It's never sunny in Seattle, who are they kidding? And think of the bills for Windex to clean off sap, leaves, and bird crap from the windows.
Warren Buffet, I have read, owns a LOT of BNSF railroad which would be used to transport the oil instead of the pipeline; by some accounts, to the tune of $10 billion/year in revenue.
I'm old enough to remember when Ronald Reagan got in trouble for his now-legendary "Mr. Gorbachev, tear down this wall" speech, because according to all the "best" people, it would 'Anger' Russia.
I think the powers-that-be tried to use the Soviet Union to destroy the US; that failed because Russia was an economic basket case.
So they learned their lessons, and with the other Communist power, first they gave them nuclear capability (Clinton letting them have ICBM MIRV guidance systems), then they hollowed out the US economy in favor of Red China.
Now that they feel secure, they are using the old chant "Don't make them angry" -- but about China this time, not Russia.
China does not have the logistics yet to invade CONUS; and that's not their style anyway.
"A million deaths is just a statistic" - Josef Stalin
Disclaimer: I've been reading C.S. Lewis for 40 years or more and don't remember seeing this in any of his books.
Perhaps it was a transcription of a speech or radio address, or an essay not collected into his regular books?
Hey Ted,
"Sod OFF, Swampy."
You'd think someone who barely beat out Beta O'Dork, would be interested in uncovering election shenanigans, eh?
"Sod Off, Swampy."
140% of available shares short means naked short selling by definition, which is illegal.
Troll blocked.
Naked shorting, which is what Melvin Capital did, is breaking the law.
It's not about hedge fund vs. hedge fund at this point. It's about the ability of those ultimately on the hook for the debts incurred, to have the liquidity to pay up. The potential liability of a short is infinte; it's not a figure of speech. The issue is, with float of 49 million shares, with about 70 million shares outstanding, and # of shares short==226% of float, that's about 120 million shares short. Let's pretend the average price of shares short was $30. That means the amount owed is 10x the nominal value of the shares, 10x10*120 million. That's 12 billion. Nobody has that much sitting in their desk drawer; they have to first sell other equities (driving their price down), or go after the liquidity of the market market, and behind them, the banks,
And the liquidity is needed to backstop other trades.'
Fun times.
Now do the cost to ship the oil by rail; the carbon footprint of the trucks and diesel locomotives; the environmental cost of each train derailment / truck wreck.
There's a LONG article on Zero Hedge that walks through the minutae of it, including who owns the shares, who is borrowing shares, and all that. You still can't lend out a share twice, no matter who owns them. And since the short contracts exceeded the number of shares,, then for our purposes, it doesn't matter whether retail investors or other hedge funds own them.
Secondly, you can't just say "I'll close my short position by giving you $300". To close a short, you have to buy back the shares; and if people decline to sell at $300, you have to offer more until one of the owners relents.
I don't care whether you're a small time investor, or what you feel about North Korea, nor Reddit; none of those made any difference to me in the first place.
Here's the Zero Hedge article; the real risk, as they say, is systemic lack of liquidity. https://www.zerohedge.com/markets/its-not-just-robinhood-reddit-rebellion-has-clogged-entire-financial-systems-plumbing
But the motivation of the bit players is to get even with some of the big boys who benefit from a rigged game to the point that they are allowed to break the rules and the laws; analogous to one Kevin Clinesmith who falsified the letter from the CIA to the FBI about Carter Page and all, and got off with 6-months probation, a $100 fine, and 400 hours of community service, while the DOJ is looking for 10 years in prison for a guy who gasp made a meme for the 2016 (not even 2020) election.
(Think of the, what was it called again. LTCM and their Nobel-Prize Black-Scholes option pricing. Reality has a nasty way of intruding upon mere models, with a hat tip along the way to Nobel Physicist Richard Feynman..."if it doesn't agree with experiment, it's wrong becomes "if it doesn't agree with the market, yo're bankrupt")
Points 1 and 6 are the giveaways.
The problem is that more shares were sold short, than were actually physically available. That's called naked shorting; and not only is it illegal, but it means that if every last person who owned a share sold it, there would still be short options which could not be closed. Since those shorts were made weeks ago when the price per share was << $50/share, the loss per share is (call it) maybe 100x the nominal price of the shares when the contract was made.
This means the Melvin Capital does not have the money to close their options. Normally a broker will force-sell a client's other positions to raise money to maintain the required funds for a margin trade. If they didn't have sufficient collateral, then Melvin would have to do one or more of the following: a) double down on further shorts hoping to spook retail investors into selling, driving the price down. This happened to a limited extent after hours on Thursday, but failed (obviously) by close of day Friday, when the closing price was $325/share. b) Shout for somebody to halt trading to stem the losses and buy time (many apps "magically" put all kinds of restrictions on buying GME and a number of other shorts, on Friday). c) Cheat. Have the market makers force-sell, not Melvin Capital's other holdings, but the small retail investors' shares of GME. This happened on Friday. Robinhood will be sued / arbitrated out of existince over this; it wouldn't surprise me to see a number of the Executives go to Federal Prison (wire fraud / racketeering related issues).
I you buy a share, cash, there's not further risk on that purchase than the loss of the investment you already made, for which RH already HAS the money.
Retail investors were being forced to sell without their knowledge and against their will, at the low price of the day, in order to save the hedge fund.
You're a liar and a troll. Sod off, swampy.
Humor writer Dave Barry of the Miami Herald newspaper had this gem:
"Let me stress right now out front that I was guilty as sin. I was driving in downtown Miami, which in itself shows very poor judgment because most Miami motorists graduated with honors from the Moammar Gadhafi School of Third World-Style Driving (motto: "Death Before Yielding"). I probably should never have been there anyway, and it served me right when the two alert police officers fired up their siren, pulled me over, and pointed out that my car's registration had expired. I had not realized this, and as you can imagine I felt like quite the renegade outlaw as one of the officers painstakingly wrote out my ticket, standing well to the side of the road so as to avoid getting hit by the steady stream of passing unlicensed and uninsured motorists driving their stolen cars with their left hands so that their right hands would be free to keep their pit bulls from spilling their cocaine all over their machine guns. Not that I am bitter."
Nice armpit hair, I guess.
You can buy a stock you don't own yet, and hope the price goes up, so you make money.
You can sell a stock you already own, hoping the price goes DOWN, so you don't lose any money.
When you buy a stock, your risk is limited: you can only lose as much as you paid for the stock, they can't come after you for anything else.
But if you have a brokerage account and they give you certain permissions (you have to have enough money and have a clue what you're doing...)
You can short a stock.
That means, you BORROW some shares from the broker. You SELL the borrowed shares. You are hoping the stock prices goes DOWN.
When the stock price goes down, you buy the stock back at the lower price, and give those back to your brokerage. You get to keep the difference in price.
The risk in a short is, NOT just the amount the stock cost when you shorted it. What if the stock goes up? What if the stock was at $1 / share. So you borrowed and sold 2000 shares, for $2000. Great, when the stock goes to 50 cents, you buy it for $1000 (2000 shares times half-a-buck-per-share), and give the shares back, and you've made $1000.
Clear so far?
Now, what's the risk in a short? Let's say you sold 2000 borrowed shares for $1 apiece. Now let's say that company announces they've discovered the cure for liberalism. Their stock goes to $1000 / share !! Now you have to come up with, $2, 000, 000 -- a cool two million -- to buy your 2,000 shares back.
In theory there is no limit to what you might owe, by shorting a stock.
Hang on, because it gets worse.
Now there are two kinds of shorts -- not joking, despite the pun -- regular and naked. In a regular short, your broker actually has the shares to borrow. In a naked short, they've sold more shares than actually EXIST.
So when it comes time to buy them back -- it's like all 3 of the Three Stooges trying to go out the same door at the same time. EVERYBODY wants the stock. But there isn't enough to go around. So the price goes UP. That makes all the people with shorts on the stock, go even FURTHER into debt. And so on.
(There's a rule that you can't buy back your shares in a short until the price temporarily drops a bit. So what does that rule do, if it just keeps going UP?)
But there's one more nasty ingredient.
There are organizations called "hedge funds" -- for rich people (net worth usually in the millions at least, or at least (say) $250,000 yr in income, sometimes more than that.) They are called "hedge funds" because they provide a hedge, a shelter, against risk and uncertainty.
Sometimes what the hedge funds do -- and this is kinda near the border of what is legal -- is, they see a stock of a weak company. And they informally say, "We iz ALL gonna short that stock at once, and drive the stock down, and that'll bankrupt the company but make us rich, so YAY US!"
Some hedge funds tried to do this to GameStop. The rationale on the surface, was, hey, retail store + COVID == business sucks. But GameStop had two things.
Some e-commerce Fanbois who are gamers / weaponized autists, who know how to use every chink in the rules to win. So when the hedge funds said, "Let's short GameStop" the autists said, F this S, we're gonna buy and drive the price UP.
And the hedge funds (who were doing naked short selling) got caught with their pants down, bigtime. If you owe too much on a short, your brokerage fund, or bank or whatever, can FORCE-sell other stuff you own, to make sure you're good for the money on the short. That happened to the hedge funds here: $2.5 BILLION in losses so far.
So now they're squawking to the FTC and lawyers and Congress and everybody, "Waah! Those nasty redditors aren't letting us bend the rules!"
Hilarity ensues.
ICWUDT
Irish famine?
That's what drove the price down to the 130s. It's around double that right now.
Parent's pension fund would not be invested in Melvin Capital.
Total losses of hedge funds through yesterday on GME == 14 billion.
Total value of NASDAQ=50 TRILLION.
1/30th of 1%.
And NASDAQ is dwarfed by bond trading and currency trading.
Sod off lying troll.
Game stop dropped from 500 overnight to bouncing between 300 and 312 the last 10 min or so.
See the wire running up his shirt under the jacket?
Literal cut-and-paste of a Q drop. They are square brackets and are part of the original post from Q.
Not gonna lie, I always thought MAGA Mindset was just riding Trump's coattails while looking out just for your own fame & fortune, which is why I never bought it or bothered reading it.