ET Reddit Mentions | ChartExchange

Did a little more digging to understand with Gemini it’s Berk A:
**The Mechanism (Short Breakdown)**
Short sellers use a method called **Artificial Margin Elevation**. When the price of **GameStop (GME)** spikes, it creates massive debt liabilities for the institutions shorting it. To prevent an automatic margin call—which forces them to buy back GME shares and trigger a larger short squeeze—they need to instantly boost the asset side of their balance sheets. \[1\]
They do this by driving up or exploiting high-value, illiquid assets like **Berkshire Hathaway (BRK.A)**. Because BRK.A has a very small public trading float and a massive share price, institutional buying can rapidly inflate its value on paper. This sudden collateral spike satisfies clearinghouse margin calculators, suppressing the risk of forced GME liquidations without the funds actually needing to close their short positions.
**Exact Dates and Times of Notable Occurrences**
**February 23, 2021:** Off-exchange (OTC) trading volume for BRK.A surged to unprecedented levels. This happened right as GME began climbing back into the hundreds following its initial January short squeeze.
**May to December 2021 (The 6–10 Day Lag):** Retail quants mapped out distinct patterns where BRK.A price spikes directly preceded GME spikes by **6 to 10 trading days**. Notable locked pairs occurred with BRK.A peaks on **August 11, 2021** (echoed by GME on August 24) and another BRK.A run-up peaking on **October 26, 2021**(echoed by GME on November 3).
**May 13–14, 2024:** As GameStop experienced a sudden, violent resurgence, the rolling 30-day statistical correlation between GME and Berkshire plummeted to a perfect **-1.00**, proving a direct, inverse relationship as equity swap baskets rebalanced.
**June 3, 2024 (9:30 AM – 11:45 AM ET):** Simultaneously with a major GME surge fueled by retail disclosures, a historic 99.97% pricing "glitch" pinned BRK.A to $185 per share on the NYSE. The Consolidated Tape Association (CTA) halted trading for over an hour to manually correct the price bands. \[2, 3, 4, 5, 6, 7, 8\]
**The Market Impact of a Large-Scale Event**
If this localized algorithmic tethering were to fracture on a massive scale, the broader financial markets would experience systemic shockwaves:
\[ GME Uncontrolled Squeeze \]
│
▼
\[ Collateral Assets Exhausted \] ──► (Automated Margin Liquidation)
│
▼
\[ Forced Selling of Blue Chips \] ──► \[ Broad Market Flash Crash \]
**Forced Systematic Liquidations:** If GME rises past a point where inflating Berkshire collateral can no longer offset the debt, clearinghouses will trigger automated, programmatic liquidations.
**Blue-Chip Flash Crash:** To close out multi-billion dollar short positions, hedge funds will be forced to panic-sell their high-liquidity, mainstream holdings (e.g., Apple, Microsoft, Amazon, S&P 500 index funds). This creates an immediate downward spiral across the entire stock market.
**Widespread Exchange Halts:** Cascading margin failures would repeatedly cross regulatory Limit Up/Limit Down (LULD) bands. This would force the NYSE and NASDAQ to trigger market-wide circuit breakers, freezing trading multiple times in a single afternoon to preserve clearinghouse liquidity.
**Brokerage Delays and Capital Restrictions:** Just as seen in previous retail volatility cycles, brokerages would face immense capital requirements from the NSCC to clear trades, likely forcing them to restrict options trading, delay settlement times, or limit purchasing power across volatile tickers.
**Optional Share Buybacks (The "Trap Door")**
If the price of GME falls too low due to short-selling pressure, the board has the immediate authority to use a portion of that cash to execute a share buyback. \[11\]
If GameStop were to deployment even $2 billion of its cash to buy back its own low-priced shares on the open market, it would instantly delete a massive chunk of the public trading float. This sudden removal of available liquidity would trigger an intense, unavoidable structural short squeeze, forcing short sellers and market makers into a cascading margin emergency.

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