(Adapted from a comment thread in another thread)
Imagine (the hedies) shorting at $350 and covering in 4 months at $20. They'll not only recover their losses, they'll probably end up to the better.
Shorts don't expire, they pay interest. And they don't have 4 months, they likely don't even have 4 days.
Right now it's about 30% APY. Let's do the math using the current stock price of GME (~$300) x 115% the number of float shares (~50million) / 365 per day. (numbers approximate and rounded because math hard)
That's over 40 million in interest per day. Never mind that their positions are so below water they are walking dead. They have dug their graves so deep their only play is literally to keep digging and hope they come out in china. Remember that $3 billion injection that Melvin got from Citadel? It covers their interest for 75 days at that burn rate, ignoring all their other existing overhead. But that assumes the price stays at $300. If it hits $1,000 they run out of time before March. $2,000 and "Valentines day Massacre" will have a new meaning. It's why they are desperate to run FUD (fear, uncertainty, doubt) articles in press, pushing AMC and Silver as 'the new' targets to divert support away from GME. It's why they are literally committing crimes behind the scenes to drive down and halt further raises. It's why the >$320 closing price leaving tons of options in the money on Friday scared the shit out of them. All those in the money options exercising exhausts the brokerage stocks they hold in leverage. That means they have to buy more next week to cover the next round of expiring options if the price continues to rise. There are no new stocks at $300 to buy, shit is about to go parabolic unless they do something, anything!
3 billion only bought the zombie time. To repay their responsibilities at $300 would cost 15 billion. But before Robinhood and others removed the ability to buy new shares 3 days ago, there were multiple documented partial sales as high as $5,400. At that price it would cost 270 billion to repay their responsibilities. At that price interest exhausts their $3billion on Thursday. And that assumes that was the high. It's not.
They are sitting on TRILLIONS in duties and the most they could scrounge up were a few weeks (days) of life support. If they fold, the brokerages must pay out, if they fold the banks must. There is no escape.
They are going to ride their position into the dirt because it's the only play they have. They CAN'T repay, so they MUST ride to die. Their only hope is to stay solvent longer than you stay (classically) irrational. But all anyone has to do to break them is LITERALLY nothing. More new money comes in to buy rather than sell every day. And every time a "rational" actor sells, it is bought by another "irrational" one who simply likes the stock. The noose doesn't just tighten with every dollar of smart money leaving to be replaced by crayon eating autists, no, the trap door has already been released and the body is already in freefall. You can add more length to the rope, but there's no ground below you and you can't fall forever. There's no slipping the knot, your hands are tied. The story is written, the ending is a few pages beyond. Putting down the book doesn't change how this ends, it doesn't matter if you keep reading or not.
* this is not financial advice, I'm a deplorable dirty poor that lives in a basement and I have not showered yet today
The smell of energy drink and pizza is profound, and so is your post.
Thanks!
Nice analysis and entertaining as well.
Thank you for explaining
Stay in the basement and keep buying GME. Those of us that can't buy right now are counting on you and your anon investor buddies.
Hand Wringing Intensifies! Thanks Fren!
Hey man, this is not solicitation of official financial advice or anything, but do you think I should buy some GME in the dip today? I’ve got severe FOMO
I just did @ $220 now i have 3.18 shares
Yes you absolutely should. Never invest more than you can afford to lose of course. But 100% yes.
It's important to note that the current price of a stock does not reflect the value of EVERY stock, just those currently being traded. The volume of trades is low, no one is selling, EVERYONE is holding. In fact, the only real moves in the market were ladder attacks, just like every day last week where the hedgies put up a few shares for less than the current price, bought by other hedgies, than sold back and forth for lower an lower amounts back and forth to one another.
This drives the apparent price down, and no shares really change hands. That is, unless people compete to buy those shares at those lower costs. Which they did, and you should too. If people weren't sniping hedgie ladders then the price would hit $20 in a day. But it can barely dip below $200. It's just too much of a steal they can't dip it any more. IF you don't snipe these artificially depressed shares, others will. If I had the money I would, but I already did. It's such a good deal many people have sold other stocks to provide liquidity to keep sniping. I've considered liquidating some of my crypto in the middle of a crypto bull market to do so, we'll see.
Eventually, the hedgies have to close their positions (don't believe the accounting shennanigans, they haven't closed from 140% down to 60% or whatever they are saying, it's accounting tricks.) In the end, that $200 price only reflects the value of shares participating in ladders. It's a tiny fraction of a single percent of total shares, that aren't participating in that market, because they are holding to participate in the squeeze. And THAT market is worth far more considering that last Thursday that market held and refused to sell at $500, in fact their refusal to sell pushed the price up as high as $5k.
So yes, if your goal is to participate in the squeeze, buy those dips. Put a buy limit up for market open tomorrow (not a market buy, as a sudden spike may mean the price you get isn't a dip), or wait for more laddering post morning spike and do a market buy in either 10-11 or late afternoon, as these seem to be good dip buying times.
We're going to be laughing at these low volume ladders the next several days as they try desperately to flip the market before they go insolvent. The desperate tricks they are playing to achieve that by the way are monumental. Be sure anything you buy doesn't have a stop loss - if you place a order on your shares to sell at say, $100 to save you incase the 'bubble bursts' to protect you from losing it all, spoiler, you WILL lose it all. Part of the reason ladder attacks exist are to fish out and trigger stop losses and margins. Your stop loss positions are aggregated and sold to the brokers, so they know what they need to hit to trigger your automatic sales. (welcome to the rigged game. They know your position, you don't get to know theirs)
Also, this isn't a speculative bubble, it's a squeeze, it isn't going to pop the way a bubble does because the squeeze hasn't squoze yet and when it DOES it will take days before the back end on the way down ever drops below even the highs we've been seeing.
*this is not financial advice, I was suppose to get a lobotomy but due to a clerical error I received two.
I just bought another $GME
BUY HOLD GME, BUY HOLD BB ??? TO THE MOON. Current strategy at r/wsb
FF event incoming in 3, 2, 1 ...........
I'm NOT a investfag and without too much knowledge or research I can tell you this is incorrect. The crisis of the "Hedies" is they can't even cover what is there now. The fear is Hedge funds will go belly up. Banks will go broke.
Four months! SMH LOL Top kek right there.
(I know this was taken from another thread, posted by someone else. I'm just piling on.)