Let's just assume that there are 100 shares of GameStop (worldwide) and go from there. Let's assume that the price per share/stock before all of this was $100 (in a "good" economy, etc.). How would this all work?

A nice timeline, step by step, line by line would be nice. For ex:

  1. Stock is selling at $100 per share (100 shares total). June 20XX

  2. Economy starts tanking, stock now at $95 per share. August 20XX

  3. People start predicting that it will go down further, thus they start "betting" (insert definitions that are accessible and not jargony), etc.

^ something like that would be nice. Thanks!

  • queenjamie [none/use name]
    ·
    4 years ago

    Person C can then “loan” the shares to another person. So now all 10 shares are loaned twice. Stonks.

    Jesus and this is allowed? Wtf

    • ChapoBapo [he/him]
      ·
      4 years ago

      This is where everyone is supposed to put enough of their money so they can retire.

      • Owl [he/him]
        ·
        4 years ago

        The thing you're supposed to put your money so you can retire is in actually buying and holding on to stocks. (Because shares come with a vote on how the company operates, and enough of the share holders are voting "make shareholders rich" that you can assume this is what the company will do. Capitalism!)

        Shorts and puts and calls and all that shit is a layer of absurd gambling on top of that. Which, according to standard economic theory, makes the stock prices more stable and reliable for people doing the buy-hold thing. (Doesn't seem like a great theory to me tbh.)

      • queenjamie [none/use name]
        ·
        4 years ago

        And I'm assuming all through this, Person B (original owner) can "sell" their interest in the stock? In other words, they can go to Person D and say "hey I got ten stocks that Person A (borrower) is borrowing right now, do you want to buy them? You'll get extra interest from A when he gives the shares back!"

        All the while Person B has no idea that Person A "sold" to Person C, and has no idea that Person C "loaned" to somebody else. Is this also allowed (i.e. for A to sell stock even though someone else is borrowing it)?

        EDIT: I mixed up the people lol. This is needlessly complicated and it's a fucking travesty that it's allowed.

        • ChapoBapo [he/him]
          ·
          4 years ago

          I have absolutely no idea, but based on my understanding of wall street and their obsession with creating contracts to do every damn thing, I wouldn't be surprised if someone came up with a way to do that or something like it.

    • acealeam [he/him]
      ·
      4 years ago

      Its actually not i dont think, but it happens anyway

      Although it is very similar to how banks create money if you didn't know about that. inflation doesnt come from the mint printing money, it comes from the fed setting the interest rate and minimum reserve ratio. there are some good videos on this but theyre probably all from ghouls.

      https://youtu.be/JG5c8nhR3LE

      • queenjamie [none/use name]
        ·
        4 years ago

        Yeah I'm somewhat familiar with fractional reserve banking and how banks pretty much just create money "out of thin air."

    • NukeLuke1 [he/him]
      ·
      4 years ago

      Well... yes and no. No in that it actually isn't allowed and naked short selling is illegal, but yes in that hedge fund douchebags don't actually have to follow laws.