Gamestop

[Hedgelj]

Kinda surprise there's no threads about this. Lots of illegal activity, potential class action lawsuits, SEC fines and more people realizing that rather than an democratic republic our country is more of a financial oligarchy.

I didn't get in on it (wish I did) but have a feeling that somehow they are gonna hold too long and lose everything other than the point that they made.

 

[Dannmann801]

I'm for less government. But I'm for good governance.
And I think that there should be financial regulations in place that prevent dickheads abusing the "letter of the law" to gain financially while endangering our economy, retirements, etc.

A lot of people make a lot of money speculating. They contribute nothing, make nothing, serve nothing, do nothing, mean nothing.

I'm still pissed, PISSED, that after all of the bullshit shenanigans that caused the 2008 recession that there are not a whole fuckbunch of people in jail serving really long sentences. Nobody was held accountable. And I don't believe that things have been fixed.

Can anyone say bubble?

 

[hickslawns]

I've been slammed lately. From my understanding, the little guys put a "short squeeze" on a hedge fund? Not sure if it is legal or not. I don't think it is. George Soros and one other guy shorted currencies and basically made a killing while killing the economies of entire countries. Had enough people realized what they were doing, the short could have backfired in their faces. Imagine where we'd be if they hadn't made billions a couple times doing this?

 

[bowhunter1023]

I still haven't put together the whole thing in my mind other than it put a bright light on the corruption on Wall Street.

 

[Buckmaster]

Making billions is simply that easy...interesting.

 

[Hedgelj]

I still haven't put together the whole thing in my mind other than it put a bright light on the corruption on Wall Street.

Basically a subreddit found a stock (gamestop/gme) that a bunch of hedge funds had overextended themselves with short futures. They convinced the entire subreddit to buy which began to elevate the price. Then it began to steamroll and the price skyrocketed as more and more people got in on it.

The hedge funds HAVE to buy to cover the shorts so they're gonna lose a billion or so depending on who you read at current pricing for GME.

Robinhood (trading app) and others did illegal things such as not allowing people to buy or selling people's shares or limiting (like 1-3 total stocks) how much you could buy of GME, or just locking down the platform so no one could do anything over this to protect the price from going even higher.

Gonna be interesting to see it unfold.

TL/DR a group of people on reddit are gambling they can out gamble Wallstreet hedge fund and currently are winning and illegal activities have been noted by other large financial institutions to protect Wallstreet.

 

[at1010]

Basically a subreddit found a stock (gamestop/gme) that a bunch of hedge funds had overextended themselves with short futures. They convinced the entire subreddit to buy which began to elevate the price. Then it began to steamroll and the price skyrocketed as more and more people got in on it.

The hedge funds HAVE to buy to cover the shorts so they're gonna lose a billion or so depending on who you read at current pricing for GME.

Robinhood (trading app) and others did illegal things such as not allowing people to buy or selling people's shares or limiting (like 1-3 total stocks) how much you could buy of GME, or just locking down the platform so no one could do anything over this to protect the price from going even higher.

Gonna be interesting to see it unfold.

TL/DR a group of people on reddit are gambling they can out gamble Wallstreet hedge fund and currently are winning and illegal activities have been noted by other large financial institutions to protect Wallstreet.

Yep - great synopsis above here.

Although the hedge funds had tons of money tied up in short call options, the volume of the internet was able to put on the squeeze, resulting in exponential stock growth. Also you have to realize that these hedge funds not only bet on options but are often leveraged by multiples, which results in even more money at stake - so when the options are going to be missed, the re-buys to cover there losses are MASSIVE. All that, coupled with the internet and sensationalism of making money, fast! Resulted in a unique growth pattern on a stock, that is seemingly worthless.

All in all, I disagree with what Robinhood and other brokerage firms did to stop the bleeding. I think it will be a hard case to prove as they can use the excuse "we couldn't handle the volume of trading on those particular stock, or the amount of cash we were having to put up to cover those stock trades" - they are already spewing this narrative.

Going forward, this is an extremely slippery slope for the SEC. Currently, as I am sure you all have seen, the SEC will stop the bleeding and shut the markets down if the DOW/S&P drop a certain amount, within a certain period of time. Markets are heavily influenced by emotion and from the worst crashes in the past, the SEC has learned that when selling hits a certain stride, it is best to give everyone some air. So when considering this, when a stock is growing at exponential rate, and the stock is basically a very low valued stock from the companies balance sheet perspective, should they stop that growth? At least for a period of time to make sure all buying into it truly know what they are getting into?

Please note - the markets are HEAVILY influenced by emotion. The fact that J&J vaccine proved 66% effective yesterday against the new covid strains and the Gamestop/AMC situation had investors worried, we saw the worst sell off since October. I am not sure this type of volatility is truly good for anyone, other than those who gambled on the singular equities like GME, AMC, etc.

Just my 2 cents.

AT.

 

["J"]

Basically, the Reddit group sent a message too the Wall Street folks... It kind of resembles this......

 

[Ohiosam]

This video gives a good synopsis of what happened.

 

[Jackalope]

It absolutely exposes the hypocrisy of our current system. Giant hedge fund companies are allowed to latch ahold of stocks and short them into bankruptcy, but in the end claim they would have gone bankrupt anyway. So a bunch of individual investors bet against the short sellers and end up costing them over a billion dollars. So the low-cost trading app that these people were using starts to restrict them, sells some of the stock, and a whole bunch of other illegal stuff, but allowed the hedge fund companies to continue trading. Those people on Reddit did nothing wrong. They didn't do anything these hedge fund companies don't do every day.

Here's the thing. There's not much that can be done about it. These people and others can continue to attack the hedge funds on every stock they're heavily shorting on. They can do this until they run out of money. But most people just threw 20-50 bucks at it for fun. The whales are being eaten by the minnows. The politicians are all "power to the people" but behind the scenes you know they're freaking out because these billionaire hedge fund people are their friends and Wal Street owns DC. Unfortunately this could also have a disastrous impact on the stock market. Never before have we seen massive investment for fun with the expectation of loss just to stick it to the man.

 

[Jackalope]

This video gives a good synopsis of what happened.

Subscribed to that dude. Great content. Thanks.

 

[at1010]

It absolutely exposes the hypocrisy of our current system. Giant hedge fund companies are allowed to latch ahold of stocks and short them into bankruptcy, but in the end claim they would have gone bankrupt anyway. So a bunch of individual investors bet against the short sellers and end up costing them over a billion dollars. So the low-cost trading app that these people were using starts to restrict them, sells some of the stock, and a whole bunch of other illegal stuff, but allowed the hedge fund companies to continue trading. Those people on Reddit did nothing wrong. They didn't do anything these hedge fund companies don't do every day.

Here's the thing. There's not much that can be done about it. These people and others can continue to attack the hedge funds on every stock they're heavily shorting on. They can do this until they run out of money. But most people just threw 20-50 bucks at it for fun. The whales are being eaten by the minnows. The politicians are all "power to the people" but behind the scenes you know they're freaking out because these billionaire hedge fund people are their friends and Wal Street owns DC. Unfortunately this could also have a disastrous impact on the stock market. Never before have we seen massive investment for fun with the expectation of loss just to stick it to the man.

I agree with most of this, except the last part. I think this is very similar to the DOT.com boom of the early 2000s. You have a lot of folks with FOMO (fear of missing out), they believe that there has been some secrete code unlocked that will results in turning 50 bucks into thousands. This has been realized by some, only adding fuel to the fire. However, like all things that go up - they must come down. I believe these folks gambling will get burnt, just like the during the early 2000s. We have to realize these companies that are exploding have P/E ratios that are incalculable (in negatives prior to boom).

I will agree that it is bad for the economy, as I stated above, with volatility comes emotion and with emotion typically comes large sell offs.

 

[Sgt Fury]

 

[Ohiosam]

Subscribed to that dude. Great content. Thanks.

I like his style. If he gets something wrong he fesses up on the next video.

 

[hickslawns]

I agree with most of this, except the last part. I think this is very similar to the DOT.com boom of the early 2000s. You have a lot of folks with FOMO (fear of missing out), they believe that there has been some secrete code unlocked that will results in turning 50 bucks into thousands. This has been realized by some, only adding fuel to the fire. However, like all things that go up - they must come down. I believe these folks gambling will get burnt, just like the during the early 2000s. We have to realize these companies that are exploding have P/E ratios that are incalculable (in negatives prior to boom).

I will agree that it is bad for the economy, as I stated above, with volatility comes emotion and with emotion typically comes large sell offs.

Well said Al. When people were getting paid more to stay home than to work. . .this escalated. That didn't help. But these companies keep pushing the bar/changing the rules. "Excuse me, this is how we determine profit" is responded to with "well that sucks. We are going to do it this way." Lots of false bubbles. Companies buy back their own stocks which keeps the price high? That's BS just to get the CEO his next bonus.

All these things keep happening and the little guy at home is tired of it. Pretty interesting to watch it unfold. I'm glad I'm not in anything speculative. My stocks are mainly "buy and forget about them" stocks or set up as a hedge for when the economy drops. No home runs for me. I'm happy just walking the bases. Lol

 

[Jackalope]

I agree with most of this, except the last part. I think this is very similar to the DOT.com boom of the early 2000s. You have a lot of folks with FOMO (fear of missing out), they believe that there has been some secrete code unlocked that will results in turning 50 bucks into thousands. This has been realized by some, only adding fuel to the fire. However, like all things that go up - they must come down. I believe these folks gambling will get burnt, just like the during the early 2000s. We have to realize these companies that are exploding have P/E ratios that are incalculable (in negatives prior to boom).

I will agree that it is bad for the economy, as I stated above, with volatility comes emotion and with emotion typically comes large sell offs.

Yes but being an ignorant investor and jumping on the bandwagon without understanding the full picture is nothing new, or illegal. Unlike big hedge funds the Reddit investors didn't hide their intentions, they posted it for the world to see, they knew and made known that their intent was to cost the big funds billions and they would likely lose their "investment". If someone saw that rise and bought in without doing even the simplest homework then shame on them, they would have lost that money anyway somewhere else. Lol. What these guys did is nothing compared to what people like soros did to an entire country and shorted their currency into oblivion. Working class people lost everything overnight. It's nice to see the big guy get fucked, even if it is a double edged sword.

 

[at1010]

Yes but being an ignorant investor and jumping on the bandwagon without understanding the full picture is nothing new, or illegal. Unlike big hedge funds the Reddit investors didn't hide their intentions, they posted it for the world to see, they knew and made known that their intent was to cost the big funds billions and they would likely lose their "investment". If someone saw that rise and bought in without doing even the simplest homework then shame on them, they would have lost that money anyway somewhere else. Lol. What these guys did is nothing compared to what people like soros did to an entire country and shorted their currency into oblivion. Working class people lost everything overnight. It's nice to see the big guy get fucked, even if it is a double edged sword.

Amen! Who doesn’t love seeing David defeat Goliath?!

Did you see the Mets owner say something like “I am just trying to make an honest living” hahaha what a joke.

 

[at1010]

Well said Al. When people were getting paid more to stay home than to work. . .this escalated. That didn't help. But these companies keep pushing the bar/changing the rules. "Excuse me, this is how we determine profit" is responded to with "well that sucks. We are going to do it this way." Lots of false bubbles. Companies buy back their own stocks which keeps the price high? That's BS just to get the CEO his next bonus.

All these things keep happening and the little guy at home is tired of it. Pretty interesting to watch it unfold. I'm glad I'm not in anything speculative. My stocks are mainly "buy and forget about them" stocks or set up as a hedge for when the economy drops. No home runs for me. I'm happy just walking the bases. Lol

That’s the best investing strategy you can have brother. Warren Buffet to Charles Schwab and various others have stated that index tracking funds over the long term is the best for 99% of people.

The Intelligent Investor - Benjamin Graham, fantastic book on this concept. He has since passed away but book has been classic for 50+ years.

 

[Big_Holla]

 

[Big_Holla]