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u/DeepFuckingValue and the GameStop Reddit mania

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Re: u/DeepFuckingValue and the GameStop Reddit mania

#461

Post by toast0 »

samename wrote: post #442
toast0 wrote: post #340

Earlier quoted context omitted.

Short interest is high, but AFAIK, none of the reporting tells you what price the shorts sold for. If the shorts from $20 all got out, and you're seeing new shorts that got in wednesday, the dynamic is much different.

Is there any way to know if that has happened? I imagine if a big player knew this or it leaked from a credible source, the stock could crash.

Watch the documentary in 3 years? :) I've only got enough knowledge about the markets to be dangerous, so don't expect any of this to be complete and accurate.

I don't think this type of information is publicly reported; or really aggregated anywhere. The brokers whose clients sold short presumably know the clients positions, and the clients know their positions, but absent an aggregated report across brokerages of that, nobody would know the whole picture. A brokerage probably has a duty to keep their clients' positions confidential, however.

I don't know how securities lending is organized. If it's centralized around a single vendor like clearing and depository is; maybe that vendor would know when shares were borrowed and returned, and could guess about the positions. Similarly, brokerages with lending programs should know when their clients' shares were borrowed and returned and could have a partial picture. This may again be data the brokerage or the lending facilitators would have a duty to keep confidential.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#462

Post by ericd »

jjeaff wrote: post #407
adolph wrote: post #394

Earlier quoted context omitted.

If nobody buys, does the trillion dollar seller make a sound?

Only if insolvency makes a sound. If the shorts don't have the trillion dollars to buy that stock to pay back the debt by the deadline then they are sol.

What deadline exists for shorts, assuming these aren't puts?

Re: u/DeepFuckingValue and the GameStop Reddit mania

#463

Post by jojobas »

PeterisP wrote: post #360
jojobas wrote: post #189

Earlier quoted context omitted.

That's a great part of their sentiment - "I may not profit that much, but these fat cats will suffer". Also, bankruptcy still means a fair share in the assets of the bankrupted.

Well, the other fat cats will have a claim on a fair share in the assets of the bankrupted; the WSB investors would not have any claim whatsoever on the assets of a bankrupt hedge fund who shorted the same stock - they will have the stocks they bought, the fund does not owe them anything, the broken promise to buy and return loaned shares was to some broker, not to any retail investors.

I believe anyone's shares can be lent out by their brokerage. That might differ broker by broker but that's the general idea, there's no dedicated "other side of the short" as such.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#464

Post by pb7 »

runarberg wrote: post #451
pb7 wrote: post #430

Earlier quoted context omitted.

It’s odd to me that you see the mutually beneficial transaction there but not in the stock market. I will state this once as simply as I can: stock market investors are rewarded for funding companies by taking on that risk in hopes that the companies they invest in produce a profit. It is overwhelmingly similar to the process you are describing with your credit union, but in a much more distributed way. > Workers don…

Shareholders and investors aren’t the only means of collecting revenue for a business. Alternatives include: * Setting aside parts of the profit for future investment * Getting a loan from a bank or your local credit union * Community or owner funding Do you honestly think that if it wasn’t for investors businesses would just stop existing? In a world without venture capitalists businesses would need to stand on thei…

> Setting aside parts of the profit for future investment

Companies go public without being profitable. Raising money via IPO is one step to becoming profitable.

> Getting a loan from a bank or your local credit union

No bank is going to loan $100M to a complicated startup with no collateral that needs capital to grow quickly and is unlikely to be able to start repaying for years. This is where VCs come in — they understand complex business models and invest as needed in exchange for equity.

> Community

This is regular investing. The people in your community are not more important than people living elsewhere. Everyone should have an equal opportunity to invest in promising businesses everywhere.

> Owner funding

Bootstrapping is already extremely common and accounts for most small businesses of which there are thousands and thousands. It’s not suitable for big businesses that make global impact. You can’t have a bootstrapped Google or Airbnb or Square.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#465

Post by samename »

pb7 wrote: post #421
whatever1 wrote: post #418

Earlier quoted context omitted.

Pardon my ignorance, I have no expertise in the field. When you issue new shares, do they have a fixed price or are they sold at market value (whatever market decides the price to be)? If the latter happens, I expect that the price of the [edit:GME] stock will collapse immediately.

Issuing shares is a move done to raise money. It would then follow that GameStop would want to get the most money possible for these shares so they would try to sell them for the highest price possible, somewhere around the current going price. I’m not 100% on whether they have to release them all at once but I’m guessing dumping multiple million shares all at once would crash the price which isn’t good for anyone in…

I’m new to this as well - how do you know how many shares that have shorted? I heard that even the number of shares shorted isn’t guaranteed to be accurate.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#466

Post by ericd »

runarberg wrote: post #419
Alupis wrote: post #279

Earlier quoted context omitted.

You do understand where the "interest" comes from on your savings account right? The bank doesn't just invent it... And largely speaking, when you make money on the stock market it comes from a multitude of sources, including the hedge funds you seem to despise. Not to mention, just because you made a profit on the market doesn't mean someone was screwed over. The stock is worth whatever it's worth when you sold it.…

idk. I simply don’t like the fact that people are gambling with my workplace. And I especially don’t like it when shareholders pocket parts of the profit that I made them without bringing anything of value to the company. I don’t despise hedge funds any more then I despise the stock market as a whole. We don’t need it. In fact I would argue that the existence of the stock market is actively harmful. I would go so far…

"And I especially don’t like it when shareholders pocket parts of the profit that I made them without bringing anything of value to the company."

Are you trolling? You do realize why those shares are out there, right? Because your company needed money, and those people gave your company their money to get started, grow, hire more people, etc. Is that not bringing something of value?

Re: u/DeepFuckingValue and the GameStop Reddit mania

#467

Post by me_again »

j2bax wrote: post #437
sfblah wrote: post #427

Earlier quoted context omitted.

I'm not sure anyone cares, but the way to think about this is simply to ask if you would own GME at $300 a share if you had to hold it for the next 20 years. The answer is just obviously no. You'll never receive anything remotely close to that in dividends from the company. It's just a mania.

Why not? Gaming/hardware is a massive industry. They have enough brand recognition to take a slice of it if they make the right moves.

They don't have a moat. What can they do that Best Buy can't?

Re: u/DeepFuckingValue and the GameStop Reddit mania

#468

Post by IG_Semmelweiss »

runarberg wrote: post #122
raziel2701 wrote: post #22

On wsb u/deepfuckingvalue showed he still holds 50,000 shares and 500 deep ITM call options. He has secured a profit of $13.8 million dollars, and his remaining open position is valued at $45 million. I would caution people to not quickly fall into the "if he's still in, I'm still in" meme. He has secured a $14 million bag, regardless if the stock goes to zero he's already secured a life changing amount of money, he…

> I would not be surprised if this is the beginning of another stock market crash. Good. Let it crash and burn. The stock market has never done anything for me. Shareholders making money out of my work is not exactly in my interests, nor is it in the interest of the majority of the world’s workers. My only wish is that this time around the stock markets will stay down after they burn, and be remembered in history as…

I think your argument is better stated in that you don't see value from predatory capital vs sweat capital.

I can see the aversion to HF / VC. But you can't use that broad brush to paint all investment capital as predatory.

First, I can infer that your aversion to capital is due to vulture funds that have been known to extract money from perfect viable companies via buyouts (i.e. thinking "barbarians at the gates" type investments) for example.

However, the solution is not just to put everything in a savings account and disregard everything else is predatory.

How did we get here ? How did these funds come to exist ? Why are savers getting hurt and vultures making bank ? That's what you should really be questioning.

I think a much better argument can be made in that you would much rather increase interest rates, and stop the profilgate money lending by the fed, so that extremely cheap capital would not be available for these vultures to exist.

How do you back such scenario by direct action ? I don't know. However, i know you are not contributing to utopia by wasting your investment capital by letting it slowly burn in a savings account.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#469

Post by jmalicki »

ggggtez wrote: post #183
jzoch wrote: post #89

Earlier quoted context omitted.

Trying to figure out the "fundamental" value of anything is a fools errand. Im not saying GME wont drop eventually but there is no value on fundamentals of everything. Look at all the short-sellers of TSLA who made the same mistake. These companies are valued on what the market decides and we all know "The market is irrational".

To be honest, this is kind of the problem I have to stock investing as a whole. It sounds great to "invest on the fundamentals", but there doesn't appear to be a way for the average person to even comprehend what "the fundamentals" even are. But there has to be at least one fundamental: If the company goes bankrupt, the stock is worth nothing. Gamestop is most certainly going to go bankrupt eventually. Their business…

If the stock is worth a lot, they can sell more to raise cash, to pay off any debtors, and close all the stores. Then GameStop is just a corporation sitting on a large bank account.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#470

Post by fakedang »

troupe wrote: post #459
__MatrixMan__ wrote: post #432

Earlier quoted context omitted.

What "a world worth retiring in" means in each retiree's case is gonna vary based on their situation. Wanna die on Mars? Maybe put it all in Space X, I don't know. All I'm saying is that it's a shame that we're taught that the point of investing is to make money, rather than make a difference with a side effect of having more money. Because left to its own devices, money tends to motivate some pretty awful things. I…

> I hate letting my money sit in an account while smart kids can't afford college If you know of a smart kid that can't afford to go to college, you could make them a reasonable interest loan and it would be a win for both of you.

There's a YC idea there somewhere. Especially when a lot of family offices are looking at wealth preservation over volatility.
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