GME

[doodle]

(Moved my post from the "Wsb phenomenon" thread)

I know very little about options trading, so I have a dumb question. When a big Wall Street hedge fund places a very large short bet on a struggling company that's teetering near insolvency, does that large bet effectively put downward pressure on the stock price, thus making the company more likely to actually become insolvent?

If so, then would it be accurate to say that big Wall Street hedge funds' short bets on struggling companies could be viewed as "predatory" in a certain sense? Like picking off and devouring the slowest, weakest animals in a herd?

If so, then would it also be accurate to say that part of why WSB Redditors enjoy trying to screw over big Wall Street hedge funds isn't necessarily because they despise extreme wealth per se, but because they view the hedge funds' predatory behavior as ethically suspect?

Yes to all. A lot of posts concern predatory wall street hedge funds causing real world pain for people losing their gamestop jobs. There is a large social justice element to this.

They worship Elon...and he's the richest man in the world...so it's not against wealth per se....just a club of elites.

[yankees60]

Wouldn’t NOW be the time to short it?

Only if you want your face ripped off.

Until the short interest comes down to just an absurd level this thing will move higher. New shorts are coming in only to get squeezed and fuel the rocketship higher.

At some point this will drop 90% in a week as the late to sell longs try to keep some profit but not until short interest drops at least below 100% of the float.

Between May 2018 and q1 2020 i accumulated over 4,000 shares at an average price of about $10.

I rode this sonofabitch all they way down to $2.80 waiting for this mother of all short squeezes. It was like a race between the longs and shorts to see if the shorts could hang on for bankruptcy or start covering first.

GME did a huge buyback of 40% of the shares. Then some activists acquired and it had some life. The price moved big up to $14 and i sold every share last Nov to get out with a tidy profit and lessons learned.

My investment thesis was always that a massive squeeze would come some day and i would stay in until most of the shorts were cleared. Then i got married and had a baby and decided i didn't want to lose the family's money and i chickened out.

Those shares i sold for 55k in Nov are now worth more than 800k. I'm sick over it.

It cuts both ways.

In 1986 I was the Chief Financial Officer for a company that had an IPO (initial public offering).

That turned my $7,000 investment into $250,000.

I remember the day the manager of Ernst & Young who'd I'd worked closely and extensively with through the process asked what I was going to do with all that money. I told him I was going to pretend it never existed. Which was the exact wise thing to do as not that many years later it turned into a $7,000 tax return write-off.

Another time around early 2000, my $30,000 that I'd invested in IRAs over the years was worth $130,000. When I sold it in early 2003 it brought me $25,000.

[Cortopassi]

I was working at Palm during their IPO in 2000. We all had options in the multi-thousand share range. All calculating how much we made, on paper.

ZERO came of it for any of us. Once we vested, we were way underwater. The IPO nearly marked the end of the dotcom bubble.

----------------------
3/2/2000

PALM INC. SHARES more than doubled during first-day trading, after hitting the market at a starting price that was already well-above expectations.

Shares of the handheld device maker, which were priced Wednesday night at $38, soared as high as $140 before dipping to close at $95. The 23 million-share offering was originally expected to sell for between $15 and $17 a share, but the company raised its offering price in response to high demand.

"You don't usually get deals that are this strong," said Irv DeGraw, research director at WorldFinanceNet, noting that Palm wasn't your typical tech offering. "They make some money. They've got a real organization, and they know how to run it." (MY EDIT -- NOT!)

The stellar IPO gives Palm (PALM), spun off earlier this year from networking behemoth 3Com (COMS), a preliminary market value of about $54 billion.

[Kriegsspiel]

“BUCKLE THE FUCK UP.” (Another user, u/DeepFuckingValue, appears to have held major amounts of GameStop shares for over a year—giving them demigod status among r/WallStreetBets superfans—while hedge fund manager Michael Burry of The Big Short fame has also long held the stock.)
link

Currently loving the fact that this sentence was printed by Time Magazine.

[Xan]

All sorts of headlines about how Biden is "monitoring the situation", how NASDAQ has some plan to try to stop it and give the big investors a chance to "recalibrate their positions".

I don't understand. Everybody's playing the same game and everybody's taking risks. The short-sellers knew their calls could be wrong, and they turned out to be wrong. Why are we concerned about them? If their bets had paid off, they'd keep their money no questions asked. If I had lost money because my short positions turned out badly, nobody would be "monitoring" or letting me "recalibrate".

[Smith1776]

The hypocrisy of Wall Street at its finest.

What I find really funny is how many pundits are saying that WSB is going to be targeted and investigated for market manipulation/fraud. There's nothing really to target. WSB is not an institution. It's not a hedge fund. It's not people colluding behind closed doors. It's an open discussion forum and anyone can join the sub. It's a few million everyday people with a few bucks each agreeing "WE LIKE THE STOCK."

What are they going to do? Shut down the sub? They'll just open a new one. The only way to shut down stuff like this is if you somehow stop people from communicating about the stock market generally.

[Kriegsspiel]

All sorts of headlines about how Biden is "monitoring the situation", how NASDAQ has some plan to try to stop it and give the big investors a chance to "recalibrate their positions".

I don't understand. Everybody's playing the same game and everybody's taking risks. The short-sellers knew their calls could be wrong, and they turned out to be wrong. Why are we concerned about them? If their bets had paid off, they'd keep their money no questions asked. If I had lost money because my short positions turned out badly, nobody would be "monitoring" or letting me "recalibrate".

Elites. Bending over. Angry about.

But to go back to earlier... how did the WSB people find out about the shorts on GME? Correct me if I'm wrong, but short selling a stock does not have to be disclosed. So the fact that they knew people were shorting GME means those people were telling people they were doing it. Presumably, for the reasons that Tortoise mentioned.

As long as they aren't borrowing money to do it, I don't care. They might go bankrupt and some people will lose their money they put at risk with them. But if the government is going to bail out lenders who lend for these purposes, then we have a problem.

[InsuranceGuy]

[deleted]

[Kriegsspiel]

What are they going to do? Shut down the sub?

Yes.

They'll just open a new one. The only way to shut down stuff like this is if you somehow stop people from communicating about the stock market generally.

Maybe even with a .win address

[InsuranceGuy]

[deleted]

[Xan]

All sorts of headlines about how Biden is "monitoring the situation", how NASDAQ has some plan to try to stop it and give the big investors a chance to "recalibrate their positions".

I don't understand. Everybody's playing the same game and everybody's taking risks. The short-sellers knew their calls could be wrong, and they turned out to be wrong. Why are we concerned about them? If their bets had paid off, they'd keep their money no questions asked. If I had lost money because my short positions turned out badly, nobody would be "monitoring" or letting me "recalibrate".

Not sure how the NASDAQ will do anything given that GME is on the NYSE.

I completely agree with your assessment of the risks as well, the short sellers have been borderline predatory. This turned out to be more than simply a short squeeze given that they have had a shakeup with Ryan Cohen and 2 of his Chewy buds joining the board and their contribution to the future of the company.

https://www.mediaite.com/news/nasdaq-ce ... dit-users/

A more careful reading reveals that NASDAQ is throwing around ideas to thwart similar things in the future, not to deal with this particular case.

[Smith1776]

What's extra, extra funny is the thought of the SEC investigating how a bunch of people calling themselves "degenerates", "retards", and "autists" managed to take down elite hedge funds run by ivy league snoots.

Funny as fuck.

[InsuranceGuy]

[deleted]

[Smith1776]

What's extra, extra funny is the thought of the SEC investigating how a bunch of people calling themselves "degenerates", "retards", and "autists" managed to take down elite hedge funds run by ivy league snoots.

Funny as fuck.

Call me autistic on this one, I've made a bunch of money on GME while I have to say most of their posts leave me feeling dumber having read them. I'm almost ashamed to have it marked read in my reddit history.

Congratulations, my fellow autist.

[Smith1776]

Like, seriously, if the SEC is to prove market manipulation they will, at the very least, have to look at the content of discussions.

I'm just imagining a bunch of suited up old guys in a boardroom reading Reddit posts out loud as part of their investigation:

FUCK YOU, SHITRON. YOLO'ING GME CALLS. SHAKE OUT THE WEAK HANDS. WHO NEEDS DD WHEN YOU'VE GOT .

WE'RE REACHING AUTISM LEVELS THAT SHOULDN'T EVEN BE POSSIBLE.

[InsuranceGuy]

[deleted]

[Kriegsspiel]

Call me autistic on this one, I've made a bunch of money on GME.

Not yet, though, right?

[InsuranceGuy]

[deleted]

[yankees60]

FOX News led off their 4:00 PM segment with a full uninterrupted segment on this.

How many minutes an hour is FOX News composed of commercials? They seem never ending.

[InsuranceGuy]

[deleted]

[pp4me]

I thought a guy on Bogleheads described it pretty well....

Think of WallStreetBets as a massive hedge fund that is creating a short squeeze on another group of hedge funds. These types of plays have always happened. It is just that this is the first time that this is happening openly and in public via a community. Think of it as a hedge fund made up of hundreds of thousands of individual investors that is having its conversations openly and in public, and that is taking counter positions against those of major Wall Street firms.

Another said it's the kind of runaway speculation you see just before a market crash.

[Smith1776]

Xan should write a Regex function that autocorrects Bogleheads to Knuckleheads.

[yankees60]

FOX News led off their 4:00 PM segment with a full uninterrupted segment on this.

How many minutes an hour is FOX News composed of commercials? They seem never ending.

I can't stand FOX News for the same reason.

After doing a quick Bing search this is what I found out (which being nearly 5 years old is dated):

https://www.mediapost.com/publications/ ... ommer.html

Fox Television Network, Fox News Highest In Commercial Clutter



Fox Television Network and the Fox News Channel run the most commercials time per hour among the respective broadcast and cable network categories.

With results from iSpot.tv, the Fox Television Network averaged 15 minutes and 4 minutes in the first quarter of 2015 -- virtually flat (0.16% higher) versus the fourth-quarter period and the highest of all broadcast networks. These results include local TV ad time and exclude promotional time.

Fox News Channel was at 16:52 -- the most of any cable network (and all networks overall). It was down 3% from the previous quarter. Fox News has been posting soaring viewership due to the Presidential election news/campaigns.

After Fox, CBS is the next-largest broadcast network with commercial time -- 14:23, down 0.7%. ABC is next at 13:51, up 0.05%. NBC had the biggest change, up a strong 9% to 13:46 versus the fourth quarter of 2015. CW has the lightest advertising load at 10:43, down 6.4% from the fourth quarter 2015.

[Kriegsspiel]

In a pretty blatant "fuck you" to the plebes, the CEO of NASDAQ said they'll halt trading on stocks with "unusual social media chatter." link

[Kbg]

A couple of thoughts.

To get this much press I can't help but think there are some whales swimming somewhere deep in the ocean who are long.

Liquidity for really massive capital movements has been very poor with the advent of automated trading, so I think there is a structural piece to it.

Taylor is right on his SEC comments but I doubt they would be too interested in the small fry even if the little guys are trying to pump and dump. There are some pretty smart folks and software watching for digital trading footprints and I'm going to guess the data collection sensors have been focused on GME for the past couple of days looking for market manipulation.

It will be super interesting to see how this story plays out. Definitely good entertainment value.

If someone is buying into the Reddit theory (and what comes next is not a recommendation to buy or sell anything and currently I have no position in either but reserve the right to in the future) but supposedly Express and Blackberry are the next targets per a different board I read. I have no idea what Express even is and supposedly BBerry was halted today.