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Joined 2 years ago
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Cake day: July 1st, 2023

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  • Every post I read in this format makes the same trivial mistake. It assumes that shorts decrease the amount of available shares.

    No they don’t! They infact INCREASE the float.

    When you calculate 44m - 55m there should be a + in-between, not a -.

    It is so simple. If the company had only 3 shares and I borrow 1 and sell, now there are 4 shares owned and 1 share owed. Real float is still 3, apparent float is 4. Thus causing price suppression.

    In theory I could borrow and sell the same share over and over. The real float is always 3, but the apartment float grows.

    TLDR: shorts increase the apparent total number of shares in the float.