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  #121  
Old 07.02.2021, 15:00
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Re: Gamestop/Robinhood

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A really big short order will cause the share price to fall. This indirectly can harm the company since the reduced value can adversely affect their ability to get credit at favourable rates. This decreases cashflow which can kill a company.

So generally, shorting is fine, but just like buying huge amounts of stock can benefit a company, huge shorting harms it.

With a company like GameStop, if it's just about holding on, a big short can finish it off.
The short position has to be closed, so it's a short term positionwith an unlimited loss potential, rather than just 100% limit of losses if you buy & hold the shares.

Their credit risk is not based on share price, however if there are significant short issues, the company could well be going bust. A privately owned company like Rolex (a Charity), has no market price, yet could get credit without issue.
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  #122  
Old 08.02.2021, 00:14
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Re: Gamestop/Robinhood

I am not sure you understand corporate governance. Namely, the BOD of a company are on the hook should a share price fall dramatically - which could cause a takeover and/or liquidation. As NAT mentioned, a decline in share price also increases interest rates/credit for the entity to pursue.

Let me give you a personal example; back in the day my OH worked for ABN/AMRO which was a solid bank in the early/mid 2000s. Except, they had very little exposure to the CDO market (until ironically in 2007) whereas other banks were making a killing. And so, ABN's share price and returns were not as promising as their competitors.

In comes the Children's Investment Fund, a prominent hedge fund back in the day, to call for the breakup/sale of the bank because of their "relative" low level of returns:

https://www.marketwatch.com/story/ch...up-of-abn-amro

And so, ABN/AMRO gets put into play. It devolves into a "pissing" contest (for lack of better terms) between RBS and Barclays. At the time, "Sir" Fred Goodwin (his title has been since removed) overpaid for the asset. I think they paid Euro 38 per share (a ridiculous price - but Goodwin was all about WINNING!!)

In the end, as we know, RBS needed a bailout due to the CDO crisis and liquidity issues. But it was the hedge fund which put the bank into play initially.

And the hedge fund made a fortune and then some - ironically, for the wrong reasons. ABN's share price reflected their conservative risk profile but that conservatism didn't help their share price back in the hey day/Wild West of the securitization/CDO market.

Last edited by terrifisch; 08.02.2021 at 00:57. Reason: added info
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  #123  
Old 08.02.2021, 09:31
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Re: Gamestop/Robinhood

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I am not sure you understand corporate governance. Namely, the BOD of a company are on the hook should a share price fall dramatically - which could cause a takeover and/or liquidation. As NAT mentioned, a decline in share price also increases interest rates/credit for the entity to pursue.

Let me give you a personal example; back in the day my OH worked for ABN/AMRO which was a solid bank in the early/mid 2000s. Except, they had very little exposure to the CDO market (until ironically in 2007) whereas other banks were making a killing. And so, ABN's share price and returns were not as promising as their competitors.

In comes the Children's Investment Fund, a prominent hedge fund back in the day, to call for the breakup/sale of the bank because of their "relative" low level of returns:

https://www.marketwatch.com/story/ch...up-of-abn-amro

And so, ABN/AMRO gets put into play. It devolves into a "pissing" contest (for lack of better terms) between RBS and Barclays. At the time, "Sir" Fred Goodwin (his title has been since removed) overpaid for the asset. I think they paid Euro 38 per share (a ridiculous price - but Goodwin was all about WINNING!!)

In the end, as we know, RBS needed a bailout due to the CDO crisis and liquidity issues. But it was the hedge fund which put the bank into play initially.

And the hedge fund made a fortune and then some - ironically, for the wrong reasons. ABN's share price reflected their conservative risk profile but that conservatism didn't help their share price back in the hey day/Wild West of the securitization/CDO market.
Babks are rarely 'solid' due to gearing & derivatives they & more importantly their Auditors don't fully appreciate. Gearing is great till it goes wrong as happens so specracuamlly in 2008. Long-Term Capital Management was very profitable till it went bust, people never learn.
Banks levels of returns are incredibly low, hence the requirement for more & more gearing.
As the adage goes, only invest in a business that can be run by an idiot as one day it will, as you clearly pointed out.
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  #124  
Old 08.02.2021, 14:09
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Re: Gamestop/Robinhood

Putting a squeeze on Wall St is hardly new, from 1923
https://www.barrons.com/articles/the...?siteid=yhoof2
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  #125  
Old 08.02.2021, 14:15
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Re: Gamestop/Robinhood

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A Swiss has made $2 million on Gamestop and bought a house in Zurich

So much for the wall street bets readers not knowing what they're doing!!

https://www.blick.ch/wirtschaft/zuer...d16332015.html
The tax office may bring very bad news, soon. If those gains make him qualify as professional trader it will count as income and increase the tax bill accordingly. And to make matters even worse he'll have to pay 10.6% AHV (mandatory pension), too.

He seems to be in Kanton Zürich, that makes a total bill in the order of 35-40% likely, if it's considered income.
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  #126  
Old 09.02.2021, 23:39
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Re: Gamestop/Robinhood

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The tax office may bring very bad news, soon. If those gains make him qualify as professional trader it will count as income and increase the tax bill accordingly. And to make matters even worse he'll have to pay 10.6% AHV (mandatory pension), too.

He seems to be in Kanton Zürich, that makes a total bill in the order of 35-40% likely, if it's considered income.
Let's hope the house he bought cost no more than the net after tax and AHV etc.
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  #127  
Old 09.02.2021, 23:46
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Re: Gamestop/Robinhood

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The tax office may bring very bad news, soon. If those gains make him qualify as professional trader it will count as income and increase the tax bill accordingly. And to make matters even worse he'll have to pay 10.6% AHV (mandatory pension), too.

He seems to be in Kanton Zürich, that makes a total bill in the order of 35-40% likely, if it's considered income.
On the other hand if the tax office forces him to take a mortgage on his house, that will in the long term save him quite a lot of taxes and so in the long run it will work out pretty much as the same.
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  #128  
Old 10.02.2021, 23:44
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Re: Gamestop/Robinhood

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On the other hand if the tax office forces him to take a mortgage on his house, that will in the long term save him quite a lot of taxes and so in the long run it will work out pretty much as the same.
I'd rather keep the 35-40%.
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  #129  
Old 24.02.2021, 23:03
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Re: Gamestop/Robinhood

They're at it again.

GME shot up by 104% today, its trading was halted into the close due to its volatility.
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  #130  
Old 25.02.2021, 15:21
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Re: Gamestop/Robinhood

GME +195% in Frankfurt, let's see what's happens when NYSE opens in an hour from now
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  #131  
Old 08.03.2021, 20:45
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Re: Gamestop/Robinhood

Currently up 44% for the day @ $183, I cant believe this shit, HickvonF you have been investing the wrong stocks
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  #132  
Old 08.03.2021, 22:31
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Re: Gamestop/Robinhood

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Currently up 44% for the day @ $183, I cant believe this shit, HickvonF you have been investing the wrong stocks
Even I'm not that silly
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  #133  
Old 08.03.2021, 23:30
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Re: Gamestop/Robinhood

They skinned the short-sellers by $6b so far. Well done boyz

https://finance.yahoo.com/news/games...175436958.html
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  #134  
Old 09.03.2021, 00:15
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Re: Gamestop/Robinhood

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The tax office may bring very bad news, soon. If those gains make him qualify as professional trader it will count as income and increase the tax bill accordingly. And to make matters even worse he'll have to pay 10.6% AHV (mandatory pension), too.

He seems to be in Kanton Zürich, that makes a total bill in the order of 35-40% likely, if it's considered income.
If he moves to Zug or Schwyz before the end of the year, does this solve his "problem" (I'd love to have such a problem in my life)?
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  #135  
Old 07.04.2021, 23:12
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Re: Gamestop/Robinhood

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GME issued a shelf offer for up to $100mln on Dec 08, basically announcing to issue 6.1mln new shares based on the stock price at that time. Not bad. That should have brought the total outstanding shares to 75mln or so.
Looks like this shelf offering didn't get acted upon, presumably (assumed by market commentators) due to regulatory restrictions. Assumed because the update has been accompanied by preliminary info on how business is doing so far this year.

Anyway, the shelf offering has been increased a couple days ago to $1 bln and not more than 3.5mln shares. At today's prices that filing amounts top some $650 million. Everybody seems to be wondering why they didn't file for far more than that.
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  #136  
Old 29.07.2021, 23:10
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Re: Gamestop/Robinhood

Melvin Capital and probably others have shifted their positions to 2 Brazilian funds, some 1M put options totalling over 200% of the total issue GME shares

I guess these 2 Brazilian hedge funds will take the fall and there will be nothing to cover their losses.

As criminal as it gets
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  #137  
Old 05.11.2021, 19:24
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Re: Gamestop/Robinhood

Personally, it was nice to see the masses be able to communicate with one another and do something together to make themselves a little money.
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