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135Dobie

Joined: 11/03/2001 Posts: 635
Likes: 333


GME currently has a market cap of 24 billion at the current price


I don’t care how big their portfolio is, that’s a large chuck of money to cover. To answer the question, GME has roughly 70 million shares. People who went short thought the stock would decrease, when it was trading around 5-10 dollars. Even with a small increase, they could use margin to borrow more stock to cover losses. Remember, 70m shares at 10/share is only 700 million. Rinse and repeat until they outspend the retail investors. They had plenty of margin to cover. Now, however, the share pool is dwindling, due to many retail investors holding. So all their short positions will come due eventually, and either they have to buy more GME stock to cover, or get margin called and lose other positions. There is more to it, but that is a TL/DR version.

(In response to this post by hoos2008)

Posted: 01/27/2021 at 9:11PM



+1

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Current Thread:
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