GameStop/Reddit vs. Big Financial

[jsharmon7]

I believe the GameStop situation was mentioned in another thread, but I’d like to start one regarding the fallout and what it means for the future.

Cliff notes:
Melvin Capital shorted GameStop, likely to drive the price down. The subreddit WallStreetBets took offense and started driving the price up. The nerds took the upper hand and forced Melvin Capital to double down on their short with another $1.7B. Nerds respond and the price eventually is up over 700%. Melvin Capital surrenders and is now down 30%. Two billionaires just bailed them out with an investment of almost $3B to save the company.

Why is this significant?

It means the stock market can weaponized. The Internet has allowed the coordination necessary to use the stock market as a political tool. If my group has the cash, we can attack your investments.

Is this concerning to anyone else? Just a risk companies take? If my understanding is accurate, Soros used investments to cripple the Bank of England on Black Wednesday.

 

[jsx1043]

This is very interesting and I’m following as I’m trying to learn more about financial/market manipulation by unsavory folks. I have no idea how a group of posters on Reddit can have that much power. Wouldn’t they need an investor or bank to make those moves?

I believe activity like this is only the beginning. Normalizing the concept of the Great Reset, doxing, social credit scores and woke capitalism has just opened Pandora’s Box.

The Council for Inclusive Capitalism

Join the global movement with other CEO's, leaders and individuals transforming our economies and societies. Make the world fairer, more inclusive and sustainable.

www.inclusivecapitalism.com

NGFS

Welcome to the NGFS website. The organizational structure of the Network consists of the NGFS Plenary, the NGFS Steering Committee, the Workstreams, the Chair and the Secretariat.

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Is ‘Stakeholder Capitalism’ Newspeak for Economic Fascism? | Mark Hornshaw

A system that replaces the goals of true stakeholders with the iron will of ruling elites looks and smells an awful lot like an infamous economic system that came to prominence in early 20th-century Europe.

fee.org

 

[jsharmon7]

The redditors are just using trading apps like Robin Hood, Ameritrade, etc. The WSB subreddit just gave them a virtual gathering place to discuss the situation and then everyone bought stocks on their own. The subreddit is blowing up right now as everyone keeps encouraging each other to hold out until Friday.

Those apps were shutting down or banning buys earlier today, which seems pretty shady also.

Scaramucci called this “the French Revolution of finance.” I think regulators will make sure it never happens again, though.

 

[kickbacked]

I just heard about this. Im not very knowledgable with stocks. Maybe someone can explain it to me a little better. Isn't there a big risk that some people on reddit who just became a millionaires see that money and sell off the stock they own, causing the little guys who just jumped on the train to be stuck holding nothing?

 

[BugI02]

This is very interesting and I’m following as I’m trying to learn more about financial/market manipulation by unsavory folks. I have no idea how a group of posters on Reddit can have that much power. Wouldn’t they need an investor or bank to make those moves?

I believe activity like this is only the beginning. Normalizing the concept of the Great Reset, doxing, social credit scores and woke capitalism has just opened Pandora’s Box.

The Council for Inclusive Capitalism

Join the global movement with other CEO's, leaders and individuals transforming our economies and societies. Make the world fairer, more inclusive and sustainable.

www.inclusivecapitalism.com

NGFS

Welcome to the NGFS website. The organizational structure of the Network consists of the NGFS Plenary, the NGFS Steering Committee, the Workstreams, the Chair and the Secretariat.

www.ngfs.net

Is ‘Stakeholder Capitalism’ Newspeak for Economic Fascism? | Mark Hornshaw

A system that replaces the goals of true stakeholders with the iron will of ruling elites looks and smells an awful lot like an infamous economic system that came to prominence in early 20th-century Europe.

fee.org

Musk was pulling for the little guys with his following, I think he has a particular woody for short sellers and has burned them several times

GameStop explodes another 157% higher after Elon Musk's 'Gamestonk' tweet extends Reddit-driven short squeeze

REUTERS/Shannon Stapleton/ Tobias Schwarz/Pool GameStop surged 105% higher at Wednesday's market open after Elon Musk's 'Gamestonk!!' twe...

markets.businessinsider.com

 

[gregkl]

I'm just starting to learn about investing. I'm very late to the game, but hopefully not too late.

My son though is really into it. He says, you can make some big money off this GME deal, but you are playing with fire cuz it could come crashing down very quickly.

I'm too risk averse to try something like this. There are some guys on the investing thread that played some. I think a couple did well.

If I could have bought in and watched it shoot through the roof by the end of the day, I would have been selling it. My father in law who made his millions in the stock market says; "don't get greedy."

 

[BugI02]

I just heard about this. Im not very knowledgable with stocks. Maybe someone can explain it to me a little better. Isn't there a big risk that some people on reddit who just became a millionaires see that money and sell off the stock they own, causing the little guys who just jumped on the train to be stuck holding nothing?

I don't really play this type of investment, but if I understand it correctly they are engineering a 'short squeeze'. Someone who shorts a stock is basically buying a contract in which they gain financially if the stocks value falls as they expect - it is a pure money play and the players don't care if they damage or ruin a company as long as they get paid. Conversely, if the value of the shorted stock is above their contract price, in some cases they have to buy the stock at the higher price in order to fulfill their contract, which potentially ruins THEM

I think most entrepreneurs detest short sellers as parasites who create no value and simply are trying to make a buck by exacerbating the volatility of a stocks price

 

[BugI02]

If I could have bought in and watched it shoot through the roof by the end of the day, I would have been selling it. My father in law who made his millions in the stock market says; "don't get greedy."

Do you know the best way to make a small fortune playing the stock market? Start with a large fortune

 

[jsx1043]

I don't really play this type of investment, but if I understand it correctly they are engineering a 'short squeeze'. Someone who shorts a stock is basically buying a contract in which they gain financially if the stocks value falls as they expect - it is a pure money play and the players don't care if they damage or ruin a company as long as they get paid. Conversely, if the value of the shorted stock is above their contract price, in some cases they have to buy the stock at the higher price in order to fulfill their contract, which potentially ruins THEM

I think most entrepreneurs detest short sellers as parasites who create no value and simply are trying to make a buck by exacerbating the volatility of a stocks price

So basically pulling a Romney/Bain Capital?

 

[fullmetaljesus]

My boss's son if he sell now will turn 7k into 60k.

My boss is trying to talk him into selling before it dies.

 

[gregkl]

My boss's son if he sell now will turn 7k into 60k.

My boss is trying to talk him into selling before it dies.

That's a trade I wouldn't hesitate to do. I once rode a stock down until it hit zero value. I'll try not to do that again. If I can make 30%, for the most part it's gone except for stuff I hold long term like my Ford stock. It has basically tripled since I bought it, but I'm hanging on to it. It pays dividends. For a fast runner, I will wait until it doubles, but this guy is looking at an almost 9 fold gain. Take the money and run.

 

[mbkintner]

That's a trade I wouldn't hesitate to do. I once rode a stock down until it hit zero value. I'll try not to do that again. If I can make 30%, for the most part it's gone except for stuff I hold long term like my Ford stock. It has basically tripled since I bought it, but I'm hanging on to it. It pays dividends. For a fast runner, I will wait until it doubles, but this guy is looking at an almost 9 fold gain. Take the money and run.

No dividend paid since March 2020. It will come back eventually but DRIP'ng while prices have been down the last year (even by Ford standards) would have been nice.

 

[gregkl]

No dividend paid since March 2020. It will come back eventually but DRIP'ng while prices have been down the last year (even by Ford standards) would have been nice.

I think the new CEO will help the company. They are exiting low margin vehicles and focusing on more profitable stuff. Plus, they may cut a deal with Rivian. They sure are invested in them. I look at my Ford stock as a long term investment. I bought in 2010, I believe. I also used it once to get the class A discount on a new Ford. Who knows, I might get a wild hare and use it for a new Bronco!

 

[rooster]

The long story short on the GameStop situation is that hedge funds and other big money shorted 140% (read borrowed, sold and promised to buy back later) of the available GameStop shares. This much overextension leads to a situation where they were paying over 50% interest on those borrowed shares last week.

some people on Wallstreetbets figured out that since these funds were most likely doing this with borrowed funds it could set up like the VW infinity squeeze. They spread this knowledge and others bought and held shares. This drove the price up to the point where Melvin capital needed a 2.75billion dollar loan to stay solvent.

the more interesting part of this is that it appears that Melvin capital used that money to pay off margin calls instead of closing out their positions at a loss. The short interest is still over 140% meaning no one has closed out their short positions. The hedge funds are running out of ways to manipulate the stock back to single digits and the deplatforming of Wallstreetbets represents the peak of desperation.

anyway I know this is long. Sorry it’s kinda complicated.

 

[jsx1043]

Bongino broke this story down from The Guardian article and framed it as a “little guy takes down Wall Street” story:



(This is the FB clip of the shortened clip from his one hour podcast. The short clip has not been posted on YT, Rumble or his website yet.)

Ep. 1444 Wall Street is in a Panic Over This Story - The Dan Bongino Show

For show notes, visit https://bongino.com/ep-1444-wall-street-is-in-a-panic-over-this-story This show is brought to you by Express VPN https://www.expressvpn.com/bongino In this episode, I discuss the

rumble.com

Here is another stock that’s moving due to r/WallStreetBets - AMC Theaters:

AMC Theatres Stock Price Surges Thanks to Rallying Reddit Users

Reddit group WallStreetBets is currently using their powers to help AMC Theatres after targeting GameStop.

movieweb.com

This is interesting, to say the least. I don’t get the warm feeling that all this drastic movement won’t result in some sort of crash due to speculation, price-fixing and manipulation by the hedge funds.

 

[jsx1043]

The hedge funds are running out of ways to manipulate the stock back to single digits and the deplatforming of Wallstreetbets represents the peak of desperation.

Have they been deplatformed already?! Man, the swamp doesn’t mess around...

 

[rooster]

Have they been deplatformed already?! Man, the swamp doesn’t mess around...

Just happened like 10 minutes ago. I’m guessing a move to 4chan. Powerful people are losing money and they won’t stand by and be laughed at

 

[jsharmon7]

They weren’t banned. They made it private due to the number of bots and new members.

 

[rooster]

AMC and other heavily shorted stocks aren’t going up because of wallstreetbets they are going up because of margin calls and and Market makers making it harder to borrow shares.

the rest of the market is going down because as hedge funds are being forced to pay astronomical interest on their short positions they have to get money from somewhere.

iborrowdesk has a lot of information on shorts and shares available https://iborrowdesk.com/report/AMC

None of this is because of wallstreetbets. It’s because hedge funds are over leveraged and have maxed the credit cards on a bad bet. Then when they maxed the credit cards they sold the house to pay the interest only (not principal). This is the same kind of speculation that brought us the mortgage crisis. Some people made millions on that as well. Watch “The big short”.

 

[Twangbanger]

The redditors are just using trading apps like Robin Hood, Ameritrade, etc. The WSB subreddit just gave them a virtual gathering place to discuss the situation and then everyone bought stocks on their own. The subreddit is blowing up right now as everyone keeps encouraging each other to hold out until Friday.

Those apps were shutting down or banning buys earlier today, which seems pretty shady also.

Scaramucci called this “the French Revolution of finance.” I think regulators will make sure it never happens again, though.

Yes, I can see them using triggers and switches and that sort of thing to thumb the scale.

So, if the short positions haven't been closed yet, we're basically watching a two-day cat-and-mouse game, where we're seeing if the geeks can hold out long enough to drown the Geckos, without getting greedy and roasting each other?

Will be interesting.

It is getting so that an honest market-grifter can't even make a decent corporate profit without having a heart attack anymore, geeez.