Topic: Modern Day David V Goliath (Redditors v Hedgefunders)

[rodderzzz]

Anyone else following this? It's absolutely mental.

https://www.bbc.com/news/business-55817918

[DJBrenton]

Anyone else following this? It's absolutely mental.

https://www.bbc.com/news/business-55817918

I got in yesterday at $120 and it's now around $340. I'm holding out till Friday when it's hoped to reach $1,000 which would make me £7000 profit on my £1000 gamble. I know you're not supposed to risk money you can't afford to lose but it was too good an opportunity.

[Jiminy Cricket]

Anyone else following this? It's absolutely mental.

https://www.bbc.com/news/business-55817918

Short selling probably should be outlawed. I say 'probably' because there might serious downsides to outlawing the practice of which I am unaware. But the general principle that people should not be invested in the downfall of a stock seems completely obvious to me (as someone who knows FA about the stock market).

[Buggy Eyes Alfredo]

[Jiminy Cricket]

sometimes, sometimes, the Internet is just brilliant!

[Elmo!]

It's a nice analogy... but it is copied and pasted from Reddit. I read that couple of days ago....

[Commie Bobbie]

I got in yesterday at $120 and it's now around $340. I'm holding out till Friday when it's hoped to reach $1,000 which would make me £7000 profit on my £1000 gamble. I know you're not supposed to risk money you can't afford to lose but it was too good an opportunity.

If only I had a few quid spare!

[Buggy Eyes Alfredo]

Alexandria Ocasio-Cortez                     @AOC

Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino

[rodderzzz]

I got in yesterday at $120 and it's now around $340. I'm holding out till Friday when it's hoped to reach $1,000 which would make me £7000 profit on my £1000 gamble. I know you're not supposed to risk money you can't afford to lose but it was too good an opportunity.

My buddy went in at $94 yesterday and got out today at $340. He told me to jump but I didn't have the money available to go in right away and missed the boat. Ive jumped on Blackberry and AMC today will see how they manage through to the end of the week.

[DJBrenton]

If only I had a few quid spare!

Me too. I'm gambling the Universal Credit I got yesterday. It adds a little sense of danger when you'll be living on a credit card if it al goes tits up.

[DJBrenton]

My buddy went in at $94 yesterday and got out today at $340. He told me to jump but I didn't have the money available to go in right away and missed the boat. Ive jumped on Blackberry and AMC today will see how they manage through to the end of the week.

They've been hyped by the industry to get redditors off Gamestop. Not sure they'll do much.

[killer-heels]

How exactly do you buy this stock?

[mickeydocs]

What a wonderful thread. Thank you Rodderzz

[rodderzzz]

How exactly do you buy this stock?

Same as any other stock, although I think Gamestop has probably topped out

[rodderzzz]

They've been hyped by the industry to get redditors off Gamestop. Not sure they'll do much.

No, these are two companies with massive shorts betted against them, along with Bed bath and beyond, that's why they're expecting runs on them. I doubt they'll hit Gamestop numbers but they'll see 100% jumps i think.

[Elmo!]

Surely if the hedge fund were smart they would have "hedged" their bet and buy stock of their own once it became clear what was happening. That way they can cut their losses when they have to sell the stock they borrowed to short.

[Crumble]

I wouldn't buy gamestock now. The original short sellers probably covered their positions on the way up and are now long. They stand to make a killing from selling high to buyers who are late to the party.

(For avoidance of doubt, I am not authorised to provide investment advice. I have no position in Gamestock, long or short.)

[Chakan]

Seems to have flattened out now around $320 been like that for around 3/4 days now.

[DJBrenton]

Seems to have flattened out now around $320 been like that for around 3/4 days now.

What??? It opened at $61 on Monday, $95 yesterday and $327 today. How is that flattened out for around 3/4 days?

[DJBrenton]

No, these are two companies with massive shorts betted against them, along with Bed bath and beyond, that's why they're expecting runs on them. I doubt they'll hit Gamestop numbers but they'll see 100% jumps i think.

Maybe so. Good luck. I hate short sellers.

[TepidT2O]

Isn’t this a company that is losing money like water?

[Elmo!]

Isn’t this a company that is losing money like water?

Yeah. They're basically Blockbuster.

Which is why the hedge fund was short selling.

[Chakan]

What??? It opened at $61 on Monday, $95 yesterday and $327 today. How is that flattened out for around 3/4 days?

Hmmm my app graph showed flattened? Weird


Edit: Ok app fucked up, nevermind me.

[Schmidt]

Been reading about this all day, one of the posters there put around $50k in sometime in 2019 and is now up to around $50 million+ off the back of this. Needless to say the hedge funds that have been manipulating the stock market for decades are unhappy that the peasants are doing it too now.

[MBL?]

Isn’t this a company that is losing money like water?

They probably won’t exist in a few years. Comparable in a way to blockbuster.

[TepidT2O]

They probably won’t exist in a few years. Comparable in a way to blockbuster.

So, why are people buying stock in it if they’re all just going to lose their money?

Just to make a point?

[Elmo!]

Been reading about this all day, one of the posters there put around $50k in sometime in 2019 and is now up to around $50 million+ off the back of this. Needless to say the hedge funds that have been manipulating the stock market for decades are unhappy that the peasants are doing it too now.

On paper but surely he isn't going to be able to sell that much stock at that price, before it inevitably plummets again.

And as said above it wouldn't surprise me if the hedge fund have covered their position by buying up and selling the stock as it has gone up.

[DJBrenton]

So, why are people buying stock in it if they’re all just going to lose their money?

Just to make a point?

It's a raid against the short sellers. The principle is that if enough people can keep hold of enough shares then the hedge funds will have to pay silly money to buy the shares they've already advance sold and have to own on Friday to cover their positions.

[Schmidt]

On paper but surely he isn't going to be able to sell that much stock at that price, before it inevitably plummets again.

And as said above it wouldn't surprise me if the hedge fund have covered their position by buying up and selling the stock as it has gone up.

He's already sold around $13 million. The hedge fund apparently shorted around 140% of shares (no idea how or why that's even possible) and have deadlines to return a lot of them this Friday, it doesn't seem like covering themselves with sales is even remotely feasible unless the redditors get cold feet and sell up.

[TepidT2O]

It's a raid against the short sellers. The principle is that if enough people can keep hold of enough shares then the hedge funds will have to pay silly money to buy the shares they've already advance sold and have to own on Friday to cover their positions.

Oh... I see .....  that makes sense

Much more than the stuff about bananas above

[gazzalfc]

Didn't know if this should be in the gaming, gambling or news section.

Looks like Reddit is doing more to regulate the stock market than entire governments have over the past decade.

Plus the idea of a few billion $ hedge fund owners are getting twitchy then that's all good

[bornandbRED]

Managed to get in on this at 82 dollars. Also have a position on BB which will be interesting. It's going to come crashing down at some point, but it's one hell of a ride until then.

[Babel Time]

Didn't know if this should be in the gaming, gambling or news section.

Looks like Reddit is doing more to regulate the stock market than entire governments have over the past decade.

Plus the idea of a few billion $ hedge fund owners are getting twitchy then that's all good

If by regulate you mean create a giant Ponzi scheme, then they sure did.

Many retail investors will get sucked into this at high prices and spat out the other end with massive losses, when this thing comes crashing back down.

Sure a bunch of hedge funds lost a bit of money, most of those will only have a small amount of risk in any one name though, they'll survive.

[Elmo!]

Is there anyway the hedge funds get out of this by just borrowing the shortfall and giving it back with whatever contractual interest they owe, leaving everyone left with useless shares bought at inflated prices that no one wants to buy? Or do they legally have to hand o er the shares rather than cash?

[DJBrenton]

Is there anyway the hedge funds get out of this by just borrowing the shortfall and giving it back with whatever contractual interest they owe, leaving everyone left with useless shares bought at inflated prices that no one wants to buy? Or do they legally have to hand o er the shares rather than cash?

They have to actually own the shares on Friday. They've basically sold shares they don't own (borrowed them effectively) and have to provide those shares by close of business. That's why Friday could be so interesting. Watching the chase for too few shares at ever increasing prices. That's the possibility. t will just take balls of steel not to cash out too early as at a point, the shares could plummet.

[Elmo!]

They have to actually own the shares on Friday. They've basically sold shares they don't own (borrowed them effectively) and have to provide those shares by close of business.

Yeah but imagine you are one of those shareholders who they have borrowed stock from. If the fund came to you and said we'll give you the value of the shares at the value they were at when we borrowed them in cash plus say 20% or whatever, say half way in-between. You'd probably jump at that rather than take back shares that are immediately going to plummet. I don't know how these systems work but just talking hypothetically.

[DJBrenton]

Yeah but imagine you are one of those shareholders who they have borrowed stock from. If the fund came to you and said we'll give you the value of the shares at the value they were at when we borrowed them in cash plus say 20% or whatever, say half way in-between. You'd probably jump at that rather than take back shares that are immediately going to plummet. I don't know how these systems work but just talking hypothetically.

That's not how it works at all. They owe shares they borrowed at $20 and they'd be worth $800 now  for example. It's not like overlooking a bit of interest because you're mates. There are people with millions who've thought this strategy through. It's also a bit more impersonal. You don't buy directly from someone you know. It's all brokered. I have no idea whose shares I bought so i can't negotiate with them. If I have to repay in shares, I have to repay in shares. It's how shorting or going long works.

[Elmo!]

That's not how it works at all. They owe shares they borrowed at $20 and they'd be worth $800 now  for example. It's not like overlooking a bit of interest because you're mates. There are people with millions who've thought this strategy through. It's also a bit more impersonal. You don't buy directly from someone you know. It's all brokered. I have no idea whose shares I bought so i can't negotiate with them. If I have to repay in shares, I have to repay in shares. It's how shorting or going long works.

No I get its impersonal. I wasn't suggesting they approach each one individually. And given the timescale even a more automated system of making such an offer would be impractical. I was just thinking hypothetically. And on paper it is $800 but that is not going to last, especially after the deadline has passed. Those original shareholders will not get 800 per share when everyone inevitably loses interest and no one is buying any more.

[MBL?]

If there’s a deadline won’t most sell before?

[Jiminy Cricket]

If there’s a deadline won’t most sell before?

I expect/guess so. But how many late arrivals will be on the ball and do this? So, although the price may well drop very significantly, will enough sell to cause the price to drop low enough to pull Wall Street investors out of their hole? I have no idea.