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GameStop Is Rage Against the Financial Machine

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Re: GameStop Is Rage Against the Financial Machine

#71

Post by boringg »

vmception wrote: post #60
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…

Gotta hit discord and telegram too Telegram has threads now on announcement channels that are unlinked from discussion channels

WallStreetBets hit their threshold on discord - no more invites.

Re: GameStop Is Rage Against the Financial Machine

#72

Post by unethical_ban »

So, can someone explain rationally how options/derivatives are actually useful to the economy, rather than a market manipulation and gambling mechanism?

In the traditional, elementary school understanding of stock, people buy into a company because they want part ownership, and the stock goes up as the company does well and has solid financial strength.

Derivatives seem to be an unnecessary accelerator.

Re: GameStop Is Rage Against the Financial Machine

#74

Post by jscheel »

rabuse wrote: post #2

I bought into this at around $80. Was shocked to wake up and see it at $350.

I bought quite a bit around 88, later theorized that shorts would be able to stair-step down to ~60 on circuit breakers yesterday (like the day they did before), so I sold around neutral. Feeling pretty dang dumb now.

Re: GameStop Is Rage Against the Financial Machine

#75

Post by goatcode »

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…

> * Massive astroturf campaigns (the WSB mods are claiming that this is already happening.

That's 75% of the site as it is.

Re: GameStop Is Rage Against the Financial Machine

#76

Post by Edmond »

VikingCoder wrote: post #22
Edmond wrote: post #14

Earlier quoted context omitted.

This is a reductive take, there is the idealized model of the market that the efficient market hypothesis refers to and there is the real one, which can get quite messy. The market does serve a real purpose, ie deploying capital and providing liquidity.

It serves that purpose, but is the market as it exists today the best way for society to achieve that purpose? K-shaped recoveries make me think "I wish there were a better way." But I'm an idiot. So my best idea right now is, "When a business issues stock, they also have to issue an additional 20% to the government, and then we need to keep the tax rate low-ish on dividends, but increase the tax rate on capital gain…

Well, not sure which country you're writing from but here in the US, private property laws should be enough to nip the idea of government taking shares of a private company.

Dividends and capital gains in general have an inverse relationship, ie dividend paying stocks typically are low growing and as such don't tend to experience much price increase (ie capital gains). You own such shares so you can get the consistent dividend (share of profits) as your return...There may be exceptions but in general this relationship holds.

In a non-bubble market, the capital gains are a reflection of company's growth and expected future profits, thus the stock price is based on present-value-of-future-cashflows model (ideally of course, the reality is often messy).

In other words dividends and capital gains are not inherently in conflict, they merely reflect life-cycles of companies. Of course there are a ton of unprofitable companies on the market currently with high stock prices, there is a larger debate to be had on why that is and how to curtail it.

Re: GameStop Is Rage Against the Financial Machine

#77

Post by xiphias2 »

jdjfktkrnj wrote: post #18
dangoldin wrote: post #8

Earlier quoted context omitted.

“The market can remain irrational longer than you can remain solvent.” - supposedly John Maynard Keynes

r/WSB likes to rephrase this as "we can remain retarded longer that they can remain solvent"

I hope it's true...I want to see Melvin bankrupt, especially after the ,,we closed our positions'' bs. I don't know why but it sounds so much fun :)

Re: GameStop Is Rage Against the Financial Machine

#78

Post by elliekelly »

dannyw wrote: post #33
ping_pong wrote: post #4

It's really not. Because eventually retail is going to get destroyed. Yes, some hedge funds have lost their shirts, but those are the first ones who were in the short before the squeeze. The hedge funds and more importantly day trading shops making money right now are the ones who saw the activity and are goosing the stock price right now. I don't know if people realize that there are thousands of day trading shops w…

You underestimate just how much concentrated retail volume is. I have had more than ten people ask me how to buy GME. Its on the front page of everything. Bitcoin’s nearly $1T market cap is more or less all retail. Plenty of WSB posts with multi million positions. Disclosure: I long GME.

> Plenty of WSB posts with multi million positions.

This is interesting. I wonder what percent of outstanding shares of $GME WSB commenters collectively own and whether the SEC could make the case they're operating as a "group" for disclosure purposes.

Re: GameStop Is Rage Against the Financial Machine

#79

Post by shmoogy »

unethical_ban wrote: post #72

So, can someone explain rationally how options/derivatives are actually useful to the economy, rather than a market manipulation and gambling mechanism? In the traditional, elementary school understanding of stock, people buy into a company because they want part ownership, and the stock goes up as the company does well and has solid financial strength. Derivatives seem to be an unnecessary accelerator.

If you use them like WSB they are an unnecessary accelerator, they're intended for being used as a hedge (and probably other things more savvy investors know more about).

Re: GameStop Is Rage Against the Financial Machine

#80

Post by baq »

schnevets wrote: post #17
vmception wrote: post #11

Earlier quoted context omitted.

Quantum Market Hypothesis In one dimension, the new GME management (which did occur) does a secondary market offering directly into liquidity, recapitalizing themselves which changes all the fundamentals. This wouldnt be known information because the expectation of no liquidity, but now that there is liquidity it creates new information

The only way this could get stupider is if GME took their impressive new warchest and bought/merged with Valve, pulling a unicorn into the stock market. At that point, reddit would have memed a brick and mortar retailer into a SPAC.

if only gaben agreed. i think the internet would break.
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