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It's as old as the brokers go - once shit hits the fan, the retail trader starts to read and realize what was actually in all that paperwork they quickly clicked through as they were signing up for their trading account.
I was actually referring to the 2010 period well after bonds were issued (I think?). I think the p/e was over 200 at the time and cash flow was next to nothing, if any, due to razor thin margins and reinvestment.
CNBC just mentioned how a pension fund was a 16% holder of MAC. At that size in a dying dog, they were essentially trapped - if they try to sell, they drive prices lower in a hurry. If they don't sell, they could be in for a long slow slide, keeping capital tied up in a dog.
Enter the short squeeze, and it was manna from heaven for trapped longs in dogs. The fund dumped their entire stake into this squeeze.
I'm sure there will be lots of stories as bigger investors in these dogs who are somewhat trapped and smaller investors who were waiting to get back to breakeven all dumped their holdings into desperate shorts and overeager diamond hands.
I have a question - was this exclusive to RobinHood or did the same happen with other brokerages? If it's exclusive to RobinHood, why was their cash requirement so low as to not cover the trading, regardless how volatile that trading was? I would guess other brokerages were experiencing some "stress" as well.
Was reading this thread by FuturesTrader 71 at Twitter:
lolz as the kids say (I think)
