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Reddit's GameStop, AMC surge is the new Occupy movement

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Re: Reddit's GameStop, AMC surge is the new Occupy movement

#151

Post by totalZero »

Hamuko wrote: post #98
thaumaturgy wrote: post #87

Earlier quoted context omitted.

It's hilarious seeing this comment the day after a busy HN thread titled, "Tesla’s charging stations left other manufacturers in the dust" ( https://news.ycombinator.com/item?id=25930253 ). (I am ambivalent towards Tesla.)

I've never really seen a Tesla charging station, so I don't really have any feelings about it. I've heard that there are nine of them in the country.

What country?

I've seen Tesla chargers at more than nine gas stations here on the east coast. I drive a lot of highways. Sometimes it's just one or two, sometimes it's a row of several. It certainly does seem like there are hundreds of Supercharger stations in the US.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#154

Post by craig1f »

Hamuko wrote: post #34
anthk wrote: post #3

Good. I'm tired of fake Economics where the value of a company or the product is not made from the real value of it, while some yuppies get rich in the proccess. The more they cry, the better. Hope is collapses so "middle" and low class workers can get fair prices of what they earn by doing actual hard work. Because this will create a good crash, dont fool about it. It will harm everyone, but at least this Century wi…

> I'm tired of fake Economics where the value of a company or the product is not made from the real value of it I still don't understand how Tesla is valued so high when they're still figuring out panel gaps.

I feel like Tesla is sort of an opposite situation.

These short-sellers that Reddit is going after, would swamp the media with FUD articles to drive Tesla stock down. They bet on Tesla to lose, and when Tesla didn't lose, they tried to drive them out of business by manipulating the media.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#155

Post by skrebbel »

avidphantasm wrote: post #39
djoldman wrote: post #13

Earlier quoted context omitted.

1. There isn't any one entity that is short 140% of the GME float. 2. If a stock shouldn't be allowed to be sold short past 100% then we should outlaw subletting apartments. Why shouldn't someone be allowed to pay to borrow something, and then rent it out? How is that manipulative in and of itself?

Can anyone explain what utility, to the real economy, that short selling stocks provides? Practically speaking, why is shorting useful? What problems in the financial system does it solve. Asking in earnest.

It's in a short seller's interest to get a company negatively in the media. This means that they will actively hunt for morally/legally/financially objectionable stunts a company might pull and leak it to journalists.

There's a lot of fun Matt Levine articles on Bloomberg about this dynamic.

Eg from https://www.bloomberg.com/opinion/articles/2020-05-29/you-ca... (https://outline.com/atF74W):

> The thing about inflating your revenue by pretending that you sold more coffee than you did is that people can go to your stores and watch you sell coffee. It is a reasonable bet that they won’t do that, because it’s incredibly boring. “Who is going to send 1,500 people to our stores to watch us sell coffee all day, count how much we sell and compare it to our financial statements,” Luckin could reasonably have thought. But the answer was “short sellers”! They actually hired people to sit around watching the coffee get made, so they caught the fraud.

I also warmly recommend his "Everything is securities fraud" rant that follows this paragraph. (note: I know nothing about stock markets (or reddit or gamestop for that matter) so someone let me know if I'm just a noob eating up some slightly smarter noob's nonsense)

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#156

Post by Hamuko »

totalZero wrote: post #151
Hamuko wrote: post #98

Earlier quoted context omitted.

I've never really seen a Tesla charging station, so I don't really have any feelings about it. I've heard that there are nine of them in the country.

What country? I've seen Tesla chargers at more than nine gas stations here on the east coast. I drive a lot of highways. Sometimes it's just one or two, sometimes it's a row of several. It certainly does seem like there are hundreds of Supercharger stations in the US.

Finland.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#157

Post by newacct583 »

simonh wrote: post #127
anthk wrote: post #3

Good. I'm tired of fake Economics where the value of a company or the product is not made from the real value of it, while some yuppies get rich in the proccess. The more they cry, the better. Hope is collapses so "middle" and low class workers can get fair prices of what they earn by doing actual hard work. Because this will create a good crash, dont fool about it. It will harm everyone, but at least this Century wi…

A few punters losing money on GameStop stock (and an awful lot of them will lose), and possibly some hedgies taking a minor trim, is hardly going to bring down our system of economics. Bear in mind all but a few of these small investors haven't made a single penny. They only make money when they actually sell, and as soon as a significant number of them do sell the price will fall and the money the others think they…

Yeah. It's market manipulation from every angle and every party right now. All the crowing about "sticking it to the man" is almost certainly prosecutable as securities fraud. And yes, the folks holding the early shorts either have financing available to hold until it comes down or have transferred the position to someone who does. The people holding the bag at the end of this are indeed going to be individual investors, most of whom thought they were sticking it to the man.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#158

Post by FabHK »

criddell wrote: post #94
nradov wrote: post #46

Earlier quoted context omitted.

Short selling accelerates price discovery in order to allow for more efficient capital allocation, thus making our overall economy stronger.

> more efficient capital allocation Can you explain this more? More efficient on what axes? How does that translate to societal benefits that aren't just on paper?

Ok, here are the links:

* When a firm decides whether to take on new projects, they look at the projected profit of that project, and compare to their cost of capital. Only projects whose profit exceeds the cost of capital should be executed.

* Stock prices influences a firm's cost of capital, eg when raising more money.

* Relative stock prices also influence, in mergers, say, who takes over whom.

* Via all these levers and more, stock prices help select which projects of all possible ventures are realised, and who manages them.

* All of this is aimed at funding those projects that produce the highest output relative to the resources dedicated to them.

* All of this only works if stock prices are a somewhat accurate reflection of the prospects of a firm; in other words, if the share price reflects the fundamental value of the firm.

* Short sellers (and long buyers) that analyse firms and trade when they perceive a discrepancy between share price and fundamental value can trade upon that insight, which will have two effects: a) it will tend to bring the share price closer to the fundamental value, and b) it will be profitable for the firms that are correct in their assessment.

That's basically the big picture story.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#159

Post by totalZero »

TheRealDunkirk wrote: post #80
xyzzyz wrote: post #65

Earlier quoted context omitted.

So does Toyota, which makes more things that more people want to buy, and yet is only valued at a quarter of Tesla.

Toyota makes fairly boring products of the last century. Musk is currently shooting rockets into space and deploying a network of satellites. The optics of this cannot be discounted.

Go to the third world and you'll see that reliability and longevity give Toyota a huge cachet that is basically unrivaled.

That effect is amplified in countries that have import tariffs on automobiles, because the secondary market is large.

Not everyone in the world buys cars to pleasure themselves. For most people, automobiles are a tool and their dependability is more important than their excitement factor.

Also, anyone who buys a Tesla because they like SpaceX rockets is an absolute dunce. That's like subscribing to the Washington Post because you like the navel oranges that Amazon Fresh delivers.

Re: Reddit's GameStop, AMC surge is the new Occupy movement

#160

Post by scatters »

avidphantasm wrote: post #39
djoldman wrote: post #13

Earlier quoted context omitted.

1. There isn't any one entity that is short 140% of the GME float. 2. If a stock shouldn't be allowed to be sold short past 100% then we should outlaw subletting apartments. Why shouldn't someone be allowed to pay to borrow something, and then rent it out? How is that manipulative in and of itself?

Can anyone explain what utility, to the real economy, that short selling stocks provides? Practically speaking, why is shorting useful? What problems in the financial system does it solve. Asking in earnest.

Short selling incentivizes fraud investigation. Case in point: Muddy Waters.
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