deny access to means rather than end-product. One precedent for this which I've studied alot is in the case of sovereign debt, where solidarity among lending institutions (banks and so forth) simply refuse to lend more to indebted countries in order to enforce austerity and political change (this is basically the story of international finance relations since the 70s, and no one talks about it). This kinda of neoliberal strategy is favoured because it sticks with the script of "open-markets": the state isn't denying anything, it's allowing certain institutions to do stuff (even if that stuff happens to be denying access). It's devolution of power 'outside' the state and 'freedom' to corporate action. — StreetlightX

Allowing individuals to buy on margin is another way that the predictability of the market is increased. When a stock plummets to a particular point, it triggers a margin call, and the person who bought on margin is forced to sell in order to cover the margin. This amplifies the fall, making the overall fall more predictable. If it falls a certain percentage, margin calls will begin, forcing a further fall, and more margin calls. A fall will always proceed in a somewhat predictable way due to the standards employed in margins.

From what I was reading earlier to make sure my understanding of margins was correct, that’s normal practice when someone buys something on margin and then it tanks below the required maintenance margin percentage (e.g. if you buy $2k of something with only $1k of cash, i.e. at 50% margin, and then it tanks to only $1.5k in value, if your maintenance margin is 33% then your holdings of that will be liquidated to cut the losses of the money you borrowed from the brokerage to purchase it). — Pfhorrest

Margin is more complicated than this though. If you have a variety of holdings you can take margin on more stable stock to buy other more risky companies which are not marginable. This makes a dependence between different sectors in the market. Widespread market crash is now a natural and predictable phenomenon, as a fall in one sector will precipitate selling in another sector to cover margins, resulting in a cascading event which becomes quite predictable and lucrative to the short sellers.

It shows which companies have what short position in what stock above a certain threshold. So it doesn't directly show net short but you can probably derive it from there.

Exchange data probably contains it. If I'm not mistaken you need to flag short sales in the order message.

If there's something shitty about shorting a struggling brick and mortar retailer during a pandemic, then there's something much shittier about removing the people's ability to support that retailer/buy that stock in order to help out your boys over at Melvin. — BitconnectCarlos

This doesn't help Gamestop in any way. They've already issued those shares and received the notional value. Any premium being paid goes to the seller.

This doesn't help Gamestop in any way. They've already issued those shares and received the notional value. Any premium being paid goes to the seller. — Benkei

Does it not protect Gamestop from potential liquidation? Like if the total market cap of GME drops below the total assets of Gamestop that will incentivize the shareholders to call for liquidation of assets to cut their losses, no? Thus putting Gamestop completely out of business. Propping up their share price in turn prevents that, no? (Also, don’t companies borrowing power usually hinge on share price too?)

the short answers are no, no and no. The market price of a stock in no way changes the capital of a company and therefore has no effect on its solvency. I suppose some banks might be persuaded by the market expectations of the companies performance to give loans to the extent market capitalisation is a measure of that but not for a volatile stock like this.

Heavy short selling suppressed gamestop's stock price for years, this hurts the company, no? Suppressing the share price leads to a lower market cap for the company.

market cap only reflects the expected performance of investors. That in itself doesn't affect Gamestop's performance.

Look at it this way, when a company issues a stock for the first time it's like it gets a perpetual loan from the investor and in return will pay a variable interest (dividends) which is related to company's performance. This loan can be transferred from investor to investor and prices for the loan will vary depending on expected dividends and therefore expected performance. One investor pays another for the right to the dividends but the original amount loaned to the company doesn't change.

Shorting a stock is again just transactions between investors, first you borrow one from an investor and sell it to another investor, then later you buy one from yet another investor to return the borrowed stock to the first investor. These are all transactions between investors with no effect to the company but says something about investors' expectations of the performance of the company.

I suppose some banks might be persuaded by the market expectations of the companies performance to give loans to the extent market capitalisation is a measure of that — Benkei

Right, that's what I'm talking about. I once worked for a penny-stock company and their whole business strategy seemed to be to look promising enough to boost their stock price enough to convince investors that they're worth lending money to actually do that promising stuff with.

Right, that's what I'm talking about. I once worked for a penny-stock company and their whole business strategy seemed to be to look promising enough to boost their stock price enough to convince investors that they're worth lending money to actually do that promising stuff with. — Pfhorrest

Yeah, this is my understanding of it. One of the principle consequences of low stock value is an inability to attract loans and investments. As the ghost of Gary Numan in that video said, driving down the value of a company does genuine harm. Shorting the crap out of them can destroy their ability to transform their business, can ultimately destroy the business itself when it becomes more attractive to liquidate than to persevere.

market cap only reflects the expected performance of investors. That in itself doesn't affect Gamestop's performance.

Look at it this way, when a company issues a stock for the first time it's like it gets a perpetual loan from the investor and in return will pay a variable interest (dividends) which is related to company's performance. This loan can be transferred from investor to investor and prices for the loan will vary depending on expected dividends and therefore expected performance. One investor pays another for the right to the dividends but the original amount loaned to the company doesn't change.

Shorting a stock is again just transactions between investors, first you borrow one from an investor and sell it to another investor, then later you buy one from yet another investor to return the borrowed stock to the first investor. These are all transactions between investors with no effect to the company but says something about investors' expectations of the performance of the company. — Benkei

Why is it a perpetual loan rather than a one-time loan when the stock is issued for the first time and sold to the public?

I understand that shorting is just a transaction between investors, but that does impact the market cap. I admit that I don't have much experience in traditional markets, but I would think a low market cap reflects poorly on the brand, no? Wouldn't a low market cap make it harder to get loans? Maybe Gamestop or AMC employees get offered stock options as part of their compensation? While I understand that a company's market cap may not reflect its fundamentals or its actual performance, I find it hard to swallow that market cap just apparently doesn't matter to the company as you seem to be implying.

Why is it a perpetual loan rather than a one-time loan when the stock is issued for the first time and sold to the public? — BitconnectCarlos

It's not a loan it's like one, which I just used to describe a specific aspect of the relationship between the company and investors. I call it perpetual because the company is not obligated at any time to repay the notional on its outstanding equity.

While I understand that a company's market cap may not reflect its fundamentals or its actual performance, I find it hard to swallow that market cap just apparently doesn't matter to the company as you seem to be implying. — BitconnectCarlos

That's indeed what I'm implying. A bank offering loans because of a high market cap in lieu of its own risk assessment isn't doing it's job well. A company can have a low market cap while having a stable and sustainable business model, simply because it offers a low yield to investors and the reverse is possible too where a company attracts a lot of venture capital but isn't sustainable (yet), like most start ups and scale ups.

https://drive.google.com/file/d/16IV7TIbE4hhS25g30dg3pytMCOigoY7x/view

:heart: :hearts: :death:

On gDrive because CNBC keeps taking down the full video elsewhere.

On gDrive because CNBC keeps taking down the full video elsewhere. — StreetlightX

They maybe had to take it down because it's unethical for a television journalist to use his platform to actively try to devalue the stock price of a particular company. The only argument he had left by well before the midpoint is: IT'S GONNA CRASH!!!! I'm pretty sure there's rules against market manipulation by using the media to scaremonger.

And it probably is gonna crash tbf. But protecting a financial elite that stands to lose tens of billions through failed market manipulation under the guise of benevolent nannyism for the little guy who might lose a few thousand is more transparent than he realises. Do they know they might lose their investment? On the stock market of all places? Yeah, they know, you condescending ****!

@Michael

GME's still at 121% short volume. Over 20 billion dollars lost for shorters so far.

Fuck that interviewer.

I'm looking at GME's balance sheet and it does seem that GME holds $GME common stock so getting shorted on a massive scale can't be too helpful there. I heard as a result of the AMC stock appreciation AMC was able to pay off $600mm in debt and the organization can continue running after coming very close to bankruptcy recently.

IG have stopped trading GME and AMC again: https://www.bbc.co.uk/news/business-55871381

I saw an interview with the RobinHood CEO in which he suggested existential reasons for this. I don't really have much of a grasp on how buying frenzies hurt brokers, seems kind of counterintuitive, but IG are claiming the same thing here. Anyone know why these frenzies might hurt brokers?

The market price of a stock in no way changes the capital of a company and therefore has no effect on its solvency. — Benkei

Well, if the market cap of the company is collateral for any debt, it might be an issue. (I think mentioned this already)

Anyway,

This whole Gamestop event just shows that we are living quite similar times as in the 1920's. Then too speculators could gang up on stocks (and I'm talking of both the hedge funds and others) as there isn't much anymore of the New Deal era limitations/regulations in force.

And that this kind of issue gets so much focus tells again tells about these times...