Reddit/Gamestop vs.Wall Street

Muahahaha

seamus wrote: »

The important part here is that the key instigators don't really care. They're prepared to lose the money they put in. A few later comers who wanted to cream off will probably lose out.

The main demonstration here is just how much of the money in the hedge market is completely invented and adds no value to anything whatsoever.

Hedge funds engage in these kinds of manipulative practices continuously. It's basically just a big game to them; to see who can place the wildest bets and come out on top.
The entrance of a player who isn't willing to play by the unspoken rules has completely upset the apple cart.

Id have thought the key instigators will eventually take huge profits and sell out their position and that will spread panic to the rest of the herd and the share price will eventually crash back down to its true underlying value (which is nowhere near the $140 per share it is trading at the moment). However if analysts are correct the share price is set to rise even higher before that happens so there might be a while to run here yet.

Its definitely going to interesting to watch on though and and see how this plays out. There seems to be a generational element behind it whereby millennials and Gen Xers pissed of with Wall Street gambling and bailouts are out to give them a bloody nose and its been working delightfully so far. But the problem is they have pushed the value of the company past $20bn when the reality is its worth nowhere near that amount and had been closing shops due to competition from Amazon.

FortuneChip

What happens once the those shorting firms have all destroyed their books trying to balance things, does the price regulate itself over time?
Whatever about the early members of the "buy" group, will some of the later bandwagoners be left holding stock worth nothing?

Too Tough To Die

Too Tough To Die wrote: »

This is all Donald Trump's fault.

https://edition.cnn.com/2021/01/27/politics/gamestop-stock-surge-trumpism/index.html

Its really an attack on the hoi polloi. The idea that elites are working in their own interests is an ancient one, its a form of historical illiteracy to blame Trump.

He also assumes that the elites in this case are experts, but they are the guys who caused 2008. A little person's uprising wouldn't be a bad thing. In fact the EU bans short selling.

The good thing about this is that even more Americans will now know the game is rigged. Trade on the "free market" to push a stock and the big boys will shut you down.

Vic_08

Overheal wrote: »

“ Our mission at Robinhood is to democratize finance for all. We’re proud to have created a platform that has helped everyday people, from all backgrounds, shape their financial futures and invest for the long term.

We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. We also raised margin requirements for certain securities.

Amid significant market volatility, it’s important as ever that we help customers stay informed. That’s why we’re committed to providing people with educational resources. We recently revamped and expanded Robinhood Learn to help people take advantage of the hundreds of financial resources we offer and educate themselves, including how to make sense of a volatile market. In 2020, more than 3.2 million people read our articles through Robinhood Learn.

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:mad: so basically the brokers are forcing everyone into sell-only on these stocks now because we can’t have regular people buying into this thing any longer. What the hell! How is that not market manipulation?

It's what casinos do when a card counter uses their ability to flip the odds at a blackjack table against the house; kick them out.

FortuneChip

FortuneChip wrote: »

What happens once the those shorting firms have all destroyed their books trying to balance things, does the price regulate itself over time?
Whatever about the early members of the "buy" group, will some of the later bandwagoners be left holding stock worth nothing?

I think people realise that they are going to lose money. This isn't normal investing. They are paying to get at the hedge funds.

WrenBoy

Surely RobinHood closing the open market to cause a crash is market manipulation !??

Steyr 556

Steyr 556 wrote: »

You can only play the game by their rules apparently.

They basically took their ball and went home. Except it wasn't their ball. The referee let them do it.

Vic_08 wrote: »

It's what casinos do when a card counter uses their ability to flip the odds at a blackjack table against the house; kick them out.

The casino is both a private building and the games are rigged. It's nice to admit that the game is rigged. But we knew that.

Fred Cryton

seamus wrote: »

The important part here is that the key instigators don't really care. They're prepared to lose the money they put in. A few later comers who wanted to cream off will probably lose out.

The main demonstration here is just how much of the money in the hedge market is completely invented and adds no value to anything whatsoever.

Hedge funds engage in these kinds of manipulative practices continuously. It's basically just a big game to them; to see who can place the wildest bets and come out on top.
The entrance of a player who isn't willing to play by the unspoken rules has completely upset the apple cart.

Populist nonsense. Hedge funds have an important role to play in price discovery. They were correctly shorting an overvalued stock here, and will be proved right in the end. This is just a price spike and many retail investors will get burned out of this.



Hedge funds also provide liquidity. Where would we in ireland be if funds hadn't come in and bought up property in 2011-2013 at a time when no-one else had any money. Probably would never have come out of recession.

paw patrol

This is brilliant seeing hedge funds get battered like this.

But a second more interesting thread to this, is how the financial and political elite systems closed ranks to stop the great unwashed doing what these funds do on an almost daily basis.

The constant media outrage linking this to racism, white supremacy and all that good stuff. Even saw a headline with the antisemitism thrown in for good measure.

The closing down of access to these shares on Big Tech and the financial system just freezing out the rabble for behaving against the rules of polite society.
All this happening while the white house sits there doing nothing for the common man.

Finally this is overt conclusive proof to the claim from George Carlins famous quote

It's a big club, and you ain’t in it. You and I are not in the big club.
And by the way, it's the same big club they use to beat you over the head with all day long when they tell you what to believe. All day long beating you over the head in their media telling you what to believe, what to think and what to buy.
The table is tilted folks. The game is rigged, and nobody seems to notice, nobody seems to care. Good honest hard-working people -- white collar, blue collar, it doesn’t matter what color shirt you have on -- good honest hard-working people continue -- these are people of modest means -- continue to elect these rich cocksuckers who don’t give a **** about them.

It doesn't take a conspiracy theorist to see the cemented links between these people and organisations.

The game is rigged. Knowing that is 90% of the battle.

Infini

Seen this showing up last night, absolutely fúcking hilarious and a real bit of karmic revenge against those investors who are now on the receiving end of their own manipulations. Really took off once they got Musk to tweet "Gamestonk" and really shows how powerful small time investors can be if organised. Best thing of all is those small timers could walk away with a payday of their own, believe someone invested $1000 at the start and now has close to 1million because of this. Fair fúcks to them!

Fred Cryton

Fred Cryton wrote: »

Hedge funds also provide liquidity. Where would we in ireland be if funds hadn't come in and bought up property in 2011-2013 at a time when no-one else had any money. Probably would never have come out of recession.

All that happened when those funds ( who aren't necessarily hedge funds) bought property is house prices stopped falling. The real economy was growing in spite of this.

Personally the best thing for a society is low house prices and high wages.

simongurnick

Love this. Worked in the industry on the self directed side for years and saw many clients fight tooth and nail to make a few bob, while hedge funds could almost move the market as they please, given the size of their positions.
At this point, it's a question of when this thing crashes down, because all these people are going to want to sell off at some point.

paw patrol

Fred Cryton wrote: »

Hedge funds also provide liquidity. Where would we in Ireland be if funds hadn't come in and bought up property in 2011-2013 at a time when no-one else had any money. Probably would never have come out of recession.

You are on a wind up.
These hedge funds bought all the good property , plenty of irish people were willing to buy and had cash to buy much of those properties at the prices the funds paid.

NAMAs laziness meant they only offered bundles in lots at prices that only institutions could afford - not even afford - at prices they alone could access credit for.
Selling to these funds was a moral crime and theft from the irish taxpayer.

cubatahavana

I tried to buy 50 dollars from revolut in AMC stocks yesterday just for a laugh and still waiting for them to finalise the transaction. If it rises enough for a bottle of Moet, I'll consider myself lucky

JohnFalstaff

WrenBoy wrote: »

Surely RobinHood closing the open market to cause a crash is market manipulation !??

Robinhood also sell customer order flow to shops like Citadel (who also invested in Melvin).

The only people guaranteed to make big money here are the HFTs and brokers.

simongurnick

Gatling wrote: »

Has anyone actually made real world money on this or is just a case of sticking it to the hedge funds

People are absolutely making money

Harry Palmr

Some more detailed reading here. Guardian have gone quite big with this

https://www.theguardian.com/business/2021/jan/27/gamestop-stock-market-retail-wall-street

https://www.theguardian.com/business/nils-pratley-on-finance/2021/jan/27/gamestops-dizzying-share-price-rise-is-game-over-for-the-short-sellers

and a stupid opinion piece here but with some excellent posting below the line by people not paid to write lazy crap.

https://www.theguardian.com/commentisfree/2021/jan/28/anarchy-in-jokes-and-trolling-the-gamestop-fiasco-is-4chan-think-in-action

joseywhales

hatrickpatrick wrote: »

The entire system is built upon the idea of making money by exploiting others without actually producing anything of value. It's a total corruption of the original idea behind the stock market. These funds and their activities have ruined the lives of millions of people all over the world, so I don't have the slightest amount of sympathy for anyone who chooses to take part in that horrendous buttf*ck of society when they get burned by the methods they've used to burn everyone else for decades.

In a proper functioning market, driven by fundamentals, market participants using their research capabilities, produce an ever more efficient market. The result is that capital flows toward good stock, which is a good thing. It provides financing to help well run business expand and take on new opportunities. Making society more productive and providing industry and jobs. However in this market where fundamentals mean nothing anymore, I agree with you. This bubble will burst like all others before it.

Muahahaha

Overheal wrote: »

Friend is on that wave. He put in 2k and he’s up to 20k now. I have pocket change so I bought one share of AMC :pac:

Well the good news is that AMC is surging too, it is up 300% as the same Redditors who are buying Gamestop are also going in hard on AMC. Its mad stuff, a cinema chain in a pandemic tripling its size :eek:

https://twitter.com/markets/status/1354439672018178054

https://twitter.com/mcwm/status/1354447688671096834

paw patrol

paw patrol wrote: »

You are on a wind up.
These hedge funds bought all the good property , plenty of irish people were willing to buy and had cash to buy much of those properties at the prices the funds paid.

NAMAs laziness meant they only offered bundles in lots at prices that only institutions could afford - not even afford - at prices they alone could access credit for.
Selling to these funds was a moral crime and theft from the irish taxpayer.

I even asked NAMA if I could buy a particular property at reduced prices in 2010 or so. They didn't answer ( and this was on a dedicated investor email). Instead they were sold off to the vultures.

Gatling

Gatling wrote: »

Has anyone actually made real world money on this or is just a case of sticking it to the hedge funds

One guy invested 50k back in 2019. By the beginning of the month, he'd upped it to about 1.5 million. By Friday that became 3 million and on Monday it was up to $23,000,000.

A big part of this is those shorting the stock doubled down and shorted it again. As this is what they've been doing for decades. This attracted more attention, and meant that there was a promise of a bigger payday further down the line, so more people bought in and the price skyrocketed.

Elon Musk has a particular disdain for these cnuts. They pulled a similar stunt on Tesla a while ago, and nearly drove the company out of business. He caught wind of this madness last week and tweeted about it. That tweet alone caused a $50 jump in the price. I'd say he's delighted.

https://imgur.com/gallery/DCCpuZA a quick breakdown for anyone still not sure of the ins/outs of the whole thing.

It is absolutely farcical that these big guys, who've been playing this game for decades and using these tactics to line their pockets are normally the first to cry about intervention in the market. Now that the shoe is on the other foot, they are crying out for something to protect them from going bust.

I've seen people crowing about how this is damaging peoples' retirements etc. There are strict rules about how much of a 401k can be invested in any one fund at a given time. It will impact to a certain degree, but people aren't gonna end up with no pension because of this (or at least they shouldn't, if the fund was playing ball_

joseywhales

joseywhales wrote: »

In a proper functioning market, driven by fundamentals, market participants using their research capabilities, produce an ever more efficient market. The result is that capital flows toward good stock, which is a good thing. It provides financing to help well run business expand and take on new opportunities. Making society more productive and providing industry and jobs. However in this market where fundamentals mean nothing anymore, I agree with you. This bubble will burst like all others before it.

The only way for a company to benefit from high stock levels is to issue more stock. Which reduces the stock price and angers shareholders. In fact companies are more likely to buy more stock, which just reduces their liquidity. And in fact stock buybacks used to be illegal.

The people at the SEC are going to have a nightmare dealing with this. CNBC and Melvin Capital are going to be targetted in investigations for sure.

Andrew Ross Sorkin of CNBC yesterday claimed on air that he received a phone call from Gabriel Plotkin who runs Melvin Capital, the hedge fund with the biggest holding of shorts for Gamestop (GME), saying he has sold out of GME and taken a huge loss. It's been pointed out that this is impossible because the open short position is still too big to have had the biggest holder of that position sell. So either Melvin Capital handed the position over to another investment firm (which is extremely unlikely as no other hedge fund would touch it) or Plotkin called Sorkin at CNBC and lied about being out of GME to spook the retail investors into selling and taking their profits while they could get them so MC could recover some at a cheaper rate.

I don't know which is more likely. A hedge fund with close ties to a financial channel lying to benefit from misinformation or another hedge fund taking on a massive loss for no reason. All I know is that the first one is market manipulation and highly illegal and the second is basically impossible. Even Sorkin sounded nervous saying it live on air, noticeably shaky in his voice, because he knows questions are going to be asked by the SEC about this call he claims to have had with Plotkin. Either way Melvin Capital can't have closed out their position when Plotkin said they did because the shares were still being hoarded by the WSB crowd en masse. Definitely some shady stuff going on at MC and CNBC.

Fred Cryton

Fred Cryton wrote: »

Populist nonsense. Hedge funds have an important role to play in price discovery. They were correctly shorting an overvalued stock here, and will be proved right in the end. This is just a price spike and many retail investors will get burned out of this.

The shorts were 139%. That's called naked shorting and is very much illegal. If you think they were "correctly shorting overvalued stock" then you are extremely naive. I'll leave this here for you.

- Naked shorting is the illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short.

They got caught with their pants down from greed and paid the price. No sympathy for them whatsoever. The SEC won't have any either once the smoke starts to clear. I guarantee some of those shorts on their books are not even accounted for.

timmyntc

Shorting stocks serves no purpose other than to enrich stock speculators, the world would be a lot better off if it were banned

argolis

How can there be more shares shorted than are available?

1. Michael borrows 1 share from Jim
2. Michael sells the 1 share to Pam
3. Toby borrows the 1 share from Pam
4. Toby sells the 1 share to Ryan

There's only 1 share held by Ryan, but Toby and Michael both now have a legal obligation to buy 1 share and give them back to Pam and Jim respectively. So the share is 200% shorted.

In reality only 1 share exists so more are owed than actually exist. If Ryan realises that fact, then he can jack up the price on Toby and Michael who are now screwed because they have no choice but to buy at whatever price Ryan demands. That's the "short squeeze".

In the Gamestop situation, Citron and Melvin can't wait it out very long. They'll have to keep posting more and more money as collateral against their potential losses AND they're paying daily interest on the loaned shares, based on the current share price. Now the share price has sky rocketed, so are their premiums. They're hemorrhaging money to keep the shorts going and trying to wait it out.

They put out a fake story that they had closed out their shorts hoping that would cause the share price to fall (so they could buy the shares back cheaper) but it was shown to be total BS because there are tools available that show exactly how many shorts are still active.

simongurnick

Deleted User wrote: »

The shorts were 139%. That's called naked shorting and is very much illegal. If you think they were "correctly shorting overvalued stock" then you are extremely naive. I'll leave this here for you.

- Naked shorting is the illegal practice of short selling shares that have not been affirmatively determined to exist. Ordinarily, traders must borrow a stock, or determine that it can be borrowed, before they sell it short.

They got caught with their pants down from greed and paid the price. No sympathy for them whatsoever. The SEC won't have any either once the smoke starts to clear. I guarantee some of those shorts on their books are not even accounted for.

Snakes.
For shares to be sold short, the actual shares are borrowed from other customers margin accounts. It's part of the margin agreement. So in reality the amount of short shares outstanding should never even be close to 100% because not all long shares are held in margin accounts.

conorhal

Deleted User wrote: »

I think people realise that they are going to lose money. This isn't normal investing. They are paying to get at the hedge funds.

Pretty much, pay attention 'Occupy Wallstreet' hippies! That's how you protest the system.

Clearly nothing was learned from the casino banking crash of '08, so the vox populi are now using the banks own rod to deliver a lesson on fairness, and it seems the banks think it's unfair, because massive redistributions of wealth are only supposed to flow one way apparently.

What this larp really tells me is that our financial systems are utterly borked if a bunch or Redditor's can crash it into the ground for a laugh.

James Brown

Saw this and thought it was great. No issues with the idea of investments funds but they have zero social conscience and make things like housing worse. Nice to see someone sticking it to them however it will be short lived.

joseywhales

It's no big deal, the big problem is the overvalued stock market.