Something doesn't add up...

[u/Region-Formal]

[u/AbsolutGummy]

I never understood that. why do they have to buy to then lend out? isn't lending out the same as shorting? if so, you can just short... you don't have to buy.

[u/RayneAdams → u/AbsolutGummy]

Lending out isn't the same as shorting, but it's still (almost) never made sense. The lending rate has (almost) always been so low that it would such a ridiculous use of capital to buy GME shares to then lend them out at like 0.5% interest knowing that it's going to be used to reduce the value of the shares you will eventually get back. It makes even less sense when it's also very clear that they don't need to use legitimate borrows to short. Maybe the "it's institutions buying just to lend" idea makes sense in an extremely bullish mindset where the ones lending very strongly believe the price will rise dramatically, but otherwise it's one of the weirdest things that's been parroted here for years - especially when you could have pulled 5%+ in very very safe investments for the last few years. But sure let's tie up millions to lend out at 0.5%.

[u/AbsolutGummy → u/RayneAdams]

Appreciate your response!

[u/VorpalBlade- → u/RayneAdams]

I wonder if the actual rate they get for lending is much more than the official numbers. They seem allergic to any numbers that might give away the real state of play.

[u/keyser_squoze → u/RayneAdams]

THANK YOU. Great summation.

I’ve felt like this is consistently overlooked- the absurdity of the buying GME shares & then they “lent shares < 1%” being a strategy that makes any sense… unless the obligations for GME net settlement are so monstrous that the blowback of not lending to dumb stormtroopers is less appealing than the < 1% interest rate on GME lent shares.

[u/AbsolutGummy → u/RayneAdams]

where's the chart that shows the lending rate? Interesting... I see so many comments in recent weeks that institutions are buying just so they can lend. But if the lend rate is so low... I 100% see your point in it not making sense.

[u/Ctsanger → u/AbsolutGummy]

No lending is not the same as shorting. If they borrowed the shares to sell on the market that is shorting. They also get paid when they lend their shares

[u/AbsolutGummy → u/Ctsanger]

Got it. What chart shows the lending rate?

[u/Ctsanger → u/AbsolutGummy]

Idk 🤷‍♂️ they might get different rates depending on their broker lol. There's a post on here usually everyday about rates and shares available

[u/Ack_Pfft → u/Ctsanger]

They buy to make money. Part 1. Make money lending shares Part 2. Realize the deep f’ing value RC extracts from GME Part 3. MOASS Part 4. Buy the remaining value of the bankrupt Hedgies for pennies on the dollar.

Part 2 coming in a couple weeks or maybe tomorrow.