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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#221

Post by boringg »

Blackstone4 wrote: post #201
cannabis_sam wrote: post #191

Earlier quoted context omitted.

>people in financial services are worried that [this will] dent confidence in the market. They they don’t give a single fuck about retail investors. (Outside of PR initiatives of course)

Well I work in financial services and I care about people including retail investors which disproves your point. Everything is not black and white. There are of course people in the sector who dont care. There are a mix of views.....

Agree - and glad to hear that. I think the statement should have been posted along the lines of a majority of people who are in positions of power in the financial industry barely care about retail.

Re: GameStop Is Rage Against the Financial Machine

#222

Post by challenger-derp »

VikingCoder wrote: post #38
tempsy wrote: post #30

Earlier quoted context omitted.

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.

Dumb question - could the shorts actually negotiate with Gamestop directly to get them to issue new stocks? Wouldn't that be a win-win (and the retail loses, because a) the stock is diluted, and b) no one would be "forced" to buy from them)

An associated qn is what price GME would issue new stock at if such a deal took place? higher/ lower/ current stock price?

Suppose lower. Unlikely. Because a better price for GME to raise capital exists -- the current stock price.

Suppose at (approx.) current stock price. Possible. But what's in it for GME to offer such a deal to shorts instead of offering it to stockholders? Suppose offer to stockholders, then shorts still have to cover and thus potential of short squeeze remains (which is beneficial to future capital raises). Now, suppose GME offered it to shorts, squeeze is extinguished, the rally fizzles, stockholders who propped up GME's price feel betrayed. At offer to raise capital at current stock prices seem better placed with stockholders than shorts.

Suppose higher. Now we might be on to something. Without GME's offer, the shorts have to close out huge positions by buying from the secondary mkt -- short squeezing the price up and making future purchases to close remaining short positions increasingly costly. Shorts don't want this. Shorts would rather close by buying shares at a higher, _constant_ price (constant means not subject to squeeze). GME, if desperate for capital, could extend an olive branch to shorts with a deal that says, hey, I'm offering n stocks at a 75% premium to the current price of $400, wanna take it?

Re: GameStop Is Rage Against the Financial Machine

#223

Post by blueblisters »

dheera wrote: post #172
drzoltar wrote: post #159

Earlier quoted context omitted.

I’m worried what will happen down the road. Robinhood is likely getting super valuable data on this. Combine that with correlating post activity on Reddit and you have a recipe for obliterating the arbitrage of retail investors. These hedge funds will also buy the data that Robinhood freely sells [1]. Sure, squeezes like this will still happen every so often, but on average the hedge funds will win more in the long r…

Really the only thing the hedge funds could do to "win more" in the long run is to stop shorting stocks en masse. The more they short sell, the more this can be pulled off again and again. Which is good IMO, I'd be happy in a market where short selling and negativity in general just isn't a thing. If you aren't optimistic about a company just stay out.

Short sellers are incentivized to uncover scams and overvalued equities, as a few other folks pointed out. There are firms like Muddy Water doing the hard work of finding companies swindling investors and using publicly available data to make a case against them. Without short selling, they lose the incentive to do that.

Re: GameStop Is Rage Against the Financial Machine

#224

Post by esoterica »

cwhiz wrote: post #68

I am loving every minute of this. The "professionals" gamble on the market all the time, front run, high frequency trade, and relentless tactics to get rich at the expense of the "retail" investors. Now they are upset that apps like Robinhood has provided unprecedented access to the markets. Their exclusive access to insane gambling nonsense is being torn down in real time. If Wall St can gamble and cause a global fi…

> Now they are upset that apps like Robinhood has provided unprecedented access to the markets. Their exclusive access to insane gambling nonsense is being torn down in real time.

This is such hilariously clueless nonsense, the fact that it's expressed with such smug confidence and upvoted to the top of the thread is really emblematic of HN's complete ignorance of any topic outside of programming.

When retail volume goes up there a plenty of "professionals" (brokerages, market makers) that make a killing off executing the retail flow. I assure you the industry is loving the fact that everyone and their cat is FOMOing into trying to day-trade on Robinhood. If you really want to stick it to Wall Street put all your money into a low-fee index fund.

Re: GameStop Is Rage Against the Financial Machine

#225

Post by boringg »

this_user wrote: post #150
boringg wrote: post #112

Earlier quoted context omitted.

I think that only works on co-ordinated activity. Everyone on their is so small and not working in co-ordinated way. There is considerable discussion in the thread about the legality of it. Also - what do you think short sellers like Citron do all the time. Put out fake reports about companies to make money off their short positions. The sentiment on the trade is eff those short sellers and their sketchy tactics.

> I think that only works on co-ordinated activity. Everyone on their is so small and not working in co-ordinated way. There is considerable discussion in the thread about the legality of it. There are entire threads and Discord channels dedicated to coordinating this. It will be extremely difficult to convince a court that there is no coordination or market manipulation, especially when there are people who are spel…

In Citron's case they cast super sketchy dispersions about companies and hope that they influence investors who don't understand how the companies operate. It's right at the line and the cost of proving them wrong is not worth the effort... plus the SEC has bigger fish to fry when they have a mandate to enforce.

Re: GameStop Is Rage Against the Financial Machine

#226

Post by dec0dedab0de »

shuntress wrote: post #104

One of main points I've seen from people angry about a perceived deliberate manipulation to reduce Gamestop's stock price is that this will directly impact retail workers in the form of job loss. Could anyone explain how this might happen? My naive assumption is that the relationship between a company and it's stock is (mostly) one-way. If a company cuts jobs, this along with all other signals from that company will…

I think that can happen if the board decides to sell the company because the stock is low, then it is bought by another company that just wants to extract as much profit as quickly as possible. For example by taking on a bunch of debt to pay themselves bonsues, then declaring bankruptcy and liquidating the remaining assets. I am far from an expert, but I think something similar happened to Toys R Us.

Re: GameStop Is Rage Against the Financial Machine

#227

Post by icebraining »

diarrhea wrote: post #105
thepasswordis wrote: post #86

There's a mantra among these people of "I just wanted to play video games, why couldn't you leave me alone?" The culture of a lot of redditors and internet trolls in general seems to be that they feel like they are the eternal punching bag of society. They were the punching bag in high school, they didn't get into a good school (or go to college at all), and now they're the punching bag of society as "incels" or "whi…

I'm not sure there's much of an overlap. Incels are a rather small group, and I think most wallstreetbets users are surprisingly... normal. You can't bet on stocks if you're poor. So you'll have lots of mid/late 20s educated guys with decent incomes. This to me really feels like a classic "for the lulz" (and some personal profit), avalanche-style event.

Yeah, but that doesn't mean they aren't portrayed as incels.

Re: GameStop Is Rage Against the Financial Machine

#228

Post by TheCoelacanth »

cwhiz wrote: post #209
krok wrote: post #128

Earlier quoted context omitted.

You are missing something - these aren't naked shorts. The fact that more than the whole float is out on loan does not imply that naked shorting is going on.

How can you get to a point where 140% of the shares are shorted without naked shorts?

A owns 1 share (the only share in existence for simplicity) and lends it to B.

B short sells to C.

C lends 1 share to D.

D short sells.

200% of outstanding shares are shorted.

Re: GameStop Is Rage Against the Financial Machine

#229

Post by VikingCoder »

fennecfoxen wrote: post #82
VikingCoder wrote: post #22

Earlier quoted context omitted.

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 gain…

You're proposing to make the market more efficient by giving the politicians more power to boss companies around and pick winners and losers. This is an excellent thesis if you believe central planning is the best way to allocate society's resources and is definitely never a vehicle for official corruption, and taxpayer funds are never ever misused for bailouts and other political favors. If not, such a move will onl…

> You're proposing to make the market more efficient by giving the politicians more power to boss companies around and pick winners and losers.

I'd love to hear your analysis of how Norway is handling their oil reserves.

Huge companies are not paying taxes. That's a problem. You seem to think there's no good solution. I maybe agree. But I'm willing to move on to a bad solution. How about you?

> As it turns out, government is already entitled to N% of a company's profit, through corporate taxes.

If you think in practice that actually works, then you and I are on completely different pages.

> politicians start filling board seats with political apparatchiks

I'm proposing the government receive non-voting shares, or is just restricted from voting. I don't want politicians on boards.

In fact, if you're curious, I think that the major political parties should refuse to endorse anyone who doesn't 100% divest themselves of all future income, instead promising to receive all of their future income through their government pension. And elections should be publicly funded (each citizen gets $100 per year to allocate to whichever politician or party they want to, and that's it). Amend the Constitution to overturn Citizens United. Re-instate the Fairness Doctrine.

> everything shady about big business with everything shadowy about government

That you apparently believe they're not already 100% glued together already shows again that you and I are on completely different pages.

> More private equity, or just incorporating overseas.

Yes, we need a "Uniform Commercial Code" for taxation, around the world. We all suffer that that doesn't exist.

> Apple can just take its cash hoarde and invest like crazy

That problem already exists in many ways. We should never have allowed corporations to get as big as they are, and we should start to break them up. Competition is good.

Re: GameStop Is Rage Against the Financial Machine

#230

Post by FriendlyNormie »

LiquidSky wrote: post #142
arafa wrote: post #101

Am I missing something in the Gamestop news that isn't "hedge fund gambles billions on naked shorts and loses"? That seems like a real blunder on their part. In other contexts we would just call this gambling, I think. Shorts have infinite liability, not hedging them is not something I can get behind.

Because the Masters of the Universe are obviously better and smarter than the pleb masses. That's why they're rich, right? They're the ones who are supposed to be manipulating the market, not these filthy peasant swine who dare to cost their betters money. Their faithful, obsequious servants in the financial news and investor class are merely crying about how unfair this all is to their masters.

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