GameStop Is Rage Against the Financial Machine • Hacker News Board

Re: GameStop Is Rage Against the Financial Machine

#661

Post by noncoml » Thu, Jan 28, 2021, 1:20 AM UTC

germinalphrase wrote: post #658

noncoml wrote: post #639

Earlier quoted context omitted.

> How does this differ than other populist manipulation via social media? We've seen this technique used repeatedly in many domains. IMHO, it looks obviously the same in many ways. Are you sure you are up to date with what happened? My understanding, and in layman's terms, is that a hedge fund shorted more GME stocks than they are available. Redditors noticed and correctly thought that if they buy all the stocks avai…

How did they notice that the hedge fund had overextended their short position by so much? Is such information part of some required reporting?

Don't know exactly how, but the data are availble. One source is https://s3partners.com/, not to be confused with Amazon S3

Re: GameStop Is Rage Against the Financial Machine

#662

Post by WhompingWindows » Thu, Jan 28, 2021, 1:22 AM UTC

hntrader wrote: post #382

I'd like to know whether these retail investors see Gamestop as artwork or as speculation/investment. Artwork - they buy it not because of any intrinsic value or expectation of a dividend/capital gain, but because of reasons pertaining to subjective utility - childhood nostalgia, a desire to get symbolic revenge at hedge funds, entertainment value, or a desire to access gambling services in a country where online gam…

They could leverage their brand and hype to pivot into new business, supposedly. Maybe it's another WeWork situation where they have a lot of retail and claim to be tech but never make the switch into true tech.

Re: GameStop Is Rage Against the Financial Machine

#663

Post by wolverine876 » Thu, Jan 28, 2021, 1:22 AM UTC

There are so many assumptions in this narrative that have no foundation. (Neither repetition and emotion are signals of truth; the inflammation and use of those things is a good signal that some manipulation is going on and that facts are lacking.)

* The 'little guy' is powering this movement. We don't know who is leading it and who is pushing it. We do know that social media is often used for mass manipulation, leading large numbers into highly delusional, angry territory.

* The intention is retribution: We don't know who is pushing this or why.

* The 'little guy' will benefit: Investment activities with no economic benefit will lose money, in a functioning market. The 'little guys' are the ones who most need an increase in economic activity and suffer most from the economic loss, especially right now.

* Markets are gambling: Financial markets serve an economic benefit to the public; otherwise they have no purpose. Market activity that has no economic benefit wastes precious resources. It denies resources to the people who are most productive to them,and gives them to the unproductive and sometimes to the corrupt, empowering them.

* This angry mob is driving GameStop's securities prices: Do we have evidence that it's not others?

* Regulations are to control the 'little guy': Regulations protect everyone from fraud and stabilize our markets. Not all regulations are well-intended or perfect, but an unregulated market is not realistic or desirable.

* There is a 'little guy' and 'big guy': These are just arbitrary divisions with no definition, and they may have nothing to so with the situation. Whenever something goes wrong, there are always people who will try to gain power buy inflaming a mob and pointing them toward a target. In the past, it was often religion that was used. We know this technique is often used on social media, to great effect.

What I see is an angry mob. I wouldn't treat it as anything else. Edit: Looking at past angry mobs and financial bubbles, it's the mob that suffers. Someone else will make money off of them.

Re: GameStop Is Rage Against the Financial Machine

#664

Post by selectodude » Thu, Jan 28, 2021, 1:22 AM UTC

nl wrote: post #471

restingrobot wrote: post #440

Earlier quoted context omitted.

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.

An unrealized gain (ie, "everyone holding") isn't actually money though. The sensible people will take their (massive) profits, and those who believe the "as long as everyone holds" rhetoric will be left with losses, probably on margin.

Nobody is allowed to hold GME on margin anymore. Haven't been able to for weeks.

Re: GameStop Is Rage Against the Financial Machine

#665

Post by llampx » Thu, Jan 28, 2021, 1:24 AM UTC

fennecfoxen wrote: post #628

6nf wrote: post #615

Earlier quoted context omitted.

How do you know they don’t think that the GameStop bag will have money in it?

It's possible they think so, but if they think it'll have money in it, after it lost money six of the last seven quarters, I'm not sure what they're smoking.

You could have said the same about $TSLA or $AMZN at some point in their history. If stocks were rational, TSLA shorts would have made money last year instead of losing billoins.

Re: GameStop Is Rage Against the Financial Machine

#666

Post by wolverine876 » Thu, Jan 28, 2021, 1:24 AM UTC

noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

Can you provide some factual basis for these claims? We can type out claims without foundation endlessly; the Internet demonstrates that well; what we need is real knowledge and facts.

Re: GameStop Is Rage Against the Financial Machine

#667

Post by erichocean » Thu, Jan 28, 2021, 1:24 AM UTC

cwkoss wrote: post #593

nerfhammer wrote: post #504

Earlier quoted context omitted.

but a stock is partial ownership of a real business, which has revenue and owns other assets

That is true for businesses with "reasonable" P/E multiples of ~5 or less. When a business has a P/E multiple of >100+, a significant portion of the investment is speculative rather than a rational projection assets and future earnings. It's really hard to make a rational value fundamentals argument for why anyone is willing to invest in TSLA, with its current price putting its P/E of 1700.

Siri, what is Amazon's P/E ratio?

Re: GameStop Is Rage Against the Financial Machine

#668

Post by svachalek » Thu, Jan 28, 2021, 1:25 AM UTC

nico_h wrote: post #622

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…

Can someone explain how we're supposed to believe WSB can move the market that much? I mean, it's up against hedge funds etc with literal billions and we're supposed to believe a bunch of people on Robinhood can go against those higher power and cause them some inconvenience? The volume for GME today was like 89,734,235 vs an average of 24M . How does "retail" traders can keep the stock up 100% from the previous day…

No one is buying this stock because they want this junk company, it's all manipulation. They have an army of buyers and use some calculated techniques with options to gain leverage. They're not all college students in for $100. I know of people who have borrowed 6-digit sums to get in on this bet.

Potentially there are also pros on the WSB side of this game but I think they would potentially face legal risks that the individuals don't have to worry about.

Re: GameStop Is Rage Against the Financial Machine

#669

Post by astrange » Thu, Jan 28, 2021, 1:25 AM UTC

wolverine876 wrote: post #666

noncoml wrote: post #654

There are 100 cows. A hedge-fund believes that the milk consumption will go to zero, so they borrow the 100 cows for one month and sell them for $1 each. Then they borrow them again, and sell them once more for 90c. Certain that they will worth $0 at the end of the month A Redditor notices this. She knows that in a month's time, the hedge-fund will have to buy 200 cows, and there are only 100 available. Her plan is s…

Can you provide some factual basis for these claims? We can type out claims without foundation endlessly; the Internet demonstrates that well; what we need is real knowledge and facts.

Are there any claims in that post?

Re: GameStop Is Rage Against the Financial Machine

#670

Post by mckirk » Thu, Jan 28, 2021, 1:26 AM UTC

Some interesting observations:

In the last few hours, the WSB Discord was banned for 'hate speech' and the WSB subreddit had to close for a while because of a massive influx of bots. To me, that does not really seem like an indication of the short squeeze being over and the big players being safe out of the game.

And yet, the prevalent opinion here seems to be that retail investors can only lose from here on out... what am I missing?