Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

GameStop Is Rage Against the Financial Machine

bloomberg.com

Post reply on HN
Print view View original

371–380 of 1001 posts

Re: GameStop Is Rage Against the Financial Machine

#371

Post by rtkwe »

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.

For the people with the stock now to make real money they'll have to sell eventually either to the people who've shorted or to a normal investor right? Then after the short position closes the stock price will fall at least some because the demand will fall. Unless the only person buying stocks near the end is the shorter and everyone unloads their shares to them someone's buying above the price $GME will fall to.

Re: GameStop Is Rage Against the Financial Machine

#372

Post by paulpauper »

paxys wrote: post #293
paulpauper wrote: post #282

A lot of ppl are expecting this to be dumped hard. i dont think that is going to happen. I think rather it is going to stabilize eventually and not crash, much like Tesla. The market tends to do what consensus does not expect. GME is flush with cash and has the backing of various high profile billionaires. It may make a major acquisition or something like that.

There is a massive difference between Tesla and GameStop. The latter is not flush with cash, but rather hundreds of millions of dollars in debt. Their revenue has been declining every quarter. There is no long term business plan, the digital game sales space is already too crowded. It will be a miracle if they can manage to turn around.

that was 3 months ago . the market is forward looking.

Re: GameStop Is Rage Against the Financial Machine

#373

Post by lamp_book »

raesene9 wrote: post #286
Blackstone4 wrote: post #140

Earlier quoted context omitted.

I believe you are far off the mark here. Retail investors are well within their rights to drive up a stock to what could be above fair market value....some may well lose money in doing so. The whole narrative around retail vs. hedge funds/wall street is naive to say the least...people in financial services are worried that retail investors may lose a lot of money here which may dent confidence in the market. The iron…

But what they're trying to achieve here (AFAIK) is a short squeeze. The whole point of this move is that there's massive short interest in GME, and the WSB crew (and anyone else long on it) can take advantage of it until those positions are closed. After that, if people hang around, sure they'll likely lose money if they bought at the top, but until those big positions close, there's money to be made.

It does assume the short position is naked which might seem like the case but is not a confirmed fact as far as I understand the situation.

Re: GameStop Is Rage Against the Financial Machine

#374

Post by oh_sigh »

krok wrote: post #188
arafa wrote: post #154

Earlier quoted context omitted.

Please explain. I thought this was the whole purpose behind hedging, was to avoid the short squeeze. Are people reneging on the purchase agreements or overpromising? How can we know these aren't naked shorts and if so, why are they still facing the short squeeze?

You can have a short squeeze without naked shorting. Shorts who aren't naked have borrowed the stock from someone. If that person asks for it back, they have to go out and buy it in order to return it. At least in theory, if retail investors buy up the stock, some of the institutional investors who own it, and who have lent it out, will sell it to them. This could mean that they recall lent stock. As this happens, sh…

Since you're nice and explaining things...what happens if a naked short gets called in but literally no one will sell any stock for any amount of money, so the shorter can't fulfill their obligation?

Obviously not going to happen with GME or anywhere realistically, but I'm just curious how that would be handled.

Re: GameStop Is Rage Against the Financial Machine

#375

Post by stephen_greet »

AdmiralAsshat wrote: post #20

> These points doubtless make me appear to be a complacent shill for the financial industry, talking down to the rubes. For the record, I’m still angry about the way workers were ripped off in Britain more than three decades ago, and about the way the little guy ended up bearing the brunt for the financial implosions of 2000 and 2008. But it looks horribly to me as though the same thing is going to happen again — and…

I think the author is arguing here that the solution to combating institutional gambling via trading is not to allow retail investors to also gamble.

Should someone who has no idea what they're doing be able to leverage themselves up 100X to buy a call/sell option by pressing a few buttons in Robinhood because they read about YOLO stock on Wallstreetbets?

As someone who has lost a lot of money by following the Reddit sentiment on an investment, I think the author's point here is fair.

This is not to say I wasn't an idiot. I was. But at a hard time in my life I needed more money so I gambled big and lost big. I worry other people will fall into the same trap.

Re: GameStop Is Rage Against the Financial Machine

#376

Post by kgwgk »

dheera wrote: post #233
amalter wrote: post #194

Earlier quoted context omitted.

Hard no! I want scams and shady schemes uncovered. What a disappointment that Herbalife wasn't brought down by the shorts. I'm struggling to even understand what a market with "no negativity" means. We want to evaluate firms with a critical eye. If they are mis-valued, that serves no one.

> We want to evaluate firms with a critical eye. If they are mis-valued, that serves no one. Hard disagree here. Sometimes mis-valuing firms serves a LOT of people. There are many firms who could create value if only they had more capital to work with. As an example, it's very possible that a company hard hit by COVID could recover if they got fresh capital and used it to explore new business models that are quaranti…

> There are many firms who could create value if only they had more capital to work with.

Those don’t need to be misvalued to get capital, they just need to be properly valued.

In fact if they cannot get the capital it’s because of misvaluation! And other misvalued firms that will destroy value get that capital instead.

Re: GameStop Is Rage Against the Financial Machine

#377

Post by paulpauper »

tpmx wrote: post #319
IIAOPSW wrote: post #116

Earlier quoted context omitted.

I was disapointed in some of his videos about Coronavirus and Cuomo's executive orders. But then I remembered that he is neither a stock trader nor an epidemiologist. His channel is fundamentally an opinion show. Its a good opinion show, but still an opinion show. When he starts giving opinions on things far outside his wheelhouse he becomes a more-rational-than-average lay person.

He's so smart.

I call them 'professional morons'--high-profile who have a lot of status and money and clout in various tech and investment fields despite being sorta dim and banal

Re: GameStop Is Rage Against the Financial Machine

#378

Post by Enginerrrd »

cwhiz wrote: post #198
this_user wrote: post #87

Earlier quoted context omitted.

> I see no reason why "retail" traders can't fuck around on Robinhood and cause some meme stocks to explode. It's called 15USC78i "Manipulation of security prices" [1]. It is unlawful to transact just for the purpose of forcing others to transact. Going through a fund's 13F filings, and deliberately driving up the prices of put options they sold should fall squarely into that area. And there are more than enough post…

There are some base requirements for market manipulation that are not met here. Namely, lying. You're allowed to tell your "friends" they should buy a stock.

A lot of people have had the hammer brought down on them for pump and dumps performed by only making true statements.

Re: GameStop Is Rage Against the Financial Machine

#379

Post by paxys »

paulpauper wrote: post #372
paxys wrote: post #293

Earlier quoted context omitted.

There is a massive difference between Tesla and GameStop. The latter is not flush with cash, but rather hundreds of millions of dollars in debt. Their revenue has been declining every quarter. There is no long term business plan, the digital game sales space is already too crowded. It will be a miracle if they can manage to turn around.

that was 3 months ago . the market is forward looking.

The market is sometimes forward looking, and sometimes a bubble.

Re: GameStop Is Rage Against the Financial Machine

#380

Post by DennisP »

nightowl_games wrote: post #124
boringg wrote: post #23

Earlier quoted context omitted.

I don't think you understand what's happening here. There's only so much volume available as a result of the short positions. WSB et al are putting in money on a long hold. As a result that drives up the price. Yeah gamma's are in for sure making money. There are some people who have made multiple millions. One individual sitting at $31M currently on a $50k investment. Some retail will lose, but wall street instituti…

> For them to win this they need to keep putting more money into the fire which pulls in bigger and bigger fish. This isn't true. The institutions with Short Exposure are connected to the institutions who buy Robinhood data and perform high frequency trading on those orders. Citadel and Melvin can BUY GME themselves to mitigate the risks. It is likely that a substantial amount of GME is being held by the institutions…

> It is likely that a substantial amount of GME is being held by the institutions who had short exposure.

To some extent, sure, but bear in mind the total short exposure was 140% of the total GME shares.

Post reply on HN