LogFAQs > #950166641

Esrac posted...

Is there any reason to hold at this point?

Just been trending down all day.

Look at it this way. Imagine 100 shares of a company exist. a hedge fund borrowed 140 shares they didn't actually own, and immediate sold them to drive price down. They hoped that they could buy back 140 at lower prices to pocket the difference in profit.

Instead people bought those 140, and hold them, which makes them scarce. This drives price up. The ones who sold the 140 initially are paying interest on that bet every single day. They already lost 6 billion on their bet and they're worth 12.5 billion, plus got a cash injection of 2.1 billion from another hedge fund.

When/if they give up, they will have to buy those 140 shares at any price. It's simple supply/demand.

Now the question is this. The weeks leading up to this has shown consistent short interest in excess of 100% (i.e. they're on the hook for borrowed shares that need to be bought back for more than the total amount of shares in existence).

Mainstream media lately has been reporting that they closed their position, but this implies they bought on the order of 50-75 million shares. If you look at the volume the week prior before brokers were limiting buying of stock, daily trades were a magnitude higher than they were this week with all the manipulation.

They aren't officially required to report the short interest until Feb 9th. Everything else is speculation. But at the same time, media was reporting that reddit was jumping on a bunch of other "pump and dump" stock, when any idiot with a brain could see none of the other options were in a similar position of being shorted in excess of 100%. And if you've been following the conversation on WSB, absolutely no genuine user was pushing silver, or whatever the media was saying today.

Whether it's worth it to hold? No one can answer for you. If this squeezes, it's a theoretically infinite cap. No one knows what that will mean. They've already blatantly manipulated the market and so so so desperately want people to sell. If they truly covered their position, they wouldn't necessarily want to advertise that. So why are they spending so much effort to tell you this?

Last week had a dip to 120 before stabilizing back to the 300s. No one has a crystal ball, but yes there is reason to hold if you believe the underlying short squeeze premise.

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PGY-2. Anesthesiology.