If you are wondering what this whole #wallstreetbets vs #gme (gamestop) is about? Wonder no longer, a brief explanation

From a low of $10 the share value has hit $147 as of yesterday. All in a span of a few months. This has had a catastrophic effect on hedge funds that are short

2/n shorting is selling stock borrowed from someone else & then buying it back to return it. You make money by buying it back for less than you sold it for. While you borrow the stock, you pay interest. You also have to keep a margin account with money in it for the interest

3/n for example, lets say day before yesterday when stocks of #SinghuBorderinc farmers, trading at an all time high you figured out that in 48 hours tandav will begin on them and their stocks will collapse.

Step 1 - you borrow shares from a broker, your only charge is interest

4/n step 2- sell these shares on the market for the going rate of Rs 1,000.

Step 3- wait for the tandav to begin and prices to collapse today when the price reaches Rs 100

Step 4- buy back at Rs 100.

Step 5- 900 rubbees profit / share.

The key thing to remember here

5/n is that you don't own these shares, so you don't have the liberty of waiting forever. The brokers can call in their shares and you have to return it in no matter what it is selling at.

The bubble pops as soon as the shorts come due and you can't make money

6/n on the fall because everyone assumes it is coming. The hedge fund# shorted the stock when it was $10 and the most they could possibly make is $10/share a share if GameStop went bankrupt and their share price went to $0.

7/n They didn't have to pay much interest and they didn't need a lot in their margin accounts. Now the stock is 20 times higher or something and they have to pay a lot more in interest to keep on borrowing it.

8/n They also have underfunded margin accounts and this is where a Margin Call comes in. U have to keep around 125% of the price of the stock in there. Here the hedge funds purchased at $10 & the margin funds would be $12.50. The fuck up?

9/n Share is pushing $343 (sorry not $140 as I mentioned earlier). This means $425 / share * #of shares. This can put you seriously in the red if you are a small billionaire hedge fund.

Now we come to the double and triple fuck ups.

The brokers are wanting to sell and cash out

10/n so they are calling in their shares. The hedge funds which sold at $10, now have to buy it back at $340 + interest.

In the event of a margin call, you must either fund the margin account or the broker will liquidate your other positions to zero your account.

11/n This is where the short sellers have no choice and their shorts come "Due". There is no actual due date and the broker would be happy for you to just pay them interest out the nose well in excess of the theoretical $10 you could have made, but they also want their

12/n stock back and if you can't fund your margin account they will dump you and sell your stuff.

Yes, through rich people magic, the actual existence of the stock you borrowed and sold may be iffy. You're still going to have to buy a stock back and return it and pay

13/n interest on the stock you borrowed, even if more stocks got borrowed than actually existed. The most important thing is that there were so many shorts that there weren't even enough stocks being traded to cover them. It was such a sure thing that the price would go down.

14/n All those institutions aren't just desperate to cut their losses, they actually HAVE to come up with stocks and their aren't enough for sale. That's why this is still working even with people selling to secure profits.

15/n usually these big vultures want retail investors (the mom and pop investor) to fail. In this case a bunch of grognards on a reddit forum called wallstreet bets ganged up against these parasitical hedge funds and pushed up the price.

This has huge real world consequences

16/n take the case of Melvin Capital. A $12bn hedge fund. It had massively shorted #gme (you know now what it means), and because prices have soared to $343, Melvin capital has begged other hedge funds to invest money in it to ride out this tide. As of this point $2.75bn has

17/n been pumped in. When you are short and shares rise you have two options. Stay invested but keep pumping money into your margin account in the hopes that the prices will again drop.

18/n Or you buy back shares and give it back to your broker to cut your losses (assuming prices will rise even more)

For decades these vultures in the form of hedge funds and shorters have made $100's of billions from investors like ek you and me. Nwo though a bunch of

19/n dude bro investors from reddit have taken a few of them to the cleaners.

So what does the 1% do? Go to the "yeh bhik gayi hai gobermint".

Trading will be halted. The forum on reddit is banned already. Maybe even subpoenas and arrests are now on the cards.

20/n the hedge funds will eventually right themselves and go back to ripping off mom and pop investors.

If you are in the US and want to get rich quick, invest in AMC, Nokia, Blackberry.

These are few more shorted stocks rising exponentially.

The end