Thread to explain the mkt

Q: Why is GameStop still trading at $350 when everyone that understands "fundamentals" think this is a $5 dollar stocks?

A: The only "fundamental" that matters, 62M shs short with 50M share float. It is physical impossible to cover this short.

(1/6)

This squeeze does not stop until this short is covered

I would GUESS that is when it gets below 25M shares, or 50% of float, and probably much less than that.

Viewed this way, what happened this week it is not that irrational.

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Q2: Why is this driving the entire stock market down?

A2: Because the "masters of the universe" are not surrendering their shorts/covering.

So the fear is these shorts will rise so much, leading to losses and inability to meet margin calls. Brokers at risk

(3/6)

Note this is a fear, the financial system is not impaired now.

But it was reckless and irresponsible for the "masters"/brokers/prime brokers/clearinghouses/regulators to allow this to happen. They are now paying the price.

https://www.bloomberg.com/news/articles/2021-01-29/clearing-firms-prevent-cascading-failures-q-a-with-larry-tabb

(4/6)

What's Next?

Will the "masters" cover shorts or think they have a giant pay-day ahead when these short stocks collapse? If wrong, margin calls put the financial industry at risk.

Viewed this way, we can see why the S&P is down 2% today and near the lows of 2021.

(5/6)

The "retail revolters" did not get lucky. They saw this vulnerability was allowed to happen and took advantage of it.

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