what does that even mean? like they'll give you call and write you a check? your share is on fidelity or td. how is that going to work? I think it's delusional to think you'll make millions off of GME.
Most likely, X, XX and low XXX holders will get an apointment with a lawyer working for the DTCC that will make them an offer for all their shares. That direct settlement supercedes anything on record with the retail broker.
Larger holders will most likely have enough resources to bring their own lawyer to the party and negotiate. I have already been in contact with one and he helped me devise a plan should it go that way.
This precedent was set in the 1920s, it has legal backing... but more importantly, it's often used in a limited fashion when a company goes bankrupt and is delisted.
And no, it's not delusional to think I'll make millions off of GME. If you don't think that's the case, read the DD linked in the r/Superstonk wiki. Even with a low-side estimate, every share has been shorted and "rehypothecated" 2.3 times and all those positions must be closed eventually.
This has nothing to do with fundamentals (even though they look pretty damn good) and it has nothing to do with technicals (the price now is 100% manipulated). It is a unicorn, a one-time thing that can never happen again thanks to some SEC reforms recently signed into effect.
I don't "know", but it makes the most logical sense. Most brokerages / apps can't even deal with a share price of 7 figures. Hell, the NASDAQ needed to patch the entire exchange system a few weeks ago because Berkshire Hathaway went above $423K.
I think the ticker is going to halt before it becomes an IT issue and the SEC is going to tell everyone to settle off-exchange or take what the ticker says. So, if the ticker stops at, say, $500K, your three-share HODLer will be faced with a dilemma- take 1.5M now, or talk to a lawyer to negotiate a settlement.
Good question. Other countries have their own clearing and settlement facilities. Their settlement mechanisms may end up being a bit different, and I have no idea if they can "reach back" to the Fed to cover shortages.
But the DTCC has no authority to force any settlements outside of the US.
Also if Wallstreet flips the board like that, the rest of the world will abandon the US stock market. The US government definitely doesnt want that happening.
The federal government have everything to gain by letting it play out and making them payout in full. They get to retain global confidence in the NYSE, and then sit back and collect billlions in income tax from retail investors.
There are probably millions of people with X, XX, XXX shares. There is not enough money in the universe to pay all of these people multi-millions of dollars per share. Lets say each share is worth $10 million, and lets say the float is 60 million. That is $600,000,000,000,000, or $600 Trillion. The DTCC does not have $600 Trillion even if you throw in whatever insurance. The sovereign debt of the US is $30 Trillion.
I'm just spitballing numbers here, but I'm still not not convinced that your gonna have a bunch of multi-millionaires. The dollar will lose all its value before that happens.
Exactly why I've been saying there will be fuckery during the settlement process, but also an historic opportunity if you do your homework. Even though the price may be notionally in excess of $1M per share, we won't see $1M in cash per share.
All shorts must cover, and during a liquidation, that means all short positions must close. While there may be a very small percentage of shares that will be multimillions, that would represent the peak and only a few shares would be sold at that.
I think quite a few will get out, at least partially, in the thousands / tens of thousands range- which DTCC is prepared to cover in cash and securities pledged to the facility by banks and other hedge funds. Last I checked, DTCC was fully prepared to cover an average price of $15K a share.
Post that, the Fed covers, and I understand they can handle another $4T before needing to go to the well. They will most likely use this opportunity to isolate apes with lowball offers that are still eye-popping for your average office drone or minimum wage worker- and I bet most take the offer. With the proposed 50% short-term capital gains tax, HODLers could see half, while the IRS hands half to the Treasury to back new T-Bills, recycling a large portion of the payout.
Larger investors / institutional investors won't want the cash and would prefer security swaps- they will instead take MBS, CMBS, and other equities including T-Bills, putting the Treasury on the hook to pay out over time. The longs will eat the shorts and absorb all their assets.
I also stand by the theory that MOASS will occur as the market bubble pops- it's the decrease in value of the underlying securities the SHFs are using for collateral that's gonna kick this off. That means a lot of banks, HFs and institutional investors are going to be hit as well- leaving pools of assets that can either be sold off (to Black Rock et. al.?) for cash or directly swapped in settlement.
Let's not overlook the 2009-esque mortgage defaults about to hit once forbearance ends, with a lot of real estate up for grabs- banks will repeat what they did back then, but we can be in a position to own those subprimes rather than a Black Rock or Chinese billionaire. Land will always be more valuable than fiat, and a savvy investor can turn a package of MBS into a healthy monthly dividend check. (BTW, this is not just a crazy idea, either- two of my three retail brokerages have a private MBS offering that allows an individual investor to do just this.)
Honestly, I think we are going to end up with lots of multi-millionaires- on paper. I don't think any individual investor is gonna see a bank account with 50 or 100M just sitting in there. Hell, I'm guessing better than half are doing most of their trading out of an IRA or Roth, meaning the piper doesn't have to be paid for a decade or more, and the gains on paper will end up immediately recycled into the economy.
Edit.. BTW, I gave you an upvote. It's a valid question, valid concern, and the math is correct. No reason to downvote pure logic.
Edit.. BTW, I gave you an upvote. It's a valid question, valid concern, and the math is correct. No reason to downvote pure logic.
Yeah thanks man, I just have this pathological need for things to make sense. I'm not against the squeeze being squoze, I just don't understand why everyone says "$30 million floor" and "we're all going to be millionaires." I feel like that is kinda delusional. Maybe making a couple thousand per share is within the realm of possibility. Thanks for the comment write-up, gives a lot to mull over.
The only reason I give even a tiny bit of credibility to a major squeeze is because of Q's post that said "game over" which is very close to "game stop." I'm an XX holder and will be happy if I can just make enough to pay off my mortgage, LoL.
All shorts must cover
I've seen this a lot, where does this come from? I understand from a legal perspective I suppose the law says they MUST close, but who is enforcing the law? If the SEC or the Gov. have not been enforcing the law wrt naked short selling, why would they force Citadel, DTCC, or even the FED to close the positions? They could just as easily walk away from the short positions just as Citadel would have walked away from a bankrupt GME.
The common response I hear is "then the world will lose faith over the US Stock market and the gov. wouldn't want that" or something along those lines. To that I would say, the world has been deceived into believing that the flu is the most deadly disease known to mankind and that vaccines are safe. If the MSM started blasting that not enforcing SEC rules and not covering naked shorts is totally cool and justified to save the economy and it's really retail investors fault for being so greedy and manipulating the market ... most of the world would believe them!!!
what does that even mean? like they'll give you call and write you a check? your share is on fidelity or td. how is that going to work? I think it's delusional to think you'll make millions off of GME.
Most likely, X, XX and low XXX holders will get an apointment with a lawyer working for the DTCC that will make them an offer for all their shares. That direct settlement supercedes anything on record with the retail broker.
Larger holders will most likely have enough resources to bring their own lawyer to the party and negotiate. I have already been in contact with one and he helped me devise a plan should it go that way.
This precedent was set in the 1920s, it has legal backing... but more importantly, it's often used in a limited fashion when a company goes bankrupt and is delisted.
And no, it's not delusional to think I'll make millions off of GME. If you don't think that's the case, read the DD linked in the r/Superstonk wiki. Even with a low-side estimate, every share has been shorted and "rehypothecated" 2.3 times and all those positions must be closed eventually.
This has nothing to do with fundamentals (even though they look pretty damn good) and it has nothing to do with technicals (the price now is 100% manipulated). It is a unicorn, a one-time thing that can never happen again thanks to some SEC reforms recently signed into effect.
I don't "know", but it makes the most logical sense. Most brokerages / apps can't even deal with a share price of 7 figures. Hell, the NASDAQ needed to patch the entire exchange system a few weeks ago because Berkshire Hathaway went above $423K.
I think the ticker is going to halt before it becomes an IT issue and the SEC is going to tell everyone to settle off-exchange or take what the ticker says. So, if the ticker stops at, say, $500K, your three-share HODLer will be faced with a dilemma- take 1.5M now, or talk to a lawyer to negotiate a settlement.
One problem with that theory....How will US lawyers settle with the hundreds of thousands of international investors that have GME shares?
Does your 1920 precedent include anything about that?
Good question. Other countries have their own clearing and settlement facilities. Their settlement mechanisms may end up being a bit different, and I have no idea if they can "reach back" to the Fed to cover shortages.
But the DTCC has no authority to force any settlements outside of the US.
Also if Wallstreet flips the board like that, the rest of the world will abandon the US stock market. The US government definitely doesnt want that happening.
The federal government have everything to gain by letting it play out and making them payout in full. They get to retain global confidence in the NYSE, and then sit back and collect billlions in income tax from retail investors.
There are probably millions of people with X, XX, XXX shares. There is not enough money in the universe to pay all of these people multi-millions of dollars per share. Lets say each share is worth $10 million, and lets say the float is 60 million. That is $600,000,000,000,000, or $600 Trillion. The DTCC does not have $600 Trillion even if you throw in whatever insurance. The sovereign debt of the US is $30 Trillion.
I'm just spitballing numbers here, but I'm still not not convinced that your gonna have a bunch of multi-millionaires. The dollar will lose all its value before that happens.
Exactly why I've been saying there will be fuckery during the settlement process, but also an historic opportunity if you do your homework. Even though the price may be notionally in excess of $1M per share, we won't see $1M in cash per share.
All shorts must cover, and during a liquidation, that means all short positions must close. While there may be a very small percentage of shares that will be multimillions, that would represent the peak and only a few shares would be sold at that.
I think quite a few will get out, at least partially, in the thousands / tens of thousands range- which DTCC is prepared to cover in cash and securities pledged to the facility by banks and other hedge funds. Last I checked, DTCC was fully prepared to cover an average price of $15K a share.
Post that, the Fed covers, and I understand they can handle another $4T before needing to go to the well. They will most likely use this opportunity to isolate apes with lowball offers that are still eye-popping for your average office drone or minimum wage worker- and I bet most take the offer. With the proposed 50% short-term capital gains tax, HODLers could see half, while the IRS hands half to the Treasury to back new T-Bills, recycling a large portion of the payout.
Larger investors / institutional investors won't want the cash and would prefer security swaps- they will instead take MBS, CMBS, and other equities including T-Bills, putting the Treasury on the hook to pay out over time. The longs will eat the shorts and absorb all their assets.
I also stand by the theory that MOASS will occur as the market bubble pops- it's the decrease in value of the underlying securities the SHFs are using for collateral that's gonna kick this off. That means a lot of banks, HFs and institutional investors are going to be hit as well- leaving pools of assets that can either be sold off (to Black Rock et. al.?) for cash or directly swapped in settlement.
Let's not overlook the 2009-esque mortgage defaults about to hit once forbearance ends, with a lot of real estate up for grabs- banks will repeat what they did back then, but we can be in a position to own those subprimes rather than a Black Rock or Chinese billionaire. Land will always be more valuable than fiat, and a savvy investor can turn a package of MBS into a healthy monthly dividend check. (BTW, this is not just a crazy idea, either- two of my three retail brokerages have a private MBS offering that allows an individual investor to do just this.)
Honestly, I think we are going to end up with lots of multi-millionaires- on paper. I don't think any individual investor is gonna see a bank account with 50 or 100M just sitting in there. Hell, I'm guessing better than half are doing most of their trading out of an IRA or Roth, meaning the piper doesn't have to be paid for a decade or more, and the gains on paper will end up immediately recycled into the economy.
Edit.. BTW, I gave you an upvote. It's a valid question, valid concern, and the math is correct. No reason to downvote pure logic.
Yeah thanks man, I just have this pathological need for things to make sense. I'm not against the squeeze being squoze, I just don't understand why everyone says "$30 million floor" and "we're all going to be millionaires." I feel like that is kinda delusional. Maybe making a couple thousand per share is within the realm of possibility. Thanks for the comment write-up, gives a lot to mull over.
The only reason I give even a tiny bit of credibility to a major squeeze is because of Q's post that said "game over" which is very close to "game stop." I'm an XX holder and will be happy if I can just make enough to pay off my mortgage, LoL.
I've seen this a lot, where does this come from? I understand from a legal perspective I suppose the law says they MUST close, but who is enforcing the law? If the SEC or the Gov. have not been enforcing the law wrt naked short selling, why would they force Citadel, DTCC, or even the FED to close the positions? They could just as easily walk away from the short positions just as Citadel would have walked away from a bankrupt GME.
The common response I hear is "then the world will lose faith over the US Stock market and the gov. wouldn't want that" or something along those lines. To that I would say, the world has been deceived into believing that the flu is the most deadly disease known to mankind and that vaccines are safe. If the MSM started blasting that not enforcing SEC rules and not covering naked shorts is totally cool and justified to save the economy and it's really retail investors fault for being so greedy and manipulating the market ... most of the world would believe them!!!
I thought this was a really good point: https://www.reddit.com/r/gme_meltdown/comments/ojbmw0/the_ultimate_and_yet_simplest_counter_point_for_a/
But everyone seems to know that the floor is $30 million.