The great Gamestop battle of 2021

[MacGyver]

5 minutes ago, btq96r said:

Yeah, and basketball players would be able to take more efficient FG attempts if it wasn't for that pesky shot clock.

Show Millennials and Gen Z they have the power to shut down a major exchange, and Wall Street might as well go back to ticker tape and phone orders if they want to stay open without incident.

If there’s one thing we’ve learned one thing in the last few years it’s that the internet has made the world a much smaller place.

From the colored revolutions to BTS Tiktok’rs taking over rallies a lot more marginalized groups are finding their voices through the internet.

We should also definitely couple in the fact that Wall Street has some amazing skill at monetizing flaws in market systems - they’re also surprisingly immature in some areas that make them vulnerable to stuff like this.  

[Chucktshoes]

Sooo....were these firms in charge of anyone’s pension fund? 
 

 

Edited January 28, 2021 by Chucktshoes

[QuackerSmacker]

9 minutes ago, Chucktshoes said:

Sooo....were these firms in charge of anyone’s pension fund? 
 

 

Absolutely not.  These are hedge funds, whose sole function is to trade like bandits, and they do.  Cheer on the little guys!

[Chucktshoes]

3 minutes ago, QuackerSmacker said:

Absolutely not.  These are hedge funds, whose sole function is to trade like bandits, and they do.  Cheer on the little guys!

Oh, I’m cheering alright. I’m loving this for a multitude of reasons. 
 

 

 

[QuackerSmacker]

1 minute ago, QuackerSmacker said:

Absolutely not.  These are hedge funds, whose sole function is to trade like bandits, and they do.  Cheer on the little guys!

And  just to clarify, it's so much easier to kill a company, and then steal the remnants, that to buy in and build it into something.  Hence, the shorting.  It's just slam, slam, slam, short, short, short, all of which mean sell, sell, sell, whether they actually own it or not, and their goal is to slam, short, sell it into oblivion.  In this case, a couple million individual investors decided to stick it to them.

I've been in this for 45 years.  This is SO refreshing to see!

[QuackerSmacker]

The prevailing commentary in the media today really disgusts me.  The big concern seems to be that we need to limit, curtail, or shut down the little guy's ability to trade these stocks.  It's too risky.  He's not supposed to speculate.  It's short term.   SO WHAT!  Everyone can speculate but the little guy?

Nobody ever cared about that until the LITTLE GUY just won BIG!

What a pathetic cave-in to the big money.  

The huge, rotten, selfish, corrupt hedge funds finally get their ass kicked, and the regulatory response seems to all be directed at shutting down the little guy to protect them.   

What a joke.   We'll see how this plays out.  It will certainly be interesting, but it will not infect all (or hardly any) of Wall Street and IMHO it has nothing to do with today's general market decline, which was overdue.  That's about Biden.

[Erik88]

5 hours ago, Chucktshoes said:

 

 

Thanks for sharing the video. The comments over in r/wallstreetbets are great. Can't wait to see what the stock does the next few days.

 

 

[Daniel]

1 hour ago, QuackerSmacker said:

The prevailing commentary in the media today really disgusts me.  The big concern seems to be that we need to limit, curtail, or shut down the little guy's ability to trade these stocks.  It's too risky.  He's not supposed to speculate.  It's short term.   SO WHAT!  Everyone can speculate but the little guy?

Nobody ever cared about that until the LITTLE GUY just won BIG!

What a pathetic cave-in to the big money.  

The huge, rotten, selfish, corrupt hedge funds finally get their ass kicked, and the regulatory response seems to all be directed at shutting down the little guy to protect them.   

What a joke.   We'll see how this plays out.  It will certainly be interesting, but it will not infect all (or hardly any) of Wall Street and IMHO it has nothing to do with today's general market decline, which was overdue.  That's about Biden.

They dont make the rules to protect you.

[Chucktshoes]

19 minutes ago, Daniel said:

They dont make the rules to protect you.

I know I’m hella hard on Reddit, and you obviously love it. They get a Broken Clock Award here. 

[btq96r]

3 hours ago, MacGyver said:

If there’s one thing we’ve learned one thing in the last few years it’s that the internet has made the world a much smaller place.

From the colored revolutions to BTS Tiktok’rs taking over rallies a lot more marginalized groups are finding their voices through the internet.

We should also definitely couple in the fact that Wall Street has some amazing skill at monetizing flaws in market systems - they’re also surprisingly immature in some areas that make them vulnerable to stuff like this.  

Bingo.  The internet has let a bunch of disenfranchised folks get inside the OODA loop of some heavy hitters in the financial world.  Disruption at its finest.

The series of moves and counter moved seems afoot with WallStreetBets being banned from Discord...not for the recent shenanigans of course, but for failing to reign in "hate speech".  Lulz...okay. 

I'm still thinking the crowd sourced hedge busters might be a manipulated entity by someone looking to benefit in the chaos, but this genie is out of the lamp.  The generations who have had to live through two economic Armageddons ('08 & COVID), while being screwed in-between to the point where they can't say they have equity in the American Dream have a lot of un and underemployed folks, alongside some others who are a-okay helping chaos along...that's who was shown what their collective will can do when they focus it. 

These are the generations who have existed in the most rapidly changing times we've ever seen for their entire lives.  They switch apps for everyday use and patterns of life like everybody goes through pairs of shoes. 

Wonder who wins a battle of adaptions...them, or the federal government/financial Lethargarians who only successfully innovate at what amount to rigged evolutions?

Edited January 28, 2021 by btq96r

[Chucktshoes]

 

Edited January 28, 2021 by Chucktshoes

[MacGyver]

There’s some increasing evidence that Wall Street firms are playing both sides of this and fueling it.

A firm could potentially simultaneously see orders and then trade options at prices they can then ensure.

As retail investors were increasingly shut out yesterday as their brokerages closed access, the price still rose quickly.

Some hedge fund have already figured out a way to make money off of this.

Again, this is some billionaires screwing other lesser billionaires - so on one hand who cares. But, a lot of those retail investors are going to be left holding empty bags.

GME’s drop is going to be as fast as it’s rise. 

[Garufa]

Looks like Robinhood has put a stop to buying Gamestop, along with the other stocks that have been targeted for "attack".

"Shares of AMC Entertainment Holdings, BlackBerry Ltd., Bed Bath & Beyond Inc., Express Inc., GameStop Corp., Koss Corp., Naked Brand Group and Nokia Corp. have been restricted to “position closing only,” the company said in a blog post. This means that traders cannot initiate new positions in shares of those companies and can only sell existing holdings."

https://www.foxbusiness.com/markets/trading-app-robinhood-blocks-users-buying-gamestop-other-stocks

Edited January 28, 2021 by Garufa

[MacGyver]

1 hour ago, Garufa said:

Looks like Robinhood has put a stop to buying Gamestop, along with the other stocks that have been targeted for "attack".

"Shares of AMC Entertainment Holdings, BlackBerry Ltd., Bed Bath & Beyond Inc., Express Inc., GameStop Corp., Koss Corp., Naked Brand Group and Nokia Corp. have been restricted to “position closing only,” the company said in a blog post. This means that traders cannot initiate new positions in shares of those companies and can only sell existing holdings."

https://www.foxbusiness.com/markets/trading-app-robinhood-blocks-users-buying-gamestop-other-stocks

I know this will read as "the little guy getting screwed again."

But, I wonder to what extent the brokerages have an ethical burden to act?

Basically, if you see Wall Street firms market-making and buying options and other complex derivatives at the same time - you're basically watching folks get screwed.

Is it better to have a pissed of customer with some money - or a pissed off customer with no money?

I know, I know - free market - everyone knew there were risks.

But, if you know the little guy is going to get screwed - because it's literally a setup - do you step in and put a stop to it?

Investing isn't for everyone - I get it - but if somebody spent their rent money this morning at $460 and it's trading at $155 right now - where do you put a stop to it?

A couple of hedge funds got screwed - likely by another hedge fund.  Fine. Everyone needs a hobby.

But, this isn't that anymore. 

[Grayfox54]

I've never played the stock market and quite frankly don't understand anything about it. I have no idea what a "short" is or how in hell forcing a company to fail makes you money? About all I do know is that there's a bunch of dirty, unscrupulous  azzholes who would sell their own mothers into prostitution to make a buck. 

Ok, so a bunch of little guys got together, used the same tricks the big guys use and made a bunch of money? Now the big guys are crying foul? Can somebody explain this in language that I can understand? Use little words please. And why is all this so bad? I don't get it?  

Edited January 28, 2021 by Grayfox54

[btq96r]

11 minutes ago, MacGyver said:

I know this will read as "the little guy getting screwed again."

But, I wonder to what extent the brokerages have an ethical burden to act?

Basically, if you see Wall Street firms market-making and buying options and other complex derivatives at the same time - you're basically watching folks get screwed.

Is it better to have a pissed of customer with some money - or a pissed off customer with no money?

I know, I know - free market - everyone knew there were risks.

But, if you know the little guy is going to get screwed - because it's literally a setup - do you step in and put a stop to it?

Investing isn't for everyone - I get it - but if somebody spent their rent money this morning at $460 and it's trading at $155 right now - where do you put a stop to it?

A couple of hedge funds got screwed - likely by another hedge fund.  Fine. Everyone needs a hobby.

But, this isn't that anymore. 

I would have two questions...

1)  Who are they protecting, either by default or by design?  I have a feeling I'm not going to enjoy that answer.

2)  What systemic steps are being taken versus reactionary ones?  I have another feeling this was done when the right people had their phones blow up by very important stakeholders who were very angry the risk side of their risk/reward model came due.

It's pretty easy to see this isn't a decision matrix kicking in, and I don't like something as important as the public exchanges being subject to action only because fervor from one side or the other reaches a high enough pitch.  Ethical burdens should be built in (like how trading halts are set up on that circuit breaker model to prevent a dive) and ad-hoc intervention should really be a last resort to keep the system from caving in on itself.

Edited January 28, 2021 by btq96r

[MacGyver]

1 hour ago, btq96r said:

I would have two questions...

1)  Who are they protecting, either by default or by design?  I have a feeling I'm not going to enjoy that answer.

2)  What systemic steps are being taken versus reactionary ones?  I have another feeling this was done when the right people had their phones blow up by very important stakeholders who were very angry the risk side of their risk/reward model came due.

It's pretty easy to see this isn't a decision matrix kicking in, and I don't like something as important as the public exchanges being subject to action only because fervor from one side or the other reaches a high enough pitch.  Ethical burdens should be built in (like how trading halts are set up on that circuit breaker model to prevent a dive) and ad-hoc intervention should really be a last resort to keep the system from caving in on itself.

There's an old saying that if something is free - you're not the customer, you're the product.

One of the primary firms at the center of (what will be) the investigation is Citadel LLC.

They're sort of two businesses in one - they're a giant "alternative asset manager" aka hedge fund - and the other half of their business is one of the biggest market makers out there.

Citadel is a major investor in Melvin Capital - one of the hedge funds that got run over by r/WallStreetBets - having invested almost $3B after they got caught in the GME short squeeze.

On the other side, Citadel is Robinhood's biggest client.

One half of your shop just got run over - the other half looks and says - okay we've got to get this money back.  

There's some stuff in that "making our money back" that can cross the line from "ethically grey" to illegal really quick.

But, Robinhood looking after their biggest customer by offering up the common retail investor is really something else entirely,.

[btq96r]

17 minutes ago, MacGyver said:

There's an old saying that if something is free - you're not the customer, you're the product.

One of the primary firms at the center of (what will be) the investigation is Citadel LLC.

They're sort of two businesses in one - they're a giant "alternative asset manager" aka hedge fund - and the other half of their business is one of the biggest market makers out there.

Citadel is a major investor in Melvin Capital - one of the hedge funds that got run over by r/WallStreetBets.

On the other side, Citadel is Robinhood's biggest client.

One half of your shop just got run over - the other half looks and says - okay we've got to get this money back.  

There's some stuff in that "making our money back" that can cross the line from "ethically grey" to illegal really quick.

But, Robinhood looking after their biggest customer by offering up the common retail investor is really something else entirely,.

Yup.  Someone from Citadel is probably getting perp walked sooner or later.

As for Robinhood...good luck with that IPO now.  The digital community is probably working on new platforms to give them the options they want.  Robinhood could well be just another day trading app in a year.   By flexing their muscle on behalf of the big boys, they all but guaranteed some competition to their model.

Edited January 28, 2021 by btq96r

[Chucktshoes]

This isn’t about rational investing anymore. This is the internet learning a new power. The power to go after the one group of folks everyone hates, Wall Street. It’s not investing, it’s war. I was reminded of something an old buddy of mine once said, “The next American revolution will be French.”

Edited January 28, 2021 by Chucktshoes

[ReeferMac]

22 hours ago, gregintenn said:

How do you predict it will end? Do you see any illegal activity involved? I don't know why, but I really take an interest in this sort of thing.

There is no illegal activity.

What they're doing is very smart.

They are finding companies with extreme short floats and bidding them up,  forcing shorts to cover, driving the price up, which forces more shorts to cover, which....

Whats fascinating to me is, GME is still just as short as it was when this started! Talk about greedy... I think they deserve whatever they are getting! Nobody forced them to borrow shares they didn't own. Stick to covered calls if you can't take the heat.

[GlockSpock]

2 hours ago, Grayfox54 said:

I've never played the stock market and quite frankly don't understand anything about it. I have no idea what a "short" is or how in hell forcing a company to fail makes you money? About all I do know is that there's a bunch of dirty, unscrupulous  azzholes who would sell their own mothers into prostitution to make a buck. 

Ok, so a bunch of little guys got together, used the same tricks the big guys use and made a bunch of money? Now the big guys are crying foul? Can somebody explain this in language that I can understand? Use little words please. And why is all this so bad? I don't get it?  

Shorting - Lets say I let you borrow my 100 shares of stock. It's currently worth $10.00/share. So that's worth $1,000. As soon as you gain possession of my stock, you sell it. You have $1,000. Tomorrow the stock goes down and it's only worth $5/share so $500. You buy back 100 shares and pay them back to me. You pocket $500, I get my 100 shares back. That's essentially a short.

You get screwed when you borrow my 100 shares at $10.00/share, you sell them, and then the next day the stock is worth $50.00/share. Now, you could wait a while (if I'm willing) to purchase the stock to pay me back. But if I demand it back, that's called a margin call. Now you have to spend $5,000 to buy back the shares to pay me back. You just lost $4,000 and have no shares. I have my shares.

[Erik88]

41 minutes ago, Chucktshoes said:

This isn’t about rational investing anymore. This is the internet learning a new power. 

I saw several similar comments on r/wallstreetbets. Many of them claim they know they are going to lose money but it's worth it. Talk is cheap but I'm sure there is some truth to it. 

One comment that really stuck out was when someone said "occupy Wall Street just had the wrong approach". 

Edited January 28, 2021 by Erik88

[btq96r]

14 minutes ago, Erik88 said:

I saw several similar comments on r/wallstreetbets. Many of them claim they know they are going to lose money but it's worth it. Talk is cheap but I'm sure there is some truth to it. 

One comment that really stuck out was when someone said "occupy Wall Street just had the wrong approach". 

I mean, if you're back living in Mom and/or Dad's house because you're out of what used to be your everyday work, and can only make money through door dash or delivering pizza's because of COVID...what do you have to lose by taking the meager savings you have and giving a middle finger to those making out like gangbusters?

[No_0ne]

3 hours ago, Grayfox54 said:

I've never played the stock market and quite frankly don't understand anything about it. I have no idea what a "short" is or how in hell forcing a company to fail makes you money? About all I do know is that there's a bunch of dirty, unscrupulous  azzholes who would sell their own mothers into prostitution to make a buck. 

Ok, so a bunch of little guys got together, used the same tricks the big guys use and made a bunch of money? Now the big guys are crying foul? Can somebody explain this in language that I can understand? Use little words please. And why is all this so bad? I don't get it?  

 

1 hour ago, GlockSpock said:

Shorting - Lets say I let you borrow my 100 shares of stock. It's currently worth $10.00/share. So that's worth $1,000. As soon as you gain possession of my stock, you sell it. You have $1,000. Tomorrow the stock goes down and it's only worth $5/share so $500. You buy back 100 shares and pay them back to me. You pocket $500, I get my 100 shares back. That's essentially a short.

You get screwed when you borrow my 100 shares at $10.00/share, you sell them, and then the next day the stock is worth $50.00/share. Now, you could wait a while (if I'm willing) to purchase the stock to pay me back. But if I demand it back, that's called a margin call. Now you have to spend $5,000 to buy back the shares to pay me back. You just lost $4,000 and have no shares. I have my shares.

And to expand a bit on Glock Spock's response, these are relatively small companies with limited numbers of outstanding shares.  Once these internet buyers started running the price of Gamestop and others up, the margin calls on the short positions of these hedge funds were called.  Now you have a lot of the big guns all trying to buy limited numbers of shares to cover their short positions in a market that's rising by the hour.  Thus, a lot of competition for a small number of shares, thereby driving the prices up further.  If you're playing this game, the trick is to know when to get out.  However, some (maybe most) of the Reddit guys who originally bid these up did it on "long" calls, the opposite of shorts.  So now they also need to buy the grossly overpriced shares to cover their own prior sales.

[AuEagle]

Robinhood Reportedly Selling People’s GME Positions Without Warning, Investors Sue | ZeroHedge