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AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

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Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#291

Post by mywittyname »

nprz wrote: post #97
ehsankia wrote: post #48

Earlier quoted context omitted.

There are plenty of "Average people" that entered near the top, and since not everyone can sell simultaneously, that means a ton of people are losing the life savings they dumped into this out of excitement as it crashed back down. I think the point being made here is that the whole narrative of "average people beating wall street" is pretty naive and quite bullshit. All in on, maybe a few handful of people got 10x o…

> that means a ton of people are losing the life savings they dumped into this out of excitement as it crashed back down Can you provide a single case of someone losing their entire life savings by YOLOing it on GME at the top?

I definitely saw someone bragging about using their $20,000 line of credit from dental school (I assume this is intended for living expenses) to buy GME stock.

That's kind of worse than YOLOing your life savings, because if this prevents them from continuing their education, it just fucked their life.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#292

Post by Traster »

ditonal wrote: post #212
dougmwne wrote: post #85

Watching HN get caught up in this Gamestop bubble over the past week has been eye-opening to me about the community. The kind of information being spread around WSB was fully ridiculous. Wild conspiracy theories, financial advice with no basis in reality, astroturfing, and mob behavior. There has been an incredible amount of bleed-over between the garbage I've seen posted on WSB and the things posted in these HN thre…

Conspiracies happen so frequently on Wall St that “conspiracy theories” should be closer to a priori assumption than irrational fringe ideas. Were people skeptical of Moodys A+ ratings of subprime mortgages conspiracy theorists? And that’s far from the only example of financial fraud . There’s a lot of money at stake. Citadel is most of Robinhoods revenue, they put money on the opposite side of the trade via Melvin,…

>Conspiracies happen so frequently on Wall St that “conspiracy theories” should be closer to a priori assumption than irrational fringe ideas.

This is not good logic. There may be a lot of dodgy stuff going on and there may even be conspiracies, but even if you accept that there is a conspiracy that doesn't make it any more likely that the conspiracies being peddled by WSB are correct.

It's like I pick a card out of a deck, I tell you my card is 7 of spades but I have a history of lying. Most likely, the card isn't the 7 of spades. But that doesn't mean it's likely that the card is the 9 of diamonds. That's what this logic is saying - that it must be the (often clearly wrong) assertion simply because the only specific alternative is from someone you don't trust.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#293

Post by Gunax »

JumpCrisscross wrote: post #133
dcolkitt wrote: post #66

Earlier quoted context omitted.

There's a simple lesson. Buy and hold a low-fee index fund. Stop trying to pick stocks. And for God's sake stop trying to day trade stocks. Deviating from buy-and-hold indexing is mathematically a zero-sum game. Winning this game is also one of the most monetarily rewarding games on Earth. It's extremely unlikely that you're anywhere near good enough to win this game. If you don't know who the fool at the table is, i…

> There's a simple lesson. Buy and hold a low-fee index fund. Stop trying to pick stocks. And for God's sake stop trying to day trade stocks. It's a tough lesson to learn. When I realized, I think last Wednesday evening, that intelligent people honestly believed Ken Griffin was ordering Robinhood to block traders from buying GameStop stock so a short of his could make money, I started pricing out puts. (Didn't do any…

This is the first time i've heard of individual investors beating the market. If some can do so consistently, shouldn't they be running a hedge fund instead of twiddling with their retirement?

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#294

Post by cperciva »

vimy wrote: post #287
cperciva wrote: post #284

Earlier quoted context omitted.

The SEC wouldn't be prosecuting him for holding GME. They would be prosecuting him for pumping up the stock price.

My point is that the sub didn't take him and GME seriously until December or something. You can't be a laughing stock and a pump and dump mastermind at the same time.

I'm not so sure about that. Spending 2 years trying to pump the stock and failing doesn't change what happened later. You can't escape a murder charge by saying "I spent two years trying and failing to kill the victim"!

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#295

Post by totalZero »

dougmwne wrote: post #262
ditonal wrote: post #212

Earlier quoted context omitted.

Conspiracies happen so frequently on Wall St that “conspiracy theories” should be closer to a priori assumption than irrational fringe ideas. Were people skeptical of Moodys A+ ratings of subprime mortgages conspiracy theorists? And that’s far from the only example of financial fraud . There’s a lot of money at stake. Citadel is most of Robinhoods revenue, they put money on the opposite side of the trade via Melvin,…

I have been seeing people on WSB claim that the stock price shown on the ticker is "manipulated by the hedgies" and asking when the real stock price is going to finally appear. This is pretty similar to Q people asking when it will be revealed that 45 is still the president. That one absolutely fits my definition of "wild conspiracy theory." In terms of more popular accusations of wrongdoing among brokerages as they…

> I have been seeing people on WSB claim that the stock price shown on the ticker is "manipulated by the hedgies" and asking when the real stock price is going to finally appear. This is pretty similar to Q people asking when it will be revealed that 45 is still the president.

I don't think it's fair to draw an equivalence between the two theories.

It's pretty easy for a large market participant to impact the bid/offer when there isn't much liquidity, especially if the natural buyers are restricted from trading. The price moves because of supply and demand.

The WSB perspective is perhaps a bit uninformed, but it's not particularly bizarre (unlike the QAnon garbage). They're just asking "when will the price reflect our pent-up demand rather than artificial supply?"

Unfortunately, the reality is that prices get set during these moments of absolute craziness. That's why you sometimes see hedge funds reload after hours after an earnings miss on one of their long positions. They want to absorb the supply so the stock doesn't crash lower.

Look at GME today. The price moved a couple of percent even though nobody has the slightest reason to believe that GME stock is worth this particular price. Some say it should be higher due to flows around positioning, and others say it should be lower because of fundamentals.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#296

Post by llampx »

notyourday wrote: post #255
PartiallyTyped wrote: post #226

Earlier quoted context omitted.

The observation was that during the duration of restricted trading and therefore reduced momentum, there had been sequences of trades with batches of 100 shares sold at continuously smaller values with very little difference between one batch and the next and the difference was in 3rd and 4th decimals. The fact that retail was restricted to selling and hedge funds were not, further corroborates foul play.

> The fact that retail was restricted to selling and hedge funds were not, further corroborates foul play. It was not. Only retail that played in a couple of YOLO gamified market brokerages that was restricted.

Many retail brokers all over the world restricted buying of GME and other stocks in that time period.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#297

Post by Layke1123 »

mlyle wrote: post #218
nytesky wrote: post #175

Earlier quoted context omitted.

I remember for me during 2008 I finally understood how NOTHING has intrinsic value, it’s always about what others perceive in the market. Real estate, dollars, gold, stock all arbitrary in a way I never considered. All built on sand.

Some things have utility distinct from what people are willing to pay for them. My cheeseburger with one bite out of it has a market value of 0.

Ha ha I love this comment. So simple and yet illustrates the point exactly. Although if I were starving and you said I could have it for one dollar and I wouldn't be able to eat for the next 72 hours, you'd probably have my dollar.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#298

Post by ryanlol »

jcranmer wrote: post #121
nprz wrote: post #97

Earlier quoted context omitted.

> that means a ton of people are losing the life savings they dumped into this out of excitement as it crashed back down Can you provide a single case of someone losing their entire life savings by YOLOing it on GME at the top?

The Washington Post had an article yesterday about someone who was apparently $400k down on GME ( https://www.washingtonpost.com/technology/2021/02/02/gamesto... ): > The Reddit poster Volkswagens1, who declined to give his name but said he lives in the Pacific Northwest, showed The Washington Post an image indicating roughly $400,000 in potential GameStop losses from the day but insisted he would not sell. > He said…

Looking at this guys posts it seems like he’s down $400k from the peak, but remains above his initial investment.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#299

Post by marketgod »

Aunche wrote: post #281
ditonal wrote: post #212

Earlier quoted context omitted.

Conspiracies happen so frequently on Wall St that “conspiracy theories” should be closer to a priori assumption than irrational fringe ideas. Were people skeptical of Moodys A+ ratings of subprime mortgages conspiracy theorists? And that’s far from the only example of financial fraud . There’s a lot of money at stake. Citadel is most of Robinhoods revenue, they put money on the opposite side of the trade via Melvin,…

Nobody is saying that we should not be investigating Citadel or Robinhood or the hedge funds. The problem is that people are treating these conspiracy theories as facts and acting on this misinformation. Many people got duped into buying GME at a heavy loss. Others are going to abandon the stock market altogether because they think it's rigged.

I hate to respond to this "rigged" word but the markets are rigged except not in the way you think. If you try to bet on value plays you will never succeed. If you bet on the stocks the hedge funds support, you will succeed. Go against them and your account will just die. Learn to see what they want and that's how you join the house. It's just hard for a regular person to understand that.

Re: AMC, GameStop Give Hedge Fund Mudrick Capital $200M in Gains

#300

Post by totalZero »

FiberBundle wrote: post #251
ditonal wrote: post #212

Earlier quoted context omitted.

Conspiracies happen so frequently on Wall St that “conspiracy theories” should be closer to a priori assumption than irrational fringe ideas. Were people skeptical of Moodys A+ ratings of subprime mortgages conspiracy theorists? And that’s far from the only example of financial fraud . There’s a lot of money at stake. Citadel is most of Robinhoods revenue, they put money on the opposite side of the trade via Melvin,…

I was sceptical at first too because of the fact that they only restricted buy orders, but it makes perfect sense from the perspective of a broker in this situation. Thomas Peterffy explains it pretty well in [1], basically if you have a short squeeze and the supply is limited because of people holding their shares, the stock would basically go to infinity. Those that sold call options are out of business and the bro…

> if you have a short squeeze and the supply is limited because of people holding their shares, the stock would basically go to infinity.

Whoa whoa whoa. This is a slippery slope argument.

If everybody is holding their shares as in your scenario, then the only way to buy shares would be to get them from a short seller. Market-makers typically have an obligation to maintain continuous and two-sided quotations, but there are exceptions to this rule in mitigating technical or legal circumstances (solvency risk seems like it would be a valid exception).

If nobody is selling and everyone is buying, the price ought to go higher. That is what happens in unadulterated markets. But the price won't go to "infinity." Rather, it will go to the level at which long holders decide the payoff for selling is irresistible. They will begin to sell. A new price will be set.

It is true that some hedge funds (including Melvin) would potentially have been ruined if the natural buyers had been permitted to bid for the stock. However, exchanges don't halt securities just because a hedge fund is about to go under. That is a fundamentally unfair practice. Hedge funds have failed in the past, too; not every market participant is Too Big To Fail. Their PB would be left to cover the short position, and would be responsible for whatever loss remains after the hedge fund goes broke.

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