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Comment by chovybizzass | Hacker News Reader

its because the hedge funds are shorting and buy buying $GME we are effectively going to bankrupt them. This is payback for 2008 and a million more things.

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I suspect you don't understand how large many of these funds are. This nonsense is not going to bankrupt these folks. Non-shorted hedge funds are going to use this event to extract more dollars from individual investors. Frankly, I wouldn't be surprised if the funds that were initially short have already reversed their positions and are now riding this momentum to the bank. They have much more information and much more trading speed.

> This nonsense is not going to bankrupt these folks. Non-shorted hedge funds are going to use this event to extract more dollars from individual investors

And, probably worse, lobby the government for more regulation such that retail traders have even fewer levers to pull.

This short squeeze is a stress test of the entire market. The reason that the brokerages stopped trading yesterday is because the clearinghouse (there's apparently only really one) are at risk of going under from this. If that happens it'll be a cascading failure and the whole market will crash.

Source: The WeBull CEO in the first 7 minutes of this video explains all this: https://m.youtube.com/watch?v=MAqxQe0l4g0&feature=youtu.be

Which will only get the price up for a short amount of time, it will be dumped after that anyway.

GME fundamentals haven't changed (much) - it's not worth much on paper, maybe $10, $20, $30?

Market behaves irrational rn, but at some point it will become rational again. And then GME stock will crash.

But as everyone knows: the market can stay irrational longer than you can stay liquid (https://quoteinvestigator.com/2011/08/09/remain-solvent/)

> its because the hedge funds are shorting and buy buying $GME we are effectively going to bankrupt them.

Which hedge funds? Melvin has already retreated.

For me the oddest thing about the situation is how people that absolutely won't believe Melvin Capital stating it has exited its position (an easily discoverable lie which would result in their LPs filing lawsuits against their personal wealth and probably jail sentences) seem to think all the people posting and upvoting BUY AND HOLD YOLO are acting in good faith and not trying to maximise the upside of their call options...

Yes, exactly. This is what I meant with "This has the veneer of a crowd sticking it to someone they felt exploited by, but in the end, they're just being exploited by someone else."

Can you explain why didn't the data about shorts change then? Are you saying someone else went and shorted it over 130% when Melvin stepped back?

Sure. Other people will have shorted at artificially high prices they don't need to worry about margin calls on, and will be quite happy to wait for the price to drop.

Those high prices can still go up, and squeeze them toward a margin call. People thought $100, then $200, $400 were high, yet it passed those by.

Yes, it is artificial, but the capital you need when shorting (to cover your position) is very real, and with each price hike, it goes up.

The NYSE provided short interest data is only released twice a month. The last time being on Jan 27.

https://www.nyse.com/market-data/reference/nyse-group-short-...

I have some friends in this mob, I'm legitimately thinking about cutting them out of my life, at least temporarily, because I told them this, and they think I'm a shill for some hedge fund I've never heard of.

Someone is laughing all the way to the bank about stirring up an internet mob, and I hate it.

As a regular person, how could I check if Melvin Capital or anyone else has shorted a given stock. I assume its the same place that people went to to find out the shorts exceeded the number of shares. You know this reminds me of the end of the movie trading places.

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