I just wonder why didn't hedge fund just bought some GME and squeeze shorts. at a low price, GME was worth 500M. You do not have to have a lot of money to just pump it up(In hedge fund terms). It is basically free money or no? Naked shorts have to cover somewhere.
Hedge funds do care about fundamental value. More to the point, hedge funs might have problems existing a sizeable position way above fundamental value even if paper profits are up in the sky. Someone else needs to buy when you sell, remember. Probably they had precluded the possibility there would be millions of morons willing to value GME at tens of billions, or more succinctly, before GME became a WSB meme stock that value simply wasn't there.
Hedge funds who were not short GME are involved in the short squeeze. The volume is too high for this to be just retail.
Sure they've joined in now, I understood his question as why they didn't initiate it though. Although I realize that's not a clear cut fact.
You mean they have the risk that if they buy it for example 10 to 20 there are no bids to dump it all back?Bids are there if massive naked shorts are covering. Positive EV. Addition to that lots of traders join if something is moving so you don't have to pay all up your own money!
I read that shorting losers has been a great strategy for years prior to the recent inversion. Again, why should they have foreseen such a huge enough amount of additional buying above consensus fundamental value to trigger massive short covering?
This is a theory I have as well. But I'd love to be wrong about it. What if it was Elon behind it all?
There is something bigger than a regular short squeeze going on here. There is someth8ng under the hood that will eventually come out and it ain’t reddit and it’s army of ants buying 5 shares. Like illegal naked shorting.