First let me start by correcting something: people that commented on the squeeze are saying there are still 120% short interest. This is incorrect. The number of loaned shares halved in the last 2 weeks. So I think it is safe to assume the bears closed their positions. But a lot still hold on. We won't get the end of month report for another 10 days, so we'll have to wait to see exactly what the situation now is.
You could say Michael Burry started it all, or at least put things into motion. I do not know if he was alone or not. Why didn't you hear about it? Michael Burry, a neurosurgeon, has been an outspoken "covid skeptic", so he had no place in the media. But now he is saying the rally is insane and GME is going to crash, so the media is featuring him once again 😀
The liberal Washington Post has slammed buyers (imagine my surprise). They called short sellers & hedge funds "the good guys". Conservative, alt-right, libertarian, or socialist, they're the enemy of all now. It's more than just the alt-right & radical left that want a revolution now. For once all sides (except liberals) agree on something, the dogmatic bourgeois-liberals in power are alienating everyone here.
I would be more popular if I said "go get them, they'll all be squeezed and you'll all be millionaires", but I can say with certainty this will end badly. First the hedge funds and their congress & media friends won't go down without a fight, and then even if the last bears get wiped out and the stock soars to $3000, which might paralyse the clearing houses and hence the market by the way, the exit door will be much much too small for the huge army of buyers.
WSB won a battle, but they should be careful not to get ahead of themselves and "overstay their welcome". Best to fall back and plan the next battle now.
Free brokers are not surprising anyone. They ended the short squeeze.
The "free" brokers that not only halted trading but halted buying while allowing selling, and some (the ones I disliked the most before this already) have even BEEN SELLING their clients shares against their will!
The "free" brokers have literally caused their clients to lose money. Both the ones that got their shares force-sold, and those that bought mid squeeze just before buying was halted at what is now the top.
Vlad, fitting name, from Robinhood has been saying on tv he had no liquidity issues. And he also said he did not stop trading because the people he gets money from asked him to. Then why did he stop it? And why only on the buy side? Vlaaaaaad? The clearing house asked to halt the trading? Then why did not-free brokers NOT halt it?
The end of an ERA.
Everyone is scared of populism so absolutely everyone is siding with the GME longs, a funny one in particular is Elon Musk, once again this guy is really taking big risks, doing the popular thing everyone agrees on.
Bears are going to be much more silent from now on. It is typical for the population to dislike short sellers, it has always been like this, and honestly people today are more ignorant and dumber so bears are at greater risk of real violence coming from crowds of people that don't understand markets or from politicians that want votes.
One intervention that made me laugh: Citron research known for releasing bearish research (translation: taking a short position then spreading FUD) announced they would not publish any short research anymore, and focus on longs only.
Final words.
Short estimates from ortex & S3 show that shorts dropped from 62m to 27m. It is likely that GME drops back to 10 - 30 dollars, and the US congress has already planned to have hearings on the matter.
People that mocked me for criticizing free brokers have paid the price, and this zero commission thing is taking a hit, a lot of people with "big" accounts will move on (why, oh WHY do people with 100k+ accounts use crappy free trading PHONE APPS????).
A screenshot of the recent Natural Gas short squeeze (remember James Cordier from optionsellers dot com apology video?) as well as the famous Volkswägen one:
I also want to correct something. There is no naked short selling going on (at least not on a big scale). Any "pro" person with a suit acting all knowledgeable saying there is so, is a clown and a charlatan. You CAN NOT naked short sell a stock. It is illegal, even for market makers, in the US and the EU, since the 2008 crisis.
Comment
⋅
I did a bit of research and I found some interesting things... First the narrative is wrong (when is it ever not?).
I got some data from bloomberg, that got it from Citadel...
The real short % according to S3's data is 122%. However, their 55% figure is technically not a lie, but extremely misleading. I will explain everything.
S3 head is redefining share float to include shares that don't exist in order to be able to say shorted % of float is lower.
it reduces the traditional SI % Float, Instead of Shares Shorted/Float our calc is Shares Shorted/ (Float + Shares Shorted)
So, by this definition, if a stock is shorted 400% of existing shares (total banana count borrowed and resold 4x) and total shares is 100, short % is calculated like this:
400 shorts / (100 shares + 400 longs whose shares are borrowed) = 0.8
That is, the normal way we define short % would say it's 400% shorted. S3's way says 80%.
Knowing this formula, we can work back to what S3 would have said the short % of float was using the normal definition of short % of float:
55% short of float means for all existing shares + shorts (or, ont he other side of the trade "longs whose shares were borrowed away to short") is 55/45 as much as existing shares. Meaning, portion of shares short by the normal definition (% of existing bananas borrowed) is 55/45 = 1.22
That is, S3's data is telling them that after friday trading, GME is still 122% short.
Etch1234
⋅
@Etch1234, >it reduces the traditional SI % Float, Instead of Shares Shorted/Float our calc is Shares Shorted/ (Float + Shares Shorted)
MatrIxD3viL
⋅
@Etch1234, I didnt understand how you converted the 55% short of flow to 55/44. could you please explain again?
MrRenev
⋅
@MatrIxD3viL, The "official" calculation is shorts/float. But "demand" is not really float, as not only "float" is holding the share, you add the people that loaned their shares: they still "own it" but they are not holding currently, so to have the total number of real shares being held he adds the shares sold short (should add the number loaned imo if they have this number).
He got 55% from a source that claims to have the current number, not 2 weeks old, they got 55% from shorts/(float + shorts).
Maybe this is easier to see without getting into the math details too much:
55% = shorts/blabla, 45% = float/blabla, Simplifly by blabla
MatrIxD3viL
⋅
@MrRenev, Thanks a lot! great explanation! basically, as long as it is above 50% it is still shorted more than 100%.
MrRenev
⋅
@Etch1234, Well the number itself is not what is important at this point. It's much higher than other stocks, and no matter how you calculate it and what the real number is, I'm sure it was dropped in almost half. So if they say 55% then it's 25%, if they say 122%, then it should be around 65% now.
Maybe Shares Shorted/ (Float + Shares Loaned) is better.
Etch1234
⋅
@MrRenev, maybe it is better, but it's VERY misleading and convenient for them that they decide to change the definition of it NOW. It seems like it doubled from 130% to 260% and they scalped 400 -> 180 which would have been very profitable for them. So it's in half from when it doubled, i.e. it's the same as in december. But I guess that gives them a lot more margin to play with in case they get a margin call. They would keep shorting but there are no more shares to borrow, they just increased their cash unless they find a way around that but idk how that would work.
MrRenev
⋅
@Etch1234, I think these numbers are wrong, I only trust the numbers reported by the exchanges, I am no stock expert and I don't know how & if many shorts that go through citadel and not the NYSE can go undetected.
The 31 December there were 71 million shares short as reported by the exchange.
The 15 January there were 62 million shares short as reported by the exchange.
And I'd be willing to bet that number is down to less than 40 million today. This is still very high.
MatrIxD3viL
⋅
@MrRenev, wait, so by this calculation, there is not short squeeze at all.... how can they accumulate all the 140% if 20% are held by cohen and some public institutions and lets say 10M shares are held by WSG guys... how can it go to less than 100%? and if so, how is that melvin lost 53% in just week and a half?
The calculation and what Etch said is correct. But the numbers the calculation is based on, which comes from "S3" are bollocks. There were 70 millions shares sold short, now they are less than 40.
The next exchange release in 10 days to 2 weeks will confirm that.
Oh actually that same guy Ihor Dusaniwsky@ihors3 posted something new:
"GME short interest is 8.82BN; 27.12M shs shorted; 53.15% SI % Float; 34.1% S3 SI % Float; 26% borrow fee and easing to 10%. Shs shorted have decreased by -35.2M over the last week. Shorts are down -13.38BN in 2021, which includes up +1.93BN on today's -22% move. @CNBC #s3data". According to this guy there are even less shorted shares than I predicted, 27m. That's a bit low, I'm gambling on 35m. Idk where he gets his numbers from.
There has been a multi billion dollar transfer of wealth from hf to wsb autists.
Maybe Cohen bought from short sellers? I don't get why you think it cannot go down. I am certain half bears already bought back in. If you keep bidding you'll find people that will sell eventually, the price did go up 1000% in days. The short squeeze happened imo, and would have continued if trading did not get halted.
I heard Melvin lost 30%? Maybe they only had 1% of their capital in, but since it went up 30X they end up losing 30% XD
Wall street is a bunch of sheep, so I'm sure there are hundreds of funds that piled onto this "easy money" short.
What is interesting is that at these huge prices the sellers are not selling massive amounts (maybe they are and we'll find out in a filing soon?). If they're not, it's because they are afraid of a popular uprising?
Here is what they did:
Sources (S3 head):
twitter.com/ihors3/status/1355990194575564801?s=19
twitter.com/ihors3/status/1356004816414269448
twitter.com/ihors3/status/1355969693841051650
S3 head is redefining share float to include shares that don't exist in order to be able to say shorted % of float is lower.
it reduces the traditional SI % Float, Instead of Shares Shorted/Float our calc is Shares Shorted/ (Float + Shares Shorted)
So, by this definition, if a stock is shorted 400% of existing shares (total banana count borrowed and resold 4x) and total shares is 100, short % is calculated like this:
400 shorts / (100 shares + 400 longs whose shares are borrowed) = 0.8
That is, the normal way we define short % would say it's 400% shorted. S3's way says 80%.
Knowing this formula, we can work back to what S3 would have said the short % of float was using the normal definition of short % of float:
55% short of float means for all existing shares + shorts (or, ont he other side of the trade "longs whose shares were borrowed away to short") is 55/45 as much as existing shares. Meaning, portion of shares short by the normal definition (% of existing bananas borrowed) is 55/45 = 1.22
That is, S3's data is telling them that after friday trading, GME is still 122% short.