GameStop Taking Down A Hedge Fund

[Red Phoenix]

Their discord has now been banned for hate speech and they've set their reddit to private. So not going too well at the moment.

[Heinze]

Is it too late to get on the GME train? I was going to buy on Monday after what happened last week then said "nah".

[M_B]

27 minutes ago, Red Phoenix said:

 

I don't think everyone that shorts has to be evil, it's more that a lot of the idiots on wall street are probably abusing it and treating it like a casino so I'm glad that a group of people on reddit can do what they have done. If it happens more often it could redistribute some wealth maybe and let people know that they can do something if it looks like companies are being driven into the ground from stock manipulation. 

Whilst I agree with your sentiments, shorting is not stock manipulation. It's a healthy market mechanism. You cannot short a company into the ground unless that company is a busted flush with an inflated share price.

 

Stock manipulation is an entirely different thing used to artificially inflate or deflate a price. The current share price of GameStop for example is an obvious example of stock manipulation and at some point it will go pop.

[rb14]

This might help understand..? 

 

https://www.spiked-online.com/2021/01/27/how-lockdown-boredom-broke-the-stock-market/

 

[Aventus]

42 minutes ago, Red Phoenix said:

Their discord has now been banned for hate speech and they've set their reddit to private. So not going too well at the moment.

They had a massive problem with bots trying to fuck them.

Thousands of brand new accounts created to either cause panic or get people to divert their attention to a different stock. 

 

The mods needed the downtime to get a handle on it, people with a lot of money are paying for these bots to influence WSB.

 

They're panicking and trying whatever dirty tactics they can. Yesterday it looked like they tried to do mass buy then sell the stocks to get the price down to see if they could trigger people's sale prices and start the cascade, but the redditors just bought the dip.

most of the main trading apps conveniently went down at the same time, again with the hopes of causing panic. 

The talking heads are all over the news trying to say how much of a scam the whole thing is and people shouldn't get involved. 

 

WSB keep posting memes, pointing out the dirty tactics, holding their stocks buying dips and the price keeps going up. 

[Red Phoenix]

2 hours ago, M_B said:

Whilst I agree with your sentiments, shorting is not stock manipulation. It's a healthy market mechanism. You cannot short a company into the ground unless that company is a busted flush with an inflated share price.

 

Stock manipulation is an entirely different thing used to artificially inflate or deflate a price. The current share price of GameStop for example is an obvious example of stock manipulation and at some point it will go pop.

 

I meant the type of artificial deflation you mentioned I think, and another issue is surely that while we can see a group of people on reddit supported by others around the internet raising Gamestop's shares like this we don't get to see the other side, with these hedge funds and all of the shady shit they carry out to manipulate things in their favour. They're obviously a lot more experienced and have a lot more money to use, which surely leads to insane amounts of corruption and them treating the stock market like a casino.

 

Then when things go too badly they get their bailouts.

 

1 hour ago, Aventus said:

They had a massive problem with bots trying to fuck them.

Thousands of brand new accounts created to either cause panic or get people to divert their attention to a different stock. 

 

The mods needed the downtime to get a handle on it, people with a lot of money are paying for these bots to influence WSB.

 

They're panicking and trying whatever dirty tactics they can. Yesterday it looked like they tried to do mass buy then sell the stocks to get the price down to see if they could trigger people's sale prices and start the cascade, but the redditors just bought the dip.

most of the main trading apps conveniently went down at the same time, again with the hopes of causing panic. 

The talking heads are all over the news trying to say how much of a scam the whole thing is and people shouldn't get involved. 

 

WSB keep posting memes, pointing out the dirty tactics, holding their stocks buying dips and the price keeps going up. 

 

Yeah have seen some what's been happening, I wouldn't be surprised if they were classed as the latest version of Trump insurrectionists by the end of the week, or if it's being blamed on Russia.

[Red Phoenix]

The reddit is back and there's almost 4mil members on there, surely that's going to be a target like their discord was. Looks like they have no intention of giving in :

 

 

 

 

[PestiRed]

6 hours ago, Strontium Dog™ said:

 

Okay, but there are limits to how far you can spin this out with a business that isn't making any money. By any measure, shares in this company are not worth anywhere near what they are going for. It's a bubble, and the one thing we know about bubbles is that they always burst. 

In the meantime, the activist shareholder that initially invested is using the high share price to raise cash so he can convert the primary operation to online which could give both the business and its workers a future. Some good can come from this

[Red Phoenix]

 

 

[Red Phoenix]

What a surprise if true. Threaten something the elites are busy manipulating and you're soon turned into the "other".

 

[Red Phoenix]

 

[VladimirIlyich]

14 minutes ago, Red Phoenix said:

 

Don't hedge fund managers,when a fund collapses,just pass/sell their stocks on to another fund manager?

[Red Phoenix]

18 minutes ago, VladimirIlyich said:

Don't hedge fund managers,when a fund collapses,just pass/sell their stocks on to another fund manager?

 

I've no idea. Maybe we'll find out later today.

[Mudface]

22 minutes ago, VladimirIlyich said:

Don't hedge fund managers,when a fund collapses,just pass/sell their stocks on to another fund manager?

Dunno, but the guy is taking the piss after loads of Tweets criticising people like Occupy protestors and other activists protesting against inequality for daring to have a smart phone. 

[Spy Bee]

The economy is built on shite. It's only a matter of time until their is a complete revolution of it.

[M_B]

6 hours ago, Red Phoenix said:

 

I meant the type of artificial deflation you mentioned I think, and another issue is surely that while we can see a group of people on reddit supported by others around the internet raising Gamestop's shares like this we don't get to see the other side, with these hedge funds and all of the shady shit they carry out to manipulate things in their favour. They're obviously a lot more experienced and have a lot more money to use, which surely leads to insane amounts of corruption and them treating the stock market like a casino.

 

Then when things go too badly they get their bailouts.

 

 

Yeah have seen some what's been happening, I wouldn't be surprised if they were classed as the latest version of Trump insurrectionists by the end of the week, or if it's being blamed on Russia.

There is a lot of negative fantasy in your thinking Red. As regards GameStop, I don't see where the folks taking short positions have done anything wrong and certainly nothing illegal. They are merely pointing out that GameStop has an unsustainable business model. They are not wrong. If GameStop does not move to a digital platform then its days are numbered. But by taking short positions and highlighting the short comings of the company, they are helping to prevent the damage when it goes bankrupt and motivating the company to change. If GameStop were making bundles of cash with an online platform then nobody would be able to short it.

 

Shady shit does happen, on both sides of the market. It is not limited to Hedge Funds. The reddit users who started all this for example will have cashed in at the expense of their followers who they have encouraged to buy into the price rise. That is pretty shady. When it crashes, and it will, a lot of folks will be left with nothing and will realise they have been manipulated into transferring their wealth to the reddit users. I somehow doubt the folks on the reddit forum will be magnanimous enough to return their money.

 

As regards bailouts - the bailouts in the last financial crisis went to those companies who fell foul of market manipulation that created an artificial debt bubble. And yes, some of those companies were directly involved in creating that bubble in the first place. Shorting exposed that debt bubble however, and helped to save the financial system. Without shorters, the bubble would have kept expanding past the point of no return.

[M_B]

6 hours ago, Red Phoenix said:

The reddit is back and there's almost 4mil members on there, surely that's going to be a target like their discord was. Looks like they have no intention of giving in :

 

 

 

 

For a share price to remain high then there needs to be sustained buying. If demand drops, then the market makers will drop the price - holding on to your shares means nothing. Then stop losses kick in, and it goes into free fall. The only way to keep it up is to keep people buying, but that won't last forever. Those people buying in now would be better off donating their money to charity because they aren't going to see it again.

[Brownie]

Coincidentally I logged on to my pension fund yesterday and the investment part of the account has lost a fair bit of money this year.

[Carvalho Diablo]

Rhoads > Axelrod

[Red Phoenix]

26 minutes ago, M_B said:

There is a lot of negative fantasy in your thinking Red. As regards GameStop, I don't see where the folks taking short positions have done anything wrong and certainly nothing illegal. They are merely pointing out that GameStop has an unsustainable business model. They are not wrong. If GameStop does not move to a digital platform then its days are numbered. But by taking short positions and highlighting the short comings of the company, they are helping to prevent the damage when it goes bankrupt and motivating the company to change. If GameStop were making bundles of cash with an online platform then nobody would be able to short it.

 

Shady shit does happen, on both sides of the market. It is not limited to Hedge Funds. The reddit users who started all this for example will have cashed in at the expense of their followers who they have encouraged to buy into the price rise. That is pretty shady. When it crashes, and it will, a lot of folks will be left with nothing and will realise they have been manipulated into transferring their wealth to the reddit users. I somehow doubt the folks on the reddit forum will be magnanimous enough to return their money.

 

As regards bailouts - the bailouts in the last financial crisis went to those companies who fell foul of market manipulation that created an artificial debt bubble. And yes, some of those companies were directly involved in creating that bubble in the first place. Shorting exposed that debt bubble however, and helped to save the financial system. Without shorters, the bubble would have kept expanding past the point of no return.

 

21 minutes ago, M_B said:

For a share price to remain high then there needs to be sustained buying. If demand drops, then the market makers will drop the price - holding on to your shares means nothing. Then stop losses kick in, and it goes into free fall. The only way to keep it up is to keep people buying, but that won't last forever. Those people buying in now would be better off donating their money to charity because they aren't going to see it again.

 

I think you've got some good points and you clearly know more about how the stock market works than I do, but to focus on Gamestop is missing the point a bit as well I think. It looks like it's about a growing number of people against the hedge funds. Some people will lose money, and yeah some will regret not knowing what they got into. It seems to be more about defeating hedge funds on this though to the point that they either collapse or it's confirmed that they've lost the battle and given up their shorts. It's basically a big fuck you to the entire way the system works in this area and that explains why the establishment are coming out with so much bullshit to try and scare people off from making it into something bigger.

 

I think the only way they get out of this is to put a halt on the ability for people to trade in Gamestop shares pending some type of bullshit investigation, and maybe then the hedge funds win. Another populist uprising has been seen off and we wait until it manifests somewhere else.

 

The only thing that solves this situation is the system being made fairer. If the Dems would listen to people like AOC, Warren, Sanders, etc, and actually fucking do something maybe this type of situation would have less of a need to take place. If nothing changes though and these traders lose, it's not going to solve anything. If they win they get stronger, more support and maybe try something bolder. Clearly the establishment will be putting efforts into trying to stop that because it risks unravelling their entire ponzi scheme if not.

[Numero Veinticinco]

23 minutes ago, Carvalho Diablo said:

Rhoads > Axelrod

Not having that at all. Rhoades is even worse than Axe. 

[VladimirIlyich]

3 hours ago, Mudface said:

Dunno, but the guy is taking the piss after loads of Tweets criticising people like Occupy protestors and other activists protesting against inequality for daring to have a smart phone. 

I was picking up on the mention of bankruptcy. I had no idea what he meant about iphones.

[SasaS]

What good companies have so far been ran into the ground by shorting? Genuine question.

[Rushies tash]

Another genuine question - would the fee paid to the person whose shares are 'borrowed' negate the losses suffered from their share value nose diving?

[M_B]

28 minutes ago, SasaS said:

What good companies have so far been ran into the ground by shorting? Genuine question.

Depends what you mean by good.

 

If you mean financially viable, then none, because it's impossible to short a profit making company, or even a loss making company with a preceived bright future.

 

If you mean a company that we have feelings for - nostalgia etc - then Woolworths is an example. It had a busted business model and shorting made it's ability to get further investment difficult. The real problem of course was that Woolworths didn't move with the times and paid the price for it, not the mechanism of shorting.

 

Edit: In the panic of the financial crisis, shorting had to be suspended because the panic exaggerated the collapse, and Lloyds and Barclays would have folded had the government not stepped in.