GME

[GT]

I too am trying to figure this out.

Here's a good explanation: https://slate.com/technology/2021/01/ga ... s-gme.html

Basically, social media is now big enough that a bunch of individual investors figured out that they can pool enough money to execute the same type of short squeeze normally only the territory of corporations and hedge funds. It won't last, and the stock will almost certainly crash once the Reddit crowd wrings the lemon dry and starts to sell en masse. In the long run, the truly big deal is how it puts a lot of the big hedge funds on notice that they're not the only sharks in the water.

What if anything can GameStop do with this new found capital - Develop / BUY a streaming service - buy out of brick and mortar leases? What happens to GameStop when the bubble pops

[Cortopassi]

I too am trying to figure this out.

Here's a good explanation: https://slate.com/technology/2021/01/ga ... s-gme.html

Basically, social media is now big enough that a bunch of individual investors figured out that they can pool enough money to execute the same type of short squeeze normally only the territory of corporations and hedge funds. It won't last, and the stock will almost certainly crash once the Reddit crowd wrings the lemon dry and starts to sell en masse. In the long run, the truly big deal is how it puts a lot of the big hedge funds on notice that they're not the only sharks in the water.

What if anything can GameStop do with this new found capital - Develop / BUY a streaming service - buy out of brick and mortar leases? What happens to GameStop when the bubble pops

I am interested in this answer.

I have always understood it as a company makes their money through share offerings, like an IPO. Then they theoretically shouldn't give a crap about how their stock trades on a secondary market (except for bonus stock options) because they already received their capital.

Yes? No?

[flyingpylon]

According to this article, three of the trading apps are citing trade settlement costs from their partner Apex as the reason for not allowing purchases. They have since re-enabled purchases.

https://finance.yahoo.com/news/webull-p ... 11214.html

The apps above do not include Robinhood.

[vnatale]

I too am trying to figure this out.

Here's a good explanation: https://slate.com/technology/2021/01/ga ... s-gme.html

Basically, social media is now big enough that a bunch of individual investors figured out that they can pool enough money to execute the same type of short squeeze normally only the territory of corporations and hedge funds. It won't last, and the stock will almost certainly crash once the Reddit crowd wrings the lemon dry and starts to sell en masse. In the long run, the truly big deal is how it puts a lot of the big hedge funds on notice that they're not the only sharks in the water.

What if anything can GameStop do with this new found capital - Develop / BUY a streaming service - buy out of brick and mortar leases? What happens to GameStop when the bubble pops

I am interested in this answer.

I have always understood it as a company makes their money through share offerings, like an IPO. Then they theoretically shouldn't give a crap about how their stock trades on a secondary market (except for bonus stock options) because they already received their capital.

Yes? No?

A. I think you are asking if the company as an organization (separate from company employees owning the stock or options) gets any more money when their stock goes up. The answer would be No.
B. However, if they want to sell more stock in the future then it is desirable to have a good track record for prior public offerings. That would lead to the public paying maximum price for the new shares being sold.

[Smith1776]

Off the top of my head.

The valuation of a company's stock dictates cost of capital. That in turn determines how cheap/expensive it is to raise financing.

A stock price that is too low also makes you a target for a bear raid and takeover.

Some businesses have covenants and internal benchmarks that have stock price as a component. For instance, some lenders use enterprise value as part of their lending criteria. Enterprise value (EV) is calculated with the formula EV=MC+Total Debt−C.

On the other hand, people like Buffett in interviews have remarked that in principle short sellers can't really hurt a business operationally. Due to the above I don't think that's strictly true, but probably mostly true.

[GT]

I too am trying to figure this out.

Here's a good explanation: https://slate.com/technology/2021/01/ga ... s-gme.html

Basically, social media is now big enough that a bunch of individual investors figured out that they can pool enough money to execute the same type of short squeeze normally only the territory of corporations and hedge funds. It won't last, and the stock will almost certainly crash once the Reddit crowd wrings the lemon dry and starts to sell en masse. In the long run, the truly big deal is how it puts a lot of the big hedge funds on notice that they're not the only sharks in the water.

What if anything can GameStop do with this new found capital - Develop / BUY a streaming service - buy out of brick and mortar leases? What happens to GameStop when the bubble pops

I am interested in this answer.

I have always understood it as a company makes their money through share offerings, like an IPO. Then they theoretically shouldn't give a crap about how their stock trades on a secondary market (except for bonus stock options) because they already received their capital.

Yes? No?

A. I think you are asking if the company as an organization (separate from company employees owning the stock or options) gets any more money when their stock goes up. The answer would be No.
B. However, if they want to sell more stock in the future then it is desirable to have a good track record for prior public offerings. That would lead to the public paying maximum price for the new shares being sold.

Thanks Vinny - How would quarterly dividend pay outs work?

[vnatale]

I too am trying to figure this out.

Here's a good explanation: https://slate.com/technology/2021/01/ga ... s-gme.html

Basically, social media is now big enough that a bunch of individual investors figured out that they can pool enough money to execute the same type of short squeeze normally only the territory of corporations and hedge funds. It won't last, and the stock will almost certainly crash once the Reddit crowd wrings the lemon dry and starts to sell en masse. In the long run, the truly big deal is how it puts a lot of the big hedge funds on notice that they're not the only sharks in the water.

What if anything can GameStop do with this new found capital - Develop / BUY a streaming service - buy out of brick and mortar leases? What happens to GameStop when the bubble pops

I am interested in this answer.

I have always understood it as a company makes their money through share offerings, like an IPO. Then they theoretically shouldn't give a crap about how their stock trades on a secondary market (except for bonus stock options) because they already received their capital.

Yes? No?

A. I think you are asking if the company as an organization (separate from company employees owning the stock or options) gets any more money when their stock goes up. The answer would be No.
B. However, if they want to sell more stock in the future then it is desirable to have a good track record for prior public offerings. That would lead to the public paying maximum price for the new shares being sold.

Thanks Vinny - How would quarterly dividend pay outs work?

Thanks for the question...but I'll defer answering as I have no expertise in these matters. I would bet that several here could give a much better answer than a guess from me so I will defer to them.

[Maddy]

Ain't capitalism wonderful when you got a seat at the table?

[vnatale]

Capture.JPG (23.66 KiB) Viewed 5620 times

[Cortopassi]

Politicians on the right and left (AOC, Ted Cruz, etc.) are agreeing and retweeting each other that Robinhood shutting down GME trading was wrong. At least one class-action suit has been filed already.

We may have just lucked into the unifying rallying cry we all needed after the election.

Ain't nothing like hating on billionaires to unify the country! Unifying seems to always involve hating some group, unfortunately.

[vnatale]

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[Kriegsspiel]

In fact, I would not be surprised if claims that 'Russia is involved' are forthcoming.

Whoops, I was one smear behind. The Financial Times opinion section and Time are A/B testing whether "alt-right" and "fascist" (lol) will get people mad at WSB.

Further, notice how the powers that be are claiming they want to help the retail investors not get hurt as the reason they are manipulating the markets. It's the same excuse they use for their coronavirus diktats.

They've found a playbook that's been working, and it looks like they're sticking with it.

[doodle]

I'm curious, how is union busting any different than the attack the elites are mounting on wall street bets?

[Smith1776]

The politics sub-forum is leaking again.

[doodle]

The politics sub-forum is leaking again.

I'd prefer to stay in the enlightened and nebulous realm of philosophy....let's try to keep real world politics out of this.

[Kriegsspiel]

The politics sub-forum is leaking again.

I'd prefer to stay in the enlightened and nebulous realm of philosophy....let's try to keep real world politics out of this.

You have it backwards. That's what the politics forum is for. Real world politics that specifically relate to GME are the kind of thing to talk about here.

[vnatale]

Robinhood received bipartisan rebuke from Congress for ending Gamestop sales. Why that's concerning

Robinhood is being condemned by lawmakers for freezing Gamestop trading amid pressure from Wall Street bigwigs

By JON SKOLNIK
JANUARY 28, 2021 11:05PM (UTC)

https://www.salon.com/2021/01/28/robinh ... oncerning/


After putting a trading freeze on Gamestop's stock amid the short squeeze suffered by Wall Street hedge funds like Melvin Capital and Maplelane Capital, Robinhood is being raked through the mud by lawmakers across both aisles for bending the knee to Wall Street, according to CNBC.

[Smith1776]

We live in amazing times, guys.

[Kriegsspiel]

I wonder when the hedge funds' contracts expire on GME? The WSB people (well, it seems like everyone, at this point) think they're still sticking it to the hedge funds, but from what I understand, it could have already expired.

[doodle]

I wonder when the hedge funds' contracts expire on GME? The WSB people (well, it seems like everyone, at this point) think they're still sticking it to the hedge funds, but from what I understand, it could have already expired.

Supposedly sometime Friday I have heard.

[Kriegsspiel]

AFAIK, options expire on the third Friday of the month, so they already expired a week ago if they expire in January. If they expire in February the hedge funds have to weather another few weeks. I wouldn't be surprised if there were different rules for institutional vs. retail though.

[SomeDude]

I really wish i still had those 4,000+ shares back. I waited 2 years for this.

I tried to buy 1 share yesterday at $250 just for kicks. Interactive brokers wouldn't let me. They are only allowing purchases to close out positions. - they are only allowing the shorts to buy to cover.

[Kriegsspiel]

WHAT THIS

ANTHONY DENIER: Well, it wasn’t our choice. Our clearing firm gave us a call and said we’re going to have to stop allowing new opening positions in the three names, AMC, GME, and KOSS. Highly volatile, and what happens is this is not a political decision. And unfortunately, it got political. I think, you know, I think it was once said that don’t let any good crisis go to waste. And that’s clearly what’s happening here.

And we’re seeing politicians jump on the bandwagon so they can get– so they can start trending on Twitter. But in reality, what’s going on is that there is a two-day settlement between if you buy the stock today, those brokerage firms that you bought that stock on have to fund that trade with the clearing central house called DTC for two whole days. And because of the volatility of stocks, DTC has made the cost of the collateral of the two-day holding period extremely expensive.

And we just can’t afford– well, we’re not a clearing firm, but our clearing firm simply cannot afford the cost to settle those trades. We cannot use customer funds to front that cost due to regulation. So the brokerages or the clearing firms have to go into their own pockets to do it. And they simply can’t afford the cost of that trade clearance. That is the reason why these stocks are coming off. It has nothing to do with the decision or some sort of closed room cigar– smoke-filled cigar room of Wall Street firms getting together to the dismay of the retail trader. This has to do with settlement mechanics of the market.

I believe ERE Jacob and Mark Cuban were making the same point.

[CT-Scott]

I really wish i still had those 4,000+ shares back. I waited 2 years for this.

I tried to buy 1 share yesterday at $250 just for kicks. Interactive brokers wouldn't let me. They are only allowing purchases to close out positions. - they are only allowing the shorts to buy to cover.

I was able to buy through TD Ameritrade's website yesterday (I didn't try the mobile app). It is my understanding that they were still allowing buying regular shares, just not certain instruments (which I'm so ignorant about, I forget what those even are - but I think the opposite of a short?).

[CT-Scott]

WHAT THIS

ANTHONY DENIER: Well, it wasn’t our choice. Our clearing firm gave us a call and said we’re going to have to stop allowing new opening positions in the three names, AMC, GME, and KOSS. Highly volatile, and what happens is this is not a political decision. And unfortunately, it got political. I think, you know, I think it was once said that don’t let any good crisis go to waste. And that’s clearly what’s happening here.

And we’re seeing politicians jump on the bandwagon so they can get– so they can start trending on Twitter. But in reality, what’s going on is that there is a two-day settlement between if you buy the stock today, those brokerage firms that you bought that stock on have to fund that trade with the clearing central house called DTC for two whole days. And because of the volatility of stocks, DTC has made the cost of the collateral of the two-day holding period extremely expensive.

And we just can’t afford– well, we’re not a clearing firm, but our clearing firm simply cannot afford the cost to settle those trades. We cannot use customer funds to front that cost due to regulation. So the brokerages or the clearing firms have to go into their own pockets to do it. And they simply can’t afford the cost of that trade clearance. That is the reason why these stocks are coming off. It has nothing to do with the decision or some sort of closed room cigar– smoke-filled cigar room of Wall Street firms getting together to the dismay of the retail trader. This has to do with settlement mechanics of the market.

I believe ERE Jacob and Mark Cuban were making the same point.

IMO, if Robinhood wasn't doing anything shady, they should have been a lot more transparent as to the reasons why they did what they did, right from the start. So their leadership/communications team only has themselves to be blame.