GAMESTOP CORPORATION stock forum
GME July 31 and Aug 6 both closed unchanged at 0.00%. Based on GME's 29% volatility, single-day odds ~1%. For two in six days, ~1 in 10,000. Pattern suggests algorithmic manipulation. 🎯 🎯
GME just put the 10 billion in cash into tesla
GME I just don't like the stockbut MOON SOON MOON WEN?
GME Ryan destroyed the stock with convertible bonds
GME I just like the stock
GME "XRT...just hit 1,305% short...blah blah blah". it's a nothing burger, and here's why.First of all, did you know that institutional investors can essentially create or dissolve ETF shares by simply providing or acquiring the necessary underlying shares? if the ETF is cheaper than the sum of its component stocks, the ETF is bought long and the particular overvalued underlying shares can be shorted. however, if the sum of its components is cheaper than the ETF, the ETF is shorted instead. the institutions keep the value difference. it's an arbitrage play. then, when the imbalance is gone, they simply dissolve the ETF shares sold short by supplying the requisite amount of shares of the component stocks that make it up, in the proper ratios.
Why does this matter? because it essentially means XRT cannot be short squeezed. if the ETF gets bid up when they are short, they just provide the underlying stocks that make it up that are collectively cheaper and dissolve the shares they are short. they don't need any shares of XRT to be available. they buy the shares of the component stocks when they are relatively cheap and use them for this process, essentially buying low and "selling" high.
on any given day, some of the stocks that make up the holdings of XRT will be trading at a relative discount to their % of the holdings of XRT and some will sell at a premium to their representation there. by buying the ones that are "undervalued" while they are, they can provide them when XRT is overvalued and pocket the value difference.
another important point here that is adjacent to this idea - the 24ish million XRT shares shorted right now is not even extraordinarily high. the 18 month average number of shares short (reported every 2 weeks) is a little over 20 million shares.
also, and most importantly to anyone long this stock, does this level of shorting of XRT matter for GME's stock price? hopefully, you've already figured out the answer to that is basically no. GME makes up around 1% of the holdings of XRT. even if there could be a squeeze, which there can't really be, GME would only benefit from about 1% of the move, as that is its fraction of its composition of XRT. with 24m shares of XRT short, that represents about 830k shares of GME. even on a super low volume day like yesterday, that is about 20% of one day’s volume in GME (0.2 days to cover, basically).
finally, in the last 18 months, there have been 6 times when the XRT days to cover ratio has been as high as it is right now (based on most recent published data). in 5 of those 6 situations, GME was LOWER 1 month later. the average 30 day return from each of those 6 (including the one up month) was -4.58%. so while it SOUNDS good that XRT is highly shorted, it's a perfectly normal situation that over the long haul, offers no significant relevance (not positive anyway) to the near term future price action of GME.
"XRT...just hit 1,305% short.,," is ironically exactly what it was stated to be by your local hype man - "nothing to see here".
like most of the rest of that sort of post "hedgies are fvcked", "this is ITTTT", etc, it sounds good, but it's almost all hype and almost no substance, and what substance there is usually is misrepresented. if you're new to this and you actually want to make money on the stock, you'll do well to ignore the hype.
GME Are we there yet?GME XRT, the main ETF which is used to short GameStop, just hit 1,305% shares short. ZERO shares available to borrow. Absolutely nothing to see here, folks.