Disagree, argue, criticize, but no personal attacks. https://steemitimages.com/1280x0/https://cdn.steemitimages.com/DQmZ4Sn6s2izPgBFS34oP56DUAmPwKTLN39YH6X7mkGL6TC/Screenshot%202019-03-16%20at%2021.50.21.png. Daily Moving Average Charts submitted by /u/louis_lafaille [link][comments]. Source: CNBC. (2008) estimate hedge funds could have lost as much as 30 billion euros when their strategy to short-sell Volkswagen stock backfired. Please note that as a topic focused subreddit we have higher posting standards than much of Reddit: 1) Please direct all advice requests and beginner questions to the stickied daily threads. Combined with a 20% stake owned by another entity and the requirement for indexes that track the DAX to have a position in VW, there was less than 1% off the float left to trade. Prosche agreed to cash-settle the short sellers which sky rocketed the price. 1-530-723-5499. How much would $GME have to go up in order for it to become the most valuable company in the world? 2008 Volkswagen short squeeze chart. Is it something that could possibly happen with GME? The squeeze itself happened in late 2008. On Oct 28 of 2008, $VW shares traded as high as $912 during the famous “infinity short squeeze”, making the automaker the most valuable company in the world (albeit for just a fleeting moment.) Doesn’t really answer the big dip during the squeeze. Source: Bloomberg, FT. Press question mark to learn the rest of the keyboard shortcuts. With all the hoopla surrounding GME I’m looking at the big squeeze of VW. It was also perhaps the earliest use of the term “Infinity Squeeze”. There’s a clear climb where the squeeze has begun but a big drop to pre-squeeze levels before skyrocketing. Back in 2008, German automaker Volkswagen A G (OTC: VWAGY) briefly became the most valuable company in the world when its market cap peaked at $370 billion thanks to a short squeeze. 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. The German state of Lower Saxony owns a 20 percent stake in VW, which it said it would not sell. 3) This is an open forum but we expect you to conduct yourself like an adult. Market Insider works with public RSS feeds of best business news websites, personal blogs and provides automatically generated list of financial news links directly referring to its sources. So, say you shorted 5,000,000 shares of $GME at $10, your losses would theoretically amount to $167,856,000,000. Buy the dip? The average short squeeze in this data set lasted approximately 12 days from the onset to the peak. Was it a big doubling down by shorts to instil fear in the market by slamming through stop losses? Hi, welcome to r/investing. It was also perhaps the earliest use of the term “Infinity Squeeze”. In this case we compared the 2 short squeezes on the same timeframe - Daily time frame. That left precious few shares available for anyone else. Violations will result in a likely 60 day ban upon first instance. Based on the above chart, it does appear as if the short squeeze may have already happened. Now I want to preface this by saying it is highly improbable (actually, virtually impossible) that this will happen. A short interest ratio of five or better is a good indicator that short sellers might panic, and this may be a good time to try to trade a potential short squeeze. This includes beginner questions and portfolio help. This means that for every share that was available to cover with, 12 were sold short. Currently, the most valuable publicly traded company is Apple $AAPL with a market cap of $2.34 trillion or $2,340 billion. The short interest was only ~12%. Things only kicked into gear when Porsche unexpectedly announced they'd increased their stake in VW to 74%. View daily, weekly or monthly format back to when VOLKSWAGEN AG stock was issued. The last major short squeeze that happened was to Volkswagon in 2008. The October 2008 short squeeze on shares of Volkswagen AG has since been referred to as the “Mother of all Squeezes”. Will this be the same trajectory for stocks in the same position today? I was not involved in stocks back then, but does anyone know why? The short interest was only ~12%. On 26 Oct, to the Short Sellers' surprise, Porsche announced that it had bought enough options to purchase 31.5 percent of the stock, this would reduce the public float to just 1%, when 12.8% of the stock was shorted. They were basically bankrupt and it was the middle of the GFC. At its peak, gamestop had a ratio … Thanks to this community, it now feels like I've been given the keys to absolute freedom. Isn’t there -% of the float available for GME when short interest is taken into account? What is Market Insider? I do not know, but here's what could have happened. 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. We do not create or publish our own content or copy full articles from other sites. However, once the short squeeze ended, Volkswagen shares have depreciated to the same levels at which they were trading before the short squeeze. In the VW squeeze, the ratio of Available shares to Short shares was 1:12. This IS NOT, and NEVER HAS been the case with gamestop. Volkswagen Infinity Squeeze. Market Insider is a business news aggregator for traders and investors that proposes to you the latest financial markets news, top stories headlines and trading analysis on stock market, currencies (Forex), cryptocurrency, commodities futures, ETFs & funds, bonds & rates and much more. Motley … The auto industry was in deep trouble in 2008, the stock started dropping and this was what attracted the shorts looking to make bank. -» GME is quite "fresh/new" versus Volkswagen so we have to use the best time frame that shows not too much noise but gives us the best info. The result: instant short-squeeze. As we can see, prices always tells us what might … I think weak hands would only sell now, especially with all the media attention. Is there a place where I can see real-time short info on GME? How realistic is it that we would see the same spike with the GME trades? Could this happen to GME?Yes, if some big whale was secretly buying up GME. On 28 October 2008, the price of Volkswagen common shares exceeded 1,000 euros. By Friday, Volkswagen's ordinaries closed at €497, down 50 per cent from the Tuesday highs as the squeeze loosened. I Own These 3 Potential Short-Squeeze Stocks. As of Friday closing, GameStop $GME’s market cap was $4.53 billion. 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. The following calculations are for your amusement only and should not be considered investment advice. For $GME’s market cap to surpass $AAPL, it would have to reach $33581.33 per share–a 51556% increase from its current price or 1306667% from its 52 week low of $2.57. Here's the daily chart showing how it ran up for two days, dropped massively on the third day, then was all the way back down to where it began on the sixth day. The next two days the stock price skyrocketed as Short Sellers covered and the price fell afterwards. By December, Volkswagen's ordinaries were all the way back in the mid-200s. "The short squeeze was released on 29 October 2008 when Porsche agreed to cash-settle sufficient options for the short sellers to close out their positions.". Why? Is the float size to short interest ratio relevant or comparable to GME? Lamb et al. A “classic” short squeeze usually involves a rapid rise in a price of a stock and then a dramatic fall as everyone tries to liquidate their gains. OP can you PLEASE repost this ASAP - the people need to see this - we in the losses before squeeze. Volkswagen Infinity Squeeze. The Volkswagen squeeze has a huge economic significance. At such points most traders have already sold shares. Inversely, if you had shorted $GME at $10 a share, your losses would be peak at about 335710%. The epic short squeeze in GameStop (GME) is the biggest financial markets story since the Great Financial Crisis. ... For example, the chart below shows that between the periods of early March 2018 through early April, TSLA was massively shorted. The Infinity Squeeze of 08 briefly made $VW the most valuable company in the world. Disclaimer: I do not hold any $GME positions. By that time VW became the most valuable automaker on the planet thanks to its stock price having skyrocketed, while the short … Market Insider is a business news aggregator for traders and investors that proposes to you the latest financial markets news, top stories headlines and trading analysis on stock market, currencies (Forex), cryptocurrency, commodities futures, ETFs & funds, bonds & rates and much more. Dougherty (2009) names a couple of hedge funds with large exposures and describes how the world's 94th richest man at that time, German billionaire Adolf Merckle, ended his own life … How much would $GME have to go up in order for it to achieve the same. A short squeeze may seem exciting, but the more reliable way to get rich is to identify and buy strong companies, and hold them for as long as possible. 2) Important: We have strict political posting guidelines (described here and here). It seems crazy but I guess so does everything to this point. Price fell from the highs of $350 to a low of $250. A visual chart of the Volkswagen short squeeze. The squeeze itself happened in late 2008. It’s kind of what everyone is trying to figure out, isn’t it? The October 2008 short squeeze on shares of Volkswagen AG has since been referred to as the “Mother of all Squeezes”. The Volkswagen short squeeze took the longest amount of time to climax at 31 trading days. Disclaimer 2: I failed high school math so my calculations could be off by a couple of decimal points. Were there other factors at play? Im not saying anything else... Press J to jump to the feed. GameStop Price Chart. The kicker was, Porsche had owned 43% of VW shares and also another 32% in share options. Will Tesla follow suit? I am a bot, and this action was performed automatically. At Yahoo Finance, you get free stock quotes, up-to-date news, portfolio management resources, international market data, social interaction and mortgage rates that help you manage your financial life. Discover historical prices for VWAGY stock on Yahoo Finance. The VW short squeeze is quite different to what we're seeing with GME. My guess is that Porsche decided to buy massive amounts of Options instead of buying shares which would drive the price up, so short sellers were successful in pushing the price down until the trading day after Porsche's announcement. Short squeeze is a term that you might come across every now and then. TLDR: To make history the same way $VW did in 2008, $GME has to go up to $33581.33 per share. The 2008 Volkswagen short squeeze vs. the 2020 Tesla short squeeze. Here's What I'm Doing Lemonade, Beyond Meat, and iRobot stocks could be poised for big drops after short … Lots of people say yes, down 20% after hours though. Porsche was buying up Volkswagen but Short Sellers were shorting it because Volkswagen stock probably wasn't worth what Porsche was paying for it, especially as the price increased due to Porsche buying up the company. Because bigger time frames don't have the same date. TSLA Short squeeze example. You have to have a lot of shorts in order to have a short squeeze. The case aims to explain this apparent market distortion using rational arguments such as the tentative takeover of Volkswagen by Porsche and the role of derivatives, particularly delta hedging. Neuer DAX-Rekord, die 15.000 ist in Reichweite, Schlagzeilen von Volkswagen passend zum Chart | Nachricht | finanzen.net Things only kicked into gear when Porsche unexpectedly announced they'd increased their stake in VW … So what happened to Volkswagen to shoot the stock price up 400%? The VW short squeeze is quite different to what we're seeing with GME. Please contact the moderators of this subreddit if you have any questions or concerns.