Read on Twitter
The reason they're shaking their fingers at us is the whole Gamestop thing is scaring the shit out of them.
Reddit just killed at least one hedge fund. Maybe more.
This could end the practice of shorting stocks as we know it (which is essentially gambling), and they hate it.
Reddit just killed at least one hedge fund. Maybe more.
This could end the practice of shorting stocks as we know it (which is essentially gambling), and they hate it.
In case you weren't aware, here's how this completely insane and perfectly legal financial practice works:
You see a company in distress. You think their stock is going to go even lower.
So you borrow shares of that company and sell them.
Yes. Borrow. You can do that.
You see a company in distress. You think their stock is going to go even lower.
So you borrow shares of that company and sell them.
Yes. Borrow. You can do that.
Then you set up a timed order to buy back that same amount of stock.
You're betting the price of the stock will go lower so when you buy it back cheap and return it to who you borrowed it from, you'll have made a profit.
If that sounds like gamification of the economy: yup.
You're betting the price of the stock will go lower so when you buy it back cheap and return it to who you borrowed it from, you'll have made a profit.
If that sounds like gamification of the economy: yup.
HOWEVER, if the price of the stock goes up higher than the price you sold your borrowed stock at ... uh oh.
You're going to have to pay more to buy it back then you sold it for, and you *have* to buy it back because you borrowed the stock.
Oh shit.
You're going to have to pay more to buy it back then you sold it for, and you *have* to buy it back because you borrowed the stock.
Oh shit.
So you're going to have to scramble to buy shares to "cover your short."
And when people realize you *have* to buy this particular stock, the price will shoot up as you become desperate to find someone to sell you enough shares to cover what you borrowed.
And when people realize you *have* to buy this particular stock, the price will shoot up as you become desperate to find someone to sell you enough shares to cover what you borrowed.
This is called a squeeze. It's going to be a huge, momentary blip in Gamestop's stock price.
(People are saying Friday; likely when a bunch of shorts come due.)
Conceivably for one brief moment, Gamestop could hit $1000 a share.
It was $12 a share in October.
(People are saying Friday; likely when a bunch of shorts come due.)
Conceivably for one brief moment, Gamestop could hit $1000 a share.
It was $12 a share in October.
Pretty much.
A hedge fund exists not to invest wealth in companies to expand and improve the economy, but to find loopholes and gimmicks to create wealth via financial trickery.
Big ol' house of cards. https://twitter.com/AggroWill/status/1354237180894449668
A hedge fund exists not to invest wealth in companies to expand and improve the economy, but to find loopholes and gimmicks to create wealth via financial trickery.
Big ol' house of cards. https://twitter.com/AggroWill/status/1354237180894449668
Essentially nothing.
It's all artificial. Gamestop's shareholders may profit from what's happening, but the company itself won't. This isn't going to save them.
Shares are pieces of the company that have already been sold. https://twitter.com/AlexStritar/status/1354237764208910336
It's all artificial. Gamestop's shareholders may profit from what's happening, but the company itself won't. This isn't going to save them.
Shares are pieces of the company that have already been sold. https://twitter.com/AlexStritar/status/1354237764208910336
After the squeeze, the price of Gamestop is going to come crashing back down again because it isn't worth $1000 a share.
It's probably "really" worth maybe $5 a share, given their current situation.
This is all just pretend. It's madness.
And it's the basis of our economy.
It's probably "really" worth maybe $5 a share, given their current situation.
This is all just pretend. It's madness.
And it's the basis of our economy.
Gamestop was hyping Christmas to save them. PS5! Xbox Series X!
Then the pandemic and demand for processors resulted in lower production on consoles.
Gamestop didn't sell enough because there wasn't enough to sell. I think they came in something like 25% below expectations.
Then the pandemic and demand for processors resulted in lower production on consoles.
Gamestop didn't sell enough because there wasn't enough to sell. I think they came in something like 25% below expectations.
As a company, Gamestop is likely finished. What their mismanagement couldn't kill, the pandemic did.
All of what's happening with the stock right now is essentially a battle between maggots, vultures and fungus over the corpse of the company.
All of what's happening with the stock right now is essentially a battle between maggots, vultures and fungus over the corpse of the company.
This is true!
If you were a regular ol' 9-5 Gamestop employee and had shares in the company, you're in line to have a nice nest egg (if you sell when the squeeze hits, that is). https://twitter.com/Pharniel/status/1354239407054860289
If you were a regular ol' 9-5 Gamestop employee and had shares in the company, you're in line to have a nice nest egg (if you sell when the squeeze hits, that is). https://twitter.com/Pharniel/status/1354239407054860289
Yup. /r/WallStreetBets saw the short coming due and decided to flip the script on the hedge funds.
Incidentally they're eyeing a couple other stocks with shorts coming due: Blackberry, AMC, etc.
This might not be over. https://twitter.com/CaptainSagit/status/1354238272743071744
Incidentally they're eyeing a couple other stocks with shorts coming due: Blackberry, AMC, etc.
This might not be over. https://twitter.com/CaptainSagit/status/1354238272743071744
Incidentally, I believe what's happening is more or less the ending scene of Trading Places.
Reddit is Dan Aykroyd and Eddie Murphy.
(Someone correct me on this if I'm wrong.)
Reddit is Dan Aykroyd and Eddie Murphy.
(Someone correct me on this if I'm wrong.)
That's entirely up to you.
Understand that what's happening right now is gambling. This is not finances anymore. This. Is. Gambling.
Never put in what you aren't willing to lose, and be aware the SEC may step in to "correct" the market.
https://twitter.com/kodiakjs/status/1354241716509962242
Understand that what's happening right now is gambling. This is not finances anymore. This. Is. Gambling.
Never put in what you aren't willing to lose, and be aware the SEC may step in to "correct" the market.
https://twitter.com/kodiakjs/status/1354241716509962242
There we go. I *knew* it had to do with short selling, I just got it muddled.
See, what they did in Trading Places is how shorts are usually "supposed" to work. Reddit just did it kind of backwards.
Same result, though. A couple hedge funds are fucked. https://twitter.com/RowdyCMoore/status/1354242632847908864
See, what they did in Trading Places is how shorts are usually "supposed" to work. Reddit just did it kind of backwards.
Same result, though. A couple hedge funds are fucked. https://twitter.com/RowdyCMoore/status/1354242632847908864
Hence what I said about the SEC.
There's murmurs of "market manipulation" and grumbling from the established traders and of course they're going to push for investigations.
Dunno if it'll go anywhere, but it could. Hence why this is kind of risky. https://twitter.com/NeoSilverThorn/status/1354242973181988864
There's murmurs of "market manipulation" and grumbling from the established traders and of course they're going to push for investigations.
Dunno if it'll go anywhere, but it could. Hence why this is kind of risky. https://twitter.com/NeoSilverThorn/status/1354242973181988864
"Normal" buying and selling of stocks, not so much.
In the macro sense, yes. That's what it's become. But generally you buy a stock and you hold on to it. It's an asset. It's something you measure in decades.
But "normal" hasn't been normal for a while. https://twitter.com/EsserZed/status/1354243606563991553
In the macro sense, yes. That's what it's become. But generally you buy a stock and you hold on to it. It's an asset. It's something you measure in decades.
But "normal" hasn't been normal for a while. https://twitter.com/EsserZed/status/1354243606563991553
I think you've misunderstood.
Gamestop has no stake in any of this. Their stock is pieces of the company they've sold. They don't own it. If the value of the stock goes up, it doesn't help them unless they sell more pieces.
Gamestop is barely involved. https://twitter.com/RickStokely/status/1354244034739531778
Gamestop has no stake in any of this. Their stock is pieces of the company they've sold. They don't own it. If the value of the stock goes up, it doesn't help them unless they sell more pieces.
Gamestop is barely involved. https://twitter.com/RickStokely/status/1354244034739531778
That's the true madness here: the company at the heart of this isn't even at the heart of this.
Stocks are *supposed* to be priced based on how well a company is doing. It's investing in a company in the hope it will prosper, and your piece of the company becomes more valuable.
Stocks are *supposed* to be priced based on how well a company is doing. It's investing in a company in the hope it will prosper, and your piece of the company becomes more valuable.
Instead, Gamestop and its stock are a target of opportunity.
The value of the stock is divorced from the company's performance. It's being used to game the market from two sides: a "legitimate" hedge fund, and an army of individual traders who are in essence crowdsourcing.
The value of the stock is divorced from the company's performance. It's being used to game the market from two sides: a "legitimate" hedge fund, and an army of individual traders who are in essence crowdsourcing.
Everything happening right now is just putting on display all that's gone wrong with our financial system, and why "the market" doesn't mean shit for people who are living in the economy.
Like I said earlier: house of cards.
Like I said earlier: house of cards.
That's the other major failing: for the better part of a decade, interest rates set by the Fed have hovered at or near 0%.
If you put your money in the bank, you're not earning anything. You may as well be paying someone to hold your money. https://twitter.com/BetaDecayPlus/status/1354244846698033152
If you put your money in the bank, you're not earning anything. You may as well be paying someone to hold your money. https://twitter.com/BetaDecayPlus/status/1354244846698033152
The only place to see the kind of returns you used to see from savings accounts and interest was the stock market.
So we put everything there.
And now if we raise interest rates, the stock market will buck and people will lose their savings. We're locked in a mutual deathgrip.
So we put everything there.
And now if we raise interest rates, the stock market will buck and people will lose their savings. We're locked in a mutual deathgrip.
Remember the 2008 crash?
Technically those people were "bad at their jobs." In reality they were skirting every edge of the law and common sense in order to take the money and run.
Keep that in mind in regards to these hedge funds. https://twitter.com/slytefoot/status/1354247428153683969
Technically those people were "bad at their jobs." In reality they were skirting every edge of the law and common sense in order to take the money and run.
Keep that in mind in regards to these hedge funds. https://twitter.com/slytefoot/status/1354247428153683969
Oh my god after getting owned on Twitter so hard he took his account private he went to cry on MarketWatch https://www.marketwatch.com/story/stop-laughing-about-gamestops-stock-mania-no-really-11611760785?mod=mw_quote_news
