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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#761

Post by cma »

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.

> 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.

If the hedge fund blows up, the brokerages that loaned them the stocks to short are left holding the bag, and if that blows up SIPC/brokerage insurance, many retail investors or taxpayers may be left holding the bag.

Re: GameStop Is Rage Against the Financial Machine

#762

Post by wisty »

SimonPStevens wrote: post #353
scarmig wrote: post #260

Earlier quoted context omitted.

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.

If you shout fire in a crowded theatre, people will be crushed as they run for the exit.

Re: GameStop Is Rage Against the Financial Machine

#763

Post by isatty »

jondwillis wrote: post #704
cbozeman wrote: post #623

Earlier quoted context omitted.

It wasn't David vs. Goliath. CNBC, Financial Times, WSJ, etc. can't tell you what it really was, because they're beholden to all these Wall Street types. They don't get stories unless their relationships are cordial. This was arrogant idiot billionaires vs. autistic retards of the Internet, and the arrogant billionaires in this case (Melvin Capital) had the chance to walk away when they got their $2.75 billion capita…

didn’t Melvin already cover? https://www.msn.com/en-us/money/topstocks/gamestop-short-sel...

They released a story that said that Melvin Capital AND Citron both covered their massive short position (in a company with > 100% shared shorted), in one day, including AH? I don't buy it. AH volume was 4M in premarket, and even though there was ridiculous volume the day before, I'm willing to bet that most of it was fuelled by Blackrock, Chamath and Elon.

Re: GameStop Is Rage Against the Financial Machine

#764

Post by wp381640 »

silexia wrote: post #366
Traster wrote: post #347

Earlier quoted context omitted.

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 sold a GME call option with a strike price of $320 and expiration in July today for $200. A pump and dump by novices is easy money if you know how to play it. Everyone knows this is going to crash, the question is when?

Individuals selling call options into any stock is risky. Doing it into one of the most volatile stocks of the past few decades is insane. Bragging about it being "easy money" is just sheer lunacy.

You got lucky - you have nothing to brag about. Your actions are 100x worse than anything i've seen in WSB.

Re: GameStop Is Rage Against the Financial Machine

#765

Post by lambda_dn »

If people think the big players in wall street are sitting back thinking, "oh no, a bunch of retail traders defeated us, lets pack our bags and go home" then its pure naivety.

They are already 3 steps ahead and will extract most of the gains and benefit from the losses of these retail traders over the next few weeks. They have the resources to destroy this hubris and make $$$

Re: GameStop Is Rage Against the Financial Machine

#766

Post by hehehaha »

blueblisters wrote: post #244

A more boring conversation about this is how will it actually impact Gamestop? Could the new price levels become a self fulfilling prophecy, with Gamestop being able to raise enough capital to revamp the business? "Irrational" retail investors have perhaps saved a company before - Tesla - by holding onto the stock even when every hedge fund was saying it's doomed.

As far as I know GME has not executed on any ATM sale which is very puzzling. Compare this to AMC which basically tripled its shares since last year. This leads me to believe that this is not all kosher. GME counsel is probably advising them to not go through with it. Frankly, I think Ryan Cohen bit off more than he can chew. His ideas to revive Gamestop is mostly half baked and there are way too many big players to compete against. Any money they raised from here will only delay the inevitable.

Re: GameStop Is Rage Against the Financial Machine

#767

Post by delaaxe »

vpribish wrote: post #750
chovybizzass wrote: post #720

Earlier quoted context omitted.

not for hedge funds.

yes for hedge funds. some market-making entities are legitimately allowed to be short without borrowing, but is it absolutely not just any random hedge fund!

Isn't it the opposite of what parent is saying, that market makers are allowed to do naked short selling for "liquidity purposes" but hedge funds I'm not so sure

Re: GameStop Is Rage Against the Financial Machine

#768

Post by SigmundA »

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…

What makes no sense to me as a layman is how can you sell something you don’t own legally? If I borrow your cow and sell it that’s illegal without consent, if you give me consent to sell the cow, there is still only one cow and ownership changes hands, there are not now two cows.

Re: GameStop Is Rage Against the Financial Machine

#769

Post by missedthecue »

garmaine wrote: post #737
dcolkitt wrote: post #735

Earlier quoted context omitted.

That's not true. The same share can be borrowed an arbitrary amount of times. Palm reached short interest of nearly 150% during its heyday. By definition that would require float to be borrowed a second time. https://money.stackexchange.com/questions/126685/can-a-singl...

Yes but what I’m saying is that the float doesn’t increase from 100 -> 200. There’s still only 100 shares on the market at any given time. If Alice shorts 100 cows on Monday, and then Bob shorts 100 cows on Tuesday, and both are due at close of market on Friday, it’s gonna be a bloodbath.

Shorts aren't "due". You can hold them as long as you pay the interest and have the margin requirement.

Re: GameStop Is Rage Against the Financial Machine

#770

Post by gcblkjaidfj »

freeone3000 wrote: post #727
gcblkjaidfj wrote: post #716

Earlier quoted context omitted.

> borrow the 100 cows for one month and sell them for $1 each. Who on earth is buying those cow for $1, if it is pretty obvious they are worth $0?!?! By cows i mean GME, before the meme.

People who would like to rent out cows for other people to sell, and then pay back.

All those still need someone to ultimately buy a cow at some point, when everyone knows the value is zero.

Or are the ones holding the cow the last ones that assumed they would be able to still sell a cow?

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