Help me understand, please.
If the shorts accounted for 140% of the available stock then there is no way for the shorting hedge funds to ever purchase enough stock to repay their debt because there is not 140% of GME stock available?
I don't really understand this.
Right that's theoretically why the up is infinite.
But this is also how selling loans works.
The government said banks can loan out $100 for every $10 they have cash in hand.
So banks start making dumby accounts in other backs by depositing $10 in each new account. Which those banks could now loan $100 on. Which they in tern deposited in other banks.
Going out 10x. So your initial $10 in a savings account had propogaded out into $1 million in loans. And everything but that initial $10 is just imaginary money.
This is what's happening with gamestop. Investor promised to buy the stock for say a penny. Even took out a loan to do so.
Then investor floated that stock. Saying "I'm gonna sell this stock to you for 2 pennies.". Well now that stock is a dollar. And you are going to the investor saying "where's my 2 cent stock"
Now the investor is trying to go to wallstreetbets and other independent investors say ",please sir may I have some stock"
WSB "nope"
I'll give ya $0.50?
Nope
A dollar?
Nope. We are holding.
So the price goes to the moon. The way game consoles go to the moon before Xmas. Everyone wants nobody is selling.
Thank you for taking the time to clarify. I appreciate it.
I am still however struggling on how they would ever be able to repay a short on more than 100% of stock.
They could, theoretically, buy every single unit of GME stock that exists (and their is a finite number) and still need to pay back 40% MORE than that. Right?
I've got to be mildly retarded for not understanding this. I'm sure it's something obvious I'm missing. But I can't seem to grasp it.
I imagine something will get shut down and the investors will default on the loan.
Or
Gamestop will just issue more stock
Or
Investor will find some stock to buy and sell it to you. Then immediately offer to buy it back from you at a higher price. Just so the investor can turn around and sell that stock to someone else.
Repeat until the stock has changed all the necessary hands. Making it seem legal even when it wasn't.
Curious, why did you thank him but not upvote any of his comments?
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