@INArteCarloDoss Ask yourself this. What happens when the SPAC lockups expire w/ billions in shrs to be sold at ANY PRICE by the insiders/pumpers? Remember what caused the 2000 tech crash? SPACS, for the most part, are ponzi companies - selling $1 for $80c w/ a promise to make it up on volume.
@INArteCarloDoss (2) Carson and others told you GSX had issues for months. No one cared to do the work. Is the same thing about to happen with SPACS? Don’t know. But you can pull up with lock up expirations for SPACS with a simple Bloomberg query.
@INArteCarloDoss (3) Let me help with some "hard" evidence of what's to come...
@INArteCarloDoss (7) In most SPACs, there are 15-30 restricted shrs for each free trading shr, & the restricted guys - who got the shrs for pennies on the $ - seem to want out ASAP. Thus, when the arguably artificially restricted float unlocks, it seems to result in uncontrolled selling.
@INArteCarloDoss (8) Keep in mind the '00 tech bubble pop was likely a result of too much supply (see deal calendar from 6/99 to crash) - speculative IPOs, during the time, went parabolic - & taxes on gains from '99 (when folks had to sell stock to pay the IRS); it seems a similar set up is poss.
@INArteCarloDoss (9) So, in a Bloomberg query, for the 75 SPACS that have had lockups expire in 2021, only 14.5% of them are higher, with the avg. decline for all of them at -6.1% (vs. S&P up +5.7% YTD).
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(1) @RudyHavenstein The GameStop/RobinHood issue in a nutshell: First, on Robinhood, the issue was one of undercapitalization (i.e., RobinHood did nothing wrong). So… when the volatility on GME at Robinhood picked up, as happens at any clearing house in stock that becomes...
(2) very volatile, the DTCC asked RobinHood for more margin to trade the stock (i.e., more money, or a margin call); RobinHood didn’t have the money, so all trading in the stock (both buying and shorting) was suspended; because selling the...
(3) ... stock doesn’t require more risk from RobinHood, this was allowed to continue. This happens all the time, and is perfectly NORMAL!
On shorting, and what happened with GME, first it’s important to remember that naked shorting was made illegal in 2009; thus, every...
@NorthmanTrader Yes. It’s called gamma hedging. If you buy a $30 option on a stock that trades at $850 with a 0.50 beta, you pay $3,000 ($30 x 100), while the person selling that option to you has to buy: $850 * 50 = $42,500 in the underlying stock to fully hedge. This is why stocks are soaring.
@NorthmanTrader There was a natural cap on this kind of speculation before as banks would increase the borrow cost for the gamma options purchases as demand went higher. The Fed has stepped into this market, and taken borrowing costs LOWER. So now... activity in options has EXPLODED higher.
@NorthmanTrader So... now... instead of buying stocks... retail traders are buying options. And, so are the market makers. It’s completely out of control. But, recent Fed comments suggest they’re completely ok with this. And, Congress is completely asleep at the wheel.