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The Battle of GameStop

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Re: The Battle of GameStop

#61

Post by thefreeman »

oceanplexian wrote: post #25
throwaway0a5e wrote: post #2

They're not winning. They're just minting a different set of losers and pushing the drawing out by a couple weeks. And Reddit being Reddit you can never really be sure whether organic interest is pumping the stock or if they are being manipulated by an astroturfing campaign. If day trading weren't a conflict of interest for me I'd be looking into doing something like that (and consequently not blabbing about it on HN…

Is Melvin Capital winning with their short position? When they’re contractually obligated to repurchase millions of shares and there are no shares left to purchase, what do you think is going to happen? There are winners and losers, but in this case the loser could very well be an investment firm with 12B in assets. Some wealthy investors are about to have that wealth redistributed. I think that’s the point.

"no shares left to purchase". what?? 160 million shares changed hands today. there will never be no shares left to purchase.

Re: The Battle of GameStop

#62

Post by pxue »

IIAOPSW wrote: post #15

I've wrote this elsewhere. The thing that's clicked for me after reading the comments on wsb is that populism, amplified by the modern internet, is going to radically change the finance world in a similar way to how it radically changed our political landscape. These people aren't just investing in GME to enrich themselves. They are doing it to spite the people who they percieve as rigging the game. They are doing it…

this is exactly it. people say the market is a melt up.. another bubble. but i think that's wrong.

It's like the show Billions, actual wallstreet does what wsb is doing ALL THE TIME. You make money when someone else loses money, it's simple.

Except this time, the money isn't staying in the fraternity, it's being distributed out to the common folks.

Can't have that it seems.

Re: The Battle of GameStop

#63

Post by alexeldeib »

electriclove wrote: post #37
dannyw wrote: post #18

Earlier quoted context omitted.

Melvin capital has been forced to take multiple capital injections and bail outs, to avoid being margin called. Short sellers have mark to market losses of over $6 billion, and should the momentum continue, they will be forced to sell at the worst times (infinity short squeeze). Wall St are looking like they will be the losers.

Oh I wish but Wall St creates the rules so I wouldn't be surprised if they find a way to save their butts on a short squeeze.

Isn't that what's happening? Melvin Capital sold a share of their revenue stream for billions in cash to avoid being margin called. That's not exactly "winning" but it's a way to save their butt at a lower loss, perhaps.

https://www.zerohedge.com/markets/first-casualty-big-short-s...

Re: The Battle of GameStop

#64

Post by tomc1985 »

viraptor wrote: post #47
pmorici wrote: post #22

Earlier quoted context omitted.

I wouldn’t compare what happened with GME to the lottery at least not for the people who understood why they were doing what they were doing.

It's still a lottery. They didn't know if there would be enough real following or if most people were just trolling. Even if they estimated that well, they still had no idea where the peak was.

Exactly this. Many of us have been WSB for a while and it is really hard to know whether all this GME buzz would amount to anything material until it actually happened

Re: The Battle of GameStop

#65

Post by randmeerkat »

dvt wrote: post #6

> The same emotion that caused us to root for the thieves in Ocean’s 11 is what makes Wall Street Bets so enticing. Put frankly, Millennials are tired of getting fucked by the man. When you’re underemployed with $100,000 in student loan debt, your financial situation feels overwhelming. You really don’t want to take the advice of your parents or CNBC talking heads [5] to invest 10% of your salary for a 4% annual retu…

This is exactly why I become more liberal the older I get. If it’s no longer possible for millennials to have the same economic prosperity as baby boomers did, might as well vote for UBI, universal health care, and free education. One way or another, millennials are going to pull something out of this shit show.

Re: The Battle of GameStop

#66

Post by abbbccdefd »

shouldiquitamzn wrote: post #17

I’ve made millions on WSB options plays. I can finally quit my job and stop being a cubicle slave. The visceral reaction from the media on this is disgusting. Major hedge funds got caught on the wrong side of this, and have been making a huge stink about it. CNBC to the rescue, demonizing young middle class Reddit investors. This whole thing has opened my eyes to how even my FAANG compensation is peasant money, it’s…

Yeah, running Hedge Funds like Melvin capital is where the real money is. They get a 30% cut of profits they make from their clients money and they have around $10 billion under management. They were up 50% last year so the management team took home ~$1.5 billion. They're deep in the red, down 30%, first month of 2021, due to the systemic risk they took on from all their bloated retail store short positions, but that's okay because the money they're losing is their clients and not theirs.

When they blow up, they talk to their media contacts and lay the blame on retail day traders ganging up on them and start a new fund.

Re: The Battle of GameStop

#67

Post by leowoo91 »

shouldiquitamzn wrote: post #17

I’ve made millions on WSB options plays. I can finally quit my job and stop being a cubicle slave. The visceral reaction from the media on this is disgusting. Major hedge funds got caught on the wrong side of this, and have been making a huge stink about it. CNBC to the rescue, demonizing young middle class Reddit investors. This whole thing has opened my eyes to how even my FAANG compensation is peasant money, it’s…

You might got lucky or not, but your comment is very dangerous for the people who have no idea and haven't been in the field. FAANG compensation is not peasant to billions of people, so please don't do that.

Re: The Battle of GameStop

#68

Post by hn_throwaway_99 »

admax88q wrote: post #32
IIAOPSW wrote: post #15

I've wrote this elsewhere. The thing that's clicked for me after reading the comments on wsb is that populism, amplified by the modern internet, is going to radically change the finance world in a similar way to how it radically changed our political landscape. These people aren't just investing in GME to enrich themselves. They are doing it to spite the people who they percieve as rigging the game. They are doing it…

I think this is more like beanie babies all over again. Except now that its easier to trade its happening in stocks. Populism of a companies stock doesnt really change the performance of that company. GME will implode eventually and the newest suckers or WSB will be left holding the bag.

If you look at WSB's posts though, it's nothing like beanie babies. People don't think this is going to go on forever. Posts where people lost a ton routinely make it to the top.

If anything, WSB celebrates the crazy volatility that can occur with the stocks of interest, and with it the chance to either win big or lose big.

Now, r/bitcoin on the other hand...

Re: The Battle of GameStop

#69

Post by Spivak »

ffggvv wrote: post #46
phil_e_delphian wrote: post #36

Earlier quoted context omitted.

this a profound (intentional?) misreading of how a short squeeze functions. the shorts are the ones who end up "holding the bag" in that they are contractually obligated to buy shares at current (higher) value in order to cover their position. hence the "taking on wall street" angle - institutional shorts are the chump, not the retail investors (and the institutions going long with them)

no it’s not. the squeeze is what makes the price rise, but once the wsb people start taking their profits, there will no longer be a shortage of shares and it’ll work in reverse, cascading down. it doesn’t just magically stay high forever after the shorts are covered. same cascading down effect can happen if gamestop simply issues new shares even now there’s people on reddit who said they FOMOd in at 150 price point

I mean of course it doesn’t stay high once the shorts are covered. But everyone who sells to people with short positions will absolutely come out on top which is the point.

Re: The Battle of GameStop

#70

Post by phil_e_delphian »

ffggvv wrote: post #46
phil_e_delphian wrote: post #36

Earlier quoted context omitted.

this a profound (intentional?) misreading of how a short squeeze functions. the shorts are the ones who end up "holding the bag" in that they are contractually obligated to buy shares at current (higher) value in order to cover their position. hence the "taking on wall street" angle - institutional shorts are the chump, not the retail investors (and the institutions going long with them)

no it’s not. the squeeze is what makes the price rise, but once the wsb people start taking their profits, there will no longer be a shortage of shares and it’ll work in reverse, cascading down. it doesn’t just magically stay high forever after the shorts are covered. same cascading down effect can happen if gamestop simply issues new shares even now there’s people on reddit who said they FOMOd in at 150 price point

no one is saying anything "magically" happens. The profit-taking has happened and will continue to happen - there are a finite number of shares to be purchased, yet shares are still being purchased by shorts.

There is room for profit-taking at every cost basis except for the very top - looking at that subreddit, there are no illusions that it will literally last forever, only that selling en masse now (when shorts are actively working together to fight back) undermines the squeeze.

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