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GameStop Is Rage Against the Financial Machine

bloomberg.com

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Re: GameStop Is Rage Against the Financial Machine

#481

Post by xenocratus »

oars wrote: post #461
restingrobot wrote: post #440

Earlier quoted context omitted.

You're forgetting the stock is 125% over shorted. There literally isn't enough stock for shorts to cover their current positions. That's why there is potential for infinite, (huge) gains as long as everyone holds.

As someone who's new to this world of stock trading but now understands what a "short" is, could you elaborate on this? How is it possible for a stock to be 125% over shorted? What does this mean?

The broker who is actually holding your stock can lend them out and you can indeed end up buying your own stocks more than once. You can explicitly request the broker to not do it and, in this kind of situation where 125% of the stock is shorted and some *need* to buy it... well :)

Have a read from Matt Levine's "Infinite Game" from yesterday:

https://www.bloomberg.com/opinion/articles/2021-01-26/will-w...

To quote:

> Falcone owned some bonds of a company called MAAX Holdings Inc. “After hearing rumors that a Wall Street financial services firm was shorting the MAAX bonds and also encouraging its customers to do the same, Falcone decided to seek revenge.” So he bought all the MAAX bonds. Then he bought more: Short sellers would borrow MAAX bonds (presumably from him), and then sell them to him, so that he ended up with “22 million more bonds than MAAX had ever issued.” Then he stopped lending them out, forcing the short sellers to buy bonds to cover their shorts. But there were no bonds to be bought, since he owned them all (and more).

> Falcone stated that the Wall Street firm should just keep bidding for the bonds. Falcone acknowledged that the Wall Street firm would suffer some losses doing so, but told the senior officer and the others that sometimes you are just on the wrong side of a trade.

Re: GameStop Is Rage Against the Financial Machine

#482

Post by fumar »

onion2k wrote: post #412
blhack wrote: post #57

Okay a serious question: at what point does it make sense for these hedge fund guys to just purchase reddit and shut it down? To be clear: I don't think that would work, but I think we're at the point where stuff like that is going to be tried. These guys are losing BILLIONS of dollars. Billions. Can they spend $1B to prevent the loss of $2B? (Is reddit worth more than $1B?) Other stuff I won't be surprised if we see…

It would be much cheaper just to pay some kids to make nice looking but ultimately loss making bets on there. If WSB looks like a place where people go to lose money then it's popularity will drop.

This is how WSB started. It was about sharing ineffective and losing positions.

Re: GameStop Is Rage Against the Financial Machine

#483

Post by teekert »

kylebenzle wrote: post #85
colllectorof wrote: post #37

If you want an entertaining explanation of what's going on with GameStop's stock, I highly recommend these videos from Louis Rossmann: https://lbry.tv/@rossmanngroup:a/wallstreetbets-vs-citron-re... https://lbry.tv/@rossmanngroup:a/why-mainstream-media-s-slan... https://lbry.tv/@rossmanngroup:a/gamestop-shorts-lose-billio... https://lbry.tv/@rossmanngroup:a/gamestop-shorts-are-full-of... (That's how I learned about t…

Just SO pumped that library is being used in the real world to host videos!

I had some hiccups, they should have gone with PeerTube, the more peers, the merrier.

Re: GameStop Is Rage Against the Financial Machine

#484

Post by throwaway4good »

TuringNYC wrote: post #344
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…

This Reddit Post is very revealing: https://twitter.com/inactivist_/status/1354537152445521923/p...

As if a few hundreds worth of GME stock would matter to a billion dollar hedge fund.

You can also go to 4chan where you can find selfproclaimed nazis who thinks they are fighting the jews on wall street.

It is all very idiotic.

As someone noticed elsewhere here on hn; regardless if it is a pump and dump manipulation or a short squeeze, GME will eventually come down. Maybe not in a week but surely in a year.

Re: GameStop Is Rage Against the Financial Machine

#485

Post by GordonS »

superfrank wrote: post #355
fredophile wrote: post #330

Earlier quoted context omitted.

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.

That's the idea, but there will also be a bunch of retail traders who get caught up in the frenzy and end up losing too much when the bubble pops. Maybe it's their own fault for being greedy, but they do still exist. It won't only be hedge funds left holding the bag. Also, there is a worry about multiple hedge funds going bankrupt and causing a cascading effect when they are forced to close out other positions which…

> Also, there is a worry about multiple hedge funds going bankrupt

Like you, I struggle to feel sorry for them - surely a responsible hedge fund shouldn't be shorting a single stock with sums of money they can't afford to lose? If they really are behaving like that, they must think they can't lose...

Re: GameStop Is Rage Against the Financial Machine

#486

Post by reducesuffering »

TheAlchemist wrote: post #333

I get Gamestop. But anyone knows why is Nokia also being targeted ?

WSB retail is so ignorant these days, their only criteria are cheap ticker prices (GME, NOK, BB all started < $10) with a commonly recognized brand name to them, because that is all that matters to get people on board.

Re: GameStop Is Rage Against the Financial Machine

#487

Post by xmprt »

swiley wrote: post #432
Traster wrote: post #347

Earlier quoted context omitted.

The second that the shorts have covered the price isn't going to drop to $90, it's going to drop back to $20 and most of the WSBers who were holding out for $2000 will lose their shirts. The shorts are going to lose, no doubt. But once they've lost, the stock price is probably $20. A lot of WSBers are going to be holding stock at that point, and possibly on margin. And that stock is going to be a crappy retail stock.…

They won't lose their shirts, just the beer money they spent on a meme. Plenty of them really don't care.

Things may have changed since you last used reddit but now I regularly see people playing with $1000s of dollars joking about buying weekly options and trading on leverage that they don't have and then not understanding the implications of that when things come crashing down.

Re: GameStop Is Rage Against the Financial Machine

#488

Post by minor3 »

SomewhatLikely wrote: post #422
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…

The daily volume is higher than the total number of shares for the company. Lots of people are locking in their gains. Of course someone else is taking their place at an even higher cost basis.

> Of course someone else is taking their place at an even higher cost basis.

It's probably mostly hedge funds closing their shorts

Re: GameStop Is Rage Against the Financial Machine

#489

Post by ska »

onion2k wrote: post #405
elliekelly wrote: post #49

Earlier quoted context omitted.

And (no one seems to be talking about this) but there's definitely a systemic cost. Going forward, how do you effectively manage the risk of one of your positions becoming a meme? This happening once is an interesting situation and I've certainly enjoyed watching it play out. If it happens repeatedly it will definitely start to undermine the investing public & market participant confidence in the market. That's certa…

Going forward, how do you effectively manage the risk of one of your positions becoming a meme? Hide your position better. Put out fewer signals. Lobby to make trades secret.

Or, you know, don't short more than available float (or anywhere near it)

Re: GameStop Is Rage Against the Financial Machine

#490

Post by throwaways885 »

paulpauper wrote: post #377
tpmx wrote: post #319

Earlier quoted context omitted.

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

Rossmann is hardly rich. His whole brand is fighting Apple for right-to-repair legislation as well as a bunch of pro small business stuff. What exactly is wrong with this opinion on the oppressive covid lockdowns?
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