Reddit and discord are afraid they'll be implicated in what is a classic pump and dump. Robinhood only exists because the SEC has chosen to look the other way concerning the pattern day trading rule which clearly is in jeopardy if big money starts complaining.
This is a short squeeze: the stock is shorted to the limit, and from the stock price, the shorters entered their positions "uncovered", so their risk is extremely high, and their losses are potentially infinite.
The WSB crowd and probably others noticed this, and bought the stock, knowing that it was going to become more valuable over time once the shorters had to close their positions.
They were right, and the shorters are loosing so much money that they are willing to buy back the stock at astronomical prices to limit their losses, which drives the price up even more.
The WSB crowd just need to hold until the stock is at the maximum price that the short sellers can pay, right before the short sellers default. That's the actual value of the stock right now.
If the stock climbs too much, and the short sellers default, the stock is worthless.
TBH, this is the short sellers own fault. They made the assumption that the market was "fair", and that they were going to buy back the shares for cheap when they needed them as a consequence.
It's a classic pump and dump because there's just no reason to believe that this is what's happening. There was a short squeeze at one point, but all of the funds known to hold large short positions had closed their positions by Wednesday morning; the value since then was most likely driven entirely by speculation.
In particular, I've seen a lot of speculators spreading the idea that margin calls will force everyone shorting Gamestop to buy stock at market price on Friday. This is wrong, and pretty unequivocally so, but I've had multiple friends come to me and explain that this is why they bought some.
This makes no sense - if they had closed their short positions of millions of shares and had the squeeze happen, the share price would have spiked far higher than it is now.
Why is that so? Trading volume was over 175 million each of Friday, Monday, and Tuesday. Do we have some way of knowing exactly what the price should be when they exit?
Robinhood would not put themselves in such a precarious position if they had already exited - also as for the price target of when they actually do start covering their shorts, they are still currently short more than the available amount of shares on the market - the current trading range of around 200-300 cannot be the squeeze.
You’re misunderstanding what a short squeeze means. There’s no singular “the squeeze” - no specific point in time where everyone who holds a short position has to simultaneously obtain the underlying stock. If everyone who wants out of their short position has gotten out, there’s no guarantee that any further squeeze will be forthcoming.
I don't think you understand - the assumption that they already got out doesn't hold because shorted shares/float data is publicly accessible[1]. Now I'm sure what happened today allowed them to cover some of their losses partially, but not even close to all of it.
By this logic the stock should be shorted even more than it currently is. Why did short sellers close their position if that is the case? Your story is not consistent at all.
> Robinhood only exists because the SEC has chosen to look the other way concerning the pattern day trading rule
This is simply not true at all.
I've had my trading on RH restricted specifically because of the PDT rule. As in, I was about to make a trade, and the site told me that the trade would cause a restriction because of pattern day trading.
Why does anyone want cold food delivered by a rando? I never understood to value proposition because I never got the value proposition of delivered food, outside of coldcut sandwiches and pizzas, especially once you stop being 18 living in a dorm. To each his own, I guess.
The fucked up thing is that you can’t opt out. Facebook is capturing the world around you and you can’t stop that. There’s no guarantee that the house you rent next year won’t have been mapped by Facebook. Every store you go to, every theater... it won’t be long until they won’t need you to opt in. There will be a tidy alistproducer2 shapes hole in their data, all ready to infer your movements...that is, of the people wearing them don’t capture you as part their distributed data collection.
This is not hyperbole. Facebook already lays claim to the behavioral data of non users, creating shadow profiles ready to materialize should you become a user. This an extension of that.
The moral of the story is there's no such thing as plug and play opsec. It requires thought, patience and domain knowledge. You can't outsource it because that contractor becomes your immediate and obvious weak link and will be compromised. Whether it's El Chapo's IT guys or fools who thought a cell phone company would keep them out of prison, this story just repeats itself.
The reviews are in for this response and they are bad. It's concerning that given the react it got, there's no edit addressing the concerns. The HN audience has to be the power user, bread and butter of a product like this and when you see a company ignore the concerns of a key constituency like this, their future almost never looks bright.
Letting the enemy set the terms of and frame the debate so we're starting on the low ground seems to be par for the course for folks on the left end of the spectrum. Pick your issue: climate change, policing, war on terror, lgbt rights, socialized medicine, on and on. You start to wonder if "our side" is throwing the game.
Agreed, mostly. Throw the game? I'm not sure they even know where the game is, and what's being played. Too often they're at the wrong venue suited up to play checkers. That's no way to win a chess match.
To your point, so often this happens that there's only two possibilities:
This sucks. The Atlantic was doing great reporting in the beginning of corona, pointing out how few tests were.being done. It was necessary work that reminded me how important real journalism is.
The Atlantic and Jeffrey Goldberg (now the editor-in-chief) laid the ideological groundwork for the US to invade Iraq, one of - if not the biggest crimes of the 21st century. [1] The Atlantic sold the Iraq War with reporting that relied heavily on war hawks, neocons in the Bush administration, and at times complete fabrications. It it is hard to shed a tear for an organization which helped create a conflict resulting in the deaths of 1.2 million Iraqis.
Ding, ding, ding we have a winner. This is the same FDA that stopped ethanol producers from making hand sanitizer, at the behest of the purell of course[0]. The feds have done practically nothing for the States making them compete each other for ppe and also confiscated shipments [1] while saying the national stock pile isn't for the States [2]. At this point I hope they just ignore the feds. We might be better off revisiting the articles of confederation at this point.
> In one case, the FDA said it had found significant levels of the carcinogen acetaldehyde in ethanol supplied by a company for use in hand sanitizer, according to a recent email exchange seen by Reuters.
Is anyone surprised that using fuel ethanol might not be a good idea for hand sanitizer?
They also stopped distilleries from doing so. Unless the argument there is "you can ingest alcohol made in this facility, but not put it on your skin"...
> Acetaldehyde occurs naturally in coffee, bread, and ripe fruit,[10] and is produced by plants. It is also produced by the partial oxidation of ethanol by the liver enzyme alcohol dehydrogenase
Doesn't really sound like a problem in a topical solution like hand sanitizer given people ingest it regularly.
I don't see any explicit guidance on Acetaldehyde. The requirements show 95% ethanol for ethanol-based sanitizer, with a footnote saying actually, "Lower ethanol content alcohol falls within this policy so long as it is labeled accordingly, and the finished hand sanitizer meets the ethanol concentration of 80%."
It goes on to add, "Ethanol produced in facilities normally producing fuel or technical grade may be
considered for use if the ethanol is produced from fermentation and distillation as would
be typically used for consumable goods, and no other additives or other chemicals have
been added to the ethanol. ... Because of the potential for the presence of potentially harmful
impurities due to the processing approach, fuel or technical grade ethanol should only be
used if it meets USP or FCC grade requirements and the ethanol has been screened for
any other potentially harmful impurities not specified in the USP or FCC requirements."
Edit2: Here's the USP guidance on hand sanitizer, which lists Not More Than 10uL/L Acetaldehyde / Ethanol:
https://www.usp.org/sites/default/files/usp/document/health-... Again, it's an ordinary metabolite of ethanol in the body, so this is probably pretty conservative.
Wikipedia notes, "After intravenous injection, the half-life in the blood is approximately 90 seconds." https://en.wikipedia.org/wiki/Acetaldehyde#Exposure_limits and "According to European Commission's Scientific Committee on Consumer Safety's (SCCS) "Opinion on Acetaldehyde" (2012) the cosmetic products special risk limit is 5 mg/l."
Ethanol-based sanitizers can be ingested by desperate people. I know what binge can do. These in need found a way to drink denatured alcohol [1], doing very little to clean it up.
So, please add a point to your discourse. In my opinion, FDA did more good than bad for population of US in that particular case.
There are many, many products approved by the FDA that can be abused by "desperate people". Given the limitations on sale, demand, and other things that would appear to be a lesser evil. I'd definitely disagree with the conclusion that preventing this "did more good for the population of the US". Even more so given that many of these facilities were mainly doing "personal" size efforts, 10-15ml bottles. Even at 96% alcohol (which is what the distillery here was getting), 10ml of alcohol won't put much of a dent in the alcoholic who is debating drinking hand sanitizer. It's barely a shot of vodka.
I'm not sure why this comment is downvoted -- it's definitely true, and the FDA does care about stuff that people ingest even if they aren't supposed to.
