Short Squeeze Makes VW World’s Most Valuable Company–Temporarily (Autobody News, Oct 2008) As a result of the squeeze on VW in 2008, Porsche made eight times more from options trading than it had made from its “core” business of selling cars. However I also see a chance of 4,2069% (You really just got it now?) Hi everyone, As some of you spotted out very well. Example of a Short Squeeze . So the free float available was at around only 6% and as mentioned above around 12% were borrowed. GameStop had been trading at a fairly low price and was expected to drop further. GME / GameStop Corp. short volume is shown in the following chart. Also GEM went from $12 to $340!!!! Suppose that Company C was borrowed on margin and that "Short Seller Bob" then sold 100 shares at $25. I tried to research how it started, who is involved, and where is this going. It looks to be the beginning of the end for WallStreetBets Big Short Squeeze… ... "An example of a short squeeze is the price explosion of Volkswagen ordinary shares that began on October 27, 2008. VW started at. If the short works out as planned, the hedge funds profit, but when it doesn't and the price of the stock goes up for some reason, the damage to the fund can be colossal. A short squeeze occurs when a stock moves sharply higher, prompting traders who bet its price would fall to buy it in order to avoid greater losses. I'm reminded of the VW short squeeze in 2008. Lots of shorts. Since I am very new to Reddit let me Introduce myself: I am not a financial advisor, just a (german) retarded ape like you and I really like the stock! Please correct me if I am totally wrong here. ShortSqueeze® tracks short selling in 16,000 stocks and provides market professionals with exclusive short interest data and services not available anywhere else, so you may gain from this valuable information and identify powerful stock opportunities happening - now! The premise of shorting by hedge funds essentially involves the funds betting on a stock dropping in price in the long term, and making money by borrowing shares of stock for a fee and then selling these shares to buyers who could pay a lower price. Overall it cost them billions. The shorts dug their Graves and continue to dig deeper trying to get out. $72 in 2008 and ran up to $900ish, ... GME started at $15 and ran up to $395, a 2500% increase. Vw Short Squeeze Graph / Forced To Launch What S A Short Squeeze And Why Do T Ticker Tape - For example, short positions could increase for a company that has reported.. Porsche had effectively made more money in trading stock than in selling cars—and it's not dissimilar with what has been happening with Tesla stock in the recent months, either, with Tesla becoming the world's most valuable automaker. Message board - Online Community of active, educated investors researching and discussing Lumen Technologies, Inc. Stocks. of GME hitting 42.069$. The Big Short-Squeeze: More Than A David vs. Goliath Story (GME, AMC, & BBBY) Daniel Laboe January 28, 2021 GME Quick Quote GME BBBY Quick Quote BBBY AMC Quick Quote AMC Things only kicked into gear when Porsche unexpectedly announced they'd increased their stake in VW … -» GME is quite "fresh/new" versus Volkswagen so we have to use the best time frame that … Why? The case intends to … GameStop is going under a short squeeze, maybe the most epic of all times. The VW short squeeze is quite different to what we're seeing with GME. The result: instant short-squeeze. Lumen Technologies, Inc. Press question mark to learn the rest of the keyboard shortcuts. ...Made 5k€ at first squeeze, bought in again after first drop and bagholded and average priced dow a little since then: Now holding 67 x GME @ 100€ . It did so by buying up VW shares in an effort to gain a greater foothold in the company, which at the time was a frequent but unrelated business partner. GME shorts haven't covered; they've added only added to their short position--short interest at 79.52 mil Speculators, especially hedge funds, had bet on falling prices and sold VW common shares short. Even if you don't follow stock market news, you've probably been inundated with news with what's happening to GameStop stock on social media. It's ripe for a short squeeze… Several days … I am long GME with an amount that I don't really mind losing. As Porsche started buying up VW shares, seeiking more voting rights and control of the board, VW stock price continued to inch up through 2006 and 2007, going from about €30 in 2005 to over €150 by 2007, seemingly absent any outside reason. Welcome to a completely new world, where RobinHood (traders) steal from the rich and give to the poor! Some winners, lots of losers. You may be able to find more information about this and similar content at piano.io, Volkswagen Reveals Plans for a New Flagship EV, Volkswagen Is Considering an ID.3 Convertible, Cupra Born Will Be a Meaner-Looking ID.3 EV Hatch, VW and Microsoft Team up on Autonomous Tech, Here’s What a Bodyguard Vehicle Looks like Inside, Here’s Why Solar-Powered EV Stations Are Necessary, VW ID.6 Electric SUV Spotted in Patent Images, Škoda 1203 Concept Sketch Reimagines Czech Classic. 7 likes • 8 shares. THE VOLKSWAGEN SHORT SQUEEZE Case Solution,THE VOLKSWAGEN SHORT SQUEEZE Case Analysis, THE VOLKSWAGEN SHORT SQUEEZE Case Study Solution, On 28 October 2008, the price of Volkswagen common shares surpassed EUR1,000. The 12% short interest at that time in VW is therefore not comparable with the short interest in GME currently. For reasoning see below. The squeeze itself happened in late 2008. GameStop Short Squeeze. Short Interest plays a powerful impact on the order flows that can surge into the stock market. A short squeeze happens when a large number of a company’s shares are sold short (betting that the stock will fall lower). Melvin Capital Management, the hedge fund in this case, had to start buying the same stock at a higher price because it had to cover its short. And at its core, it's not dissimilar with what Porsche had done a decade prior with Volkswagen stock. This can drive the market price of the stock down, and at that point the hedge funds would buy the stock back for less money, keeping the difference minus any fees paid to those who they've borrowed it from. The end result was that hedge funds that had been shorting VW stock had lost some $30 billion in the process. Short Volume is a data set that can be used to understand investor sentiment. Still, that punishment could come down on small-time traders sitting at home, as hedge funds run to the government screaming for help as AMC theaters and BlackBerry stock are appearing in the sights of the Reddit trader army. [1] On October 26, 2008, the Porsche company announced that it had increased its stake in VW from 35% to 42.6% and, with options for a further 31.5%, would have a total stake of 74.1%. Please, bear with me. Citron Research's Andrew Left said he was abandoning the trade "at a loss 100%." Autoweek participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. Hedge funds lost $30 billion in the VW squeeze; Within four days, the stock dropped in price by 58%; A similar phenomena happened with GameStop where hedge fund shorts got caught in a squeeze. GME spiked way higher percentage wise than the VW short squeeze. Is there a moral to this story? The vw squeeze stopped because porsche sold again the shares to "easy" financial pressure. This disparity caused short sellers to rush to buy more stock to cover their positions, driving the stock price further still through the month of October 2008, with VW stock price now hovering just above €900, and at one point exceeding €1,000 in intraday trading. Because bigger time frames don't have the same date. Meanwhile, GameStop stock price kept going up because it was attracting attention from other traders, creating a snowball effect, with more traders joining in to make some money on its way up. The stock began to appear massively overvalued, and hedge funds took notice and began shorting the stock, betting that it would go down eventually. TLDR: VW's squeeze was very different to the coming GME squeeze and people should be careful of some maybe false promises here. The greatest short squeezes pretty much originate when a person or group attempts to corner the market. Autoweek may earn money from the links on this page. So they were in a short squeeze. Imagine when FNMA & FMCC get their real valuation and more. Here's How the GameStop Short Squeeze Is like the VW Squeeze of 2008; Here's How the GameStop Short Squeeze Is like the VW Squeeze of 2008. By that time VW became the most valuable automaker on the planet thanks to its stock price having skyrocketed, while the short position had ballooned to 12% of outstanding shares. In a nutshell, the GameStop short squeeze began when retail traders in a subreddit—not investment bankers but just people bored of the coronavirus lockdowns—got fed up with a hedge fund that was shorting GameStop stock. What started happening a few days ago is that the effort of Redditors to drive GameStop's stock price up began working, inching the price of the stock upward, and hedge funds got caught on the wrong side of their bet. Wants to Tunnel under Miami, Musk Tweets, and Now Zoom Is Coming to Our Cars, This content is created and maintained by a third party, and imported onto this page to help users provide their email addresses. The GME squeeze already happened. Here's How the GameStop Short Squeeze Is like the VW Squeeze of 2008 More than a decade after the short squeeze of VW stock, retail traders team up against hedge funds. More than a decade after the short squeeze of VW stock, retail traders team up against hedge funds. The kicker was, Porsche had owned 43% of VW shares and also another 32% in share options. (Of course, when a stock is being shorted or a short squeeze is occurring, the companies themselves, GameStop in particular, have nothing to do with the situation and are basically along for the ride). Or GME fundamentals. Perhaps it's that hedge funds are now far more vulnerable to sudden and artificial stock rallies when it comes to stocks that they had been shorting for months or years, betting on troubled companies to lose stock value in difficult financial times. How Rusty Wallace’s Flying NASCAR Car Saved Lives, 10 Cool Adventure Motorcycles You Can Buy, Junkyard Car Patina Backgrounds For Zoom Calls, Bristol Motor Speedway's Dirt Transformation, Elon Musk's Boring Co. GME & AMC short squeeze vs. FNMA FMCC The retail investors are going on war against hedge fund short sellers. What's important here is: There were only TWO parties that had 94% of the stocks and they could just do whatever they wanted, it was very easy for them to just hold and the stock price went crazy for quite a long time,BUT: There are millions of apes like me and dozens of Hedgies and what more that got GME stocks, and every single person or institution has its one target price/planned sell price/price tolerance or whatever you wanna call it. In this case we compared the 2 short squeezes on the same timeframe - Daily time frame. AMC was a fail business even BEFORE the pandemic hits, yet it got pumped 1000% from $2 to $20 in just two week. It's not yet clear whether there's anything illegal about using social media platforms to cheer on an irrational stock rally. Already up +18% in Europe. ... this isn't your average short squeeze. Original post by u/trey5642 "I've been seeing a lot of comparisons between GME now and the VW short squeeze back in 2008. Predicting a short squeeze involves interpreting daily moving average charts and calculating the short interest percentage and the short interest ratio. In the stock market, a short squeeze is a rapid increase in the price of a stock owing primarily to an excess of short selling of a stock rather than underlying fundamentals.A short squeeze occurs when there is a lack of supply and an excess of demand for the stock due to short sellers having to buy stocks to cover their short positions. Perhaps another moral of the story, one that could materialize relatively soon in response to this debacle for hedge funds and institutional investors, could be heavier regulation of retail traders—not the big banks or hedge funds. It's not about boomers vs millennials or hedge funds. 7 days ago. That's a pessimistic view for sure, since very little regulation emerged in the aftermath the 2008 financial crisis. Share price spiked from ~E200 to ~E1000 in a couple days..... and then plummeted. ", Niedersachsen (Lower Saxony - ), a "state" of Germany had 20%. But one thing that hedge funds didn't hedge against in the GameStop case are thousands of small traders on Reddit who had noticed a number of stocks being shorted by hedge funds that had been essentially preying on troubled companies during a recession. the previous analysis/comparison didn't use the same timeframes - sorry for that, wasn't intentional. A stock that’s actively shorted with a high short float and days to cover ratio is ripe for experiencing a short squeeze. The German government, however, owned another 20.2%. The German state of Lower Saxony owns a 20 percent stake in VW, which it said it would not sell. GME vs VW Squeeze, NOT THE SAME! The result for Porsche was that it had been able to make billions in just a few weeks at a time when the auto industry was doing exceptionally badly in car sales. Thats why you just can't compare those two at all and IMO the GME squeeze will happen much faster and you should really think deep about how and when you wanna exit this. Hello fellow ape friends... As I have seen many many posts and comments where people compare VW with GME and because Germany and my great great great grandfather uncle A.H. (just kidding) fucked up the world so bad I see it as my duty as a german retarded ape to clear some things up: Just recently one particular post/comment (Cant find it anymore) caught my eye where one of our fellow brothers said: Don't you worry about your exit strategy, you will have plenty of time to react, look at the VW squeeze that took forever as well. Stone Cattle Road. A much smaller company than VW, Porsche had made a lot of money in a short period of time due to hedge funds betting on VW losing money. GameStop, a mall-based video game store suffering from both reduced foot traffic and the growth of online games during the pandemic, was seeing its stock decline due to these natural market conditions. Short Squeeze Mania: Silver vs. GameStop By Robert Kiyosaki Posted February 8, 2021 Robert and Kim Kiyosaki are joined by Peter Schiff to discuss if these quiet moves Buffett is making are an indication something big is about to happen. Since the state of Lower Saxony held a further 20% of the VW shares, less than 6% of the VW shares remained freely tradable. For those of you who've been living under a rock, GME's short is currently more the entire number of outstanding shares. I don't want to tell you the whole VW story now... You can find it in the magical world of the www (Wikipedia or whatever), but to sum the important facts up for you: "An example of a short squeeze is the price explosion of Volkswagen ordinary shares that began on October 27, 2008. More posts from the MillennialBets community, Press J to jump to the feed. Thus the short squeeze that's incoming. The starting point for the short squeeze at that time was Porsche's desire to accumulate more voting rights in Volkswagen. Also what I see is that the premiums on calls (and on puts) are currently enormous. It's that there's 130-150% short interest on GME. The short sellers had borrowed 12% of the VW shares that they had to buy to repay the loan on the stock market. And when some people will start to sell (and they will) and there will be some big drops, more and more paper handed bitches will sell just like in the first squeeze and it will go down FAST. The stock price had gone from about $20 at the start of 2021 to more than $347 before the close of trading on Wednesday. Hedge funds on Wall Street did this by essentially borrowing the stock from their brokers to sell back later, pocketing the difference if the price falls. The short interest was only ~12%. The Volkswagen short squeeze is archeology. By Jay Ramey This left very little that could be purchased by anybody else. Potential short squeeze coming soon. The common thread is that those who had been shorting Tesla stock over the past few years have absorbed significant losses in the process, spread out over a longer period of time. As unprecedented as the situation seems at the moment—and it is, since such coordination among retail investors has been rare—it's similar to something that happened to Porsche and Volkswagen more than a decade ago, though for different reasons.