Shorted Stocks

dpforce · 30-01-2021 01:29PM

I checked this morning OTC trading volume reports for AMC and GME during December. Time proven pump and dump scheme. GME volume doubled and tripled. AMC for few weeks went up six fold. Somebody accumulated decent positions for themselves, then all that hype on reddit and social media and then unloaded everything to robinhood, trading 212, degiro and similar crowd.
Idea is brilliant - there are a lot of firms and startups scraping data from twitter, FB, forums and other sources to gauge market sentiment. Then selling to hft, hedge funds and so on. All this added even more fuel to fire.
Most of you probably remember famous quote from "Margin Call" - be first, be smarter or cheat. Combine all of this together and you have GME, AMC madness.
Unfortunately - at the end price will go back where it was or even lower.

jive · 30-01-2021 01:44PM

dpforce wrote: »

I checked this morning OTC trading volume reports for AMC and GME during December. Time proven pump and dump scheme. GME volume doubled and tripled. AMC for few weeks went up six fold. Somebody accumulated decent positions for themselves, then all that hype on reddit and social media and then unloaded everything to robinhood, trading 212, degiro and similar crowd.
Idea is brilliant - there are a lot of firms and startups scraping data from twitter, FB, forums and other sources to gauge market sentiment. Then selling to hft, hedge funds and so on. All this added even more fuel to fire.
Most of you probably remember famous quote from "Margin Call" - be first, be smarter or cheat. Combine all of this together and you have GME, AMC madness.
Unfortunately - at the end price will go back where it was or even lower.

Not really. GME was determined to be undervalued, fundamentals were all pretty sound although not particularly exciting. Sentiment around GME was, obviously, very bad. New console cycle and addition of Ryan Cohen would have made this investment a 3 or 4 bagger. Obviously a new console cycle one can argue 'was priced in' but the price was driven lower due to excessive shorting - there are articles from March 2020 where a Korean fund who invested in GME said eSports is a viable pivot for GME and due to the level of shorts a short squeeze is possible. There's some very credible backers of GME from last year, it's not a pump and dump. Now we're seeing the short squeeze. Of course, it's gone beyond a simple short squeeze at this point but then we're getting into a whole other discussion that nobody could have foreseen or 'priced in'.

I don't know anything about AMC but it's obviously riding on the coat tails of the GME short squeeze due to the level of shorting, I don't know if AMC actually have sound fundamentals or whether they could literally go bankrupt (which was not a realistic thing for GME given their revenues and free cash flow). Without knowing anything, I would say that AMC is just riding on the momentum of GME due to the % short and people looking for a cheaper/earlier entry point to get in on a short squeeze that may or may not transpire to levels they want.

patsy_mccabe · 30-01-2021 02:59PM

The book value per share for GME is about $5.10.
https://www.macrotrends.net/stocks/charts/GME/gamestop/price-book

daheff · 30-01-2021 03:02PM

patsy_mccabe wrote: »

The book value per share for GME is about $5.10.
https://www.macrotrends.net/stocks/charts/GME/gamestop/price-book

Book value is not relevant at this point. Won't be until the shorts have covered substantially their position.

Demand and supply of shares is what's setting price now.

patsy_mccabe · 30-01-2021 03:09PM

daheff wrote: »

Book value is not relevant at this point. Won't be until the shorts have covered substantially their position.

Demand and supply of shares is what's setting price now.

Well that's where the ground is, when the rocket falls back down.

Timing belt · 30-01-2021 03:14PM

jive wrote: »

Not really. GME was determined to be undervalued, fundamentals were all pretty sound although not particularly exciting. Sentiment around GME was, obviously, very bad. New console cycle and addition of Ryan Cohen would have made this investment a 3 or 4 bagger. Obviously a new console cycle one can argue 'was priced in' but the price was driven lower due to excessive shorting - there are articles from March 2020 where a Korean fund who invested in GME said eSports is a viable pivot for GME and due to the level of shorts a short squeeze is possible. There's some very credible backers of GME from last year, it's not a pump and dump. Now we're seeing the short squeeze. Of course, it's gone beyond a simple short squeeze at this point but then we're getting into a whole other discussion that nobody could have foreseen or 'priced in'.

GME is like high street shopping and is in decline.. will it go away no... can it improve it's business with investment and new management... yes but not dramatically. All the talk about a short squeeze and potential returns like VW is misleading... VW was different as the stock was not owned by retail customers which is important as you have 100,000's of people that all need to
work together and as soon as one or two break ranks it starts to fail.

Ok.... next I hear all saying that everyone was sticking together and holding the line but how is this possible when you have 100,000's of new investors being able to buy shares at a higher prices. For this to be possible someone has to be selling and that is not holding the line.....next reply is that its ok as there was not enough volume to enable the shorts to be closed out. This is also false as the short position was 61m shares and the daily volume was as follows:
19/1/2021 74m
20/1/2021 33m
21/1/2021 57m
22/1/2021 197m
25/1/2021 177m
26/1/2021 178m
27/1/2021 99m

When you then take into account you don't who is behind the Redit page and the likelihood that that professional traders are posting in there is quite high.

Most realise that this is a pump and dump and are happy to take the risk and have some fun in the process. The guys that are trying to stick it to wall street are being played by wall street.

daheff · 30-01-2021 03:28PM

patsy_mccabe wrote: »

Well that's where the ground is, when the rocket falls back down.

eventually

but thats a way off yet. Shorts still need to cover. When they do then absolutely the share price will fall off a cliff (After a big jump).

thats when the stock market gets back to valuing the company on its trading rather than the shenanigans happening now.

daheff · 30-01-2021 03:48PM

Timing belt wrote: »

Ok.... next I hear all saying that everyone was sticking together and holding the line but how is this possible when you have 100,000's of new investors being able to buy shares at a higher prices. For this to be possible someone has to be selling and that is not holding the line.....next reply is that its ok as there was not enough volume to enable the shorts to be closed out. This is also false as the short position was 61m shares and the daily volume was as follows:
19/1/2021 74m
20/1/2021 33m
21/1/2021 57m
22/1/2021 197m
25/1/2021 177m
26/1/2021 178m
27/1/2021 99m

When you then take into account you don't who is behind the Redit page and the likelihood that that professional traders are posting in there is quite high.

Maybe they have all covered their short positions. We won't know for a while yet.

But if they did, the best they could have done is at around 114$. with needing to cover ~69.5m shares* @114, thats almost 8bn they would have needed to raise.

Now we know they didn't buy that much at 114...so if they did how much did they buy and at what price? Double/triple that price.....they need 14-21bn. Thats a lotta cash to need to raise at short notice.

I'd guess they have reduced their exposure a little @114, but i'm still thinking they have not yet fully covered (Like a lot of others).

I might be wrong and i might lose all the money i put in....but at this point i don't think so.

50m shares *139% =69.5m~ish shares

Timing belt · 30-01-2021 04:06PM

daheff wrote: »

Maybe they have all covered their short positions. We won't know for a while yet.

But if they did, the best they could have done is at around 114$. with needing to cover ~69.5m shares* @114, thats almost 8bn they would have needed to raise.

Now we know they didn't buy that much at 114...so if they did how much did they buy and at what price? Double/triple that price.....they need 14-21bn. Thats a lotta cash to need to raise at short notice.

I'd guess they have reduced their exposure a little @114, but i'm still thinking they have not yet fully covered (Like a lot of others).

I might be wrong and i might lose all the money i put in....but at this point i don't think so.

50m shares *139% =69.5m~ish shares

139% was the short position @ 31/12/2020 the latest published holding was 61m @ 15/01/2021 and this was published on the 27/1/2021.

Why have they only reduced there exposure @114?? You don't know what blended price they have close out at as there is enough volume to enable them to close out 6 times so it could be anywhere from 38 on 29/1 to 400.

Then again they may not have closed out yet or maybe they did and shorted again.

Shedite27 · 30-01-2021 04:10PM

There's no point in talking about book value for GME, this is an exceptional circumstance, it'll go to book value eventually, it's what happens between now and then that you need to figure out

Phoebas · 30-01-2021 04:15PM

Shedite27 wrote: »

There's no point in talking about book value for GME, this is an exceptional circumstance, it'll go to book value eventually, it's what happens between now and then that you need to figure out

Important for anyone new to this game buying in now to understand what their shares will be worth if they get their timing wrong.

Shedite27 · 30-01-2021 04:41PM

Phoebas wrote: »

Important for anyone new to this game buying in now to understand what their shares will be worth if they get their timing wrong.

True, I've always said GME could be about $30/40, so you're right, anyone buying in here and not selling in time could lose 90%

social.lite · 30-01-2021 04:55PM

gmedd.com lists a conservative but bullish value of $170.

That was before all of the craziness and the current stock price. Their financial year ends on Sunday night. They have serious leverage now to make good moves and get a huge cash injection.

if they make an announcement on Monday morning, chances are the "real value" will shoot up past $200 at least, and the squeeze will continue.

social.lite · 30-01-2021 04:57PM

It seems highly unlikely that they closed their position.

They "closed" on Tuesday night, but didn't announce it till it was reaching peaks of $350. Is that not a bit suspicious?

They're also paying for ads on CNBC that say they've closed their position.

Why would they do that?

Timing belt · 30-01-2021 04:59PM

social.lite wrote: »

gmedd.com lists a conservative but bullish value of $170.

And with valuations like this its no wonder why the company was shorted in the first place :rolleyes:

I value Debenhams at 150 on past performance.... Oh wait they are gone.... I value top shop at 100.... oh wait they are gone also...

Timing belt · 30-01-2021 05:03PM

social.lite wrote: »

It seems highly unlikely that they closed their position.

They "closed" on Tuesday night, but didn't announce it till it was reaching peaks of $350. Is that not a bit suspicious?

They're also paying for ads on CNBC that say they've closed their position.

Why would they do that?

So if they announced they closed out and didn't actually do so we will see some jail time for the hedge funds as this is Fraud and will be investigated.

Where is the evidence that they have paid CNBC to say they closed their position?? is it a post on redit by a rival hedge fund trader possibly!!!

PaddyTheNth · 30-01-2021 05:07PM

Shedite27 wrote: »

True, I've always said GME could be about $30/40, so you're right, anyone buying in here and not selling in time could lose 90%

My fair value finger in the air price would be $20, with $40 being the upper limit of optimism.

social.lite · 30-01-2021 05:08PM

I'd bet any money it wont drop below $100 for a long time

daheff · 30-01-2021 05:42PM

Timing belt wrote: »

139% was the short position @ 31/12/2020 the latest published holding was 61m @ 15/01/2021 and this was published on the 27/1/2021.

Why have they only reduced there exposure @114?? You don't know what blended price they have close out at as there is enough volume to enable them to close out 6 times so it could be anywhere from 38 on 29/1 to 400.

Then again they may not have closed out yet or maybe they did and shorted again.

Ok, so I don't know what they've done. Whether they have closed or not, or even at what blended price.

But looking the last few days, if they have covered the best they could have done so in the market was around 114.

Now if they've bought calls that are now itm the shorts are fine....but the call writers aren't. Either way somebody needs to buy stock.

You factor in how much stock was bought /sold by retail investors and it's reducing the likelihood that the shorts are out.

Think about how many other stocks are dropping because (probably) the hedge funds are dumping stock to cover margin calls & fees, again probability indicates there's a lot of shorts still there.

daheff · 30-01-2021 05:42PM

social.lite wrote: »

I'd bet any money it wont drop below $100 for a long time

You missed a zero

$1000

Shedite27 · 30-01-2021 06:01PM

social.lite wrote: »

I'd bet any money it wont drop below $100 for a long time

The March 19 puts at $20 were flying on Friday. A lot of people think it'll be below that by then

crushproof · 30-01-2021 07:08PM

I reckon the fun is over, it's a dangerous time for the small man.

I think of folk are going to lose their money as the price plummets over the next few weeks. I'm out of all the reddit stocks now, I could be wrong but judging by how relatively quite Friday was I can't imagine it picking up on Monday.

Back to the steady stock picks for me!

social.lite · 30-01-2021 07:11PM

crushproof wrote: »

I reckon the fun is over, it's a dangerous time for the small man.

I think of folk are going to lose their money as the price plummets over the next few weeks. I'm out of all the reddit stocks now, I could be wrong but judging by how relatively quite Friday was I can't imagine it picking up on Monday.

Back to the steady stock picks for me!

Relatively quiet to me meant a very strong resistance to the massive manipulation going on. Robin hood user were limited to 5, then 2, then 1 share during the day.

Lots of people were unable to buy, a huge attack from the shorts and the media, and the price didnt flinch. Seems like a good sign to me

shakedown · 30-01-2021 08:16PM

social.lite wrote: »

I'd bet any money it wont drop below $100 for a long time

Depending on your definition of a long time, ill take that bet.

Timing belt · 30-01-2021 08:46PM

daheff wrote: »

Ok, so I don't know what they've done. Whether they have closed or not, or even at what blended price.

But looking the last few days, if they have covered the best they could have done so in the market was around 114.

Now if they've bought calls that are now itm the shorts are fine....but the call writers aren't. Either way somebody needs to buy stock.

You factor in how much stock was bought /sold by retail investors and it's reducing the likelihood that the shorts are out.

you have no idea who is on the other side of your trade when you are buying or selling.... retail could be selling to hedge who uses shares to reduce short with broker who then sells back to retail.

Think about how many other stocks are dropping because (probably) the hedge funds are dumping stock to cover margin calls & fees, again probability indicates there's a lot of shorts still there.

Believe it or not there was a lot of economic data out during the week which made hardly any news headlines because of Redit.
e.g.
US GDP 4% 4.2% was expected
Euro talking about cutting rates again to weaken Eur to USD. (Euro goods cheaper in america = less growth in USA)
Vaccine news

But as you say its probably noting about this and is all down to the hedge funds liquidating stock to cover the shorts.

daheff · 30-01-2021 09:00PM

Timing belt wrote: »

you have no idea who is on the other side of your trade when you are buying or selling.... retail could be selling to hedge who uses shares to reduce short with broker who then sells back to retail.

Agreed. As a buyer or seller I've no idea who is on the other side of my trade.

Balance of probability is that shorts are still short more than the float.

Lots of retail investors are buying & hodling. Yes some are selling too.

You have to ask if you think the shorts can afford to buy back at these prices (& crystalize massive losses), or hold out & pull every trick they can to convince investors they aren't short anymore... And eventually get out at a much better price when the price collapses (as it will eventually).

There were ads run on CNBC to say Melvin covered their short position. This is a very unusual move

Let's say they have covered their shorts. Why would they spend money running ads to say this? Ads cost money...what's their return? If they wanted to send a signal to their investors surely they could email them instead...much more cost effective and targeted.

Why would citadel want to publicise they don't have shorts anymore? Why would they care about the retail investors losing money on a short squeeze that's no longer coming? I can't see a reason for it. Somebody help me out on it.

I can only surmise an alterior motive at this point.

I've posted I've got 3 shares at 305ish. I've got skin in this game, but I'm happy to lose it all if I'm wrong on this line of thought.

TheW1zard · 31-01-2021 12:35AM

I'll be looking to make money when it drops

daheff · 31-01-2021 11:23AM

So not so sure how accurate this website is, but it is implying shorts are even shorter

https://financhill.com/most-heavily-shorted-stocks-today

IF.....If this is accurate, then my take is more big hedgefunds are shorting now @300 ish, hoping the squeeze happens quick & sharp and they can gain from the eventual price drop.

I'm thinking Tuesday is the day, as that's when call sellers need to deliver shares.

Anybody with a different take on this please correct me.

31-01-2021 12:09PM

Unless the price goes mental tomorrow I think I will hold until at least Wednesday to see what happens. That said, I'm in for the roller coaster and don't mind if I lose it all. If I needed the money I think I would cash out at a profit tomorrow.

bish76 · 31-01-2021 12:57PM

GEVO- is it shorted / pump and dump?
For the nine months ended 30 September 2020, GevoInc revenues decreased 72% to $5M. Net loss increased 1% to$22.1M. Revenues reflect Gevo Development/Agri-Energysegment decrease of 77% to $3.8M, Gevo,Inc segment decreaseof 13% to $1.2M, United States (Country) segment decreaseof 76% to $3.9M, other segment decrease of 17% to $1.2M.Higher net loss reflects Gevo,Inc segment loss increase of1% to $9.5M.

Share price went from $1.0 last year to $4.0 at beginning of Jan and now running around $12-13 ? I know with Biden in charge there is focus on renewal energy but the pump seems disproportionate.

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