![]() ![]() This is a very complex situation so proceed with caution when approaching GME. This is just the reverse of how the higher than 100% short interest was created and this would be the short squeeze as the shorters buy up all the shares that are sold to close their positions, which could happen fast or not so fast.Īlso, combinations of these scenarios might occur. It could also happen that retailers slowly sell their shares to the shorters so they can cover, then the people of which the shares were borrowed and received them back sell again. ![]() They might go long synthetically (personally am not informed enough on the implication of this on the market makers and the market, could imagine this scenario playing out badly for retailers) but most likely GameStop will take advantage of the situation to ‘bailout’ the short-sellers by issuing new shares (possibly even above market price as they have the power to do that in this special situation) to these institutions so they can close their positions. The short sellers just realistically can’t close their positions in a normal way. More explanation: Short Interest % of Float 2.0 – ĭifficult question as this could play out in so many ways. If short interest on outstanding shares reaches more than 100% this is always bad for the shorter unless the company goes bankrupt.īut the number I displayed were short interest as % of the float (with game stop you still have the above illogical situation) Well, a short squeeze then happens and investor D (most likely the company) can charge investor B whatever he wants for the shares which D raises since investor B has to have them (or investor B goes long synthetically or whatever). How could B then ever fulfil his obligation to return the 100 shares to A and 100 shares to C? He can only buy 100 shares but he is short 200 shares. So now, short interest is 200 and outstanding shares is 100. Investor B borrows these 100 shares again from C and short sells them to investor D. Which means, outstanding shares=100, short interest =100. Investor B comes in, borrows these 100 shares and short sells them to investor C. Let’s say there are 100 outstanding shares of company X held by investor A. ![]() Update: note that GME was the only one with short interest as % of outstanding shares above 100% at the time, BB, BBBY etc didn’t have that characteristic. I personally would stay away from it but it’s rather interesting nonetheless. This might end up bad for a lot of retail investors, especially if they don’t know what they’re doing so watch out for the cesspool which is wsb, tread carefully as this is a very complex event. Most comments on wsb (gme is understated because it has its own thread) This excitement from wsb spilt over and people started scrambling for other shares with high short interest on the float ( Short interest is the number of shares that have been sold short, here represented as a percentage of float which means available shares), AMC, BBBY, LGND and BB are all over wsb now. ![]()
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