Yes. And No.
The thing is, the price will rocket. The short holders are playing games to keep the price down, and you’ll see today’s price hasn’t moved much because people are just not selling. Shorters can’t cover shorts if no one sells.
A lot of people can put in “sell prices” (or limits, or whatever they’re called), basically saying “I want x for my shares if you want to buy them”. A lot of the redditors have put this at stupid high prices - like $10,000 - so that if people buy at that point, prices start to go up.
Now, the thing here is, when shorters start to buy, yes, everyone may start selling, pushing some price down. But shorter will have to keep buying to cover their shorts, so they’ll push the price back up. Ultimately because they are so short they have to buy 100+% of all shares in the company. If people hold, they can’t buy, till they become really really desperate to buy due to contractual obligations, or interest on the borrowed shares etc.
If you look back to when something similar (but not the same) happened with VW shares, they were at a stupidly high price for a coupe of days (maybe a week), so people will be able to sell.
But the way I see it, there are 2 factions against the shorters here. One group are people that literally don’t care about their potential losses. Buying, and refusing to ever sell. The other, are people in it for some money, who will find the fact they get a 50-150% return on their shares (at $500) amazing, and sell.
The price will fluctuate a lot, there will be a lot of market work by the shorters to push the price down and weed out the investors that don’t have the stomach to stand through a small (or any) potential loss, therefore selling.
But don’t forget, yesterday, when trading was halted (unscrupulously) by some trading platforms, the price plummeted – some shorters added more shorts to the stock. Ultimately increasing their risk.
To the wider discussion, this has blown up massively, it’s a movement against Hedge Funds, against the whole system that’s broken. It’s shown up the whole fact that markets are manipulated so long as they are benefitting some people and not others. Robinhood have a couple of pending investigations/lawsuits. SEC are getting involved to work out why the share purchase was halted. Some of the brokers/intermediaries don’t have the money to cover what’s happening etc.
The system is broken, this is drawing light on it. But jump on the Reddit forum, and just read some of the stories on their, some people have paid for a year’s supply of insulin, or an operation for a friend, or even healthcare costs, or student debt paid off etc. These winners aren’t using the money for bad, but the hedge fund people don’t necessarily use their money for good.
I’m all for it, and am enjoying watching it.