Stock market drama llama: GameStop shares dramatically rise in price from some Reddit users' trading in it

[ZiprHead]

 

[Axulus]

View attachment 31659

Is fake news allowed to be spread here?

1. The losses did not surpass (or even approach) 13.1 billion
2. The hedge fund did not go bankrupt
3. Not all of wall street is saying it should be illegal. In fact, only a very few are saying that.

 

[Axulus]

Wrong. I said no regulations are needed in the case of whats happening with GME and similar situations. If wall street firms want to short a stock and a bunch of redditors want to pile into such stocks, and no lies or fraud are being engaged in by either side in the specific instance, let them do what they want. If any side is being stupid in the process, losses incurred will reduce their capital and thus future ability to repeat such behavior.

Other situations may very well be different and call for SEC intervention. My only statement on the matter is that this is not one of those situations.

So what regulations do you propose moving forward?

I'm not making any particular proposals (other than what I've stated previously about what I believe to the be SEC's legitimate purposes). I would be fine increasing the enforcement budget for those purposes.

 

[Axulus]

How in the world is placing a big short bet on GameStop an indication of recklessness and greed that needs to be "punished"? The people who buy the stock at these prices are lemming morons and will be incurring big losses when this eventually collapses back down to $20-$30 range. At the end of the day, this isn't a very profitable company nor is it likely to be for the foreseeable future.

There doesn't need to be any regulation against this. The coming financial losses that will be incurred will force them out of the market regardless.

??? In all the amusing tweets about Wall St. hypocrisy shown in this thread there have been ZERO mentions of "punishment."

Some of these retail investors will make money; some will lose money. But none of them will do what the big mega-investors do like clockwork every few years: Ask Congress for a bail-out.

The sentiment is clearly "punishment". What else would it be? Why would someone be fine risking losses to "destroy" a hedge fund if not as some sort of punishment?

 

[Axulus]

It's fun watching greedy Wall St fucks suddenly crying about maybe we should have some regulations after all so regular people can't beat us at our own game of ruining companies and lives for profit.

How were the GME short sellers ruining GameStop or ruining lives? I honestly don't care about their losses but to celebrate it as some kind of good is completely bonkers. And plenty of rich wall streeters stand to benefit from the price increase as well as plenty of the shares were owned by wealthy individuals before the rise.

Angry Floof is specifically talking about the greedy Wall St fucks that are crying. That has nothing do with the greedy Wall St fucks that are not crying. I'm also laughing at the hypocrisy on display VIA articles and news reports. They're like a sports announcer for a tug-of-war game crying that there should only be one side pulling the rope. hahaha

Who is crying (other than the hedge fund that lost the money and closed out the position, and even then I don't think the fund manager was crying)?

Edit: In fact, here is a response from one of the hedge fund managers after closing the short position.

"We'll become more judicious when it comes to shorting stocks," Left said. "Doesn't mean the industry is dead, but it just means you have to be more specific."

Seems like a mature response, not crying.

 

[Axulus]

Simply put, shorting stocks is wrong because it deprived the owner of a stock of agency over their own consideration of value, if you accept that ownership of stock in the work of others is ethical in the first place. It subsumes the held value with the speculative one.

Gobblygook. What do you mean "own consideration of value"? An owner of a stock maintains all rights associated with said ownership regardless of actions (or lack of actions) of short sellers.

 

[Axulus]

The SEC's only legitimate purpose is to investigate and punish lies and fraud on the securities market and make sure proper legal disclosures and financial reports are released. If people want to be idiots with their own money, so be it.

Losses incurred limit/reduce your ability to participate in the markets in the future. How can it not?

Except that the hedge funds in question have been violating the law since at least late last year, were reported the SEC, and the SEC did shit, so those people with the smarts to know what that meant invested in the market to force their hand, and subsequently, put at least a few of them out of business.

But your defense of hedge funds fucking over the people is noted.

How did the short seller of GME fuck anyone over? Your unthinking repeat of what you read on twitter and facebook is noted.

 

[Gospel]

Yeah fake news is not even funny. A professional hedge fund frim lost around 2 billion because a couple of reddit users outsmarted them. Now that's funny.

 

[Axulus]

..so what regulations are you proposing are needed here?

Correct me if I'm wrong, but you're making the case that there need be no regulations whatsoever. Fraud will be handled by the miracle of the free market. Who is John Galt and all that.

The regulations are already there. The fact that these companies were illegally over-leveraged (they over-shorted by 140%, which is already illegal, and were reported for it) and the SEC wasn't enforcing the law is what actually brought this on. A lot of the 'investors' from the reddit crowd are buying up the stock to hold it, knowing they'll lose most of what they put in (which is why a lot of them are only investing relatively small amounts, it's crowd funding at its best).

There is nothing illegal about shorting more than 100% of a stock. Person A buys a stock, person B borrows the stock from person A (or from A's brokerage, under consent) and shorts it to person C. Person B then borrows the stock from person C and shorts it to person D, etc.

 

[blastula]

1. The losses did not surpass (or even approach) 13.1 billion

GameStop? Reddit? Explaining what's happening in the stock market - NBC News

S3 Partners, a financial data company, said Wednesday that its analysis found that short sellers had lost $23.6 billion on GameStop this month.

Anyway, I guess all manipulators have to do now is make a bunch of reddit accounts.

 

[Axulus]

1. The losses did not surpass (or even approach) 13.1 billion

GameStop? Reddit? Explaining what's happening in the stock market - NBC News

S3 Partners, a financial data company, said Wednesday that its analysis found that short sellers had lost $23.6 billion on GameStop this month.

Anyway, I guess all manipulators have to do now is make a bunch of reddit accounts.

Cumulatively over all short positions, sure, but the hedge fund being referred to, Melvin Capital, lost about 5 billion (the fund that lost the most overall).

 

[ZiprHead]

Angry Floof is specifically talking about the greedy Wall St fucks that are crying. That has nothing do with the greedy Wall St fucks that are not crying. I'm also laughing at the hypocrisy on display VIA articles and news reports. They're like a sports announcer for a tug-of-war game crying that there should only be one side pulling the rope. hahaha

Who is crying (other than the hedge fund that lost the money and closed out the position, and even then I don't think the fund manager was crying)?

Edit: In fact, here is a response from one of the hedge fund managers after closing the short position.

"We'll become more judicious when it comes to shorting stocks," Left said. "Doesn't mean the industry is dead, but it just means you have to be more specific."

Seems like a mature response, not crying.

The spike in GameStop has led some hedge funds into trouble. Melvin Capital required a $2.75 billion cash infusion from Steve Cohen's Point72 and Ken Griffin's Citadel to help it weather the losses from a short position.

https://markets.businessinsider.com/news/stocks/gamestop-short-sellers-squeezed-losses-reddit-traders-army-cohen-palihapitiya-2021-1-1030006226

 

[Axulus]

I've been amused about this for about 2 weeks. In addition to Robinhood putting limits on these trades, yesterday, TDAmeritrade announced that they wouldn't even allow trades of Gamestock. I don't know if that's still going on today. But, all of these stocks are currently tanking. but they are way above what they were at the beginning of the year.

MSNBC interviewed an evangelical pastor this morning, who had invested 35 dollars on Gamestock. His investment was worth about 4K early this morning. He gave an excellent analogy, using a Biblical parable, where Jesus condemned the rich who had too much grain to store in their barns, but instead of sharing it with the poor, they built larger barns to store it. The guy was obviously not a conservative.

It's not the little investors who are hurting due to this behavior, as they were only investing tiny amounts of money in order to pump up these stocks. Their goal was always to hurt hedge funds etc. while making a little extra for themselves. I think it's pretty funny when small inexperienced investors are able to make a mockery of some of the biggest investors in the market.

The restrictions apparently have to do with the clearing houses charging much higher fees to clear the transactions in these stocks as there is more involved when there is this much volatility and volume. Anyone else know more about this?

 

[ZiprHead]

BOSTON (Reuters) - Hedge fund Melvin Capital Management, which had suffered heavy losses by betting against video game retailer GameStop, has closed out the position and repositioned the portfolio, a spokesman for the firm said on Wednesday.

“Melvin Capital has repositioned our portfolio over the past few days. We have closed out our position in GME (GameStop),” the spokesman said in a statement.

The spokesman also said that the firm, once among Wall Street’s best performers, is not collapsing. “The social media posts about Melvin Capital going bankrupt are categorically false,” he said.

Earlier this week prominent hedge funds Citadel and Point72 Asset Management extended a $2.75 billion financial lifeline to the fund. People familiar with the fund said it lost almost 30% in the first three weeks of January.

https://www.reuters.com/article/us-gamestop-melvin/hedge-fund-melvin-capital-has-closed-gamestop-position-spokesman-idUSKBN29X0EN

 

[Jarhyn]

I've been amused about this for about 2 weeks. In addition to Robinhood putting limits on these trades, yesterday, TDAmeritrade announced that they wouldn't even allow trades of Gamestock. I don't know if that's still going on today. But, all of these stocks are currently tanking. but they are way above what they were at the beginning of the year.

MSNBC interviewed an evangelical pastor this morning, who had invested 35 dollars on Gamestock. His investment was worth about 4K early this morning. He gave an excellent analogy, using a Biblical parable, where Jesus condemned the rich who had too much grain to store in their barns, but instead of sharing it with the poor, they built larger barns to store it. The guy was obviously not a conservative.

It's not the little investors who are hurting due to this behavior, as they were only investing tiny amounts of money in order to pump up these stocks. Their goal was always to hurt hedge funds etc. while making a little extra for themselves. I think it's pretty funny when small inexperienced investors are able to make a mockery of some of the biggest investors in the market.

The restrictions apparently have to do with the clearing houses charging much higher fees to clear the transactions in these stocks as there is more involved when there is this much volatility and volume. Anyone else know more about this?

No, they don't. It's pretty transparent manipulation given that they only blocked BUY and not SELL options. There is even some discussion of the possibility that RobinHood is illegally selling people's shares and illegally cancelling their already-approved transactions this morning before open.

And why wouldn't they? Fines for illegal activity, even prison time for some, probably seems better to them than covering the infinite losses they risked taking.

A number of markets have done this, limiting buy but not sell.

Reddit is holding the line, though. The goal is to close on Friday above 600 and bankrupt Citadel.

While I find it unethical to bet against people, it will be hilarious when Reddit goes after Citadel's long positions when they cash them to cover their shorts.

 

[Gospel]

Angry Floof is specifically talking about the greedy Wall St fucks that are crying. That has nothing do with the greedy Wall St fucks that are not crying. I'm also laughing at the hypocrisy on display VIA articles and news reports. They're like a sports announcer for a tug-of-war game crying that there should only be one side pulling the rope. hahaha

Who is crying (other than the hedge fund that lost the money and closed out the position, and even then I don't think the fund manager was crying)?

Edit: In fact, here is a response from one of the hedge fund managers after closing the short position.

"We'll become more judicious when it comes to shorting stocks," Left said. "Doesn't mean the industry is dead, but it just means you have to be more specific."

Seems like a mature response, not crying.

Who said anything about the hedge fund managers? You clearly haven't been watching CNBC else you'd be aware of the actual crybabies weeping hand over fist about it. I don't blame you for avoiding that network so there's that.

 

[funinspace]

Angry Floof is specifically talking about the greedy Wall St fucks that are crying. That has nothing do with the greedy Wall St fucks that are not crying. I'm also laughing at the hypocrisy on display VIA articles and news reports. They're like a sports announcer for a tug-of-war game crying that there should only be one side pulling the rope. hahaha

Who is crying (other than the hedge fund that lost the money and closed out the position, and even then I don't think the fund manager was crying)?

Edit: In fact, here is a response from one of the hedge fund managers after closing the short position.

"We'll become more judicious when it comes to shorting stocks," Left said. "Doesn't mean the industry is dead, but it just means you have to be more specific."

Seems like a mature response, not crying.

Who said anything about the hedge fund managers? You clearly haven't been watching CNBC else you'd be aware of the actual crybabies weeping hand over fist about it. I don't blame you for avoiding that network so there's that.

Yeah, I wouldn't watch that either...

 

[Trausti]

 

[Gospel]

How in the world is placing a big short bet on GameStop an indication of recklessness and greed that needs to be "punished"? The people who buy the stock at these prices are lemming morons and will be incurring big losses when this eventually collapses back down to $20-$30 range. At the end of the day, this isn't a very profitable company nor is it likely to be for the foreseeable future.

There doesn't need to be any regulation against this. The coming financial losses that will be incurred will force them out of the market regardless.

??? In all the amusing tweets about Wall St. hypocrisy shown in this thread there have been ZERO mentions of "punishment."

Some of these retail investors will make money; some will lose money. But none of them will do what the big mega-investors do like clockwork every few years: Ask Congress for a bail-out.

The sentiment is clearly "punishment". What else would it be? Why would someone be fine risking losses to "destroy" a hedge fund if not as some sort of punishment?

Yeah it's definitely punishment. No question about it. If the government would have done their job and punished folks for this sort of bullshit trading the last time, we most likely wouldn't see the halfcocked retribution being witnessed today.

 

[Worldtraveller]

The regulations are already there. The fact that these companies were illegally over-leveraged (they over-shorted by 140%, which is already illegal, and were reported for it) and the SEC wasn't enforcing the law is what actually brought this on. A lot of the 'investors' from the reddit crowd are buying up the stock to hold it, knowing they'll lose most of what they put in (which is why a lot of them are only investing relatively small amounts, it's crowd funding at its best).

There is nothing illegal about shorting more than 100% of a stock. Person A buys a stock, person B borrows the stock from person A (or from A's brokerage, under consent) and shorts it to person C. Person B then borrows the stock from person C and shorts it to person D, etc.

Shorting excessively can be considered stock manipulation.

Complain filed

Hedge funds, in general, are parasitic organizations that simply take money out of the system and are the antithesis of the intent of stock offerings in the first place. And no, I can't hedge or short funds I own. I either buy, or I sell. That's the limit of what's available to most people that aren't insiders.