The next day, at 9:02 a. m. New York time, CNBC's emergency news feed popped up the first news--
"Elliott fund GME Short Position was defeated by Forced Liquidation, with a scale of approximately two million shares."
The text of the news was only a few lines long, but every word was like a nail nailed to the trader's screen--
GME Short Position, established by the Elliott fund in 68 US Dollar, was banned by the securities firm Forced Liquidation because its stock price exceeded the insurance call line of 88 US Dollar.
The closing order is executed through the bulk trading channel before the market opens, and the average buying price is about 89 US Dollar.
Two million shares of Short Sellers were covered, resulting in a single-day loss of more than 42 million US Dollar.
At 9:15, Bloomberg Terminal followed up.
Short Selling proportion data plummeted from 62% yesterday to 54%--
Elliott's two million shares were sold to Forced Liquidation, and the middle-aged woman's 1.5 million shares were also half sold before the market opened.
Short Sellers camp's total position dropped from 42 million shares to 38 million shares.
But new Short Sellers is still entering the market-two small-sized Hedge Fund established about 1.5 million shares of new Short Position in the range of eighty-five to eighty-seven US Dollar.
When Zhao Chen arrived at the office, there were three curves on the Bloomberg Terminal in front of Lin Shicheng -
GME's time-sharing line, Short Position change chart and Gamma Exposure Chart.
GME's pre-market trading has been pushed to ninety-two US Dollar.
Lin Shicheng transfers data to Zhao Chen:
"Elliott was liquidated at 89 yuan. Two million shares. Lost 42 million.
The new Short Sellers built 1.5 million shares at blocks 85 to 87.
The overall Short Position dropped from 42 million to 38 million,
But the entry of new Short Sellers partially offset the net decline."
Zhao Chen put Zisha Pot on the table, and Su Wantang went to the tea room to boil water.
He opened the exposure monitoring report sent by Shen Zhiyi--
"The liquidation of Elliott is the biggest catalyst today.
The compulsory buyout of two million shares has been made, and the stock price is at 92 yuan.
If it continues to rise to 100 yuan today, the 1.5 million shares of new Short Sellers will also be insured.
Then there will be another round of stampede."
At nine-thirty, NASDAQ opens.
GME jumped short and opened high to 95.8 cents, and broke through 100 yuan 15 minutes after the opening.
The K line on Time-sharing Chart is like a fully stretched bowstring. Every time you step back, it is caught by Buying Pressure within a few seconds.
Trading Volume exceeded 100 million shares half an hour after the market opened.
Lin Shicheng sent a message to Zhao Chen in the internal communication--
"Gamma Squeeze accelerates around 100 yuan.
Market Maker's hedge Buying Pressure is concentrated around one hundred and two blocks.
Retail investors Buying Pressure followed.
The new Short Sellers is suppressed by selling orders around 100 yuan, but the volume is not large - they are also panicking."
In CNBC's live broadcast at 10 a. m., the host placed Elliott's liquidation data and GME's stock price chart side by side on the screen.
The number on the left side of the screen is the loss amount of Elliott - 42 million US Dollar.
The K-line on the right side of the screen stretches from 68 yuan to 100 yuan.
The host used an almost shouting tone--
"Elliott Fund's Short Position on GameStop was sold to Forced Liquidation before the market opened today.
This is the second hedge fund after Melvin Capital to be completely defeated by its short bet on GameStop.
Elliott was liquidated at block 68 Short Selling and block 89, resulting in a single-day loss of more than 40 million US Dollar.
GameStop's stock price exceeded 100 yuan this morning.
The market is telling Short Sellers in the cruelest way--
Stocks whose Short Selling ratio exceeds 50% cannot be arbitrarily Short Selling ed."
The commentator of Bloomberg invited a senior analyst who has followed the historical performance of Elliott on the midday show.
The analyst said something in front of the camera--
"Elliott's style is against the trend Short Selling. If you bet correctly, you will earn a lot, but if you bet wrong, you will lose even more.
On GameStop, he was liquidated at $68 Short Selling and $89.
But what really deserves attention is not his loss number, but why he entered Short Selling at 68 yuan.
Short Selling GME's logical chain itself is established--
Revenue is declining, stores are closed, cash flow is negative, and additional issuance is dilutive.
These Fundamentals factors have not changed.
Elliott saw that the proportion of Short Selling dropped from 105% to 62%. He thought that the stampede was over and Short Sellers was cleared.
But he missed a key variable - when Short Sellers stampedes, the number of borrowable stocks in the market will decrease sharply.
Melvin has closed its position, Point72 has closed its position, and Citadel has closed its position.
When these institutions closed their positions, they returned the stocks they had borrowed to the investment banks.
The investment bank lent those stocks to the new entrant Short Sellers--
Elliott is one of them.
Every change of hands in the Short Sellers camp provides fuel for the next round of stampede.
This is not a mistake in judgment by a certain Short Sellers, this is a design flaw in the entire Short Selling structure itself--
When the ratio of Short Selling exceeds a certain threshold, the mutual stepping on of Short Sellers will turn into a cycle of Self-Reinforcement until the last Short Sellers falls."
On WallStreetBets Forum, a post titled "The Second Corpse" was pushed to the top of the homepage.
The text of the post reads--
"Melvin is the first one. Elliott is the second one.
Their bailout line is between 95 and 100 yuan. It has been broken through.
They need to buy back 1.5 million shares in the market. There are no selling orders in the market.
Short Sellers are trampling on each other. Each body is providing fuel for the next stampede."
At 11 o'clock in the morning, GME's stock price hit 105 yuan.
Among the 1.5 million shares of the new Short Sellers, about 800,000 shares were liquidated, and the average purchase price was about 102 yuan.
White-Haired Old Man is sitting alone in a leather chair by the fireplace in the Explorers Club.
On Bloomberg Terminal in front of us, GME's stock price stopped at 108 yuan.
Elliott didn't come today. Neither did the middle-aged woman.
He was the only one left in the room. He picked up the Whisky cup and did not drink it. He just watched the amber liquid in the cup swaying slightly in the firelight of the fireplace.
The phone rang. It was a message from Elliott--
"I closed my position. I closed everything. I lost 42 million. My fund is liquidated."
White-Haired Old Man looked at this message and was silent for a long time.
Then he put the phone on the coffee table, picked up the Whisky cup, raised his head and drank the last sip from the cup.
The winter night in Manhattan outside the window was pitch black, and the wind from the Hudson River pushed the clouds low.
GME's stock price fluctuated around 108 yuan after the market opened, and WallStreetBets Forum was still partying.
And he was the only one left by the fireplace in the Explorers Club.
On WallStreetBets Forum, a new popular post is being pushed repeatedly--
"Elliott was liquidated. His fund size went from 800 million US Dollar to less than 400 million.
He lost money once on Tesla and again on GME.
Next time he will Short Selling. Because going against the trend Short Selling is his style.
But every time Short Squeeze goes up, he loses more. And every time he loses money, Era Vanguard makes money.
Their profit is Short Sellers's loss.
This is the cruelty of the market - in the Short Squeeze market, the profit of the bulls is equal to the loss of Short Sellers.
Short Sellers is not dead, Short Squeeze is more than that. Elliott is dead. Who is next?"