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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#431

Post by xwdv »

admax88q wrote: post #315
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…

> 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…

This would be justice though. If you were in it from the beginning as a true believer you probably got tons of money. If you’re just chaser and bandwagoner coming in at the end you will be punished for your greed along with the short sellers.

Re: GameStop Is Rage Against the Financial Machine

#432

Post by swiley »

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.…

They won't lose their shirts, just the beer money they spent on a meme. Plenty of them really don't care.

Re: GameStop Is Rage Against the Financial Machine

#433

Post by asdfman123 »

blhack wrote: post #57

Okay a serious question: at what point does it make sense for these hedge fund guys to just purchase reddit and shut it down? To be clear: I don't think that would work, but I think we're at the point where stuff like that is going to be tried. These guys are losing BILLIONS of dollars. Billions. Can they spend $1B to prevent the loss of $2B? (Is reddit worth more than $1B?) Other stuff I won't be surprised if we see…

It's probably not a good idea to buy reddit when you're losing your shirt just in hopes of turning it around in the short term. The momentum is already there for the short.

Instead hedge funds will learn from this example and get smarter about using and manipulating social media. I wouldn't be surprised if they start leading secret PR campaigns to start trends like this on reddit--screw their competitors and make a lot of money.

Why try to swim upstream when it's so much easier to make money swimming with the current?

And why buy social media when you can just manipulate it anonymously?

Re: GameStop Is Rage Against the Financial Machine

#434

Post by melq »

jowsie wrote: post #426
herpderperator wrote: post #343

Earlier quoted context omitted.

Melvin Capital did.[0] [0] https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddi...

You sure about that? https://www.reddit.com/r/stocks/comments/l64xvw/gme_dedicate...

Couldn't they close their position and still have the short interest go up because of other investors opening new positions?

If these institutions are going on record as closing their positions, when they actually havent, aren't they committing some sort of fraud?

Re: GameStop Is Rage Against the Financial Machine

#435

Post by SomewhatLikely »

wesammikhail wrote: post #391
ta1234567890 wrote: post #384

This is a great example of how the stock market is not about fundamentals, just like Bitcoin, it’s all about popularity and perception. In the end, people don’t care if the “stock is really worth” the price, they only care if themselves or someone else are willing to pay the price, nothing else really matters.

You´re right in the short term. But in the long term the hope is that things average out and true value emerges as a function of countless transactions over years and years. Markets are a value ascribing heuristic machine. There is nothing about them that can deterministically point to objective value. However, the idea is that over a longer period of time, an approximation of true value emerges though wisdom of the…

I would say it's more than a hope. Any trader whose strategy is closer to optimal will have larger profits over time and come to own a larger and larger fraction of the market. Though saying that out loud makes me realize optimal doesn't have to mean buying and selling according to true value. Optimal would in fact be predicting the behavior of other participants and trading off those predictions. I still think certain events ground value though: bankruptcies, mergers, and dividends attach a real cost/gain to holding a stock.

Re: GameStop Is Rage Against the Financial Machine

#436

Post by asdfman123 »

xorx wrote: post #117
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…

Yes, but retail is going to get destroyed in the end. The power elite always get what they want. Right now there appear to be curbs on GME and AMC buy orders for TD Ameritrade and Schwab customers. If you have to pull strings with your drinking buddy from Dartmouth to blow up a bunch of propertyless zoomers in order to prevent a margin call on the account you've leveraged to buy your house in the Hamptons, then that'…

You can still buy AMC on Robinhood. I just did.

Re: GameStop Is Rage Against the Financial Machine

#437

Post by saddlerustle »

ineptech wrote: post #190
unethical_ban wrote: post #72

So, can someone explain rationally how options/derivatives are actually useful to the economy, rather than a market manipulation and gambling mechanism? In the traditional, elementary school understanding of stock, people buy into a company because they want part ownership, and the stock goes up as the company does well and has solid financial strength. Derivatives seem to be an unnecessary accelerator.

If you put $X in to AAPL, you can hedge against catastrophe by putting $X/10 in to an option to sell AAPL, which will limit your losses if the stock drops to 0 tomorrow. So in theory, they can be used sensibly. But in practice I think it's not the existence of the derivatives market, it's the size. Our economy is like a town with 1 farmer and 9 investors who spend all day wagering with each other on whether the farme…

> Our economy is like a town with 1 farmer and 9 investors who spend all day wagering with each other on whether the farmer will have a good crop.

Objectively, that's not true. The finance industry is under 10% of GDP and under 5% of jobs.

Re: GameStop Is Rage Against the Financial Machine

#438

Post by asdfman123 »

TrackerFF wrote: post #168

But let's not kid ourselves here - a lot of WSB users are trading under the pretense that this is some great class war against the "elite". Here's what's going to happen, in the end (my predictions): - Some institutional investors will make an absolute killing - Some retail investors will make a killing - A bunch will make fast'n easy gains - A good share of retail investors will stand holding the bag. Sure, some sho…

The evil hedge funds will start rolling out the astroturf and making money off of these campaigns.

I wouldn't be surprised if the GME thing is astroturf already.

Re: GameStop Is Rage Against the Financial Machine

#439

Post by cstrat »

kylebenzle wrote: post #85
colllectorof wrote: post #37

If you want an entertaining explanation of what's going on with GameStop's stock, I highly recommend these videos from Louis Rossmann: https://lbry.tv/@rossmanngroup:a/wallstreetbets-vs-citron-re... https://lbry.tv/@rossmanngroup:a/why-mainstream-media-s-slan... https://lbry.tv/@rossmanngroup:a/gamestop-shorts-lose-billio... https://lbry.tv/@rossmanngroup:a/gamestop-shorts-are-full-of... (That's how I learned about t…

Just SO pumped that library is being used in the real world to host videos!

I'm unable to watch any of them, only the first few seconds loads. Hopefully they can improve because this is terrible

Re: GameStop Is Rage Against the Financial Machine

#440

Post by restingrobot »

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.…

You're forgetting the stock is 125% over shorted. There literally isn't enough stock for shorts to cover their current positions. That's why there is potential for infinite, (huge) gains as long as everyone holds.
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