Love this guy -- but let me help with the short sale explanation. His SUCKED. Step1: Hedge Fund BORROWS stock shares Step 2: Hedge fund immediately SELLS shares. Step 3: Stock price PRESUMABLY goes down. Step 4: Hedge Fund buys back shares at LOWER PRICE and repays those it borrowed. Net profit is the amount the stock price fell. INSTEAD THE PRICE WENT UP -- HEDGE FUND CAN'T REPLACE BORROWED SHARES -- UNLIMITED LOSSES AS PRICE CLIMBS -- SUICIDE WEEKEND
Borrowing breeds fuckery. Shares loaned can be off the books and not official. Maybe loaned out to numerous places at once. It also frees up capital to attack target company and drive their stock price down. Loaned shares are easier to digitally fake, or blatantly counterfeit -- known as "naked shorts". 140% of Game Stop shares were shorted. How did they do that?
Love this guy -- but let me help with the short sale explanation. His SUCKED. Step1: Hedge Fund BORROWS stock shares Step 2: Hedge fund immediately SELLS shares. Step 3: Stock price PRESUMABLY goes down. Step 4: Hedge Fund buys back shares at LOWER PRICE and repays those it borrowed. Net profit is the amount the stock price fell. INSTEAD THE PRICE WENT UP -- HEDGE FUND CAN'T REPLACE BORROWED SHARES -- UNLIMITED LOSSES AS PRICE CLIMBS -- SUICIDE WEEKEND
Nice summary. The second part around 25min mark is about CCP going back to Republic.
OMG Thank you for the Reader's Digest or Short Sale for Dummies version. I was lost about it but this makes sense why they pissed off.
Thanks for this explanation. What's the difference between "borrowing" and "buying".
Borrowing breeds fuckery. Shares loaned can be off the books and not official. Maybe loaned out to numerous places at once. It also frees up capital to attack target company and drive their stock price down. Loaned shares are easier to digitally fake, or blatantly counterfeit -- known as "naked shorts". 140% of Game Stop shares were shorted. How did they do that?