At what point can the shorts be covered then? When the WSB people decide to cash out, then their extremely valuable shares are bought up by the hedge funds, and the price should plummet accordingly right? What if WSB doesn't sell and just holds on for sentimental value?
correct, when WSB starts selling to make their money, prices should start to go down. Depends on how many shares they put on the market. Also fundamentally, the business can still go bankrupt, which the hedge thought was going to happen which is why it was shorted so heavily anyways. But that's longer term and the hedgefund that has a major short position was expected to fail at gamestop going to 190 per share. Not entirely sure what happens when the holder of all the shorts just goes belly up.
Don't quote me, but I think whatever company underwrote the short (it's basically a loan) would be able to sue/seize assets like any other creditor in this type of situation. But realistically, the government will probably bail them out with our money.
At what point can the shorts be covered then? When the WSB people decide to cash out, then their extremely valuable shares are bought up by the hedge funds, and the price should plummet accordingly right? What if WSB doesn't sell and just holds on for sentimental value?
correct, when WSB starts selling to make their money, prices should start to go down. Depends on how many shares they put on the market. Also fundamentally, the business can still go bankrupt, which the hedge thought was going to happen which is why it was shorted so heavily anyways. But that's longer term and the hedgefund that has a major short position was expected to fail at gamestop going to 190 per share. Not entirely sure what happens when the holder of all the shorts just goes belly up.
Don't quote me, but I think whatever company underwrote the short (it's basically a loan) would be able to sue/seize assets like any other creditor in this type of situation. But realistically, the government will probably bail them out with our money.
Like The Big Short? but instead of the money going to the elite its going back to the people? Or am I wrong?