Some frogs on reddit realized that Melvin Capital Management, headed by Gabriel Plotkin, is massively short on GameStop stock. So these reddit frogs are driving the price up to crazy heights to force the hedge fund to liquidate its position. Short selling is a legalized con where you sell a shares of stock owned by someone else and cover the fraud later by buying the missing shares on the open market whenever you have to make good on the fraud.
If the stock price goes high enough, or if the true owner of the fraudulently sold shares asks for delivery of his shares then the short seller is force to buy the shares at any price.
Imagine the story goes like this, on Monday a goy named Smith buys a share of GME for $5 and leaves it in the office of his broker, Goldstein. Later his friend Plotkin comes in and they talk:
Goldstein: "I sold this dumb goy a share of this trash stock GME. He left it with me here in the office."
Plotkin: "Really? Let me borrow that share and I'll sell it a second time to some other dumb goy."
Goldstrein: "What if Smith wants his share back?"
Plotkin: "I'll leave you some money so you can go quick buy a share in case your goy wants this share back. Here's $5."
Now Plotkin leaves with Smith's share of GME, sells it to another goy named Brown. Later he visits Goldstein to see how things are going.
Plotkin: "I sold that share to a Goy named Brown".
Goldstein: "Really? Brown is also my client. That very same share is back in the safe."
Plotkin: "GME is a real dog and is going to tank for sure. Take another $5, and let me borrow that share a second time. We'll make double the difference when this crappy stock tanks."
Goldstein: "Ok. But remember, we have to settle accounts on Friday. So whatever you do, we have to buy two more shares of GME before Friday or we're in big trouble."
And in this way Goldstein and Plotkin manage to sell more shares of GME than even exist.
Now some goys realize these two fellow white people are secretly in way over their heads on this GME fraud, and conspire with some friends to buy as many shares of GME as they can so that come Friday, Goldstein and Plotkin will be forced to pay any price to unwind their fraud. By Tuesday the price is $20 and Goldstein calls Plotkin:
Goldstein: "You have to come down here right now. GME is trading at $20. I only have the $10 you gave me, and I'm still short 2 shares of GME. If all our clients ask for their shares I'll need $40 or the jig is up - so you have to give me $30 today.
Plotkin: "You worry too much. I'll send instructions to Freidman at the bank and let him know that if needed you can draw however much you need to cover any emergency. I have $500 there."
Goldstein: "You're a real mensch. So long as this stock doesn't hit $250 I'll be ok. But you my friend are screwed if this stock is still above $5 on Friday."
Come Wednesday the stock is trading at $250.. Goldstein is panicked.
Goldstein: "Plotkin, I don't know what's going on - but GME is over $250. I'm not going to jail for you. Unless you can get me more money I'm just going to empty your account and buy the two missing shares right now."
Plotkin: "We'll be ok if we don't panic. This dog isn't worth $5 never mind $250. These goys are manipulating the stock - but they can't keep it up forever. If we get access to a little more cash we can ride this out and it will be these goys holding the bag. Fortunately I have a friend with deeper pockets."
A few hours later Plotkin has cut Cohen into the deal, and has another $2500. He holds on to $2000 and even shorts two more shares of CME. With the $2500 Steinberg and Plokin have in the bank, and the 4 shares shorted they are ok until the stock goes over $600.
If the goys lose their nerve, and the stock drops back down to $5, Plotkin and Cohen stand to make almost $500 in a few days.
But if the goys can keep the price over $250 all the way till Friday - then Goldstein, Plotkin and Cohen will be forced to buy CME for market price and give the reddit frogs all the money.
Today IRL Cohen literally bailed out Plotkin's short position with $3B:
www.benzinga.com
Reddit goys only have to hold out till friday. My prediction: lawfare before Friday.
If the stock price goes high enough, or if the true owner of the fraudulently sold shares asks for delivery of his shares then the short seller is force to buy the shares at any price.
Imagine the story goes like this, on Monday a goy named Smith buys a share of GME for $5 and leaves it in the office of his broker, Goldstein. Later his friend Plotkin comes in and they talk:
Goldstein: "I sold this dumb goy a share of this trash stock GME. He left it with me here in the office."
Plotkin: "Really? Let me borrow that share and I'll sell it a second time to some other dumb goy."
Goldstrein: "What if Smith wants his share back?"
Plotkin: "I'll leave you some money so you can go quick buy a share in case your goy wants this share back. Here's $5."
Now Plotkin leaves with Smith's share of GME, sells it to another goy named Brown. Later he visits Goldstein to see how things are going.
Plotkin: "I sold that share to a Goy named Brown".
Goldstein: "Really? Brown is also my client. That very same share is back in the safe."
Plotkin: "GME is a real dog and is going to tank for sure. Take another $5, and let me borrow that share a second time. We'll make double the difference when this crappy stock tanks."
Goldstein: "Ok. But remember, we have to settle accounts on Friday. So whatever you do, we have to buy two more shares of GME before Friday or we're in big trouble."
And in this way Goldstein and Plotkin manage to sell more shares of GME than even exist.
Now some goys realize these two fellow white people are secretly in way over their heads on this GME fraud, and conspire with some friends to buy as many shares of GME as they can so that come Friday, Goldstein and Plotkin will be forced to pay any price to unwind their fraud. By Tuesday the price is $20 and Goldstein calls Plotkin:
Goldstein: "You have to come down here right now. GME is trading at $20. I only have the $10 you gave me, and I'm still short 2 shares of GME. If all our clients ask for their shares I'll need $40 or the jig is up - so you have to give me $30 today.
Plotkin: "You worry too much. I'll send instructions to Freidman at the bank and let him know that if needed you can draw however much you need to cover any emergency. I have $500 there."
Goldstein: "You're a real mensch. So long as this stock doesn't hit $250 I'll be ok. But you my friend are screwed if this stock is still above $5 on Friday."
Come Wednesday the stock is trading at $250.. Goldstein is panicked.
Goldstein: "Plotkin, I don't know what's going on - but GME is over $250. I'm not going to jail for you. Unless you can get me more money I'm just going to empty your account and buy the two missing shares right now."
Plotkin: "We'll be ok if we don't panic. This dog isn't worth $5 never mind $250. These goys are manipulating the stock - but they can't keep it up forever. If we get access to a little more cash we can ride this out and it will be these goys holding the bag. Fortunately I have a friend with deeper pockets."
A few hours later Plotkin has cut Cohen into the deal, and has another $2500. He holds on to $2000 and even shorts two more shares of CME. With the $2500 Steinberg and Plokin have in the bank, and the 4 shares shorted they are ok until the stock goes over $600.
If the goys lose their nerve, and the stock drops back down to $5, Plotkin and Cohen stand to make almost $500 in a few days.
But if the goys can keep the price over $250 all the way till Friday - then Goldstein, Plotkin and Cohen will be forced to buy CME for market price and give the reddit frogs all the money.
Today IRL Cohen literally bailed out Plotkin's short position with $3B:
GameStop Short Seller Melvin Gets $2.75B Funding From Citadel, Point72 - GameStop (NYSE:GME)
GameStop Corporation (NYSE: GME) short seller Melvin Capital Management LP said Monday it had received $2.75 billion in investment from hedge funds Citadel and Point72.
www.benzinga.com
Reddit goys only have to hold out till friday. My prediction: lawfare before Friday.
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