(02-03-2021, 04:40 PM)chascornell Wrote: One thing they don’t explain very well on Wallstreetbets Reddit page is what happens when the HFs can’t cover their shorts
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That was a problem when the entire float was shorted plus some imaginary shares. It was the entire "to the moon thesis" The S-3 report I saw yesterday seemed to indicate that was no longer a problem. And that could have changed again this morning? Keep the float at say 30% and you can just wear the street down. They have tricks we haven't even heard of yet. Many illegal but they will get by with it. Stocks don't run to a million. A short HF can liquidate the fund and file a form of BK. Just like when a BK company tells us sorry your 100 shares are now worth 9 cents total.
And to be clear, this entire debacle is complete institutional thievery. Yes the rookies on WSB are being willfully ignorant by now and deserve to lose some money. They will surely learn the lesson eventually. That doesn't make it right though. I ran across some good video interviews with a few of the original "founders" of this movement. (Other than DFV). It was time consuming and VERY thorough. Outstanding DD going back for years. Peter Lynch style individual investing. He started cashing out at 60 but he was in sub 5 so good for him. Plus some options I guess. Far more impressive than a Momo boy that loaded up with calls 10 days ago and got lucky.