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

[Jarhyn]

Interesting all the stories I'm reading and listening to on CNBC putting the spotlight on the Redditors in this Retail Investor versus Hedge Fund saga.

Reuters outs individual who drove the surge in GME This is beneath Reuters. This is a story I would expect from CNN not Reuters.

Facebook takes down Robinhood Stock Traders discussion group. Oh, now Facebook springs into action. Where were you the last four years, you moneygrubbing POS?

The notification, seen by Reuters, said without detail that the group violated policies on “adult sexual exploitation”.

Seriously? Were the terms "red hot poker" or "sideways" your concern?

To be fair, a lot of the language that WSB uses is self-abusive. Like "you glorious retarded autist fucks, you better hold the line!" followed by something like "together ape strong".

It would to an outside observer, seem very abusive.

 

[funinspace]

Some thoughts from a writer that I find interesting. It is an interesting question, in that was this WSB grouping actually financially big enough to take on the big guys. I've seen lots of hype suggesting that equity markets are being shot up due to millennials investing their Federal hand outs, which I find preposterous, considering the size of the markets, and the size of the big players (including central banks). So...is this WSB-GME-wallstreet story well established or lots of speculation?
https://asiatimes.com/2021/01/the-great-gamestop-conspiracy/

Except the numbers don’t add up. Robinhood, the brokerage of choice for the WallStreetBets flashmob, claims to have 13 million brokerage accounts, with an average size somewhere between $1,000 and $5,000. The market capitalization of GameStop at the peak was $24 billion. If the Robinhood accounts owned GameStop, then the average Robinhood account would have owned $1,846 of GameStop equity.

There simply aren’t enough small players to pull off operations like this. Even if there were, day traders follow stories, not technical. There is a WallStreetBets user group devoted to finding short squeezes, but it has only 4,500 members (out of WallStreetBets’ 5 million members). Most of the group’s recent posts are complaints about the Robinhood brokerage. In the age of social media bots, it is hard to establish the provenance of many of the posts.

 

[Jarhyn]

Some thoughts from a writer that I find interesting. It is an interesting question, in that was this WSB grouping actually financially big enough to take on the big guys. I've seen lots of hype suggesting that equity markets are being shot up due to millennials investing their Federal hand outs, which I find preposterous, considering the size of the markets, and the size of the big players (including central banks). So...is this WSB-GME-wallstreet story well established or lots of speculation?
https://asiatimes.com/2021/01/the-great-gamestop-conspiracy/

Except the numbers don’t add up. Robinhood, the brokerage of choice for the WallStreetBets flashmob, claims to have 13 million brokerage accounts, with an average size somewhere between $1,000 and $5,000. The market capitalization of GameStop at the peak was $24 billion. If the Robinhood accounts owned GameStop, then the average Robinhood account would have owned $1,846 of GameStop equity.

There simply aren’t enough small players to pull off operations like this. Even if there were, day traders follow stories, not technical. There is a WallStreetBets user group devoted to finding short squeezes, but it has only 4,500 members (out of WallStreetBets’ 5 million members). Most of the group’s recent posts are complaints about the Robinhood brokerage. In the age of social media bots, it is hard to establish the provenance of many of the posts.

It's propaganda, or perhaps something to calm the masses.

The fact is that it doesn't take a large force to leverage a naked short like this it just takes enough force to leverage the target stock's cap.

The fact is, it wasn't hard to crowd-source a run on GME because there weren't that many stocks out there, and the hedge fund had 140% of cap on their short positions.

It is exactly the low cap on GME that made the squeeze possible, because it creates an attainable cornering of the stock.

Once the short position has been leveraged by the pump, their entire business is held for ransom at whatever price the retail investors ask.

If the average reddit user owns 12 GME stocks and holds, that represents the sum total of publicly tradable stocks. That's not a whole lot, and that's exactly why this is working.

"Together ape strong."

 

[Jimmy Higgins]

Agreed. Gamestop nearly doubled at opening this morning (190 to 380). Where in the heck are "the little people" finding the capital to do this? And to what end?

Someone is shorting Gamestop? So people are buying to Gamestop shares at $380 and seeing those shares crash to under $300 in hours? Who the hell would be dumb enough to do that? More important, who has the capital to do that?

This feels more like either Private Equity / Hedge Funds battling out with each other, or foreign fuckery whether random or targeted (I'd vote random).

 

[Jimmy Higgins]

Short selling is still one of those ridiculous gambling things we allow in Wall Street. Sure, it made for a fun film in Trading Places, but it is ridiculous that people can sell shares before buying them.

Some thoughts from a writer that I find interesting. It is an interesting question, in that was this WSB grouping actually financially big enough to take on the big guys. I've seen lots of hype suggesting that equity markets are being shot up due to millennials investing their Federal hand outs, which I find preposterous, considering the size of the markets, and the size of the big players (including central banks). So...is this WSB-GME-wallstreet story well established or lots of speculation?
https://asiatimes.com/2021/01/the-great-gamestop-conspiracy/

Except the numbers don’t add up. Robinhood, the brokerage of choice for the WallStreetBets flashmob, claims to have 13 million brokerage accounts, with an average size somewhere between $1,000 and $5,000. The market capitalization of GameStop at the peak was $24 billion. If the Robinhood accounts owned GameStop, then the average Robinhood account would have owned $1,846 of GameStop equity.

There simply aren’t enough small players to pull off operations like this. Even if there were, day traders follow stories, not technical. There is a WallStreetBets user group devoted to finding short squeezes, but it has only 4,500 members (out of WallStreetBets’ 5 million members). Most of the group’s recent posts are complaints about the Robinhood brokerage. In the age of social media bots, it is hard to establish the provenance of many of the posts.

It's propaganda, or perhaps something to calm the masses.

The fact is that it doesn't take a large force to leverage a naked short like this it just takes enough force to leverage the target stock's cap.

The fact is, it wasn't hard to crowd-source a run on GME because there weren't that many stocks out there, and the hedge fund had 140% of cap on their short positions.

It is exactly the low cap on GME that made the squeeze possible, because it creates an attainable cornering of the stock.

Once the short position has been leveraged by the pump, their entire business is held for ransom at whatever price the retail investors ask.

If the average reddit user owns 12 GME stocks and holds, that represents the sum total of publicly tradable stocks. That's not a whole lot, and that's exactly why this is working.

"Together ape strong."

But a Gamestop share doesn't have to be traded. If someone is asking too much... who'd buy it? This was $20 in mid January. That'd mean they are buying themselves up, but then aren't they going to lose?

I'm also curious about people that own controlling shares and wanting to sell in this insanity.

 

[Trausti]

Short selling is still one of those ridiculous gambling things we allow in Wall Street. Sure, it made for a fun film in Trading Places, but it is ridiculous that people can sell shares before buying them.

It's propaganda, or perhaps something to calm the masses.

The fact is that it doesn't take a large force to leverage a naked short like this it just takes enough force to leverage the target stock's cap.

The fact is, it wasn't hard to crowd-source a run on GME because there weren't that many stocks out there, and the hedge fund had 140% of cap on their short positions.

It is exactly the low cap on GME that made the squeeze possible, because it creates an attainable cornering of the stock.

Once the short position has been leveraged by the pump, their entire business is held for ransom at whatever price the retail investors ask.

If the average reddit user owns 12 GME stocks and holds, that represents the sum total of publicly tradable stocks. That's not a whole lot, and that's exactly why this is working.

"Together ape strong."

But a Gamestop share doesn't have to be traded. If someone is asking too much... who'd buy it? This was $20 in mid January.

So people should get out now before all the shorts are covered and this thing crashes.

And, ironically, now is the best time to short GME.

 

[Gospel]

Ok looks like no one here knows what this is really about. Some dude purchased Gamestop stock some time ago regardless of what everyone else on Wallstreetbets said because he liked the stock. He became a meme in the community. the Hedge fund essentially stepped in dogshit. They weren't aware of the fact that 1: They represent the bad guys behind the 2008 market collapse to these people and 2: These people don't want the stock to fall because of said dude's investment. Thus these folks adopted the "I like the stock" & "Hold the Line" as their motto. They do not plan on ever allowing the stock to plummet. But who knows, maybe its all just talk right?

Edit: 20ish billion in losses of talk btw.

 

[Elixir]

Ok looks like no one here knows what this is really about. Some dude purchased Gamestop stock some time ago regardless of what everyone else on Wallstreetbets said because he liked the stock. He became a meme in the community. the Hedge fund essentially stepped in dogshit. They weren't aware of the fact that 1: They represent the bad guys behind the 2008 market collapse to these people and 2: These people don't want the stock to fall because of said dude's investment. Thus these folks adopted the "I like the stock" & "Hold the Line" as their motto. They do not plan on ever allowing the stock to plummet. But who knows, maybe its all just talk right?

Edit: 20ish billion in losses of talk btw.

Once all the short orders have been filled, what's their incentive? None. It will be the predictable rush to the door, perhaps slowed a little by the fact that so much of the stock is held in small bits (i.e. money that the holders don't mind losing).

 

[Jarhyn]

Agreed. Gamestop nearly doubled at opening this morning (190 to 380). Where in the heck are "the little people" finding the capital to do this? And to what end?

there are six MILLION accounts on WSB right now. Where is the capital? It's the Covid checks and drug money. Also, there are some reasonably big fish there with hundreds of stocks.

Someone is shorting Gamestop?

past tense and present, yes. Lots of people shorted it. It was shorted to 140%

So people are buying to Gamestop shares at $380 and seeing those shares crash to under $300 in hours?
Who the hell would be dumb enough to do that? More important, who has the capital to do that?

you have obviously never looked into the WSB community on reddit. They simply don't care about the money. People are buying every dip because buying at the dips causes competition between the buy and the attempts to cover the shorts.

It's not a matter of "dumb" and more a matter of "I would burn this 380 dollars, knowing it will go to another retail investor along with at least double that much of a hedge fund's money".

This feels more like either Private Equity / Hedge Funds battling out with each other, or foreign fuckery whether random or targeted (I'd vote random).

Maybe some of it is. Most private equity firms would be kinda silly not to jump in on the squeeze knowing that the jackpot on the machine is "literally everything owned by Citadel capital"

 

[Gospel]

Ok looks like no one here knows what this is really about. Some dude purchased Gamestop stock some time ago regardless of what everyone else on Wallstreetbets said because he liked the stock. He became a meme in the community. the Hedge fund essentially stepped in dogshit. They weren't aware of the fact that 1: They represent the bad guys behind the 2008 market collapse to these people and 2: These people don't want the stock to fall because of said dude's investment. Thus these folks adopted the "I like the stock" & "Hold the Line" as their motto. They do not plan on ever allowing the stock to plummet. But who knows, maybe its all just talk right?

Edit: 20ish billion in losses of talk btw.

Once all the short orders have been filled, what's their incentive? None. It will be the predictable rush to the door, perhaps slowed a little by the fact that so much of the stock is held in small bits (i.e. money that the holders don't mind losing).

Their incentive it to bleed the short sellers dry at all cost. If some of them (especially the original investor that unbeknownst to him became their mascot) can make cash along the way that's a plus but they are willing to lose everything. It's not about the money. It never was about the money. For some it's about the money.

 

[Jarhyn]

Short selling is still one of those ridiculous gambling things we allow in Wall Street. Sure, it made for a fun film in Trading Places, but it is ridiculous that people can sell shares before buying them.

It's propaganda, or perhaps something to calm the masses.

The fact is that it doesn't take a large force to leverage a naked short like this it just takes enough force to leverage the target stock's cap.

The fact is, it wasn't hard to crowd-source a run on GME because there weren't that many stocks out there, and the hedge fund had 140% of cap on their short positions.

It is exactly the low cap on GME that made the squeeze possible, because it creates an attainable cornering of the stock.

Once the short position has been leveraged by the pump, their entire business is held for ransom at whatever price the retail investors ask.

If the average reddit user owns 12 GME stocks and holds, that represents the sum total of publicly tradable stocks. That's not a whole lot, and that's exactly why this is working.

"Together ape strong."

But a Gamestop share doesn't have to be traded. If someone is asking too much... who'd buy it? This was $20 in mid January. That'd mean they are buying themselves up, but then aren't they going to lose?

I'm also curious about people that own controlling shares and wanting to sell in this insanity.

Who would buy it? The person who owes of it.

Bobby borrows sally's bike, and sells it to Harry for 20 bucks, expecting to buy it back again for 10 before sally demands he return it because it's a really shitty bike.

But then Harry, the person he sold it to, found out he sold it borrowed and refuses to sell it back. Bobby owes sally her bike back. Sally is demanding her bike back. Things will go Very Badly for Bobby if he can't get that bike back from Harry.

Harry is in the process of telling Bobby "sorry, I really like this bike. I'll trade it for your house, though."

All the "non-retail" shares are held by primary shareholders who can't sell for various reasons. This is the only bike. The only one. It's going to cost Bobby his house over his attempt to make 10 bucks.

 

[Jimmy Higgins]

Short selling is still one of those ridiculous gambling things we allow in Wall Street. Sure, it made for a fun film in Trading Places, but it is ridiculous that people can sell shares before buying them.

It's propaganda, or perhaps something to calm the masses.

The fact is that it doesn't take a large force to leverage a naked short like this it just takes enough force to leverage the target stock's cap.

The fact is, it wasn't hard to crowd-source a run on GME because there weren't that many stocks out there, and the hedge fund had 140% of cap on their short positions.

It is exactly the low cap on GME that made the squeeze possible, because it creates an attainable cornering of the stock.

Once the short position has been leveraged by the pump, their entire business is held for ransom at whatever price the retail investors ask.

If the average reddit user owns 12 GME stocks and holds, that represents the sum total of publicly tradable stocks. That's not a whole lot, and that's exactly why this is working.

"Together ape strong."

But a Gamestop share doesn't have to be traded. If someone is asking too much... who'd buy it? This was $20 in mid January. That'd mean they are buying themselves up, but then aren't they going to lose?

I'm also curious about people that own controlling shares and wanting to sell in this insanity.

Who would buy it? The person who owes of it.

Bobby borrows sally's bike, and sells it to Harry for 20 bucks, expecting to buy it back again for 10 before sally demands he return it because it's a really shitty bike.

But then Harry, the person he sold it to, found out he sold it borrowed and refuses to sell it back. Bobby owes sally her bike back. Sally is demanding her bike back. Things will go Very Badly for Bobby if he can't get that bike back from Harry.

Harry is in the process of telling Bobby "sorry, I really like this bike. I'll trade it for your house, though."

All the "non-retail" shares are held by primary shareholders who can't sell for various reasons. This is the only bike. The only one. It's going to cost Bobby his house over his attempt to make 10 bucks.

Alright, maybe I'm understanding what is happening a bit better now. Still none the less crazy.

The whole concept of shorting is ridiculous.

 

[Jarhyn]

Who would buy it? The person who owes of it.

Bobby borrows sally's bike, and sells it to Harry for 20 bucks, expecting to buy it back again for 10 before sally demands he return it because it's a really shitty bike.

But then Harry, the person he sold it to, found out he sold it borrowed and refuses to sell it back. Bobby owes sally her bike back. Sally is demanding her bike back. Things will go Very Badly for Bobby if he can't get that bike back from Harry.

Harry is in the process of telling Bobby "sorry, I really like this bike. I'll trade it for your house, though."

All the "non-retail" shares are held by primary shareholders who can't sell for various reasons. This is the only bike. The only one. It's going to cost Bobby his house over his attempt to make 10 bucks.

Alright, maybe I'm understanding what is happening a bit better now. Still none the less crazy.

The whole concept of shorting is ridiculous.

Oh, absolutely. It is transparently unethical.

 

[SimpleDon]

If enough people can take a slight loss to destroy a hedge fund is this really a problem?

No, it is not a problem. Hedge funds routinely put a short squeeze on other hedge funds. It does, however, further reinforces the truth that the stock market isn't the economy and in fact, it has very little to do with the economy.

 

[SimpleDon]

...

Donna Imam on Twitter: "Hedge funds float retail investor regulation on CNBC because Americans on Robinhood have 'nothing to lose' (links)" / Twitter

...

Socialism for the rich, free-market capitalism for everyone else!

 

[Ford]

...

Donna Imam on Twitter: "Hedge funds float retail investor regulation on CNBC because Americans on Robinhood have 'nothing to lose' (links)" / Twitter

...

Socialism for the rich, free-market capitalism for everyone else!

Of course, helping rich people with tax breaks or business-friendly regulations isn't socialism. It's just "Capitalism Plus." They're paying good money to politicians for this service, after all.

 

[Loren Pechtel]

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.

In the long run we will see who lost.

Why wait when I can tell you now. The short sellers.

We have one hell of a bubble, the people investing in it are going to be hurt. We are already seeing positions being force-liquidated.

 

[Gospel]

Why wait when I can tell you now. The short sellers.

We have one hell of a bubble, the people investing in it are going to be hurt. We are already seeing positions being force-liquidated.

There are three kinds of people involved in this situation.

1: The Short Sellers
2: Investors looking for a quick buck
3: WSB Reddit users looking to burn the short sellers to the ground and don't give two shits about losing everything in the process.

There you have it.

 

[Jarhyn]

Why wait when I can tell you now. The short sellers.

We have one hell of a bubble, the people investing in it are going to be hurt. We are already seeing positions being force-liquidated.

Again, wrong way of looking at it. The people holding don't really care. They know it's a bet on a roulette table. The reward isn't the payout the reward is the thrill of the ride.

If they have their positions illegally liquidated, there's a massive wave of class action that will come on the dollars of the people who won their bets against Wall Street.

 

[repoman]

listened to Dylan Ratigan today saying that there are some times were short selling is good - like when shareholders who are also on the board the company are painting a rosy picture to be able to sell out their options. Then the short sellers says, bullshit you have terrible fundamentals and takes a risk.