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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#21

Post by wpasc »

mam2 wrote: post #7
ping_pong wrote: post #4

It's really not. Because eventually retail is going to get destroyed. Yes, some hedge funds have lost their shirts, but those are the first ones who were in the short before the squeeze. The hedge funds and more importantly day trading shops making money right now are the ones who saw the activity and are goosing the stock price right now. I don't know if people realize that there are thousands of day trading shops w…

Or not.. people have been saying that about tesla for years..

That's a false equivalency if I've ever seen one

Re: GameStop Is Rage Against the Financial Machine

#22

Post by VikingCoder »

Edmond wrote: post #14
jdjfktkrnj wrote: post #3

So, do people still think Efficient Market Hypothesis is a thing? If this doesn't prove that the stock market is just a video game, which decoupled from economic reality a long time ago... We've now entered the age of the meme stock market.

This is a reductive take, there is the idealized model of the market that the efficient market hypothesis refers to and there is the real one, which can get quite messy. The market does serve a real purpose, ie deploying capital and providing liquidity.

It serves that purpose, but is the market as it exists today the best way for society to achieve that purpose?

K-shaped recoveries make me think "I wish there were a better way."

But I'm an idiot. So my best idea right now is, "When a business issues stock, they also have to issue an additional 20% to the government, and then we need to keep the tax rate low-ish on dividends, but increase the tax rate on capital gains - hopefully encouraging companies to pay dividends, which the government would receive."

I'd appreciate if someone could tell me why my plan is awful. Because I'm sure it is, but I haven't been able to figure out why it's awful.

Re: GameStop Is Rage Against the Financial Machine

#23

Post by boringg »

ping_pong wrote: post #4

It's really not. Because eventually retail is going to get destroyed. Yes, some hedge funds have lost their shirts, but those are the first ones who were in the short before the squeeze. The hedge funds and more importantly day trading shops making money right now are the ones who saw the activity and are goosing the stock price right now. I don't know if people realize that there are thousands of day trading shops w…

I don't think you understand what's happening here.

There's only so much volume available as a result of the short positions. WSB et al are putting in money on a long hold. As a result that drives up the price. Yeah gamma's are in for sure making money. There are some people who have made multiple millions. One individual sitting at $31M currently on a $50k investment.

Some retail will lose, but wall street institutional short sellers are getting hit hard right now. For them to win this they need to keep putting more money into the fire which pulls in bigger and bigger fish. At some point large institutional investors aren't willing to bail out the short sellers.

It is also a strong argument that wall street isn't as intelligent or in control as they like to promote.

General public doesn't understand the trade or the sentiment behind it.

Re: GameStop Is Rage Against the Financial Machine

#25

Post by chrisseaton »

AdmiralAsshat wrote: post #20

> These points doubtless make me appear to be a complacent shill for the financial industry, talking down to the rubes. For the record, I’m still angry about the way workers were ripped off in Britain more than three decades ago, and about the way the little guy ended up bearing the brunt for the financial implosions of 2000 and 2008. But it looks horribly to me as though the same thing is going to happen again — and…

Aren't almost all companies like this an integral part of almost everyone's pensions?

Through your pension you're probably an investor in tens of thousands of companies and funds.

Re: GameStop Is Rage Against the Financial Machine

#26

Post by ping_pong »

tempsy wrote: post #19
ping_pong wrote: post #16

Earlier quoted context omitted.

It's all about making money. WSB was about hurting the hedge funds or screwing the system. And to be clear, I know wsb because I was one of the first group of subscribers of wsb way way back, but quit it because it wasn't engaged in what I thought was trading strategies, but a lot of shitposting. But they didn't cause this crazy short squeeze. It's the other hedge funds and day trading shops that are causing this bec…

nah you’re underestimating their power to move names in small cap stocks with high short interest.

That's absurd. People in WSB probably bought low and haven't sold at all or sold on the way up. Look at the volume. Who is shorting at these prices with this kind of activity?

Who has the money to keep buying at $350 to propel the stock to $400? Definitely not WSB. I know plenty of people dipping their toes in and buying 10 or 20 shares for fun right now. But there's 55M shares trading at all time highs. That's not retail. That's day trading shops and deep pockets.

Re: GameStop Is Rage Against the Financial Machine

#27

Post by totalZero »

jdjfktkrnj wrote: post #3

So, do people still think Efficient Market Hypothesis is a thing? If this doesn't prove that the stock market is just a video game, which decoupled from economic reality a long time ago... We've now entered the age of the meme stock market.

> do people still think Efficient Market Hypothesis is a thing?

Sure, it's a thing. But underdamping is also a thing. And information diffusion is also a thing.

The efficient market hypothesis doesn't say "markets are always efficient, and prices only move based on new public information." Rather, that information diffuses into the market. Some idiot hotshot billionaire short-seller overshorted GME, and it took time for that information to spread to other market participants. Then, once the information was there, it took time for the upward price impact to un-do the impact of the short. And it is going to overshoot the true asset value because the market is underdamped -- contrarians aren't going to step in immediately, and longs are still waiting to put in a clear indication of a top.

The real joke here is that Plotkin went so heavily short a name that was trading at a mere fraction of its annual sales.

Personally I think there are two SEC rules that should come out of all of this:

First, shorts should be reported alongside longs in 13F filings.

Second, there should either be a limitation on re-hypothecation for heavily shorted names, or short sellers should not be able to add to new positions once shorts go beyond 100% of the float.

Re: GameStop Is Rage Against the Financial Machine

#28

Post by splistud »

ping_pong wrote: post #4

It's really not. Because eventually retail is going to get destroyed. Yes, some hedge funds have lost their shirts, but those are the first ones who were in the short before the squeeze. The hedge funds and more importantly day trading shops making money right now are the ones who saw the activity and are goosing the stock price right now. I don't know if people realize that there are thousands of day trading shops w…

perhaps you don't realize these day trading shops (and loosely connected groups of high volume traders), are active on wsb

Re: GameStop Is Rage Against the Financial Machine

#30

Post by tempsy »

VikingCoder wrote: post #24
throwaway63d2b wrote: post #10

The duplicity of the media here is funny! Melvin has not closed out of its short position.

Is there any way for us to know for sure, other than them announcing their positions, or losses?

the reality is all of their major shorts are being squeezed not just Gamestop, but I agree I think their CNBC interview was just a distraction and doubt they could’ve closed out their entire short position overnight.
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