Big Short: Virtual version (users guide to the sequel)

Jan 29, 2021 | Jeremy Goldfarb


Most of us have read the book, or seen the movie. If you have not....The Big Short was a greed theme story about the spectacular rise and fall of real estate in a small window (although the story played out for much longer than the book or movie)


The Virtual Short

Maybe we can make a sequel. The theme is similar but the GAME (GME) is the same. The tag line can be "how does a small group of Davids band together to stick it to a few Goliaths? Coming soon to a streaming service near you" (because we can't really go to theaters right now)



Billionaire investors see a floundering brick and mortar retail business, and conclude they don't like the fundamentals. They publish their accounting publicly and then proceed to "short" the company stock! They do this buy borrowing that stock from a brokerage at $20/share. They are hoping that when they publish the research, people will notice it, think they are right, and push the stock down to $10. When the stock gets to $10. The evil billionaire investors will buy the stock at $10, and repay the broker the shares they borrowed. The will make a tidy $10/share profit (plus any interest they had to pay). 


But then, a small group of online warriors will notice this activity and say "enough is enough!" We need to take a stand. They will start and online thread publishing the virtues of this retail business, and making a business case how the new CEO will take it to heights never seen! Throwing up the bat signal, they will summon heroes like Elon and Chamath to spread the word far and wide. (if you think this is starting to sound like the latest installment of the Kick Ass movie series, you are right. I just noticed that too) Collectively, they will use their resources to buy shares and options of the stock in order to push the company valuation through the roof!! 


The evil billionaire investors will have to repay the borrowed shares by purchasing them for $300 a share or more. A whopping loss, and thus a resounding defeat! They'll think twice about doing that next time, and our heroes will walk away into a sunset starwipe. 


The movie ends there, and nobody really cares about what happens to the value of the stock afterward. The movie needs to end because we have things to do, and do not have time for the "what happens after". 



The truth behind this post was to give you a starters kit version on what is happening with stocks like GME, AMC or BB. It would make a hell of a movie though......



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