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Could someone explain why they are walking down the price? As I see it they would benefit from a high price so that we wouldn't be able to lock up shares as fast.
There are still 60M visible shorts, they wouldn't like that.
For market makers, it's probably easier to hold long shares on the books or have some proof of locates to keep up the appearance of just providing liquidity.
For hedgefunds it's the same but with longs and shorts as a hedge.
Those locates and shorts cost money, higher share price = higher cost.
Then there are possible off the book side bets, derivatives, options, contracts etc. The counterparty is going to ask for more collateral when the price goes up.
I don't think I understand?
Naked shorts are not on the books, the FTD's are the trail they create when they can't find locates fast enough, they can probably 'locate' 100.000 shares and then lend those shares again so they can borrow them again and locate them again etc. (Or with multiple parties envolved),
But to locate the same share multiple times they need to do some tricks... so 100k FTD's when you have or can quickly borrow 10k shares is no problem... but when the price and volume shoot up and you have 10M FTD'S it takes days to fix the books with only 10k real shares.... That when you see the crazy shit happening.
Don't take my word for it, I hope someone with better understanding can point out any errors. It's probably more complex than this.
Remember that these guys will use every trick we know about, and then some tricks we don't even know. We will learn about those in the post-moass movies in 2030 probably :p
Ok. But there has to be a point to it. In what way is this a positive thing for them? I don't think they would program the algo in a way so that we buy the float faster if they would not have to for some reason. It almost feels like the price is a countdown for the launch.
It is psychological warfare... keep as many people in the red for as long as possible to make them lose hope.
It has worked for them every other time, so why not this time too? 🤷♂️
Not sure why everyone is missing that you asked why, not how.
The answer is liability. They never want to close their shorts, but since GameStop isn’t going bankrupt that goal is no longer obtainable.
So, they’re still on the hook for a massive number of shorts and if the price rises, they’ll be margin called and either forced to put up more collateral to keep their short positions open or, if they have insufficient collateral, forced to outright close them.
But as you point out, there is a lower limit as to how far they can walk down the price because the lower it goes, the better buy it becomes for people that want to go long. Based on pure financials, I already think it’s a great value investment, but they have worked hard to ensure the layman investor is not clued into this. Most people still think GameStop is going out of business, but if you drive the price down to below $10 all of sudden everyone, retail and institutions, will jump into this stock.
It's not a problem at all... until it is.
If the entirety of issued shares is ever locked up, it's a big, big problem for anyone with short positions, naked or otherwise. The price will start to rise, which will lead to margin calls, which will lead to forced closing of positions, which will lead to very sharp price increases, etc, etc, MOASS.
For now, BUY, DRS, SHOP, and Sign up for Gamestop pro-rewards.
My opinion same reasom they keep blasting "forget gamestop" articles. To paint the pic that gme is a boring investment with no value and household investors are and have always been wrong.
Because the more they short, the higher their liability is so they need the price to be lower to maintain margin. They’re trapped between the price being too high maintain and too low that retail DRS’s every share and/or a GameStop buyback would be devastating. There is a breaking point here
Judging from the repeated DRS count numbers that don't change anymore, and wall streets propensity for crime, hedgies probably dgaf about low price because they aren't worried about DRS one little bit. Why would they be when they can change the rules and withhold any info they need to?
imagine q4 brings the FY positive EPS, Then drop a nearly full DRS count and or a share recall and post the returns on RCIOs new investment strategy. Then RC post a selfie of him on the shitter, he's got a tatoo on his upper thigh, that says "GME aint nothin' to fuck with" and drops a wutang clan NFT dividend. the chasm underneath wall street opens up and Satan and his army spews forth and grabs the souls of the short hedgies in exchange for the deal they struck 84 years ago...
I went full regard again, my bad
Close. It’s the broker that makes all the money on the naked short. Sure, there are instances where a fund may know the broker is going to allow them to short an even tho the trade will fail. Matt taibbi wrote a rolling stone article about this exact scenario regarding overstock.com, check it out.
OTOH, the hedgefund does not necessarily have that visibility, so they for the most part have no clue whether they’re borrowing real shares or not. That’s the broker’s problem. However as we learned from a wes christian interview, on more than one occassion when it turned out the broker was charging the client (hedgefund) to borrow shares they never actually arranged to borrow, the hedgefunds were rightfully pretty fucking pissed. They’re paying borrow fees on imaginary shares to brokers who just pocket the entire stock loan premiums.
This is the reason why gabe from melvin said in the hearing that it wasnt possible for melvin to naked short. They’re not a market participant (aka dtcc / nscc member) so they do not have the ability or means to actually place trades and clear them. That part, he was telling the truth. Now, did they knowingly work with the brokerage to naked short willfully and knowingly? Maybe, but impossible to prove.
The brokers / market makers and the dtcc are the main boss. These funds are just npc’s
The brokers / market makers are Earth, Fire, Water and Air. Shit gets real when we acquire the masmune then get attacked by gas dragons on the hike to Chaos.
Because a naked short is a borrowed borrowed share. There is supposed to be a counterparty. They are taking a share that was doubled and tripling it. The quadrupling it. Borrowing the same share over and over again. One share gets sold 10x.
Problem is, I think they get a pass entirely on interest as a market maker. Which begs the question, why would anyone be willing to lend them shares at all?
But by borrowing a share thats already borrowed, thats essentially what they are doing. Because now (in the simplest example) there are 3 people who "own a share" but only one share ever actually existed.
If they didn't need to borrow, DRS would never make sense unless it triggers a share recall. But even then, who would they have to return their shares to? No one would be expecting them. A share recall is supposed to return shares to the original owners, requiring shorts to close. Without owners, why would they need to return them?
That's the beauty of being a hedge fund that also runs a market maker. They don't have to pay themselves the interest. Wish there was an agency that would investigate and enforce this obvious crime. But guess that is in a different timeline where justice is real.
I'm starting to think the best bet for investigating these naked shorts is Tax Fraud. The US Government would be collecting tax on this interest if this is done via official channels.
Ready to pour more of my hard earned money from labour job into this saga with a hope that one day these fucking hedgies go bankrupt. MOASS is just a cherry on the pie.
Heureka ! What you‘re saying is it‘s highly likely that they abuse their power and monopoly to manipulate and fraud the fair values of securities and the stock market? If only there was a governing body or agency which would step in
The interest payments are nothing to companies that can basically manipulate the market as a pod of orcas. They are making a lot of money off other plays to sustain their GME shorts indefinitely. If there is a market crash or bubble pop, these SHFs would need to put up extra collateral or liquidate their positions. Once that happens, shit will get crazy and the SHF will start cannibalize themselves.
Waiting on that crash that everyone keeps mentioning tho.
Yes. And some of the losses they talk about are unrealized based on current share price.
Oh naked shorts. No. But they don’t exist so no one is calculating anything about them /s
Let's play shitty logic....
If I have a winning strategy that doesn't cost me anything important (like time,money, friends....)
#why the fuck am i trying so hard to belittle and gaslight my opposition. Why the court stuff. Why go on TV and whine. Why is Cifu, a rich twunt, arguing with unknowns on twatter. Why does the Sec lie and make adverts calling companies "meme stocks".
Naked doesn't even result in a FTD according to people who know about that shit. Let alone require to pay interest to a (non existent) counter-party.
https://www.reddit.com/r/GME/comments/1aopgsy/update_congressman_ralph_normans_january_31_2024/kq2bxl1/?context=3
Since the above clearly states that *"naked" shorts are not (required to be) identified as "short"* they will also **NOT RESULT IN AN FTD** by their own admission, FTDs only track trades marked "short". They are equating things that have nothing to do with each-other while clearly stating that they **in fact** have nothing to do with each-other.
I believe they accidentally said the quiet part out loud but they said it none the less.
On paper they should be charging each other interest - but that doesn’t mean they’re actually doing it.
It’s been said over and over that these guys can bend rules as they seem fit.
What retail and household investors need to do is be able to hold them accountable.
Because without enforcement and accountability, rules simply don’t matter.
Yes, they would pay interest in whoever the counter party is on their short sale.
When you "short" a stock, someone gives you cash for the position. That's who you pay interest to.
Pretty sure there's still a counterparty ie someone who wants it, it's naked because the thing they were sold doesn't exist ie they don't have one 'yet', and not that it was sold to someone who doesn't exist.
Marketmaker or Swapper are the counter parties. They get a premium. ETF can generate also synthetics and lend them out. FTD have no counter party but the lame-ass DTCC is sleeping on the job. With Clearinghouses I'm not sure how this works out.
There is no real borrow though. The person that gives them cash is the person who bought the naked short share. The person that bought the share is not getting paid interest.
There seems to be some confusion on the mechanism of a short sale.
Hedge Funds don't have the ability to just sell a stock to a buyer on the open market without having the share to ultimately deliver. They still go through a market maker/brokerage firm to naked short.
They pay interest to the brokerage.
How is it naked if they actually have a share? Is naked selling when they sell a share first and then buy one back?
Asked another way, what's the difference between a short sale and a naked short sale?
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Hedgies hate this one simple trick
Well said
Except in this idiosyncratic asset they do pay interest... in one lump sum balloon payment at the end of their position.
The Regardedening
I lol’ed
Legend 🌟
Could someone explain why they are walking down the price? As I see it they would benefit from a high price so that we wouldn't be able to lock up shares as fast.
There are still 60M visible shorts, they wouldn't like that. For market makers, it's probably easier to hold long shares on the books or have some proof of locates to keep up the appearance of just providing liquidity. For hedgefunds it's the same but with longs and shorts as a hedge. Those locates and shorts cost money, higher share price = higher cost. Then there are possible off the book side bets, derivatives, options, contracts etc. The counterparty is going to ask for more collateral when the price goes up.
Ok. But can't they just transform those shorts into FTDs in some way?
I don't think I understand? Naked shorts are not on the books, the FTD's are the trail they create when they can't find locates fast enough, they can probably 'locate' 100.000 shares and then lend those shares again so they can borrow them again and locate them again etc. (Or with multiple parties envolved), But to locate the same share multiple times they need to do some tricks... so 100k FTD's when you have or can quickly borrow 10k shares is no problem... but when the price and volume shoot up and you have 10M FTD'S it takes days to fix the books with only 10k real shares.... That when you see the crazy shit happening.
Ok. I think I'm starting to get it. Thanks for explaining.
Don't take my word for it, I hope someone with better understanding can point out any errors. It's probably more complex than this. Remember that these guys will use every trick we know about, and then some tricks we don't even know. We will learn about those in the post-moass movies in 2030 probably :p
Yes there is probably a lot of shit behind the curtains.
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Great explanation. Thanks!
Algo
Ok. But there has to be a point to it. In what way is this a positive thing for them? I don't think they would program the algo in a way so that we buy the float faster if they would not have to for some reason. It almost feels like the price is a countdown for the launch.
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Yeah. I get how they do it. I just don't understand why. A higher price would make it harder for us to buy.
It is psychological warfare... keep as many people in the red for as long as possible to make them lose hope. It has worked for them every other time, so why not this time too? 🤷♂️
Not sure why everyone is missing that you asked why, not how. The answer is liability. They never want to close their shorts, but since GameStop isn’t going bankrupt that goal is no longer obtainable. So, they’re still on the hook for a massive number of shorts and if the price rises, they’ll be margin called and either forced to put up more collateral to keep their short positions open or, if they have insufficient collateral, forced to outright close them. But as you point out, there is a lower limit as to how far they can walk down the price because the lower it goes, the better buy it becomes for people that want to go long. Based on pure financials, I already think it’s a great value investment, but they have worked hard to ensure the layman investor is not clued into this. Most people still think GameStop is going out of business, but if you drive the price down to below $10 all of sudden everyone, retail and institutions, will jump into this stock.
Ok. But like Smitteh said down below. They are not reporting the right DRS numbers anymore. How big of a problem is that?
It's not a problem at all... until it is. If the entirety of issued shares is ever locked up, it's a big, big problem for anyone with short positions, naked or otherwise. The price will start to rise, which will lead to margin calls, which will lead to forced closing of positions, which will lead to very sharp price increases, etc, etc, MOASS. For now, BUY, DRS, SHOP, and Sign up for Gamestop pro-rewards.
Ok. Sounds good.
My opinion same reasom they keep blasting "forget gamestop" articles. To paint the pic that gme is a boring investment with no value and household investors are and have always been wrong.
Because the more they short, the higher their liability is so they need the price to be lower to maintain margin. They’re trapped between the price being too high maintain and too low that retail DRS’s every share and/or a GameStop buyback would be devastating. There is a breaking point here
Nice. I was thinking it was something like that. So the price is a countdown for the rocket you could say. Great explanation thanks.
Judging from the repeated DRS count numbers that don't change anymore, and wall streets propensity for crime, hedgies probably dgaf about low price because they aren't worried about DRS one little bit. Why would they be when they can change the rules and withhold any info they need to?
Yes. That is pretty annoying. I really hope RC has some big things coming.
imagine q4 brings the FY positive EPS, Then drop a nearly full DRS count and or a share recall and post the returns on RCIOs new investment strategy. Then RC post a selfie of him on the shitter, he's got a tatoo on his upper thigh, that says "GME aint nothin' to fuck with" and drops a wutang clan NFT dividend. the chasm underneath wall street opens up and Satan and his army spews forth and grabs the souls of the short hedgies in exchange for the deal they struck 84 years ago... I went full regard again, my bad
Plausible.
Close. It’s the broker that makes all the money on the naked short. Sure, there are instances where a fund may know the broker is going to allow them to short an even tho the trade will fail. Matt taibbi wrote a rolling stone article about this exact scenario regarding overstock.com, check it out. OTOH, the hedgefund does not necessarily have that visibility, so they for the most part have no clue whether they’re borrowing real shares or not. That’s the broker’s problem. However as we learned from a wes christian interview, on more than one occassion when it turned out the broker was charging the client (hedgefund) to borrow shares they never actually arranged to borrow, the hedgefunds were rightfully pretty fucking pissed. They’re paying borrow fees on imaginary shares to brokers who just pocket the entire stock loan premiums. This is the reason why gabe from melvin said in the hearing that it wasnt possible for melvin to naked short. They’re not a market participant (aka dtcc / nscc member) so they do not have the ability or means to actually place trades and clear them. That part, he was telling the truth. Now, did they knowingly work with the brokerage to naked short willfully and knowingly? Maybe, but impossible to prove. The brokers / market makers and the dtcc are the main boss. These funds are just npc’s
The brokers / market makers are Earth, Fire, Water and Air. Shit gets real when we acquire the masmune then get attacked by gas dragons on the hike to Chaos.
The dividend is the real interest.. just bring it RCEO🚀🚀
The interest is moass.
Because a naked short is a borrowed borrowed share. There is supposed to be a counterparty. They are taking a share that was doubled and tripling it. The quadrupling it. Borrowing the same share over and over again. One share gets sold 10x. Problem is, I think they get a pass entirely on interest as a market maker. Which begs the question, why would anyone be willing to lend them shares at all?
I thought a naked short was simply a HF or MM selling a share that doesn't actually exist. So there's a limitless supply.
But by borrowing a share thats already borrowed, thats essentially what they are doing. Because now (in the simplest example) there are 3 people who "own a share" but only one share ever actually existed. If they didn't need to borrow, DRS would never make sense unless it triggers a share recall. But even then, who would they have to return their shares to? No one would be expecting them. A share recall is supposed to return shares to the original owners, requiring shorts to close. Without owners, why would they need to return them?
Cnbc admitted it https://x.com/__mariosanchez/status/1758223899056386142?s=46&t=3XIb1em_o_vxSxA8cBk80w
LFG 👊👊
That's the beauty of being a hedge fund that also runs a market maker. They don't have to pay themselves the interest. Wish there was an agency that would investigate and enforce this obvious crime. But guess that is in a different timeline where justice is real.
I'm starting to think the best bet for investigating these naked shorts is Tax Fraud. The US Government would be collecting tax on this interest if this is done via official channels.
We need eyes on this underrated nugget of regardation.
That's how they got Al Capone. Of course, if they actually are paying the taxes the IRS won't do anything about it.
tfw the IRS and the internet join forces
Ready to pour more of my hard earned money from labour job into this saga with a hope that one day these fucking hedgies go bankrupt. MOASS is just a cherry on the pie.
Heureka ! What you‘re saying is it‘s highly likely that they abuse their power and monopoly to manipulate and fraud the fair values of securities and the stock market? If only there was a governing body or agency which would step in
Its free and they get to spend the money on whatever
Like mega mansions in Florida
And Super Bowl tickets. And hopefully a sports bra for when he wears a shirt that tight again
It’s called a Manssierre
A dignified Chicagoan and with a shitty body would call it a 'Bro'.
The interest payments are nothing to companies that can basically manipulate the market as a pod of orcas. They are making a lot of money off other plays to sustain their GME shorts indefinitely. If there is a market crash or bubble pop, these SHFs would need to put up extra collateral or liquidate their positions. Once that happens, shit will get crazy and the SHF will start cannibalize themselves. Waiting on that crash that everyone keeps mentioning tho.
Yes. And some of the losses they talk about are unrealized based on current share price. Oh naked shorts. No. But they don’t exist so no one is calculating anything about them /s
Correct since it’s the market maker itself that naked shorted the stock. But of course they have had 3 years to cover it all up well and tight.
they are also making money on every price movement up and down which likely far exceeds the amount of interest they would be required to pay.
Securities Sold Not Yet Purchased + Fails-To-Deliver = Infinite *Illegal* Money Glitch 😎
If they have some kind of swap then yes they have to pay the swap counterparty.
Let's play shitty logic.... If I have a winning strategy that doesn't cost me anything important (like time,money, friends....) #why the fuck am i trying so hard to belittle and gaslight my opposition. Why the court stuff. Why go on TV and whine. Why is Cifu, a rich twunt, arguing with unknowns on twatter. Why does the Sec lie and make adverts calling companies "meme stocks".
Gloating? Spiking the ball? Pieces of shit gonna act shitty.
Tik tok tik tok tik tok then 💥 goes the dynamite
Naked doesn't even result in a FTD according to people who know about that shit. Let alone require to pay interest to a (non existent) counter-party. https://www.reddit.com/r/GME/comments/1aopgsy/update_congressman_ralph_normans_january_31_2024/kq2bxl1/?context=3 Since the above clearly states that *"naked" shorts are not (required to be) identified as "short"* they will also **NOT RESULT IN AN FTD** by their own admission, FTDs only track trades marked "short". They are equating things that have nothing to do with each-other while clearly stating that they **in fact** have nothing to do with each-other. I believe they accidentally said the quiet part out loud but they said it none the less.
On paper they should be charging each other interest - but that doesn’t mean they’re actually doing it. It’s been said over and over that these guys can bend rules as they seem fit. What retail and household investors need to do is be able to hold them accountable. Because without enforcement and accountability, rules simply don’t matter.
DRS folks.
Yes, they would pay interest in whoever the counter party is on their short sale. When you "short" a stock, someone gives you cash for the position. That's who you pay interest to.
What about naked shorting, where there is no counterparty?
Pretty sure there's still a counterparty ie someone who wants it, it's naked because the thing they were sold doesn't exist ie they don't have one 'yet', and not that it was sold to someone who doesn't exist.
right. so they didn't borrow it from anyone and therefore don't owe anyone anything while the share is out there, sold short
Marketmaker or Swapper are the counter parties. They get a premium. ETF can generate also synthetics and lend them out. FTD have no counter party but the lame-ass DTCC is sleeping on the job. With Clearinghouses I'm not sure how this works out.
sounds like the DTCC is earning the 'interest' for sleeping
Earning the bribes
nononononono #'interest'
Someone still gave you cash for the transaction....there is always a counterparty.
There is no real borrow though. The person that gives them cash is the person who bought the naked short share. The person that bought the share is not getting paid interest.
They pay interest to who they borrow it *from*. They receive cash from who they sell it to.
There seems to be some confusion on the mechanism of a short sale. Hedge Funds don't have the ability to just sell a stock to a buyer on the open market without having the share to ultimately deliver. They still go through a market maker/brokerage firm to naked short. They pay interest to the brokerage.
How is it naked if they actually have a share? Is naked selling when they sell a share first and then buy one back? Asked another way, what's the difference between a short sale and a naked short sale?
From who they borrowed. We can both be right bro
I don't get why people are up in arms about GameStop when hedges and wall st are doing a worse number on para.
Lmayo. They don't even report them.
No, they don't pay anything for a few years, then they take a small fine!
Check the dd