The Investment Thread

Turfie said

I love seeing that. I think we may start to see real price discovery on the naked shorted stocks soon. The DOJ investigation hopefully is helping.

The price discovery bit can get super interesting. This could be very long drawn out or another Jan-Feb squeeze that we saw last year.

Using GME as an example. It’s not crazy to believe that 250 million shares are owned. 70 million of which are real, the rest counterfeited.

Current share price is about $125 per share.

125 X 250 million = 31.2 billion

31.2 billion divided by 70 million = $445

$445 may be the real share price. But to trim 250 million shares down to 70 million shares in an APE stock is going to be very very difficult. $445 is likely a pipe dream for hedges.

Click to expand...

Here is the basic fundamental problem with the market though - we are upset about naked shorting, but entities like The Citadel are responsible for keeping the markets liquid...I.E. If I want to buy shares, I am able to buy them no matter what, even if they're essentially sold out.

I am not sure how they get around that predicament and because of that issue, I don't know if a MOASS scenario is likely to happen.

Don't get me wrong, I do believe the price is suppressed relative to its "sold out" status, but is it "$500+ per share suppressed," I don't know. There are definitely legitimate shorts that need to cover, but the excess shares are likely a completely different beast to tackle that may not come with a penalty to a specific entity/entities.