Its easily dismissed as conspiracy but having read many of their supporting arguments and seeing the SI (Short Interest) being over 220% myself along with the SEC report suggesting that shorts never closed their position... I can't say I would dismiss the possibility of another short squeeze...
Why do you think not a single institutional investor has rallied behind this cause? Hedge funds love fucking each other over and would embrace popularity with the public. Why hasn’t some firm with a few billion under management taken up this cause if there’s really anything there?
Because that would be illegal market manipulation.
Any institute, including GameStop themselves, would be committing a crime if they knowingly triggered a short squeeze. The SEC rules on this is quite clear.
What's interesting to me is that the official SEC report on GameStop "squeeze" specifically called out that the rise in price WAS NOT due to short covering, but rather a large increase in retail buying and market makers balancing options. So the reported % short went from more than 100% to less than %20 with zero short covering and prices falling? Yeah, sure.
It's not illegal to push a stock up just like it's not illegal to short a stock. Certain rules apply when you become significant share holder.
Buying significant calls will move the market as the market maker buys shares the ensure they can cover. Shorting drops price because it "creates" shares. Even six figure trades can move the market,
> How and why is that illegal? I am stumped that market participants would not be allowed to correct the capital misallocations of others.
I don't think (but someone correct me as I'm no professional) the occurrence of short squeezes are illegal, unless there is a knowing collusion behind it (check previous cases from courts regarding collusion to trigger short squeezes). What is illegal is naked shorting (https://www.investopedia.com/terms/r/regsho.asp) which could be a trigger/condition to future squeezes..
They have? Blackrock just added 10% to their stake recently. Not to mention the former-Amazon staff that GameStop is hiring along with the header of BlockChain at Microsoft mentioning working with GameStop on their new NFT Market Place.
Blackrock and Vanguard own GME because they operate the biggest S&P ETFs and mutual funds.
GME has increased its percentage of the S&P because retail investors have bought the position. Blackrock is not taking a position that a short squeeze is possible they are just reacting to the index.
A bunch of shorts 100% closed their positions. That was the original smaller push that made the stock take off. The rest of it was momentum from retail investors, algorithms, etc.
There was never going to be a flag day though... shorts cover over time as their bet looks less likely to payoff. By the time the "squeeze" day arrived the billion dollar losers had already covered.
wow I had no idea how much time has been dumped into propping up this conspiracy theory. People have a lot of time on their hands (but I guess rationalizing ones own investments is good motivation)
Its easily dismissed as conspiracy but having read many of their supporting arguments and seeing the SI (Short Interest) being over 220% myself along with the SEC report suggesting that shorts never closed their position... I can't say I would dismiss the possibility of another short squeeze...
"In seeking to answer this question, staff observed that during some discrete periods, GME had sharp price increases concurrently with known major short sellers covering their short positions after incurring significant losses. During these times, short sellers covering their positions likely contributed to increases in GME’s price. For example, staff observed that particularly during the earlier rise from January 22 to 27 the price of GME rose as the short interest decreased. Staff also observed discrete periods of sharp price increases during which accounts held by firms known to the staff to be covering short interest in GME were actively buying large volumes of GME shares, in some cases accounting for very significant portions of the net buying pressure during a period. Figure 6 shows that buy volume in GME, including buy volume from participants identified as having large short positions, increased significantly beginning around January 22 and remained high for several days, corresponding to the beginning of the most dramatic phase of the run-up in GME’s price."
Meaning shorts covering causing a small increase in price and then retail FOMOd in.
See also the graph on the next page that show short interest dropping from over 100% to around 20%.
I'd like to add to this the following scenario for explaining why short interest can be high even if the original shorters have closed their positions.
1. Lots of people are short.
2. Price goes up significantly, shorters get margin calls.
3. Price goes up a lot due to buying pressure from shorters closing their positions. (ie, the squeeze itself)
4. Price is now extremely high and fairly disconnected from fundamentals.
5. People notice the price is very high compared to earnings and open new short positions.
After step 5, there can be a ton of shorters in the stock yet there is not a very big chance of a new squeeze since the price at which the new short positions were opened is so high. Imagine how much the price of GME would need to rise to squeeze out the shorters who opened their position in the 300-400 USD price range.
FINRA and the SEC require brokers to report short interest data twice a month [1]. These are share aggregates. FINRA then provides those data for U.S.-listed companies to the exchanges, who publish it. None of those exchanges have changed their publishing methodologies in years.
> Now; SI = [Number of Share Short] + [Float] / [Float]
So you're saying that SI is always reported as higher than 100% now?
Since that's not the cause, are you saying there's negative number of short shares now?
The real 'problem' is the economy. Young folks are fed up of working 60 hour work weeks while their wages decrease (compared to inflation) and their rent increase (thanks to inflation). Any sensible young adult realizes that owning a home is impossible and affording children is improbable.
