Someone educate me but why are hedge funds not limiting the loss by covering the short and closing their short position. Wouldn't that stop pumping from WSB crowd?
The only exceptions I could think of is :
- There isn't enough volume to cover shorts due to incessant buying spree from retail side
- Lending freeze initiated by brokers on client request
I think this wording may be a bit misleading. I think the challenge is more subtle, let me walk through a scenario.
100 shares exist, all owned by person A. They lend all the shares to a short-seller, who sells them to B. Then B lends 40 of those shares back to the short seller, who sells them to C.
Now 140% of existing shares are shorted. But 240 shares are "owned" in some sense. A "owns" 100 shares and B "owns" 100 shares and C "owns" 40 shares.
What's not clear to me is which of these shares are available to be bought by the short seller. I assume you can't sell your shares if they're loaned out. So the short seller can first buy 40 shares from C and deliver to B. Then he has to buy 100 from B, including the shares he just delivered, and give them all to A.
What happens in the case where the short reaches it due date and neither B nor C want to sell?
Intuitively I would say that the short seller goes bankrupt, A doesn't get any of the stuff he loaned out back, B ends with 60 stocks while C has 40. Is that what happens in reality?
My understanding is not enough volume. So many shares are sold short that attempting to buy a significant portion back would drive up prices and initiate the short squeeze (vicious cycle of price going up and shorts forced to buy more shares to cover).
They're too stubborn to take a loss and theres not even enough shares for them to all cover. Its also not really the case that none of them have covered. People close out and then new short sellers come in at the same time taking their place, thinking this is their time and surely it will go down, which keeps the short to available shares high.
But couldn't they just settle with the original lenders without buying back the stock from the actual holders? Or is that forbidden? To me this would seem a logical decision for any lender (the business was not dead, so selling was a little bit too risky, but now taking a 100% profit and being done with that instead of having a stupidly inflated stock and 10% profits in the, seems reasonable)
The big pumping has only happened over the last few days. Hedge funds are starting to close their short positions (two of the most noted ones Melvin and Citron announced they had just this morning), and many commentators do expect that this will cause the stock to crash soon as people move on.
Not to tinfoil this too much, but it seems pretty likely from volume that that was a lie by Melvin and Citron, with the explicit goal of tanking the stock (so they can then cover at a lower price).
Agreed. The timing is also rather suspect. I am not sure why they wouldn't have announced it last night if they closed out yesterday. Instead, they waited until this morning after a ~100% jump in price. I find it hard to believe that news organizations haven't been reaching out to them pretty consistently over the last few days since they appear to be the explicit target of the WSB crowd.
Would lying not be a crime here? Maybe not if the position was all from their personal accounts. But wouldn't it be a problem if you were trading other people's money, and you ended up on the losing end, wouldn't you have problems with lawsuits from your clients, saying they were duped, and they would have pulled their money out, if not for this lie? (Or something similar)
Lying is a crime, but as we all know the punishment from the SEC and other regulatory agencies is usually a small "fine" that actually never prevents bad behavior. For many Wall street types, paying fines is literally part of the cost of doing business.
Its better for a business to be in court and pay fines then to be broke and bankrupt.
They announced they closed outside of trading hours, which makes me think they didn't actually close. Why wouldn't they announce at the close yesterday to prevent the run up to 300?
Am I correct in saying that if someone can forecast approximately when that will happen, they can short the stock and make money off of the mass selloff? Essentially putting the short sellers back where they started (in a sense)?
In principle, but it's fundamentally challenging to forecast this kind of thing. For example, Kodak is still up almost 300% (down from like 1,000% in July) on the news of a government loan they haven't received and a pivot to pharmaceuticals manufacturing they haven't started.
If you think you can outsmart both the hedge funds and WSB, go right ahead. I for one will simply regret my lack of faith causing me to miss out on 4000% returns (so far) and move on.
As a pilot run - tried migrating small amount of knowledge base from Evernote to Notion but it just feels too overwhelming. Upending existing information architecture (with umpteen possibilities re: templates) quickly gets exhausting.
This is when I realized, I need an opinionated tool. Gave up and went back to Evernote.
My experience w/ twitter has been diametrically opposite - the fact that ideas represented are easily digestible ideas (especially from fields I wouldn't bother about otherwise) have usually driven me towards exploring it further if it piques my interests.
Ofcourse, its about how you're interpreting this information - by inquiry or face value (which can be dangerous).
I was skeptical about feed quality getting diluted when twitter increased character limit to 280 -- fortunately, for me, it hasn't (as much as I expected) with few exceptions.
Would love to try some time but can't imagine porting all my notes (and knowledge base) from Evernote that I've accumulated over the years. Too exhaustive.
Given how frequently they ran out of 65,000 tickets for <enter_any_big_ticket_event> within seconds (which would pop up under resale with > 200% markup minutes later), glad this is out in the open.
Also, Fenway Park is the worst. Had a terrible experience earlier this year while trying to book Pearl Jam tickets. Presale went live at 10:00 AM on February 10th (for shows in Sept) and they ran out of tickets at 10:01 AM, are you kidding me? Suddenly I see spike on StubHub an hour later with ridiculous markups.
Fortunately my Uber driver pointed out and suggested that I wait until day of the event (as fenway park puts up unsold scalper tickets back online at market price). I followed his advice and snagged couple of tickets on day of the event at market price as he suggested.
The whole experience was mind numbing.Can't wait for Amazon tickets to disrupt this space and drive 'em out.
Edit : When I said 65,000 tickets - I'm counting Pre-sale tickets as well including Verified Fan scheme they had going this year.
I've noticed sometimes during the rush, the Ticketmaster app will report no seats available, but the website (sometimes after a few refreshes) will have seats, and vice versa. I had to refresh for probably 30 minutes the last time I bought Dave Matthews Band tickets, and ended up with pretty good seats.
> Given how frequently they ran out of 65,000 tickets for <enter_any_big_ticket_event> within seconds (which would pop up under resale with > 200% markup minutes later), glad this is out in the open.
Well, a lot of that is because more and more tickets are sold during presales (passworded or not, such as Amex presales). Sometimes there's less than 10% of inventory available on the regular sale. Sometimes there's more, but they hold back a few thousand to drop on the market to sell later.
The majority of stuff you see on Stubhub within minutes might have been listed on Stubhub for a day or two, or been primed to be pushed to stubhub at that moment for a day or two, since they were bought previously.
It's not hard to get access to most presales. If you have an Amex, you're already qualified for one of the earliest presales they have on most events. Same for Citi for some venues. Other than that, you can sign up for fan clubs to get passwords, or just search around.
> Presale went live at 10:00 AM on February 10th (for shows in Sept) and they ran out of tickets at 10:01 AM, are you kidding me?
Alternatively to what I said above, sometimes very little is released in a presale. It's a crap shoot, and depends on the tour strategy.
Yes, brokers will buy. Sometimes they over-buy too, and you can get tickets cheaper (this can be fairly common, actually). I'll tell you this, regardless of what this article says, Ticketmaster is always rolling out new mechanisms to make it easier for fans and harder for brokers. Recently they started using new queue systems for some sales, and a new ticket buying interface, as well as much more complicated bot detection heuristics.
Ticketmaster has multiple divisions. The secondary market division (TM+, their new Point of Sale offering) might not necessarily want brokers excluded, but the rest of the company must put a lot of engineering effort into it, given what I've seen. That they don't go seeking out accounts makes sense to me, because there are legitimate reasons to buy a lot of tickets (corporate bonus gifts, a concierge service, etc), and inaccurately targeting one of those will cause a lot of trouble, and maybe even a court case (if I was a concierge service with a few hundred tickets in their system, and they cancelled them all, I would consider a lawsuit because they've had my money for months and been able to capitalize on it, and if the alternative is a crippled business...)
> The whole experience was mind numbing.Can't wait for Amazon tickets to disrupt this space and drive 'em out.
It's a market, with supply and demand. If you think a new entrant will change anything, I'm sorry, but I think it's unlikely. There's already multiple ticketing companies, Ticketmaster is just the largest. AXS ticketing does some large venues as well.
I know I'm nitpicking here but I see that some elements have not been broken down ( ex : cocoa powder in cookies) even on absurdly longer time scale. Regardless, good work.
Intuitively, it can serve as a good resource to understand food composition for cooked items.
