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THE GAMESTOP GAME HAS BEEN STOPPED.....THE REVERSE HOTEL CALIFORNIA 1/29/21

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Well, I managed to snatch defeat from the jaws of victory today. I'm going to call it here. 

Have a great weak end and

Good night and good luck! 

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Fact check: "True." Started accumulating various miner shares beginning ~2001. There was no GDX or GDXJ yet, so I assembled a basket of them on my own.  We bought our house from our landlady in A

Jorma I think there are two separate issues here: 1/ Issue One...getting out of the wrecked motor vehicle that are their shorts. This requires buying back stock....sooner or later. Where are

3 hours ago, Jimi said:

  If it is the only investment decision I get right, which sometimes feels the case, it will still leave my wife & me with a cushion of financial security. 

Well deserved ... 😎

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THEY HAVE TO KILL THE SHORT SQUEEZE BEAST

The long/short hedge funds need a get out of jail free card badly.

They need access to cheap stock of the most shorted names in order to unwind their short positions at an acceptable cost that does not destroy them.

Banning trading...for some...(actually banning buying by the redditors) and deplatforming Wall Street Bets is simply a temporary panacea....it is not a cure.

The cure is.......

1/ Giant secondary stock issues from the most shorted stocks.

2/ These will then be bought by the long/shorts to provide the stock for the long/shorts to cancel their shorts.

This should be the steely knife that kills the short squeeze beast  (Someone offered points for another Hotel California reference).

Of course the original mistake from the hedge funds was thinking their hedges (i.e the short leg...not really a hedge but a form of cheap leverage) would still be valid, viable, valuable and profitable in a FED print environment.

As soon as the FED went full repo in September 2019 it changed the "Frame" for the short leg of the long/short process to a very negative one.

The frame became intensely hostile to all shorting...even of stocks with fundamentally bad businesses.

Fundamentals did'nt matter any more.

Value has been crowded out by the FED.

Just liquidity and momentum matter now.

The long/short funds should really be suing the FED for $70 billion in damages.

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8 hours ago, Jimbo said:

THEY HAVE TO KILL THE SHORT SQUEEZE BEAST

The long/short hedge funds need a get out of jail free card badly.

They need access to cheap stock of the most shorted names in order to unwind their short positions at an acceptable cost that does not destroy them.

Banning trading...for some...(actually banning buying by the redditors) and deplatforming Wall Street Bets is simply a temporary panacea....it is not a cure.

The cure is.......

1/ Giant secondary stock issues from the most shorted stocks.

2/ These will then be bought by the long/shorts to provide the stock for the long/shorts to cancel their shorts.

This should be the steely knife that kills the short squeeze beast  (Someone offered points for another Hotel California reference).

Of course the original mistake from the hedge funds was thinking their hedges (i.e the short leg...not really a hedge but a form of cheap leverage) would still be valid, viable and profitable in a FED print environment.

As soon as the FED went full repo in September 2019 it changed the "Frame" for the short leg of the long/short process to a very negative one.

The frame became intensely hostile to all shorting...even of stocks with fundamentally bad businesses.

Fundamentals did'nt matter any more.

Value has been crowded out by the FED.

Just liquidity and momentum matter now.

The long/short funds should really be suing the FED for $70 billion in damages.

I thought your previous post provided a better solution for those long/short funds. That is a lot of long term credit to tide them over and fund the margin calls till it all blows over. Well that is what I thought you said and why not?  Countless companies with little prospect of ever making a dime in the foreseeable future have lines of credit in the billions.  The Fed should just whisper to the PD's ears to lend whatever it takes to the hedge funds with stable permanent lines of credit.  I'm not sure how they would handle redemptions.

That's what the Fed did with the oil and gas drillers in 09 and $XXXBn give or take later lost, nobodies the wiser nor poorer despite the disappearance of the $XXXBn's. I was positing 18 months or so ago that 'they' were going to inflate this thing no matter what and that we were in just the middle innings. I suppose it could be the bottom of the ninth. We will see. I hadn't considered the crackup of the USA being causal in the great liquidation as opposed to that being the result.  
 

 

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Jorma

I think there are two separate issues here:

1/ Issue One...getting out of the wrecked motor vehicle that are their shorts. This requires buying back stock....sooner or later. Where are they getting the stock from? It is doubtful that the Redditers have enough stock to sell (or would want to sell). A secondary offering would provide stock in volume and at an acceptable price.

2/ Issue two: Replacing the motor vehicle...replacing the previously cheap leverage provided by the short leg...which can be handled by bank loans.

 

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On 1/30/2021 at 6:13 AM, Jimbo said:

Jorma

I think there are two separate issues here:

1/ Issue One...getting out of the wrecked motor vehicle that are their shorts. This requires buying back stock....sooner or later. Where are they getting the stock from? It is doubtful that the Redditers have enough stock to sell (or would want to sell). A secondary offering would provide stock in volume and at an acceptable price.

2/ Issue two: Replacing the motor vehicle...replacing the previously cheap leverage provided by the short leg...which can be handled by bank loans.

 

I guess the thing for Game Stop management to do is borrow a couple of hundred billion and announce a Mars base plan.

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