So, instead of finding people to sell the stock, they just pretend to sell it at whatever price they think is fair.
The company that created the stock all of a sudden sees that there are new shares of stock being created and sold and they are not getting any of that money.
This is important, because what happened with GME. The company wasn't doing well, and the stock price was going down. So a lot of really smart people with funny hats decided to make even more money by selling stock they didn't own. When the price goes down further, they can buy the stock back and no one is the wiser. This is called short selling.
The problem is that if the stock price goes UP, they have to buy the stock back at that higher price. They lose money!
What if the stock price goes up to a hundred million billion trillion dollars? They are screwed. There isn't enough money in the world to cover their loss. In fact, everyone involved with that company is screwed. Even the entire stock exchange is screwed.
So what the government is doing is stealing money from the company and the shareholders and creating stock that doesn't exist just so companies can buy that stock to cover their shares. And guess what price they are using for this fake stock? Why a price where they can say "Look how much money I made shorting that stock!"
The long and the short of it is this. Wall Street is a lie. They stole money, TRILLIONS, from regular Americans, because they lied to them and say you could buy stock in a company and when the price goes up you will get rich. Well, they lied and cheated and stole money so that THEY would get rich, and regular Americans could never get rich.
It's all a scam, and people have known this for a long, long time.
The way it was explained to me in high school was that if you wanted to sell short, you needed to find someone who was willing to lend you the stock. They had to have a share for you to sell, and you promised to buy it back at some future date.
I was horrified when I realized that you didn't really need to find someone, and you didn't really need to make a promise to buy it back one day.
It's fancy words for the following.
Someone wants to buy a stock.
No one wants to sell.
What is the price of the stock? It's infinite.
So, instead of finding people to sell the stock, they just pretend to sell it at whatever price they think is fair.
The company that created the stock all of a sudden sees that there are new shares of stock being created and sold and they are not getting any of that money.
This is important, because what happened with GME. The company wasn't doing well, and the stock price was going down. So a lot of really smart people with funny hats decided to make even more money by selling stock they didn't own. When the price goes down further, they can buy the stock back and no one is the wiser. This is called short selling.
The problem is that if the stock price goes UP, they have to buy the stock back at that higher price. They lose money!
What if the stock price goes up to a hundred million billion trillion dollars? They are screwed. There isn't enough money in the world to cover their loss. In fact, everyone involved with that company is screwed. Even the entire stock exchange is screwed.
So what the government is doing is stealing money from the company and the shareholders and creating stock that doesn't exist just so companies can buy that stock to cover their shares. And guess what price they are using for this fake stock? Why a price where they can say "Look how much money I made shorting that stock!"
The long and the short of it is this. Wall Street is a lie. They stole money, TRILLIONS, from regular Americans, because they lied to them and say you could buy stock in a company and when the price goes up you will get rich. Well, they lied and cheated and stole money so that THEY would get rich, and regular Americans could never get rich.
It's all a scam, and people have known this for a long, long time.
And now they are admitting it!
Perfect. Thank You!
The way it was explained to me in high school was that if you wanted to sell short, you needed to find someone who was willing to lend you the stock. They had to have a share for you to sell, and you promised to buy it back at some future date.
I was horrified when I realized that you didn't really need to find someone, and you didn't really need to make a promise to buy it back one day.
Shorts are ridiculously evil and corrupt.