Gyroscopic Investing

Tyler wrote: ↑Tue Jan 26, 2021 10:13 pm

doodle wrote: ↑Tue Jan 26, 2021 9:09 pm 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.

GT wrote: ↑Thu Jan 28, 2021 2:30 pm

Tyler wrote: ↑Tue Jan 26, 2021 10:13 pm

doodle wrote: ↑Tue Jan 26, 2021 9:09 pm 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 wrote: ↑Thu Jan 28, 2021 2:35 pm

GT wrote: ↑Thu Jan 28, 2021 2:30 pm

Tyler wrote: ↑Tue Jan 26, 2021 10:13 pm

doodle wrote: ↑Tue Jan 26, 2021 9:09 pm
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?

yankees60 wrote: ↑Thu Jan 28, 2021 2:46 pm

Cortopassi wrote: ↑Thu Jan 28, 2021 2:35 pm

GT wrote: ↑Thu Jan 28, 2021 2:30 pm

Tyler wrote: ↑Tue Jan 26, 2021 10:13 pm

doodle wrote: ↑Tue Jan 26, 2021 9:09 pm 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.

GT wrote: ↑Thu Jan 28, 2021 2:50 pm

yankees60 wrote: ↑Thu Jan 28, 2021 2:46 pm

Cortopassi wrote: ↑Thu Jan 28, 2021 2:35 pm

GT wrote: ↑Thu Jan 28, 2021 2:30 pm

Tyler wrote: ↑Tue Jan 26, 2021 10:13 pm

doodle wrote: ↑Tue Jan 26, 2021 9:09 pm
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?

Tyler wrote: ↑Thu Jan 28, 2021 2:05 pm

Tortoise wrote: ↑Thu Jan 28, 2021 1:47 pm 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.

Kriegsspiel wrote: ↑Wed Jan 27, 2021 9:22 am In fact, I would not be surprised if claims that 'Russia is involved' are forthcoming.

Smith1776 wrote: ↑Thu Jan 28, 2021 4:55 pm The politics sub-forum is leaking again.

doodle wrote: ↑Thu Jan 28, 2021 5:13 pm

Smith1776 wrote: ↑Thu Jan 28, 2021 4:55 pm 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 wrote: ↑Thu Jan 28, 2021 6:48 pm 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.

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.

SomeDude wrote: ↑Fri Jan 29, 2021 6:55 am 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 wrote: ↑Fri Jan 29, 2021 7:48 am 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.