Oh my god! GME is down to $150! It's down to $100! It's down to 30 cents! The hedgies are going to cover all their shorts at that 30cent price point! It's over!
Wrong.
No one is selling at these prices. Sure, maybe a few scared folk who don't know any better. Maybe they trigger a few stop losses. Maybe some margins get called. But it's not enough. Say it with me:
PRICE DOESN'T MATTER
WHAT?!
You heard me. 30cent GME? No problem.
They don't need a low price, they need your shares. If 10 people sell at 30c cents, and that's the only market activity, it's a "30 cent stock" but Melvin only netted ten shares. They are still fucked. They aren't buying 50 million shares at 30c, nor $100, nor $300, and that's their problem. It's an availability issue. Sometimes it's ALSO a price issue (too high for them) but primarily it's the availability.
All the activity driving down the listed share price are illegal ladder attacks (not that legality should be expected at this point, these folk are crooks). Those aren't actual sales though, it's just shares trading hands from hedgie to hedgie. They aren't gobbling up value. These people don't admit defeat, they are neither smart nor humble, they are crooks. They need 50 million+ shares. They need over 100% of the float to sell to them (that 50% float you hear about is accounting shennaigans, ignore it, they are still exposed). You can NOT close that many positions sniping a few shaky handed noobs. We aren't talking about a few shares they need to buy, we're talking about fucking ALL OF THEM.
I'll explain that in a second, but first let me repeat:
PRICE DOESN'T MATTER
So let's say you want to buy 50 million shares, let's look at what shares are being asked for in my hypothetical example market:
# of Shares - Price
x 20 - $0.30c
x 80 - $5
x 400 - $20
x 600 - $40
x 900 - $60
x 2,000 - $100
x 5,000 - $150
x 10,000 - $200
x 30,000 - $300
x 50,000 - $400
x 150,000 - $500
x 1 mil - $1,000
x 15 mil - $5,000
x 30 mil - $69,420
Get it? There are only a few people willing to sell at those low prices. By the time you've bought a quarter million shares (0.5% of what you need to buy) you're back up to the sustained highs. And these are just exaggerations to make a point. A stock price only reflects current trade values, not availability at those prices. If the hedgies are trading their shares back and forth to each other to drive down the price and they have ladder attacked down to a Nickel, that doesn't mean anyone's shares are only worth pocket change, that just means that that is what things are trading at in the moment. There's no volume to buy up at those costs. No one can force you to sell at a Nickel.
Get it?
PRICE DOESN'T MATTER
They need our shares, not a low price. The price does not reflect whether we are 'winning' or not. Their financial reserves indicate that, but there isn't a ticker for that. But be sure, every day the inevitable closes in. Sell out of fear if you like, but you'll just miss out in the end. People like me, as we shore up more funds, snipe these low prices, stealing away shares the hedgies use to ladder and taking shares away from shaky hands and putting them into steady ones.
This isn't financial advice, I just want to make sure people on this sub have the knowledge to not make fools of themselves in casual conversation.
This makes me feel a little better. I was taking a look at my portfolio a few minutes ago and it isn't looking great...
You haven't lost money until you sell. That's more profound than it sounds though.
If you invested for the squeeze, and you still believe it's going to squeeze, because they still are over 100% float, and they still can't buy to cover their position, then it doesn't matter what the price is, because nothing has changed.
$200?
$100?
$69?
Doesn't matter, all your underlying reasons remain the same.
Here, let's do an example:
Imagine you're Nancy Pelosi and you've just learned that Biden is going to make the whole Federal Government's automobile fleet electric. Shit, Tesla is going to go WAY up once the public learns this! Buy Buy Buy!
So you buy. A lot.
Then Tesla's price dips. Oh no! But you're not worried, because the condition you bought for, the public release, hasn't come out yet. You're down 10%, 20%, 30%!! But you don't care. Nothing about why you bought has changed.
Then the release comes out and the stock rebounds. Tesla gets contracts and it goes higher. Just like you knew it would. Everything that happened in the middle was completely irrelevant.
Please make this its own post. Very helpful and relevant.
I get it. Please don't ever make me pretend to be NP again....
So let's pretend you're Hunter Biden and you've got a crack pipe hanging out of your mouth...
Yikes.
I don't disagree in principle, but I do disagree because of what these price differences actually represent. They can ladder down to a nickel, and I believe the squeeze will look largely the same from there as if it would if it had popped off during the parabolic highs last Thursday. It's all about volume - if you exhaust 50% of you shorted position climbing from a nickel back up to $400, your point stands. But if you only clear 0.5% of you obligation in that move, the squeeze will look the same.
That's why I'm adamant about the price not mattering. There's no volume at these low prices. They can try to normalize them, but no one agrees. It's a $30 stock by company metrics, and a $30k stock by the short position.