We can't predict the future, but we know it has never happened before.
The law of supply and demand dictates:
a) When supply goes up, price goes down if demand doesn't go up too.
b) When demand goes up, price goes up if supply doesn't go up too.
In this case, hedge funds shorted $GME more than 100% of available shares through a questionable (read: mostly illegal) practice known as naked shorting. They will one day need to purchase $GME to satisfy these short positions. So we have a scenario where demand is going up (retailers are competing with the hedge funds by buying the shares) but supply is going down (retailers are purchasing $GME, and GameStop is not issuing new shares). This causes the price to go up, which will not go back down until supply is increased (either by GameStop issuing new shares or retailers selling their shares) or demand goes down (from hedge funds satisfying their short positions). If retailers do not sell, the supply stays the same or goes down, and the demand continues to rise.
They will sell when the price reaches exorbitant amounts, bankrupting hedge funds. No one knows when this will be, and people are making their own financial decisions in the end.
Oh that's good stuff! Q: Is there some kind of calendar deadline for HFs to buy back they fake shares? What stops them from from kicking the can down the road indefinitely?
That’s a question we’ve been pondering for a while and the truth is we’re not entirely sure. Eventually they will run out of money because they have to pay interest to their share lenders (shorting a stock requires borrowing a stock from someone else) although it seems like they’re all collaborating to keep the short interest percentage low. So honestly we don’t know for sure. On /r/superstonk you can read their analyses, there seems to be a number of indicators for price movement, some of which seem to have been more or less reliable (search for Elliott waves and FTD cycles on that sub for more). I wish I could give you more information but honestly I would just be reiterating what I have read there so you may just want to go research there. & there are a few must read posts. I think you can find them pretty quick by sorting for top of all time on that sub but if not you can search there: “Citadel Has No Clothes,” “House of Cards I,” “House of Cards II,” and “House of Cards III”
a) When supply goes up, price goes down if demand doesn't go up too.
b) When demand goes up, price goes up if supply doesn't go up too.
In this case, hedge funds shorted $GME more than 100% of available shares through a questionable (read: mostly illegal) practice known as naked shorting. They will one day need to purchase $GME to satisfy these short positions. So we have a scenario where demand is going up (retailers are competing with the hedge funds by buying the shares) but supply is going down (retailers are purchasing $GME, and GameStop is not issuing new shares). This causes the price to go up, which will not go back down until supply is increased (either by GameStop issuing new shares or retailers selling their shares) or demand goes down (from hedge funds satisfying their short positions). If retailers do not sell, the supply stays the same or goes down, and the demand continues to rise.
Oh that's good stuff! Q: Is there some kind of calendar deadline for HFs to buy back they fake shares? What stops them from from kicking the can down the road indefinitely?
That’s a question we’ve been pondering for a while and the truth is we’re not entirely sure. Eventually they will run out of money because they have to pay interest to their share lenders (shorting a stock requires borrowing a stock from someone else) although it seems like they’re all collaborating to keep the short interest percentage low. So honestly we don’t know for sure. On /r/superstonk you can read their analyses, there seems to be a number of indicators for price movement, some of which seem to have been more or less reliable (search for Elliott waves and FTD cycles on that sub for more). I wish I could give you more information but honestly I would just be reiterating what I have read there so you may just want to go research there. & there are a few must read posts. I think you can find them pretty quick by sorting for top of all time on that sub but if not you can search there: “Citadel Has No Clothes,” “House of Cards I,” “House of Cards II,” and “House of Cards III”