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

Wall Street was the real winner of the GameStop saga

economist.com

Post reply on HN
Print view View original

71–80 of 250 posts

Re: Wall Street was the real winner of the GameStop saga

#71

Post by iib »

ggambetta wrote: post #4

It was a weird, fun ride. My writing partner Lutz and I work in tech, but have a real passion for filmmaking. We lost some money on $GME, so we had to tell the story from our point of view. The result is STONKS, a comedy/drama feature screenplay [0], fictional but inspired by the GME events, and a love letter of sorts to WSB. We queried Hollywood producers but were ignored; we shared on WSB itself but we were insta-b…

I am in the process of reading it. I never understood the disclaimer at start, that "Any resemblance to actual persons, living or dead, or actual events, is purely coincidental." in works were I saw it. Is this usually written to defend one legally, even though the events have clear, non-coincidental resemblance to real-life events?

Re: Wall Street was the real winner of the GameStop saga

#73

Post by netcan »

JumpCrisscross wrote: post #60
netcan wrote: post #59

Earlier quoted context omitted.

Perhaps, but honestly, I think Schumpeterian creative destruction is... at this point, more of an idealistic take. It exists, but it isn't a permanent feature of the big fish economy that stock markets represent. There are processes like online travel retail overtaking travel agenting. That's a sort of creative destruction. Mostly though, travel agents were an SME sector. Like the proverbial (and literal) restaurant…

> Schumpeterian creative destruction is... at this point, more of an idealistic take Schumpeterian creative destruction is an ideal. But the process of innovation it describes is well documented in the study of entrepreneurship, venture capital, new firm formation and the industrial dynamic of new entrance. > isn't a permanent feature of the big fish economy that stock markets represent Most of the stock market isn’t…

>> Schumpeterian creative destruction is an ideal. But the process of innovation it describes is well documented in the study of entrepreneurship, venture capital, new firm formation and the industrial dynamic of new entrance

I'm not sure we disagree, at least not much.

What I meant is that descriptions/theories/models/takes^ such as these are an ideal, I agree. The extent to which this ideal describes what appears to be a dominant process in the part of the world we're describing varies.

What I'm (halfheartedly) arguing is that the Schumpeterian description currently, isn't so dominant. At least, it's not dominant enough to be the basis for understanding short selling... I don't believe. In fact, the share price of a company isn't necessarily very important to the operation of the company... in theory. Short selling is, also in theory, not necessarily all that impactful on share prices.

>>Banking and auto manufacturers share a history in being bailed out.

True, but again, this is markets in practice. The long term, perfect free market ideals are not something that generally exist in reality for a lot of reasons... both good and bad depending on your perspectives.

I don't think Schumpeter meant for his ideas to apply only in hypothetical markets. Creative destruction was as a powerful force, for example, in the early decades of auto manufacturing. Banking has always been somewhat perplexing to economists, who can't really agree on whether or not they should be considered "firms."

We might disagree about short sellers vs leveraged buyouts. I'm more skeptical of short selling and derivatives value add, more willing to entertain the idea that leveraged buyouts have a useful role. At least leveraged buyouts relate directly to financing business activities.

^Economists, atm, seem to like the term "story."

Re: Wall Street was the real winner of the GameStop saga

#74

Post by dchftcs »

djtango wrote: post #28
andrewclunn wrote: post #5

So because people traded (sometimes) using services that had associated fees... Wall Street won? There's nothing in this article that supports the click bait title.

I'm pretty sure market makers have made a killing off option premiums, especially once they realized the way to kill a gamma squeeze is to jack up premiums to the max to kill momentum (as observed during the despac squeezes)

Market making is a business that avoids taking sides over long time horizons. In this business, they need to be hedged in some way almost all the time, so what you said makes no sense.

Re: Wall Street was the real winner of the GameStop saga

#75

Post by WJW »

raxxorrax wrote: post #50
netcan wrote: post #17

$GME was always going to be a "Revolution That Wasn’t." Almost everyone playing knew it. IMO, it was kind of an exemplifier of postmodernism, used colloquially. All the "beat down hedgies" stuff was just part of the game, just like "fuck the fundamentals" was part of the game. IMO it has had an influence. A neurotic, dramatic lens through which we can look at financial institutions, more abstract economics. What is c…

I think it should started a discussion about some excesses of the stock market. Rich people can look for battered companies and severely profit from their accelerated demise which some people wanted to fight against for once. Out of their own motives for profit or just for fun to be able to at least once stick it to speculators looking for easy profit. That trading was halted and "corrected" proved they had an impact…

> people can look for battered companies and severely profit from their accelerated demise

Gamestop is one of those companies where the demise has been severely delayed IMO; they could've seen the future years ago but chose to stay with their legacy business of selling games in physical stores. Online game stores do what they do but with much lower costs and a much better business model.

There are two ways forward for Gamestop IMO but neither is very positive:

- They try to compete with the giants in the online gaming market, like Steam. I can't see them bootstrap their way into that, Steam and the others have too much network effect going on and GME has not shown any real talent in the online/tech domain.

- They try to revitalize their offline presence. I don't see this happening either. There has been a decades long trend of everything moving from off- to on-line and I don't see that changing anytime soon.

For anyone who agrees with the above assessment, the conclusion would be that the future for Gamestop is not very bright. Depending on the timescale you think it is going to play out, being short is an entirely valid position to be in. Personally, I think the sentimental memories of the ~25-~45 years old generation will keep it alive for a decade or so more.

Re: Wall Street was the real winner of the GameStop saga

#76

Post by Pelic4n »

ashurov wrote: post #62

I have seen so much fuckery with the stock price and ridiculous headlines in het media about GME that can't really believe that we have seen the actual squeeze. Furthermore, the SEC report said that the price run-up was because retail bought in, not because the hedge funds closed their positions. So when did they do this and went from 200% to 20%? Besides all of that, the fundamentals for GME are great. They are hiri…

Don't you love it when the once in a lifetime opportunity for generational wealth is also a great fundamental investment? In case the biggest short squeeze the market would have ever seen, with the potential to crash the US economy, somehow doesn't happen (damn hedgies!). With all of that that, it doesn't matter that physical sales of video games are dying and that the company is bleeding out money with a loss of $100 millions in Q3 2021 alone.

Re: Wall Street was the real winner of the GameStop saga

#77

Post by WJW »

BYazfVCcq wrote: post #46
goldnugget92 wrote: post #21

Earlier quoted context omitted.

Its easily dismissed as conspiracy but having read many of their supporting arguments and seeing the SI (Short Interest) being over 220% myself along with the SEC report suggesting that shorts never closed their position... I can't say I would dismiss the possibility of another short squeeze...

You should take the time to read the SEC Report "In seeking to answer this question, staff observed that during some discrete periods, GME had sharp price increases concurrently with known major short sellers covering their short positions after incurring significant losses. During these times, short sellers covering their positions likely contributed to increases in GME’s price. For example, staff observed that part…

I'd like to add to this the following scenario for explaining why short interest can be high even if the original shorters have closed their positions.

1. Lots of people are short.

2. Price goes up significantly, shorters get margin calls.

3. Price goes up a lot due to buying pressure from shorters closing their positions. (ie, the squeeze itself)

4. Price is now extremely high and fairly disconnected from fundamentals.

5. People notice the price is very high compared to earnings and open new short positions.

After step 5, there can be a ton of shorters in the stock yet there is not a very big chance of a new squeeze since the price at which the new short positions were opened is so high. Imagine how much the price of GME would need to rise to squeeze out the shorters who opened their position in the 300-400 USD price range.

Re: Wall Street was the real winner of the GameStop saga

#78

Post by FractalParadigm »

WJW wrote: post #75
raxxorrax wrote: post #50

Earlier quoted context omitted.

I think it should started a discussion about some excesses of the stock market. Rich people can look for battered companies and severely profit from their accelerated demise which some people wanted to fight against for once. Out of their own motives for profit or just for fun to be able to at least once stick it to speculators looking for easy profit. That trading was halted and "corrected" proved they had an impact…

> people can look for battered companies and severely profit from their accelerated demise Gamestop is one of those companies where the demise has been severely delayed IMO; they could've seen the future years ago but chose to stay with their legacy business of selling games in physical stores. Online game stores do what they do but with much lower costs and a much better business model. There are two ways forward fo…

GameStop has pivoted to some extent. It's incredibly rare that I go into one of their stores, but the last time I did it was less of a games store and more of a gaming merchandise store. Their acquisition of ThinkGeek and subsequent selling of those products in stores is satisfying a niche that nobody else (apart from maybe the mom & pop comic book store) seems interested in.

Re: Wall Street was the real winner of the GameStop saga

#79

Post by tgv »

mccorrinall wrote: post #24
1_player wrote: post #19

It's just a matter of time before some company insider is paid to manipulate their employers' stock through the power of the /r/WallStreetBets self-defined autists. Companies use social media for astroturfing and viral marketing, why not market manipulation?

Happened a lot when Shkreli was still mod

The Shrkeli, "former hedge fund manager and convicted felon"?

Re: Wall Street was the real winner of the GameStop saga

#80

Post by Kaspar1313 »

ahtihn wrote: post #52
Kaspar1313 wrote: post #42

Earlier quoted context omitted.

They've changed the way the calculate SI now. Before; SI = [Number of Shares Short] / [Float] Now; SI = [Number of Share Short] + [Float] / [Float] Ask yourself, why...

> Before; SI = [Number of Shares Short] / [Float] > Now; SI = [Number of Share Short] + [Float] / [Float] So you're saying that SI is always reported as higher than 100% now? Since that's not the cause, are you saying there's negative number of short shares now? Maybe think for 2 seconds about your 2nd formula?

Sorry; Now; SI = [Number of Shares Short] / [Float] + [Number of Shares Short]
Post reply on HN