WallStreetBets vs WallStreet: It's not about the money anymore • Hacker News Board

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#71

Post by kjakm » Thu, Jan 28, 2021, 3:04 PM UTC

jsjsbdkj wrote: post #39

tenaciousDaniel wrote: post #8

As someone who is not very educated in finance, I'm curious how to interpret today's events. Is nasdaq/robinhood/everyone else transparently manipulating the market on behalf of hedge funds? Or are these standard mechanisms in place for preventing the stock market from swinging wildly out of control? I don't know if it's standard to completely block trading on one or more stocks.

WSB has basically recreated a "boiler room", which is an ages old scam where a small group of insiders would encourage people to buy stock, drive them value up, and then the insiders dump the stock. The key insight here is that for every person selling the stock and making millions, somoene has to be buying. There's a narrative about short squeezes forcing a small number of hedge funds to buy stock, but in practice m…

This all reminds me of the crypto ICO's a few years back. Build a tonne of hype around something, get a vast number of people who don't really know what they're doing to put in their money, and then the big investors get out, tanking the price for everyone else.

In all the talk of conspiracy around this I'm surprised nobody is discussing the possibility that larger investors are likely manipulating/hyping the WSB community. The WSB community is acting untouchable but I get the feeling in the end they'll be the ones losing their money.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#72

Post by Macha » Thu, Jan 28, 2021, 3:04 PM UTC

bjourne wrote: post #35

So you're telling me that by buying GameStop stock, I can help screw over hedge fund managers? I have not bought a single stock in my whole life, but I'm in. How do I start?

You're probably late to the party here. Reddit is holding for $1000, but there comes a point where the funds would be so unable to fulfil their shorts that any ones left holding it will declare bankruptcy rather than pay, and you lose yours too.

Even if you're willing to risk throwing away some money to "stick it to the man", it will take a while - It may be easier in the US, but I signed up to Degiro to get some shares a couple of months ago and it was a fairly lengthy process even for Europe's closest equivalent to Robinhood. Day long stops in the process for e.g. putting in a verification transaction, or for degiro to do their kyc diligence etc, and the consensus is that the finale to this gamestop thing is friday, one way or the other.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#73

Post by swiley » Thu, Jan 28, 2021, 3:04 PM UTC

itake wrote: post #36

dragontamer wrote: post #23

Earlier quoted context omitted.

I just checked my TD Ameritrade account. I'm able to buy GME just fine (though I didn't hit the "confirm" button). I know RobinHood messed up here. But... they never had a good reputation to begin with. Its an open secret that RobinHood's entire setup is kind of crap.

I didn't see a failure on Schwab until I hit "confirm" yesterday. My understanding is TD Ameritrade is only blocking the purchase of stock on margin. If you have the cash, you're allowed to make the purchase.

Oh well that's reasonable. If I were a brokerage you bet your ass I wouldn't lend you money to buy GME.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#74

Post by chaganated » Thu, Jan 28, 2021, 3:04 PM UTC

bidirectional wrote: post #19

Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness.…

Unconvincing. We're all playing in the same pool. It only takes one upset stomach to set off a chain reaction.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#75

Post by luxuryballs » Thu, Jan 28, 2021, 3:04 PM UTC

willis936 wrote: post #33

Beefin wrote: post #9

People have had enough, it's not just WSB anymore. The community of retail investors in GME is far beyond WSB. It's people that are frustrated with the 1% getting bailed out time and time again and them not seeing a dime at their tax dollar expense.

Occupy Wall Street was just 10 years ago. It was the longest demonstration in a lifetime. Nothing changed. How did nothing change? What message does this send?

That sitting around playing drums and smoking doesn’t accomplish anything productive.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#76

Post by fireeyed » Thu, Jan 28, 2021, 3:04 PM UTC

tenaciousDaniel wrote: post #8

As someone who is not very educated in finance, I'm curious how to interpret today's events. Is nasdaq/robinhood/everyone else transparently manipulating the market on behalf of hedge funds? Or are these standard mechanisms in place for preventing the stock market from swinging wildly out of control? I don't know if it's standard to completely block trading on one or more stocks.

Don't you think the honchos at Robinhood got the call from the man last night ? Its a coordinated ban of serfs from buying up AMC GME BB. Its got too hot for them.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#77

Post by snickms » Thu, Jan 28, 2021, 3:04 PM UTC

newacct583 wrote: post #15

I have a lot of trouble with this frame. Yes, hedge funds are bad. Yes, it's hilarious watching those shorts get squeezed. No, WSB are not modern Sherwood bandits trading on Robinhood. They are also engaged in what is pretty clearly a criminal conspiracy to commit securities fraud (and yes , a deliberate attempt to trigger a short squeeze is securities fraud), and they're doing it on an open internet forum. This is n…

I'm not convinced that a plot formed openly on the internet actually qualifies as a conspiracy.

I'm sure things would have worked out differently for Nixon had he distributed a press release regarding an up-coming DNC burglary beforehand.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#78

Post by koolba » Thu, Jan 28, 2021, 3:04 PM UTC

bidirectional wrote: post #19

Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness.…

All those institutions are interconnected. A large hit to one player can cascade to the wider market as they're forced to sell off other positions to put up additional capital. That could cause additional sell-offs for more leveraged players. And so on... The phrase "too big to fail" exists for a reason and it's smaller than you think.

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#79

Post by dcolkitt » Thu, Jan 28, 2021, 3:04 PM UTC

mancerayder wrote: post #55

They are blocking buying, and only allowing selling GME, BB and others. How is this not evidence of a corrupted free market system? A CEO of one company can call up his connections in retail trading platform firms, CNBC, and Nasdaq and protect his profits? Why is Reddit the scandal and not that? Reddit is full of rocket emojis and YOLO jokes. But what we see here, especially with the moralizing about gambling, is an…

Robinhood is a free service. The customers don’t pay anything. If the order internalizers decide to stop paying them for their order flow, then they have to route to the exchanges. which charge fees.

Trading is still ongoing at the exchanges. It’s just the free platforms, where it’s shut down. If someone wanted guaranteed access to the exchange, then they shouldn’t have used a free broker. Are you saying that Robinhood should be forced to continue providing a free service at a loss?

Re: WallStreetBets vs WallStreet: It's not about the money anymore

#80

Post by gnfargbl » Thu, Jan 28, 2021, 3:05 PM UTC

newacct583 wrote: post #15

I have a lot of trouble with this frame. Yes, hedge funds are bad. Yes, it's hilarious watching those shorts get squeezed. No, WSB are not modern Sherwood bandits trading on Robinhood. They are also engaged in what is pretty clearly a criminal conspiracy to commit securities fraud (and yes , a deliberate attempt to trigger a short squeeze is securities fraud), and they're doing it on an open internet forum. This is n…

Assuming you're correct and this behaviour is illegal, who could the SEC prosecute?

The ultimate instigator, u/deepfuckingvalue, posts nothing but screenshots showing his position, without further comment. There don't appear to be any specific organizers within the group, and many posters claim that they are buying simply because they "like the stock." That would be a risible position for an institutional investor, but as these are individual retail investors it seems like it would be tricky to prove malfeasance.