Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

GameStop Is Rage Against the Financial Machine

bloomberg.com

Post reply on HN
Print view View original

351–360 of 1001 posts

Re: GameStop Is Rage Against the Financial Machine

#351

Post by Aloha »

Traster wrote: post #347
fredophile wrote: post #330

Earlier quoted context omitted.

It's a short squeeze. The guys left holding the bag are people that are covering their short positions in the company. The average retail investor is not shorting stocks.. There will probably also be some people that try to jump on the trend too late but that isn't who is being hurt right now.

The second that the shorts have covered the price isn't going to drop to $90, it's going to drop back to $20 and most of the WSBers who were holding out for $2000 will lose their shirts. The shorts are going to lose, no doubt. But once they've lost, the stock price is probably $20. A lot of WSBers are going to be holding stock at that point, and possibly on margin. And that stock is going to be a crappy retail stock.…

I dont feel bad for the guy who loses two grand at the casino, why should I feel bad for them?

Re: GameStop Is Rage Against the Financial Machine

#352

Post by xur17 »

kahrl wrote: post #313
kart23 wrote: post #285

Can anyone tell me why SEC won't just step in, suspend trading, and force some kind of resolution? Its obvious that the market has been effectively broken by the short sellers. It might just make the redditors more angry and likely to hit other shorted stocks, and possibly cause markets to decline, but its the best applicable solution i see. https://www.sec.gov/oiea/investor-alerts-and-bulletins/ib_tr...

Short sellers illegally borrowed more stock that actually existed. They are the criminals here. Not the people discovering this and taking the criminals for everything they have.

Is it actually illegal to do this (not should it be, is it)?

Re: GameStop Is Rage Against the Financial Machine

#353

Post by SimonPStevens »

scarmig wrote: post #260
krok wrote: post #118

Earlier quoted context omitted.

> These points doubtless make me appear to be a complacent shill for the financial industry, talking down to the rubes For context, in 2008 John Authers was a (very senior) Financial Times reporter on Wall Street. He became aware that there were queues of financial workers outside retail branches of banks in South Manhattan. These people had cash in various US banks, more than the insured deposit limit, and were with…

For the interested: https://www.ft.com/content/1fcb4d60-b1df-11e8-99ca-68cf89602... "Was this the right call? I think so. All our competitors also shunned any photos of Manhattan bank branches. The right to free speech does not give us right to shout fire in a crowded cinema; there was the risk of a fire, and we might have lit the spark by shouting about it." Enraging. You're allowed to shout fire in a crowded theate…

While I mostly agree, it is a touch more subtle than this metaphor.

Shouting fire in a crowded theatre doesn't typically cause the fire to get worse.

A major newspaper breaking news of an impending bank run, does have the likelihood of actually being the thing that triggers the bank run, or maybe making it much worse.

Re: GameStop Is Rage Against the Financial Machine

#354

Post by oh_sigh »

scarmig wrote: post #260
krok wrote: post #118

Earlier quoted context omitted.

> These points doubtless make me appear to be a complacent shill for the financial industry, talking down to the rubes For context, in 2008 John Authers was a (very senior) Financial Times reporter on Wall Street. He became aware that there were queues of financial workers outside retail branches of banks in South Manhattan. These people had cash in various US banks, more than the insured deposit limit, and were with…

For the interested: https://www.ft.com/content/1fcb4d60-b1df-11e8-99ca-68cf89602... "Was this the right call? I think so. All our competitors also shunned any photos of Manhattan bank branches. The right to free speech does not give us right to shout fire in a crowded cinema; there was the risk of a fire, and we might have lit the spark by shouting about it." Enraging. You're allowed to shout fire in a crowded theate…

It's more like no one actually saw fire, but the back half of the theater snuck out and ran away because there were rumors of a fire. Authers saw this happening and had a chance to tell the people in the front of the theater that the whole back half had thought there was a fire and ran away, but he decided to just slink out the back and leave the front half to get burned.

I'd be ashamed to call myself a journalist if that was how I behaved.

Re: GameStop Is Rage Against the Financial Machine

#355

Post by superfrank »

fredophile wrote: post #330
admax88q wrote: post #315

Earlier quoted context omitted.

> The "little guy" refers to the Reddit traders that are making a killing right now, with the expectation that eventually the stock price will crash again. The reddit traders are only making a killing if they're selling these inflated positions. At some point somebody will be left holding the bag, odds are it will be a bunch of people from wallstreetbets and other retail investors that are late to the party. There's…

It's a short squeeze. The guys left holding the bag are people that are covering their short positions in the company. The average retail investor is not shorting stocks.. There will probably also be some people that try to jump on the trend too late but that isn't who is being hurt right now.

That's the idea, but there will also be a bunch of retail traders who get caught up in the frenzy and end up losing too much when the bubble pops.

Maybe it's their own fault for being greedy, but they do still exist. It won't only be hedge funds left holding the bag.

Also, there is a worry about multiple hedge funds going bankrupt and causing a cascading effect when they are forced to close out other positions which would hurt average people. I'm not blaming WSB for this, the hedge funds got caught being greedy and deserve everything they're getting, but we do need to try to prevent their failures from affecting the market as a whole.

Re: GameStop Is Rage Against the Financial Machine

#356

Post by hbosch »

fredophile wrote: post #330
admax88q wrote: post #315

Earlier quoted context omitted.

> The "little guy" refers to the Reddit traders that are making a killing right now, with the expectation that eventually the stock price will crash again. The reddit traders are only making a killing if they're selling these inflated positions. At some point somebody will be left holding the bag, odds are it will be a bunch of people from wallstreetbets and other retail investors that are late to the party. There's…

It's a short squeeze. The guys left holding the bag are people that are covering their short positions in the company. The average retail investor is not shorting stocks.. There will probably also be some people that try to jump on the trend too late but that isn't who is being hurt right now.

Many of those shorts are exiting their positions, or already have, and taken their losses. They're the ones who can afford their losses.

Perhaps there are some funds still holding out their end of the short war, but by the time this is all over... like over over... it will be retail traders selling inflated positions to other retail traders.

Re: GameStop Is Rage Against the Financial Machine

#357

Post by VectorLock »

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…

>As best I can figure, most of the /r/ guys are doing this as a form of trolling and aren't expecting to get rich off it or pour their live-savings into it.

I saw a lot of those "pour their life-savings" into it postings. A lot of "yacht or food stamps" type sentiments being shared.

Re: GameStop Is Rage Against the Financial Machine

#358

Post by ISL »

TuringNYC wrote: post #316
alfl wrote: post #107

Earlier quoted context omitted.

If there is a reversion to mean it will slaughter the retail investors.

It happens all the time, and retail investors dont get bailed out. Here is a lowly perspective from the retail investor: https://twitter.com/inactivist_/status/1354537152445521923/p...

The retail investor only wins if they realize their profits. If they don't, those profits are shifted to a third actor (or never removed from their tormentor's pocket).

Re: GameStop Is Rage Against the Financial Machine

#359

Post by freeone3000 »

Traster wrote: post #347
fredophile wrote: post #330

Earlier quoted context omitted.

It's a short squeeze. The guys left holding the bag are people that are covering their short positions in the company. The average retail investor is not shorting stocks.. There will probably also be some people that try to jump on the trend too late but that isn't who is being hurt right now.

The second that the shorts have covered the price isn't going to drop to $90, it's going to drop back to $20 and most of the WSBers who were holding out for $2000 will lose their shirts. The shorts are going to lose, no doubt. But once they've lost, the stock price is probably $20. A lot of WSBers are going to be holding stock at that point, and possibly on margin. And that stock is going to be a crappy retail stock.…

It's also very hard to exit a falling position. It was hard to exit a rising position this morning -- the stock was on trading hold multiple times. By the time you notice it's falling, it's too late to sell

Re: GameStop Is Rage Against the Financial Machine

#360

Post by dentemple »

mdoms wrote: post #176
elliekelly wrote: post #49

Earlier quoted context omitted.

And (no one seems to be talking about this) but there's definitely a systemic cost. Going forward, how do you effectively manage the risk of one of your positions becoming a meme? This happening once is an interesting situation and I've certainly enjoyed watching it play out. If it happens repeatedly it will definitely start to undermine the investing public & market participant confidence in the market. That's certa…

> Going forward, how do you effectively manage the risk of one of your positions becoming a meme? Don't take short positions. They add nothing of value to anyone. They are just fancy gambling.

And if you do intend to take a short position anyway, don't push it past 100% of the available float.
Post reply on HN