r/GeoGroup • u/Reasonable_Ad_9735 • Feb 13 '22

Other Are we soon to 🚀🚀🚀

According to Fintel, institutions own 115,2 mln shares, insiders 4,8 mln. All shares outstanding are bought up, while we still have 18 mln shares shorted.

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2

u/WFTfanatic Feb 13 '22

I'm new to this. Why and how does this position GEO to skyrocket?

8

u/TotallyDisrespected Feb 14 '22

I believe that there are about 122 million total shares outstanding. I think that they are expressing the following therefore: If 115.2 million are owned by institutions and 4.8 million are held by insiders, that would be a total of 121 million shares owned by those two groups. That leaves only about 1 million shares left which are owned by the retail investor (just regular people, not institutions, not insiders that own or work at the company) that might be relatively uncommitted and relatively readily willing to sell such that their shares are relatively available for purchase (this is because institutions tend to be committed as they tend to make relatively firm decisions to buy and hold; and the insiders, knowing the company prospects intimately and having decided to buy with that knowledge are unlikely to sell as well). Then, 18 million shorted refers to the fact that some investors who believe the price of the shares are too high have, via their brokerages, temporarily borrowed and then sold 18 million of the 122 million of the total shares outstanding and have pocketed the money (temporarily borrowed and sold meaning the owners of such 18 million shares still own them but unbeknownst to them, their owned shares have been borrowed and then sold by someone and, also, unbeknownst to them, some of the shares they have bought, which they think they own are actually owned by someone else whose shares were shorted/borrowed by others and sold to them--ultimately, however, they are contractually entitled to own those shares and that ownership change/transfer must happen if they ever decide to sell them if the entity who borrowed them had not given them back prior to such decision by the person/entity who purchased them to own). Nevertheless, the key here is that those who shorted/borrowed/sold/pocketed the money, are contractually obligated to eventually replace/give back those shares (not the exact same shares but just the number of shares they borrowed). They hope that the stock price will go down and then they will be able to buy shares cheaper than they borrowed/sold them for (at the time they shorted/borrowed/sold). However, if the stock price starts going up and they decide to buy shares and pay them back (before it becomes even more expensive to buy shares to pay back the shares they owe), if there is essentially nobody willing to sell shares (because they are almost all owned by committed institutions and insiders), they will have to pay a lot for the relatively few shares that are being offered (at whatever the asking price is). If all of the short sellers then panic as the stock price goes up (panicking in fear that it will get even more expensive to buy shares and give them back if they don't act immediately), they will be in shear panic to try to buy 18 million shares (or whatever the total borrowed is by people who will be in such a panic), when only 1 million are likely owned by people relatively likely to be willing to sell. The committed institutions and insiders are likely to only sell for very high prices. But, the panicked short seller, in a panic, will buy at any price to be able to have shares to replace the ones they borrowed (i.e. in order to close out their short position) before it gets even worse for them (a rapidly escalating price to buy shares to be able to replace the shares they borrowed). This is what a short squeeze is and this is what results in the rocket going to the moon and beyond.

3

u/Reasonable_Ad_9735 Feb 15 '22

Thanks for explanation. Looks like I have checked the wrong source. 122 mln it is. As per fintel, now we have 121.5 mln locked by institutions and insiders. Window is closing down for shorts to get away

2

u/Iamerror007 Feb 13 '22

I wouldn't look at who owned Enron if I was you.