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It gets even wilder [merged with GME/wsb/etc]

Honest reporting on shorter-term trading activity and ideas
Adamski
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Re: It gets even wilder [merged with GME/wsb/etc]

#381681

Postby Adamski » January 28th, 2021, 7:56 pm

On eToro they stopped buying the hot stocks, same on other platforms. The retail investors can only close deals. No wonder the prices of GME Blackberry are going down. The powers that be have pulled the plug.

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Re: It gets even wilder [merged with GME/wsb/etc]

#381685

Postby GoSeigen » January 28th, 2021, 7:59 pm

joey wrote:
Absolutely spot on. I’ve been following the story closely as I have a couple of friends involved; one a professional trader who follows these sorts of things, and one who is part of the herd who moved the price due to being on Discord & WSB. There is a lot of anger in the herd about the nonsense from the SEC on this (and the trading platforms who have caved). It really does prove their point IMO. Corruption all the way through to the heart of the system. Like we didn’t know, of course, but never the less...


Doesn't prove any point at all. Last week no-one had even heard of these people. This week they think they've made a huge point about corruption in the "system". Boy these people love their "systems" and "powers that be"! Anyway, I thought Trump had drained that swamp already. If not WTF was he doing for four years????

GS

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Re: It gets even wilder [merged with GME/wsb/etc]

#381694

Postby tikunetih » January 28th, 2021, 8:29 pm

I'm pleased to see the SEC step in and wonder what took them so long...

WSB members have, perhaps unwittingly (I'm being generous here...), been participating in manipulation of security prices, which is prohibited under the Securities and Exchange Act of 1934.

Dumbest of all, they've been doing this openly, in the public domain, with the record of their criminal behaviour plastered all over Reddit.


Clap 'em in irons.

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Re: It gets even wilder [merged with GME/wsb/etc]

#381711

Postby tikunetih » January 28th, 2021, 9:18 pm

tikunetih wrote:I'm pleased to see the SEC step in and wonder what took them so long...

WSB members have, perhaps unwittingly (I'm being generous here...), been participating in manipulation of security prices, which is prohibited under the Securities and Exchange Act of 1934.

Dumbest of all, they've been doing this openly, in the public domain, with the record of their criminal behaviour plastered all over Reddit.


Clap 'em in irons.


https://www.nyse.com/publicdocs/nyse/re ... /sea34.pdf

Section 9(a)(2)

    PROHIBITION AGAINST MANIPULATION OF SECURITY PRICES

    SEC. 9. (a) It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange—

    (2) To effect, alone or with 1 or more other persons, a series of transactions in any security other than a government security, any security not so registered, or in connection with any security based swap or security-based swap agreement with respect to such security creating actual or apparent active trading in such security, or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.

A publicly promoted scheme specifically and solely intended to raise security prices in order to induce short covering by others?

=>Bang to rights.

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Re: It gets even wilder [merged with GME/wsb/etc]

#381741

Postby dspp » January 28th, 2021, 10:33 pm

tikunetih wrote:
tikunetih wrote:I'm pleased to see the SEC step in and wonder what took them so long...

WSB members have, perhaps unwittingly (I'm being generous here...), been participating in manipulation of security prices, which is prohibited under the Securities and Exchange Act of 1934.

Dumbest of all, they've been doing this openly, in the public domain, with the record of their criminal behaviour plastered all over Reddit.


Clap 'em in irons.


https://www.nyse.com/publicdocs/nyse/re ... /sea34.pdf

Section 9(a)(2)

    PROHIBITION AGAINST MANIPULATION OF SECURITY PRICES

    SEC. 9. (a) It shall be unlawful for any person, directly or indirectly, by the use of the mails or any means or instrumentality of interstate commerce, or of any facility of any national securities exchange, or for any member of a national securities exchange—

    (2) To effect, alone or with 1 or more other persons, a series of transactions in any security other than a government security, any security not so registered, or in connection with any security based swap or security-based swap agreement with respect to such security creating actual or apparent active trading in such security, or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.

A publicly promoted scheme specifically and solely intended to raise security prices in order to induce short covering by others?

=>Bang to rights.


So it is OK for shorters to publish white papers about why a stock should be valued in the market lower than it currently is, and to note (if they obey fair disclosure) that they currently have a short position in the stock, and for commentators to comment that a lot of people are going short and that this is a self-fulfilling prophecy.

But it is not OK for longs to point out why a stock should be valued higher than it is, and that the shorters must be naked as the short positions are greater than the free float, or egregiously greater than the total share issuance, and to note that a long move would cause an infinity short squeeze, and to (obey fair disclosure) and say that they currently have a long position in a stock.

And it is not hypocritical for the regulators to turn a blind eye to the hedge fund shorters for decades, yet to act immediately retail punters fight back.

No, this is not hypocritical at all, no sirree...

regards, dspp

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Re: It gets even wilder [merged with GME/wsb/etc]

#381760

Postby tikunetih » January 28th, 2021, 11:14 pm

dspp wrote:So it is OK for shorters to publish white papers about why a stock should be valued in the market lower than it currently is, and to note (if they obey fair disclosure) that they currently have a short position in the stock, and for commentators to comment that a lot of people are going short and that this is a self-fulfilling prophecy.

But it is not OK for longs to point out why a stock should be valued higher than it is, and that the shorters must be naked as the short positions are greater than the free float, or egregiously greater than the total share issuance, and to note that a long move would cause an infinity short squeeze, and to (obey fair disclosure) and say that they currently have a long position in a stock.

And it is not hypocritical for the regulators to turn a blind eye to the hedge fund shorters for decades, yet to act immediately retail punters fight back.



We shall have to see how it all plays out of course, but I don't recognise what you're describing as being an accurate description of the reality. From my perspective, yours comes across strong on feeling but not fully fact-based. For example, your comment about "the shorters must be naked" is not correct. NB you're more than capable of reading up on this without requiring hand holding from me; that's usually more productive than BB back-and-forth.

My "clap 'em in irons" comments was clearly black humour, but prima facie, the WSBers behaviour look an obvious breach of the SEA. Politically, it's all a bit tricky looking for someone's "first day in the office", but perhaps the SEC should have acted sooner before it took on the character of a budding social movement, magnifying the unwinding & fallout.

Anyway, *popcorn*.

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Re: It gets even wilder [merged with GME/wsb/etc]

#381791

Postby GoSeigen » January 29th, 2021, 8:13 am

joey wrote:
GoSeigen wrote:
joey wrote:
Absolutely spot on. I’ve been following the story closely as I have a couple of friends involved; one a professional trader who follows these sorts of things, and one who is part of the herd who moved the price due to being on Discord & WSB. There is a lot of anger in the herd about the nonsense from the SEC on this (and the trading platforms who have caved). It really does prove their point IMO. Corruption all the way through to the heart of the system. Like we didn’t know, of course, but never the less...


Doesn't prove any point at all. Last week no-one had even heard of these people. This week they think they've made a huge point about corruption in the "system". Boy these people love their "systems" and "powers that be"! Anyway, I thought Trump had drained that swamp already. If not WTF was he doing for four years????

GS


It very much DOES prove the point. It is one rule for wall street and another rule for others.


Basic logical fallacy. Two wrongs don't make a right. They're a bunch of idiots and when they lose their shirt they're going to be the ones complaining. Meanwhile some will be sitting on a beach and see nothing wrong with that.

GS

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Re: It gets even wilder [merged with GME/wsb/etc]

#381805

Postby bungeejumper » January 29th, 2021, 9:27 am

Haha, Gamestop. The most wonderfully appropriate name for a ponzi scheme since Madoff. :lol:

BJ

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Re: It gets even wilder [merged with GME/wsb/etc]

#381824

Postby scrumpyjack » January 29th, 2021, 10:27 am

and now Bitcoin has a canine rival, DogEcoin :D

https://www.telegraph.co.uk/technology/ ... e-updates/

It started as a joke, then rose 800% and it worth 6.69bn

It is getting wilder!

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Re: It gets even wilder [merged with GME/wsb/etc]

#381827

Postby dspp » January 29th, 2021, 10:32 am

tikunetih wrote:
dspp wrote:So it is OK for shorters to publish white papers about why a stock should be valued in the market lower than it currently is, and to note (if they obey fair disclosure) that they currently have a short position in the stock, and for commentators to comment that a lot of people are going short and that this is a self-fulfilling prophecy.

But it is not OK for longs to point out why a stock should be valued higher than it is, and that the shorters must be naked as the short positions are greater than the free float, or egregiously greater than the total share issuance, and to note that a long move would cause an infinity short squeeze, and to (obey fair disclosure) and say that they currently have a long position in a stock.

And it is not hypocritical for the regulators to turn a blind eye to the hedge fund shorters for decades, yet to act immediately retail punters fight back.



We shall have to see how it all plays out of course, but I don't recognise what you're describing as being an accurate description of the reality. From my perspective, yours comes across strong on feeling but not fully fact-based. For example, your comment about "the shorters must be naked" is not correct. NB you're more than capable of reading up on this without requiring hand holding from me; that's usually more productive than BB back-and-forth.

My "clap 'em in irons" comments was clearly black humour, but prima facie, the WSBers behaviour look an obvious breach of the SEA. Politically, it's all a bit tricky looking for someone's "first day in the office", but perhaps the SEC should have acted sooner before it took on the character of a budding social movement, magnifying the unwinding & fallout.

Anyway, *popcorn*.


t,

Abuse of MM privileges by indulging in concerted naked shorting games has been going on a long time. It is regrettable that the SEC appears to be complicit in it by acting so fast to shut down anti-shorting actions by the longs who seek a short-squeeze to redress the balance. If the SEC is right to shut down the wsb-crowd on GME, then presumably the SEC would be right to shut down TLF, TMC, TMF and many other internet forums where people such as me discussed going long on TSLA and thereby cost the shorts about $50bn last year :)

We can all recognise hypocrisy when we see it, and that appears to be one of the earliest evolved human traits, probably fundamental to co-operative social behaviours. I can see it going on around GME in the short term, and I hope that it is sufficiently smelly that a more structural approach will be taken to try and level up the playing field over the long term for the future.

As you say, popcorn, but for the long haul as well as the short haul.

regards, dspp

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Re: It gets even wilder [merged with GME/wsb/etc]

#381866

Postby scrumpyjack » January 29th, 2021, 12:03 pm

Shorting can serve a useful purpose, apart from assisting market liquidity, in bringing to light possible accounting scandals (eg Wirecard and many others), but it seems the US market has allowed huge naked shorting, so Gamestop was 130% shorted. This gave a huge and obvious opportunity for stuffing the shorters which is what happened!

Shadenfreude at shorters being hoist on their own petard is understandable and they should have known the risks they were taking, as should the VW shorters a few years ago.

Personally I would never ever go in for shorting because it is impossible to know the risks and the potential losses are unlimited.

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Re: It gets even wilder [merged with GME/wsb/etc]

#381867

Postby anon155742 » January 29th, 2021, 12:04 pm

More people are starting to see the hypocrisy and it is causing a revolt.

The powers that be are fighting back - blocking messaging boards, shutting down Facebook groups and chat sites. Blocking retail clients from being able to buy (but letting them sell!) these stocks was clear cut corruption.

It has resulted in the "Barbara Streisand" effect and people are looking for ways to attack the system.

We might see some big dislocations come close time in the US. :mrgreen:

Something like this could be the black swan event that starts a 1930's style down turn. For the stock market to be at near all time highs while many of the companies that comprise it are operating at reduced output is baffling. GDP is still down significantly despite distortions by nonsense like imputed rent and QE.

If confidence in the stock market is crushed (more people moving to bonds, gold etc) then it could get messy, fast!

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Re: It gets even wilder [merged with GME/wsb/etc]

#381873

Postby dealtn » January 29th, 2021, 12:14 pm

anon155742 wrote:
If confidence in the stock market is crushed (more people moving to bonds, gold etc) then it could get messy, fast!


True, but that hurts the longs much more than the shorts, of course!

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Re: It gets even wilder [merged with GME/wsb/etc]

#381912

Postby anon155742 » January 29th, 2021, 1:46 pm

dealtn wrote:
anon155742 wrote:
If confidence in the stock market is crushed (more people moving to bonds, gold etc) then it could get messy, fast!


True, but that hurts the longs much more than the shorts, of course!


Yes, but it is healthy for the market. The tide will go out and we will see who is not wearing any trunks!

Hopefully it will bring down a lot of the zombie companies and over the next 5-10 years the replacements will give us a stronger economy

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Re: It gets even wilder [merged with GME/wsb/etc]

#381925

Postby tikunetih » January 29th, 2021, 2:08 pm

dspp wrote:Abuse of MM privileges by indulging in concerted naked shorting games has been going on a long time. It is regrettable that the SEC appears to be complicit in it by acting so fast to shut down anti-shorting actions by the longs who seek a short-squeeze to redress the balance. If the SEC is right to shut down the wsb-crowd on GME, then presumably the SEC would be right to shut down TLF, TMC, TMF and many other internet forums where people such as me discussed going long on TSLA and thereby cost the shorts about $50bn last year :)


I've seen a few of your posts on Tesla where you've meticulously laid out your fundamental-based reasoning for your position. That has zero in common with a gang of speculators whose sole intention is to manipulate price such that other participants are forced to buy. The latter is illegal per SEA. No doubt many don't realise it - including virtually everyone on WSB - but that's the case.

Furthermore, there's no "Two Wrongs Make a Right Act 2020" that permits blatant securities manipulation in the belief that some other party might themselves have done something dodgy previously. That way lies anarchy. Any illegalities should be called out.

For some strange reason, "shorting" as a subject seems to raise anger in some people and addle their minds. Shorting is a valuable market function, improving liquidity and aiding price discovery; eg. if a company issues a poor trading statement, shorts covering might be some of the first buyers to step in, enabling longs to exit their positions - you don't hear longs complaining then that they've dealt at a higher price than they would've done in the absence of such short covering demand. Participants providing valuable liquidity when no one else wishes to are rightly rewarded for that service.

Capital markets - and capitalism itself - rely on effective price discovery in order to effeciently allocate capital. If you have crappy companies with sky-high valuations, that enables them to issue shares and raise capital in order to throw at unproductive business models. The more that you misallocate capital in this manner the more that the productivity of your economy becomes impaired. When we as investors are deciding where to place our hard earned, wisely allocating capital is the key thing of value we can be rewarded for. Our capitalist systems relies upon effective allocation, so defending this is critically important.

It's not the purpose of public capital markets to act as a giant multiplayer online battle arena for coordinated gangs of speculators to fight it out attempting to force the other side to "submit". There are laws against this type of behaviour, even if the WSB crew are currently unaware of them. In addition to upending the capital allocation function of markets, this type of activity is absolutely guaranteed to deliver some dreadful to losses to some of the less informed punters drawn in. Hence rules and laws.


Another thing I find odd is the ire directed at hedgies, as if they're somehow preying on the poor. A glance at aggregate hedge fund returns over the past decade vs. stock market returns - particularly when placed in context with their fees - makes it quite clear: hedgies take from the rich and give to themselves. And the rich, it seems, go along willingly. Some of the guff and ire I've read on WSB doesn't seem to have much basis in reality, or at least not the one I occupy anyway.

What about evil hedgies with their "naked shorts"? Long interest % = Short interest % + 100%, the "100 %" reflecting the free float. The moment that the first share in a company is lent out and sold short, long interest expressed as a % of float becomes >100%. Shock, "naked longs"! Do we see villagers waving pitchforks in response? Nope. Whenever a share is lent out and sold short it becomes "owned" by more than party, but it remains the case that Total long positions - Total shorts = Free float. A share lent out & sold short (and thus purchased) can be lent out again by the next holder, and so on, and if repeated sufficient times can lead to short interest > 100%. At that point, long interest ratio by the identity above will thus be >200%. All legit. "Nothing to see here", angry villagers.

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Re: It gets even wilder [merged with GME/wsb/etc]

#381978

Postby dspp » January 29th, 2021, 3:46 pm

tikunetih wrote:
dspp wrote:Abuse of MM privileges by indulging in concerted naked shorting games has been going on a long time. It is regrettable that the SEC appears to be complicit in it by acting so fast to shut down anti-shorting actions by the longs who seek a short-squeeze to redress the balance. If the SEC is right to shut down the wsb-crowd on GME, then presumably the SEC would be right to shut down TLF, TMC, TMF and many other internet forums where people such as me discussed going long on TSLA and thereby cost the shorts about $50bn last year :)


I've seen a few of your posts on Tesla where you've meticulously laid out your fundamental-based reasoning for your position. That has zero in common with a gang of speculators whose sole intention is to manipulate price such that other participants are forced to buy. The latter is illegal per SEA. No doubt many don't realise it - including virtually everyone on WSB - but that's the case.

Furthermore, there's no "Two Wrongs Make a Right Act 2020" that permits blatant securities manipulation in the belief that some other party might themselves have done something dodgy previously. That way lies anarchy. Any illegalities should be called out.

For some strange reason, "shorting" as a subject seems to raise anger in some people and addle their minds. Shorting is a valuable market function, improving liquidity and aiding price discovery; eg. if a company issues a poor trading statement, shorts covering might be some of the first buyers to step in, enabling longs to exit their positions - you don't hear longs complaining then that they've dealt at a higher price than they would've done in the absence of such short covering demand. Participants providing valuable liquidity when no one else wishes to are rightly rewarded for that service.

Capital markets - and capitalism itself - rely on effective price discovery in order to effeciently allocate capital. If you have crappy companies with sky-high valuations, that enables them to issue shares and raise capital in order to throw at unproductive business models. The more that you misallocate capital in this manner the more that the productivity of your economy becomes impaired. When we as investors are deciding where to place our hard earned, wisely allocating capital is the key thing of value we can be rewarded for. Our capitalist systems relies upon effective allocation, so defending this is critically important.

It's not the purpose of public capital markets to act as a giant multiplayer online battle arena for coordinated gangs of speculators to fight it out attempting to force the other side to "submit". There are laws against this type of behaviour, even if the WSB crew are currently unaware of them. In addition to upending the capital allocation function of markets, this type of activity is absolutely guaranteed to deliver some dreadful to losses to some of the less informed punters drawn in. Hence rules and laws.


Another thing I find odd is the ire directed at hedgies, as if they're somehow preying on the poor. A glance at aggregate hedge fund returns over the past decade vs. stock market returns - particularly when placed in context with their fees - makes it quite clear: hedgies take from the rich and give to themselves. And the rich, it seems, go along willingly. Some of the guff and ire I've read on WSB doesn't seem to have much basis in reality, or at least not the one I occupy anyway.

What about evil hedgies with their "naked shorts"? Long interest % = Short interest % + 100%, the "100 %" reflecting the free float. The moment that the first share in a company is lent out and sold short, long interest expressed as a % of float becomes >100%. Shock, "naked longs"! Do we see villagers waving pitchforks in response? Nope. Whenever a share is lent out and sold short it becomes "owned" by more than party, but it remains the case that Total long positions - Total shorts = Free float. A share lent out & sold short (and thus purchased) can be lent out again by the next holder, and so on, and if repeated sufficient times can lead to short interest > 100%. At that point, long interest ratio by the identity above will thus be >200%. All legit. "Nothing to see here", angry villagers.


t,

There has been considerable discussion on various forums re naked shorts & TSLA. Perhaps not so much here as TLF only seems to have two of us active in TSLA, but certainly in other places. And definitely it was (and still is) viewed as a collaborative endeavour by the small longs vs wave-upon-wave of FUD from the shorts that went well beyond rational anti-BEV arguments. It was quite clear that the aim of many shorters was to destroy TSLA, an objective going far beyond price discovery. And it was equally clear that the many small longs were collective in their view that this should not come to pass. So whether two wrongs should or should not make a right, it was seemingly the only way for the small longs to cohere against the forces in opposition. It's no use the SEC burying you with roses and handwringing when you are dead. Just ask Equitable Life et al what they think about regulators, this is not just a US-thing.

That naked shorting goes on is indubitable. Witness the very long period that the naked shorts took to cover & report following the TSLA split. My shares landed the same day. Yet some shorters seemed to take a week to find the shares. Very large banks, hedgies, MMs, etc. Odd eh.

I fully agree with you re the legitimate role of shorts in modern markets, indeed I made it myself several posts ago.

I partially disagree with you regarding market coordination - we can see it going on in shorting, through all sorts of signalling. So rather than get murdered it seems only reasonable that longs should protect themselves by engaging in equivalent behaviours. If nothing else it gets the maximum information into the market place as fast as possible, which ought to resolve the battles with the least collateral damage. In an ideal world we would all behave like nuns in a convent protected by ferocious but blind guardians of justice. Until that day I for one prefer to co-operate for safety.

There is a difference between longs and shorts. The long trail starts with deploying capital into the company for hopefully productive use. The short trail does not. With TSLA that was very clearly understood, many of the [edit] small longs contributed in the first raises, and were fully aware that their capital was under assault from short-funded FUD activities. That is why it rouses such sentiment. As I have pointed out before I too agree there is a valid purpose in modern markets for shorting, but equally it can have less positive effects as we can see.

Whether hedgies etc make money is irrelevant, though I have heard the days of 2&20 are long gone.

regards,
dspp

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Re: It gets even wilder [merged with GME/wsb/etc]

#381986

Postby dspp » January 29th, 2021, 3:53 pm

I just went to imgur to put together something TSLA-related, and had to laugh at these three:

https://imgur.com/gallery/TmJcrfW

https://imgur.com/gallery/V6mX14j

https://imgur.com/gallery/mri55Ql

:)

regards, dspp

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Re: It gets even wilder [merged with GME/wsb/etc]

#381989

Postby Lootman » January 29th, 2021, 4:01 pm

anon155742 wrote:The powers that be are fighting back - blocking messaging boards, shutting down Facebook groups and chat sites. Blocking retail clients from being able to buy (but letting them sell!) these stocks was clear cut corruption.

It is rather like how the casinos in Las Vegas will ask (tell) you to leave if you start winning too much money.

They do not have to be able to prove you are cheating, or even suspect that you are cheating. If you win too much you get disinvited. There are some successful gamblers who are barred from every casino.

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Re: It gets even wilder [merged with GME/wsb/etc]

#382001

Postby tikunetih » January 29th, 2021, 4:26 pm

dspp wrote:I just went to imgur to put together something TSLA-related, and had to laugh at these three


For a bit of on-topic humour, this is the best one I've seen:

https://twitter.com/Zoah_HS/status/1355074685566939137

That genuinely is her name. :D

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Re: It gets even wilder [merged with GME/wsb/etc]

#382027

Postby GoSeigen » January 29th, 2021, 5:45 pm

dspp wrote:It was quite clear that the aim of many shorters was to destroy TSLA, an objective going far beyond price discovery


Even if we accept that was the aim of somebody, please could you explain the mechanism by which selling shares destroys a company? It might destroy the share price or the holding value of some of the shareholders or result in margin calls but how in the vast majority of cases can it have any effect on the company itself?

100% genuine question. No-one has ever satisfactorily explained this to me.


GS


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