SEC fines the cheaters, but keep the money and investors get nothing
The SEC just released its latest update for Fails-to-Deliver data and it sheds a very bright light on what was going on during the GameStop (GME) debacle in January (the data is only released every two weeks so this is the first opportunity to see what was going on. Bloomberg reports, for a number of days during the GME short-squeeze, there were more than a million shares FTD daily (peaking with around $359 million worth of shares on Jan 28th).
About 2.1 million GameStop shares failed-to-deliver on Jan. 26 before falling to 138,179 on Jan. 29, the day after Robinhood and other brokerages began restricting trading in so-called meme stocks.The fact that GME made it to the Top 10 list on SEC's FTD data suggests more than a simple SNAFU. It reinforces what many have attempted to dismiss as 'unproven conspiracy theory' - the fact that a number of investors were (synthetically or not) naked short this stock.As Bloomberg points out, short sales - when an investor borrows shares, sells them and then tries to buy them back at a lower price to profit from the difference - are an everyday market occurrence. Naked short selling, the illegal practice of selling shares that aren’t known to exist, is just one possible cause of a failure-to-deliver, with more quotidian reasons being human error and administrative delays, and, of course, ahead of tomorrow's hearing (blaming and shaming fest).But in this case - amid massive short-interest (synthetic and all) it is quite evident that it was indeed 'naked' shorting that was to blame for the FTDs. $GameStop(GME.US$ $AMC Entertainment(AMC.US$
About 2.1 million GameStop shares failed-to-deliver on Jan. 26 before falling to 138,179 on Jan. 29, the day after Robinhood and other brokerages began restricting trading in so-called meme stocks.The fact that GME made it to the Top 10 list on SEC's FTD data suggests more than a simple SNAFU. It reinforces what many have attempted to dismiss as 'unproven conspiracy theory' - the fact that a number of investors were (synthetically or not) naked short this stock.As Bloomberg points out, short sales - when an investor borrows shares, sells them and then tries to buy them back at a lower price to profit from the difference - are an everyday market occurrence. Naked short selling, the illegal practice of selling shares that aren’t known to exist, is just one possible cause of a failure-to-deliver, with more quotidian reasons being human error and administrative delays, and, of course, ahead of tomorrow's hearing (blaming and shaming fest).But in this case - amid massive short-interest (synthetic and all) it is quite evident that it was indeed 'naked' shorting that was to blame for the FTDs. $GameStop(GME.US$ $AMC Entertainment(AMC.US$
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70149709 : Hoping this finally goes up
b_aver : Thanks for the update..
Shortie : I'm new to this and there is so much to learn. I think I'm more confused now then when I started. I am however investing little bits into AMC everyday and willing to stay in it for the long haul. wish I had more to invest but I'm only using what won't make me lose my house if we lose our asses in the end. so I'm comfortable either way but it could be life changing if this does what we're all hoping for
MisterJ420 : thank you!
Mcsnacks H Tupack OP Shortie : The hedge funds were selling the companies shares for them but only half of them were real company shares. And they were selling them a lot cheaper than what they were worth. Which makes the company go bankrupt and then they don’t have to pay for the shares they were selling that were real.
Mcsnacks H Tupack OP : The real reason robinhood and the other apps had to block people from buying those stocks is because the ones who insure the brokers knew what they were doing and knew if the SEC found out they would fine Robinhood and the others and the insurance companies would have to pay those fines. So they said if you’re going to continue to cheat you need to pay us more since we have to pay the fines if youre caught.
70730290 : They are going to rob the rich![[undefined]](https://static.moomoo.com/nnq/emoji/static/image/default/default-black.png?imageMogr2/thumbnail/36x36 "undefined")
70730290 Shortie : Stop! Invest in a etf or stock making money!
Jacob Kitchen Mcsnacks H Tupack OP : yup if the company goes bankrupt, they don't have to pay any taxes. that's what they were trying to do to GME and AMC, among probably others. They are cheaters!
Jacob Kitchen : I hope they burn for this.