Gamestop: 'Failing' firm soars in value as amateurs buy stock
27/01/2021
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Shares in a games company have soared more than 300% - the result of a fight between private and professional investors.
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Captain Obvious
27/01/2021 15:05:30
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bbc
Invariably they'll all ultimately lose their money, but maybe something like this can lead to changes where businesses can be supported instead of torn down by many of the major organisations that uphold society.
By supported you mean kept on life support? Why should anyone keep a clearly failing business afloat?
Stuff the short sellers & Hedge Funds. Make them use their own money rather than borrow the shares
Should be made ILLEGAL.
You do realise the borrowing done when shorting is paid for at market price?
Thats not how capitalism works dude...
There's nothing wrong with 'short sellers' they simply think the stock is over-valued. We don't complain when people pile in thinking the stock is going to go up, so why can't people invest the other way. Borrowing to do it though... yes, feels irresponsible... you should only be allowed if you have a shirt to lose.
The phrase put your money where your mouth is comes to mind.
Emphasis on your money.
Emphasis on your money.
Invariably they'll all ultimately lose their money, but maybe something like this can lead to changes where businesses can be supported instead of torn down by many of the major organisations that uphold society.
All they've done is give hedge funds and the like reason to open even more short positions! Nobody is going to hold onto shares for long in a bubble of their own making.
Removed
Agreed, shorting is a profiteering practise, it is not good for business.
The guys who make the laws, including the President himself, are all funded by, and therefore work for the hedge funds!
They didn’t give Biden millions because they wanted him to rejoin the Paris agreement!!!!
They didn’t give Biden millions because they wanted him to rejoin the Paris agreement!!!!
Naked shorting is illegal but the financial markets are to all intents and purposes unregulated
The only winners here will be the ones selling to delusional buyers right now. The person who got this little ball rolling will be laughing ! Out at the top !
The person who got this rolling was $24million up yesterday on an initial investment of $50k. Yeah he's laughing.
Yep. People on Reddit will think they've won right now. Let's see how they feel in a few month's time.
Some will make big pay days (as above), others will have been too late to the party of go home at the wrong time and there will be blood shed on both sides of the fence.
Some will make big pay days (as above), others will have been too late to the party of go home at the wrong time and there will be blood shed on both sides of the fence.
Loosing the shirt on your back has become very popular. Don't forget to buy your Tulip Bulbs that also went well for a time.
Should be made ILLEGAL.
Should be made ILLEGAL.
We like it
You have to understand this isn't investing, it's just a game now, like going to the casino. We've disposable cash from lockdown so have fun, you might win, you might lose it all, you'll have a laugh in WSB on the way.
There's an error in the article- The short selling on this stock was actually over 130% of the total shares available. This means that if the hedge funds try to get out of their trades to limit their losses, they have to buy back more shares than are available on the market, which is just pushing the price even higher. This happened to Volkswagen back in 2008, and cost traders a lot of money then.
Aye.
Porsche had bought all the shares, I seem to recall.
Hilarious.
Porsche had bought all the shares, I seem to recall.
Hilarious.
Buy a low cost International (excluding uk) tracker and sleep at night.
Sounds passive, but It is similar to momentum investing, with the index of top shares internationaly being re set every quarter. Look what happened to Tesler when it joined the S+P 500, the price soared as all other tracker funds were forced to follow suit and buy!
If it's good enough for Warren Buffet....
Sounds passive, but It is similar to momentum investing, with the index of top shares internationaly being re set every quarter. Look what happened to Tesler when it joined the S+P 500, the price soared as all other tracker funds were forced to follow suit and buy!
If it's good enough for Warren Buffet....
What’s the betting that Biden‘s donors (all big hedge funds) get him on the phone and have his mates at Reddit and other social media giants completely nuke the day traders accounts on all the sites they are coordinating, and justify it with laughable false charges?
Biden has friends at Reddit? Ok grandpa
Hedge fund were allowed to "borrow" 150% of shares, which should be illegal. Now that they got beater in their own game, they're throwing all they have. That includes cheap articles like this one, that doesn't explain the true reason why this situation has occurred and is instead trying to paint retail investors as rabid idiots who are out to destroy Wall St.
GME TO THE MOON. HOLD TILL $1420.69
GME TO THE MOON. HOLD TILL $1420.69
Wall Street manipulating Market to make money average joe kicks them in nuts they loose billions. Stock price have no reflection of value of a company. Look twitter it has never ever made a profits its worthless yet it lives in tec bubble on stock market waiting burst.
This is called "naked short selling" and IS illegal (in the US, anyway, where this is being traded).
Agreed 100% The fact of the matter is MANY US stocks are vastly over priced based on actual fundamentals. Bubble ready to burst. Good luck all you've been warned!
In a digital world Gamestop is a dinosaur and will end up like Debenhams and all the other high street stores, too the moon? Yeah sure, i'd rather invest in bitcoin better returns and more supportable than GME.
Based
Shorting is not illegal and is part of healthy market ‘price discovery’. NAKED shorting of a stock you do not own is illegal. The SEC just do not enforce it.
You’re an idiot if you have bought shares in this company and think it is going anywhere near that price. At some point in the not too distant future the price is going to come crashing down and a lot of people are going to lose a lot of money.
not ashamed at all to say that I got in on the party, admittedly a little late at $40, but still made as much in a month as I made in bitcoin over the past few months. And the fact that it's hedge funds that are bleeding makes it even more pleasant.
Still holding 400 shares
Wrong your they inexperienced generation, we the boomers will have busted
This merely illustrates how far the `markets' have deviated from the real economy. A lot of people are going to make money from speculative postures that will burn out what remains of a failing retail business. Where have we seen that before in recent times?
The situationists used to argue that capitalism will eventually consume itself. It appears they may not be wrong.
The situationists used to argue that capitalism will eventually consume itself. It appears they may not be wrong.
Should be made ILLEGAL.
What’s the betting that Biden‘s donors (all big hedge funds) get him on the phone and have his mates at Reddit and other social media giants completely nuke the day traders accounts on all the sites they are coordinating, and justify it with laughable false charges?
Except you're forgetting that what goes up must come down. The moment it teeters, it's going to crash and a lot of people will lose all the money they've just pumped into it. This is nothing except a pump and dump. The hedge funds will just hold out until that happens.
Gamestop stakeholders are probably dumping all their own shares as we speak! What an opportunity to get out high and dry.
Gamestop stakeholders are probably dumping all their own shares as we speak! What an opportunity to get out high and dry.
I'm a terribly simple soul I know.... but in my view selling something that not only is not yours to sell but, in fact, doesn't exist, on the hope you can buy it back cheaper later is.... what's the word.... fraud? Yes that's it... it's fraud.
The real issue here is that currently the rules allow hedge funds to borrow more shares that exist. This is why this has snowballed out of control. They need to buy more shares than are in existence in order to cover the losses, but those shares have been bough out by retail investors who believe in the company. Now they're trying to blame the small guys, all because they are losing their own game
You are right Mrs Smith.
FRAUD
Another word for it is usury....
But of course that's what banks do, or did do until the 2008 financial crash..
The good book says the love of money is one of the top 10 no no's.
FRAUD
Another word for it is usury....
But of course that's what banks do, or did do until the 2008 financial crash..
The good book says the love of money is one of the top 10 no no's.
But these shares do exist, and they are the fund's to sell if that's in the contract.
Can I borrow the car you're not using during the lockdown? I'm going to sell it, and once lockdown is over and you need it again, I'll buy it back and give it back to you.
It's exactly the same principle, and if the owner of the car is happy with the deal, then there's no fraud involved.
Can I borrow the car you're not using during the lockdown? I'm going to sell it, and once lockdown is over and you need it again, I'll buy it back and give it back to you.
It's exactly the same principle, and if the owner of the car is happy with the deal, then there's no fraud involved.
It isn't fraud. It is gambling.
Another commenter has it nailed - why do we view this as a valid job? Gambling is not a job!
Another commenter has it nailed - why do we view this as a valid job? Gambling is not a job!
All the biggest shorted shares on the LSE went up today aswel, its a short squeeze. PSON, CINE, PFC etc. The shorts often manipulate a share down. Taste of their own medicine.
It works the same on the way up. An institution will offer instruments without having the physical shares in their possession, that method works for buying and selling.
Er, why fraud? You've agreed with the owner that the stock IS yours to sell, and you pay them for the privilege.
Imagine this - you go to the shop and they're charging 5£ for a loaf of bread. Instead of grumbling, what if you could say to them "Ok, I'm selling you 10 loaves". They have to hand you 50£ and you get the loaves at 50p each at the next shop. That's how markets are supposed to work.
Imagine this - you go to the shop and they're charging 5£ for a loaf of bread. Instead of grumbling, what if you could say to them "Ok, I'm selling you 10 loaves". They have to hand you 50£ and you get the loaves at 50p each at the next shop. That's how markets are supposed to work.
thank goodness its stock in a games company, not, for example, stock in banks... oh..
well, if you own shares, and want to lend them to me for a term at an interest rate that suits you - obviously taking in to account how you perceive my ability to repay you, or credit rating... surely that is your decision. shorting 150% of a companies shares outstanding, is as far as I'm aware BLX, (unless some very short term naked short thing -very unlikely) - i could be wrong, please explain.
I agree with the sentiment. Short selling should be banned, I think it's a fundamentally unhealthy thing and distorts the market. However I disagree with your statement about it being theirs to sell, the fact is that the have borrowed the shares, so they do exist and it's their risk. So nothing illegal in this approach (unfortunately). What you describe is Naked Selling, where they don't have them
No its not really fraud if :
1) The shares exist
2) The people they borrow them from agree to that and get a cut.
The problem for Melvin is that neither was true.
But they only ended up defrauding themselves.
1) The shares exist
2) The people they borrow them from agree to that and get a cut.
The problem for Melvin is that neither was true.
But they only ended up defrauding themselves.
I have been listening to this most of the day on Bloomberg. Hedge funds have been shorting the company, because they were betting against the company in the virtual gambling wheel. As the company has increased in value, they have been left with very heavy losses, stating today that some hedge funds will have to borrow cash to pay off their losses or close down. Roll the Dice!
Nervous about stock markets?
The Stock market is the only way to make a decent return over the long term, but short term volatility at these high prices may mean that a fall must be expected as soon as the novelty wears off. Diversify is the name of the game.
You have been warned!
The Stock market is the only way to make a decent return over the long term, but short term volatility at these high prices may mean that a fall must be expected as soon as the novelty wears off. Diversify is the name of the game.
You have been warned!
The real issue here is that currently the rules allow hedge funds to borrow more shares that exist. This is why this has snowballed out of control. They need to buy more shares than are in existence in order to cover the losses, but those shares have been bough out by retail investors who believe in the company. Now they're trying to blame the small guys, all because they are losing their own game
The poor wage slaves are the winners here: the big hedge funds drove down the price of the stock whilst dramatically increasing demand for it. The average man on the street had little to lose by buying a few shares, knowing full well that in a few weeks time the hedge funds would be eating each other like rats in a barrel trying to get hold of the shares they'd need to cover their bets. Go WSB!
Do the retail investors believe in the company or do they want to give a good kicking to what they think are financial parasites? A bit of both perhaps.
what a load of blx, where did you even make this up ? clearly you cant do basic math. borrow more than exists ??? to buy more than exists - because you believe in a company , just because you want it to go up ?? please - break down what you like about the company first - not just it must go up.
Hedge funds are quite often set up with the intent of risk mitigation rather than making tonnes of profit - hence the name. They're not intrinsically bad.
Whipping people up into a buying frenzy / pyramid scheme is going to leave the late comers out of pocket while most instigators will be well shot by then - it might not have been done maliciously but how will it end otherwise?
Whipping people up into a buying frenzy / pyramid scheme is going to leave the late comers out of pocket while most instigators will be well shot by then - it might not have been done maliciously but how will it end otherwise?
This is the problem in society - this is seen as a job and a method of making lots of money rather than people doing something that adds value to society and the world. People are starving, the climate is creating havoc but this is seen as a vital part of humanity which involves some people making money to make others miserable.
Lack of economic incentives for the other ventures you mention. What we need to do is ensure enough supply of mathematical brains and competition to supply the City, with no barriers to entry...the wages and profit margins will fall. Start making the economic returns for the other areas pay and people will do it. On energy tech that is starting to happen.
More useful than accountants though .. plus they have a sense of humour & a personality .....
By supported you mean kept on life support? Why should anyone keep a clearly failing business afloat?
Since the Credit Crunch of 2008 the monetary policies put in place to facilitate recovery still remain. They are clearly running out of steam. It is time to get back to the real economics of capitalism: investment, value and profit.
The endless flow of cheap money is producing nothing of value, employs fewer each day, is hollowing out our towns and is slowly driving us all mad.
The endless flow of cheap money is producing nothing of value, employs fewer each day, is hollowing out our towns and is slowly driving us all mad.
Quote of the day - thank you for putting my thoughts into words
Sadly modern capitalism is destroying wealth creators and lauding over things that have momentary capital value, hence complete nobodies can cash in on a moments fame and get rich because thier star has capital, it also leads to stupidness such as when Kylie Jenner tried to sue Kylie mynogue for the rights to Kylie even though Jenner was probably named after Mynogue.
Except you're forgetting that what goes up must come down. The moment it teeters, it's going to crash and a lot of people will lose all the money they've just pumped into it. This is nothing except a pump and dump. The hedge funds will just hold out until that happens.
Gamestop stakeholders are probably dumping all their own shares as we speak! What an opportunity to get out high and dry.
Gamestop stakeholders are probably dumping all their own shares as we speak! What an opportunity to get out high and dry.
This article will just lead more people to go and get involved :)
Hold until $1420.69!
I have been listening to this most of the day on Bloomberg. Hedge funds have been shorting the company, because they were betting against the company in the virtual gambling wheel. As the company has increased in value, they have been left with very heavy losses, stating today that some hedge funds will have to borrow cash to pay off their losses or close down. Roll the Dice!
Aye, if you're a hedge fund.
You try borrowing cash at 0.1% or 0.25% or whatever the base rate is.
Good luck with that.
You try borrowing cash at 0.1% or 0.25% or whatever the base rate is.
Good luck with that.
No matter how cheaply you can borrow a loss is still a loss!
They can probably get Sleepy Joe to print some for them.
Interesting to see how many voices are trying to change this narrative into one of 'Market Manipulation', rather than the obvious reality: short sellers get greedy; overstretch themselves by shorting more than 100% of the total stock inventory; amateurs move in and take them to the cleaners. When all this is over, there will be calls to regulate what is, in essence, a case of self regulation.
Could it not get even better if say you targeted a quoted hedge fund and multiply the effect if you played the short holdings that they held?
Yes hedge funds and short sellers are unscrupulous themselves, deserve what's coming to them
think I am going to have to have a bit of a lie down..........
Watching Hedge Funds and short sellers get battered by Reddit users has to be the feel good story of the day. Question is 'Who will get left holding the bag?'
If Wall St. loses the taxpayer will foot the bill, if its the day traders then it'll be 'prices can go down as well as up'
If there was any actual justice or regulation then the people short-selling shares that they have no affirmative right to acquire, a.k.a. naked short selling, would be prosecuted for what is a crime in most jurisdictions.
Short-selling shares you own or have a legitimate option on is morally questionable. Selling *anything* you don't own is criminal fraud, that's not really a matter of opinion...
Short-selling shares you own or have a legitimate option on is morally questionable. Selling *anything* you don't own is criminal fraud, that's not really a matter of opinion...
The real issue here is that currently the rules allow hedge funds to borrow more shares that exist. This is why this has snowballed out of control. They need to buy more shares than are in existence in order to cover the losses, but those shares have been bough out by retail investors who believe in the company. Now they're trying to blame the small guys, all because they are losing their own game
The poor wage slaves are the winners here: the big hedge funds drove down the price of the stock whilst dramatically increasing demand for it. The average man on the street had little to lose by buying a few shares, knowing full well that in a few weeks time the hedge funds would be eating each other like rats in a barrel trying to get hold of the shares they'd need to cover their bets. Go WSB!
I suspect the same outcome as ever will happen on the SCC get involved.
The Hedge fund shorting & ‘forcing’ prices will be ignored, and the smaller e-traders will be hunted down & prosecuted for ‘market manipulation’, even though it is less detrimental, & hardly any different than Hedge fund actions.
The Hedge fund shorting & ‘forcing’ prices will be ignored, and the smaller e-traders will be hunted down & prosecuted for ‘market manipulation’, even though it is less detrimental, & hardly any different than Hedge fund actions.
Unless the brokerages are taking an insanely lax attitude to collateral these days, I seriously doubt that e-traders, even with options, have enough skin in the game to manipulate the markets unlike hedge funds. If there's a new version of pump and dump style tactics, fine. But people using the system legally shouldn't be penalised for taking the fight to the hedge funds.
Actually its massively different in one sense, one is at least investing in and adding value to a company which is the original point of shares, if people are spotting patterns in illegal manipulation downwards and realise the opportunity in redressing the balance upwards its not them that are in the wrong
Short Selling is a Wild West casino
Shoot the lights out and run for the hills
Or as Warren Buffet once said : "When the Tide goes out, you see who has been swimming naked"
Though this time, it might just be the big Traders swimming naked !
If little guys can add liquidity, all well and good, but no one should get any bail outs, losers MUST pay !
Shoot the lights out and run for the hills
Or as Warren Buffet once said : "When the Tide goes out, you see who has been swimming naked"
Though this time, it might just be the big Traders swimming naked !
If little guys can add liquidity, all well and good, but no one should get any bail outs, losers MUST pay !
Surely the regulators should have been stopping "shorting" from happening? Good luck to the privateers - go get 'em boys, down with established greed. They starve kids in Africa to feast on the glut.
The point is that the regulators literally enable this behaviour to protect corporate finance. The fact that the guys over at WSB took them on with all odds being on them losing every dollar they invest. As long as they stay strong, the hedge fund firms will pretty much go bankrupt (good riddance).
I suspect the same outcome as ever will happen on the SCC get involved.
The Hedge fund shorting & ‘forcing’ prices will be ignored, and the smaller e-traders will be hunted down & prosecuted for ‘market manipulation’, even though it is less detrimental, & hardly any different than Hedge fund actions.
The Hedge fund shorting & ‘forcing’ prices will be ignored, and the smaller e-traders will be hunted down & prosecuted for ‘market manipulation’, even though it is less detrimental, & hardly any different than Hedge fund actions.
Unless the brokerages are taking an insanely lax attitude to collateral these days, I seriously doubt that e-traders, even with options, have enough skin in the game to manipulate the markets unlike hedge funds. If there's a new version of pump and dump style tactics, fine. But people using the system legally shouldn't be penalised for taking the fight to the hedge funds.
But these shares do exist, and they are the fund's to sell if that's in the contract.
Can I borrow the car you're not using during the lockdown? I'm going to sell it, and once lockdown is over and you need it again, I'll buy it back and give it back to you.
It's exactly the same principle, and if the owner of the car is happy with the deal, then there's no fraud involved.
Can I borrow the car you're not using during the lockdown? I'm going to sell it, and once lockdown is over and you need it again, I'll buy it back and give it back to you.
It's exactly the same principle, and if the owner of the car is happy with the deal, then there's no fraud involved.
The most common way for institutions to short sell shares is to buy "put options" which are options to buy a share at the current price, they are not real shares which are physically owned.
This is can lead to a situation where there are more optioned shares on the market, owned by traders looking to short sell the stock, than there are real shares. Which is obviously suboptimal.
This is can lead to a situation where there are more optioned shares on the market, owned by traders looking to short sell the stock, than there are real shares. Which is obviously suboptimal.
All true, except that the big investors have enough clout (usually) to make sure the price goes low (by talking down the stock, going on tv/radio/other media to trash the stock, sending out investment notes telling everyone to sell, "insider dealing" conversations to depress the price, etc) so that they make money and the original investor loses. Market manipulation?
sorry you are very wrong its not like borrowing my car and then selling it its much more like borrowing my car then selling it ten times over.
that's why there is fraud as they never had ten cars only one just li9ke banks with loans they use cash deposited at the banks but then lend it out ten times over knowing most times the money is never moving from the banks only between accounts in that bank
that's why there is fraud as they never had ten cars only one just li9ke banks with loans they use cash deposited at the banks but then lend it out ten times over knowing most times the money is never moving from the banks only between accounts in that bank
Until you can't buy it back because it's value has gone up instead of down. Then you owe somebody a car that you no longer have.
But in this scenario you are borowing 149% of my car. I only the one car.
That's not even remotely how it works. They are also taking a position on the 5 cars your mate has yet to buy, so that when he buys them they make money. Also they are selling a piece of that position, so they can hedge their investment in case your mates plan to buy 5 more cars falls through.... It should be illegal, simple as that.
This is not investment it is pure gambling and is now very common in the US due to the new 'commission free' websites such as Robinhood. (They are not free, they aggregate the orders, add a margin and punters end up paying more for the shares) The US market looks like a bubble to me and will eventually fall but not while the magic money tree keeps printing the$. It will end in tears for many.
so the next play is to find what stock is being shorted, and then the small guys act as a group and buy. Hopefully keep their nerve and hold the stock. Small guys are only taking money from the greedy wealthy so its all good. Institutions, hedge funds etc are gonna get spooked by this. Opens everyone's eyes to what value these 'experts' bring.
Instructive that the SEC is concerned about supposed market manipulation by thousands of relatively poor individuals, but (other than a very occasional derisory and inconsequential fine) routinely turn a blind eye to the systematic market manipulation practised by the big banks & hedge funds.
Absolutely, the markets are regulated by the very same crooks who do nothing to impose level playing fields for all participants in the financial markets. The big guns are having a laugh often over a few Friday drinks with their SEC best pals...This whole thing is just one very big joke.
The "big boys" DO manipulate the markets in their favour - EVERYDAY! They are just far more subtle about it when they do it! Go day-traders send that stock through the roof and squeeze those shorters!!!
Should be made ILLEGAL.
The Hedgefund managers brought this on themselves. They shorted over 100% of the stock, and deliberately drove the value of Gamestop down. They actively tried to bankrupt a company, making thousands of people unemployed so they could earn a quick buck. These are the same people we bailed out in '08, doing the exact thing.
Good on the WSB users for giving them a taste of their own medicine.
Good on the WSB users for giving them a taste of their own medicine.
It's quite hard to bankrupt a company by shorting it's stock. It makes no difference to the balance sheet of the company if its stock value is lower.
A company goes bankrupt when it can no longer service it's debts.
The only thing a high stock price can do is give a company the possibility to raise capital by issuing more shares and diluting existing shareholders.
A company goes bankrupt when it can no longer service it's debts.
The only thing a high stock price can do is give a company the possibility to raise capital by issuing more shares and diluting existing shareholders.
Article fails to mention Elon Musk and he is crucial to this financial ‘play’. The shorters in question had placed a short stop on Tesla in the past and he has helped ramp the price of GameStop as payback; the smaller investors are doing the same. Choose your good/bad guys, but this sort of behaviour in financial markets is unhelpful to the normal Joe.
Shame they'll get bailed out again. GO MY TENDIE ARMY, GET YOUR STIMULUS CHEQUES. DADDY GOVERNMENT AIN'T GONNA GIVE YOU IT andmaybesendsomeourway?
Financial markets have been divorced from any fundamental reality for quite some time...Propped up by endless money printing schemes where 90% of the new money ends up in this casino instead of real economy. Tulip mania from the 17th century will be a child play when things collapse spectacularly...
Who invests in hedge funds? Institutional investors. Who are institutional investors - pension funds. So basically if hedge funds get burnt in a short squeeze its Joe Public who gets it in the wallet. So don't wish too much harm of the hedge funds, 'cos its the pensions that will suffer.
Financial markets add nothing to GDP. These people are parasites.
Pension funds play along because that is the way things are. Give them an alternative (the removal of parasitic marketeers) and they will bite your hand off.
Sounds like you got all your eggs in their basket. So you would say that, wouldn't you?
Pension funds play along because that is the way things are. Give them an alternative (the removal of parasitic marketeers) and they will bite your hand off.
Sounds like you got all your eggs in their basket. So you would say that, wouldn't you?
The vast sums of money being created by governments around the world don't do pensions much good either, but no one complains about that. You've got to wonder if it will ever be worth saving money again. People's financial behaviour will eventually change and this is symptomatic of that need to find new ways of not losing money.
judging by this comment you are not too far from retirement as most people below 40 honestly dont expect pensions to be worth anything by time they get to retire - assuming they do get to retire with the constantly increasing age limits
Instructive that the SEC is concerned about supposed market manipulation by thousands of relatively poor individuals, but (other than a very occasional derisory and inconsequential fine) routinely turn a blind eye to the systematic market manipulation practised by the big banks & hedge funds.
The Hedgefund managers brought this on themselves. They shorted over 100% of the stock, and deliberately drove the value of Gamestop down. They actively tried to bankrupt a company, making thousands of people unemployed so they could earn a quick buck. These are the same people we bailed out in '08, doing the exact thing.
Good on the WSB users for giving them a taste of their own medicine.
Good on the WSB users for giving them a taste of their own medicine.
It's quite hard to bankrupt a company by shorting it's stock. It makes no difference to the balance sheet of the company if its stock value is lower.
A company goes bankrupt when it can no longer service it's debts.
The only thing a high stock price can do is give a company the possibility to raise capital by issuing more shares and diluting existing shareholders.
A company goes bankrupt when it can no longer service it's debts.
The only thing a high stock price can do is give a company the possibility to raise capital by issuing more shares and diluting existing shareholders.
Higher stock value makes it easier for a company to obtain financial assistance or solicit new investment. Lower stock values make them vulnerable to takeovers.
While Gamestop did have debts, they were still solvent. There was no indiciation that Gamestop was going to fail anytime soon, so it was a deliberate act of market manipulation on behalf of the hedge funds.
While Gamestop did have debts, they were still solvent. There was no indiciation that Gamestop was going to fail anytime soon, so it was a deliberate act of market manipulation on behalf of the hedge funds.
'The only thing a high stock price can do is give a company the possibility to raise capital by issuing more shares and diluting existing shareholders'
Perfect time to issue some new shares and use them to pay all the workers.
Perfect time to issue some new shares and use them to pay all the workers.
Two of the hedgefund mangers that were heavily short on GME were regularly sending out press releases claiming that GME was going to face an imminent demise. So no, shorting a stock alone does not make a company go bankrupt, releasing misinformation in the hopes of bankrupting a company to maximize returns does help bankrupt a company, and is market manipulation.
Hedge funds manipulated the market makeing shortfall bets.
And a load board people saw these hedge funds have no choice but buy back game shares that they borrowed lent on and need pay back.
Now the price has sky rocketed and hedge funds will go bankcrupt and wallstreet gets kick in the but.
As ymthede average joe investors win.
Price of shares have no reflection of value on a company
And a load board people saw these hedge funds have no choice but buy back game shares that they borrowed lent on and need pay back.
Now the price has sky rocketed and hedge funds will go bankcrupt and wallstreet gets kick in the but.
As ymthede average joe investors win.
Price of shares have no reflection of value on a company
Brilliant!
The 'financial markets' add zip to GDP, they are run by spivs and fraudsters, whose only intent is to gamble with our hard earned economy. Raking billions out of the public purse and the very heart that is wrong with modern society.
I hope the little guys win and the banks and bankers take a MASSIVE hit!!
The 'financial markets' add zip to GDP, they are run by spivs and fraudsters, whose only intent is to gamble with our hard earned economy. Raking billions out of the public purse and the very heart that is wrong with modern society.
I hope the little guys win and the banks and bankers take a MASSIVE hit!!
Quite so. For 'investor' read 'speculator' - not nearly so respectable, and a much more truthfully descriptive term for a lot of the self-serving activity undertaken by the so-called financial services 'industry'.
You're actually incorrect.
Having a liquid market where you can easily sell your investment gives confidence to provide funding to companies in terms of capital or loans. If there was no way to sell the shares, very few people would actually give money to companies and the economy would collapse, think 2008-2009 credit crunch.
Having a liquid market where you can easily sell your investment gives confidence to provide funding to companies in terms of capital or loans. If there was no way to sell the shares, very few people would actually give money to companies and the economy would collapse, think 2008-2009 credit crunch.
"who probably have a lot of time on their hands during lockdown"
Derisive quips about one party are not politically neutral.
Derisive quips about one party are not politically neutral.
The whole article is derogatory towards the private investors. The 'traditional' market traders don't seem to realise the advent of simple trading apps have opened the market to everyone. I don't understand why the news outlets think any regulation should be towards individuals who are just buying stock!
Hedge fund were allowed to "borrow" 150% of shares, which should be illegal. Now that they got beater in their own game, they're throwing all they have. That includes cheap articles like this one, that doesn't explain the true reason why this situation has occurred and is instead trying to paint retail investors as rabid idiots who are out to destroy Wall St.
GME TO THE MOON. HOLD TILL $1420.69
GME TO THE MOON. HOLD TILL $1420.69
Who invests in hedge funds? Institutional investors. Who are institutional investors - pension funds. So basically if hedge funds get burnt in a short squeeze its Joe Public who gets it in the wallet. So don't wish too much harm of the hedge funds, 'cos its the pensions that will suffer.
Financial markets add nothing to GDP. These people are parasites.
Pension funds play along because that is the way things are. Give them an alternative (the removal of parasitic marketeers) and they will bite your hand off.
Sounds like you got all your eggs in their basket. So you would say that, wouldn't you?
Pension funds play along because that is the way things are. Give them an alternative (the removal of parasitic marketeers) and they will bite your hand off.
Sounds like you got all your eggs in their basket. So you would say that, wouldn't you?
The denizens of wallstreetbets are degenerate gamblers, not 'upstart investors.
"degenerate gamblers" who've cost the hedge funds a lot of money and trouble....so maybe not as degenerate as you try to profess....tellme, did you get stung by them and thats why you are so angry and spiteful towards a group of people you dont know? Thats a lot of hate you got showing there!
Speculation is growing that Citron and Melvin have NOT in fact closed out their short positions on GME, as is being reported by most major news outlets. Not enough stock has been traded to cover those positions. Could be desperation on the part of the hedge funds, as they frantically try to damp down amateur interest in the stock.
Good comparison, now there's a man who knows his onions, the saying btw comes from a man who mistakenly cooked a tulip bulb thinking it was an onion and was jailed as the bulb was worth its weight in gold. during theDutch tulip boom
so the next play is to find what stock is being shorted, and then the small guys act as a group and buy. Hopefully keep their nerve and hold the stock. Small guys are only taking money from the greedy wealthy so its all good. Institutions, hedge funds etc are gonna get spooked by this. Opens everyone's eyes to what value these 'experts' bring.
You're wrong, but I already pointed out on your other comment where you make this incorrect assertion as to why you're wrong. Just because you don't understand the purpose of something, it doesn't mean it doesn't serve a beneficial purpose.
Hedge funds manipulated the market makeing shortfall bets.
And a load board people saw these hedge funds have no choice but buy back game shares that they borrowed lent on and need pay back.
Now the price has sky rocketed and hedge funds will go bankcrupt and wallstreet gets kick in the but.
As ymthede average joe investors win.
Price of shares have no reflection of value on a company
And a load board people saw these hedge funds have no choice but buy back game shares that they borrowed lent on and need pay back.
Now the price has sky rocketed and hedge funds will go bankcrupt and wallstreet gets kick in the but.
As ymthede average joe investors win.
Price of shares have no reflection of value on a company
How does short selling contribute to the real economy? Other than a vehicle for gambling, does it serve any other purpose?
What? No. Did Elon Musk told you to say that?
It's quite hard to bankrupt a company by shorting it's stock. It makes no difference to the balance sheet of the company if its stock value is lower.
A company goes bankrupt when it can no longer service it's debts.
The only thing a high stock price can do is give a company the possibility to raise capital by issuing more shares and diluting existing shareholders.
A company goes bankrupt when it can no longer service it's debts.
The only thing a high stock price can do is give a company the possibility to raise capital by issuing more shares and diluting existing shareholders.
Higher stock value makes it easier for a company to obtain financial assistance or solicit new investment. Lower stock values make them vulnerable to takeovers.
While Gamestop did have debts, they were still solvent. There was no indiciation that Gamestop was going to fail anytime soon, so it was a deliberate act of market manipulation on behalf of the hedge funds.
While Gamestop did have debts, they were still solvent. There was no indiciation that Gamestop was going to fail anytime soon, so it was a deliberate act of market manipulation on behalf of the hedge funds.
The Hedgefund managers brought this on themselves. They shorted over 100% of the stock, and deliberately drove the value of Gamestop down. They actively tried to bankrupt a company, making thousands of people unemployed so they could earn a quick buck. These are the same people we bailed out in '08, doing the exact thing.
Good on the WSB users for giving them a taste of their own medicine.
Good on the WSB users for giving them a taste of their own medicine.
Article fails to mention Elon Musk and he is crucial to this financial ‘play’. The shorters in question had placed a short stop on Tesla in the past and he has helped ramp the price of GameStop as payback; the smaller investors are doing the same. Choose your good/bad guys, but this sort of behaviour in financial markets is unhelpful to the normal Joe.
You're absolutely correct, and I have no love for Musk. What WSB has done here is expose the absurdity of the markets, but crucially it's the hedge fund managers that have taken the hit. Hopefully this will be a wake up call for them, but I suspect that they will appeal for regulation so they can continue their behaviour without shouldering the risk.
Who invests in hedge funds? Institutional investors. Who are institutional investors - pension funds. So basically if hedge funds get burnt in a short squeeze its Joe Public who gets it in the wallet. So don't wish too much harm of the hedge funds, 'cos its the pensions that will suffer.
The vast sums of money being created by governments around the world don't do pensions much good either, but no one complains about that. You've got to wonder if it will ever be worth saving money again. People's financial behaviour will eventually change and this is symptomatic of that need to find new ways of not losing money.
Since the Credit Crunch of 2008 the monetary policies put in place to facilitate recovery still remain. They are clearly running out of steam. It is time to get back to the real economics of capitalism: investment, value and profit.
The endless flow of cheap money is producing nothing of value, employs fewer each day, is hollowing out our towns and is slowly driving us all mad.
The endless flow of cheap money is producing nothing of value, employs fewer each day, is hollowing out our towns and is slowly driving us all mad.
Article fails to mention Elon Musk and he is crucial to this financial ‘play’. The shorters in question had placed a short stop on Tesla in the past and he has helped ramp the price of GameStop as payback; the smaller investors are doing the same. Choose your good/bad guys, but this sort of behaviour in financial markets is unhelpful to the normal Joe.
You're absolutely correct, and I have no love for Musk. What WSB has done here is expose the absurdity of the markets, but crucially it's the hedge fund managers that have taken the hit. Hopefully this will be a wake up call for them, but I suspect that they will appeal for regulation so they can continue their behaviour without shouldering the risk.
Good luck to the investors,professional funds do not study companies profiles ,strength or viability.They tend to follow algorithms,buying or selling on share price movements,which bear no reality to companies performances.
A lot of professional funds do study the companies, their markets, meet the Management (virtually at the moment) etc. I certainly do not use an algorithm for the pension fund I manage.
Who invests in hedge funds? Institutional investors. Who are institutional investors - pension funds. So basically if hedge funds get burnt in a short squeeze its Joe Public who gets it in the wallet. So don't wish too much harm of the hedge funds, 'cos its the pensions that will suffer.
I have no sympathy for wall street traders. They have a monopoly on most IPOs with the retail trader very rarely getting a look-in. If retail traders are making a profit on open markets, so be it, it's about time some of us were able to make money when it's tended to be the rich making themselves richer.
I've been dabbling on the stock market on and off for decades now. As a small time retail investor i've seen first hand how hedge funds move in to easily short FTSE 250 stocks and decimate the price. They walk away with the profit, meanwhile investors like me are stuck holding trying to recover our losses eventually.
Karma watching hedge funds go broke :)
Karma watching hedge funds go broke :)
But these shares do exist, and they are the fund's to sell if that's in the contract.
Can I borrow the car you're not using during the lockdown? I'm going to sell it, and once lockdown is over and you need it again, I'll buy it back and give it back to you.
It's exactly the same principle, and if the owner of the car is happy with the deal, then there's no fraud involved.
Can I borrow the car you're not using during the lockdown? I'm going to sell it, and once lockdown is over and you need it again, I'll buy it back and give it back to you.
It's exactly the same principle, and if the owner of the car is happy with the deal, then there's no fraud involved.
The most common way for institutions to short sell shares is to buy "put options" which are options to buy a share at the current price, they are not real shares which are physically owned.
This is can lead to a situation where there are more optioned shares on the market, owned by traders looking to short sell the stock, than there are real shares. Which is obviously suboptimal.
This is can lead to a situation where there are more optioned shares on the market, owned by traders looking to short sell the stock, than there are real shares. Which is obviously suboptimal.
Put options are not options to buy shares at the current price. They're options to sell shares at a fixed price in the future (the strike price). So if the share price falls below the strike price you make a profit. If the stock price rises you let your option expire worthless. You pay the seller of an option a price up front (the option premium).
Brilliant!
The 'financial markets' add zip to GDP, they are run by spivs and fraudsters, whose only intent is to gamble with our hard earned economy. Raking billions out of the public purse and the very heart that is wrong with modern society.
I hope the little guys win and the banks and bankers take a MASSIVE hit!!
The 'financial markets' add zip to GDP, they are run by spivs and fraudsters, whose only intent is to gamble with our hard earned economy. Raking billions out of the public purse and the very heart that is wrong with modern society.
I hope the little guys win and the banks and bankers take a MASSIVE hit!!
The most beautiful/powerful internet event of the week!!!
Main street before Wall street for once.
Main street before Wall street for once.
Who invests in hedge funds? Institutional investors. Who are institutional investors - pension funds. So basically if hedge funds get burnt in a short squeeze its Joe Public who gets it in the wallet. So don't wish too much harm of the hedge funds, 'cos its the pensions that will suffer.
Ordinary people using an app called "Robinhood" to squeeze money out of unprincipled short sellers who are betting on the failure of companies during the pandemic is the ultimate in poetic justice. Now where's my popcorn..
This is deeper than simply a bunch of nerds wanting to make a quick buck.. This is the consequence of the uber-wealthy gatekeeping the stockmarket.
Watch as the American mainstream media will now reduce these punters to political extremists who have sullied the good reputation of Wall St.
The hedge fund got bailed out.. And the Robin Hoods of this world will be derided at every turn.
Watch as the American mainstream media will now reduce these punters to political extremists who have sullied the good reputation of Wall St.
The hedge fund got bailed out.. And the Robin Hoods of this world will be derided at every turn.
No, I reckon the world has changed with the advent of small traders able to. uy shares no longer the business of a few, everyone can get in on the act if they want to so it should be
I'm afraid you're right, we now have a history of the wrong people being blamed for things. It's black people killing the most black people, not white police officers. And you can hold a sign "Q sent me" while standing in the Capitol and Trump gets blamed. So this will be Reddits fault probably.
It's not just GME going through this. Look at the likes of AMC, NOK, BB, EXPR. Nothing like hedge funds suffering, karma.
Funniest was with VW & Porsche where shorting hedge funds had a hissy fit, when it turned out they couldn't cover their short positions as Porsche had built up such a large position in VW, with only 6% free float shares not held by Porsche. Briefly VW was the most valuable company in the world.
Hedge funds tried and failed with a court case afterwards
Hedge funds tried and failed with a court case afterwards