Author Topic: Modern Day David V Goliath (Redditors v Hedgefunders) (Read 20131 times)

aggerdid · « **Reply #40 on:** January 28, 2021, 12:29:41 am »

Although this sounds cool them reddit forums are all backward bitcoin nerds. The money side is great but if you’ve been on them forums for too long i pray for you

Schmidt · « **Reply #41 on:** January 28, 2021, 12:43:36 am »

Quote from: MBL? on January 27, 2021, 11:27:42 pm

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

This does a decent job of explaining it:

https://twitter.com/migbike/status/1354449364463325185

The hedge funds shorting the stock will basically be forced to buy at whatever price it's available at. I know a lot of stock owners can set a sell price for their stock, but what I don't know is if for example the stock is at £300 and their sell price is set to £1000, whether the hedge fund that shorted the stock is forced to pay £1000 or not.

MBL? · « **Reply #42 on:** January 28, 2021, 01:43:32 am »

Quote from: Schmidt on January 28, 2021, 12:43:36 am

This does a decent job of explaining it:

https://twitter.com/migbike/status/1354449364463325185

The hedge funds shorting the stock will basically be forced to buy at whatever price it's available at. I know a lot of stock owners can set a sell price for their stock, but what I don't know is if for example the stock is at £300 and their sell price is set to £1000, whether the hedge fund that shorted the stock is forced to pay £1000 or not.

Good thread there. I see some are comparing it to trading places. Haha.

josh101 · « **Reply #43 on:** January 28, 2021, 03:29:12 am »

Quote from: MBL? on January 27, 2021, 10:14:49 pm

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

They will.

The whole reason this started is because GameStop actually made some smart moves into transitioning into a more online and ecommerce based company. Ryan Cohen joined their board of directors after he acquired a 12% stake in the company. He had previously ran Chewy, a massive online pet supply store that he eventually sold for 3.5billion and rivaled Amazon for pet supplies. He could easily turn the company around, and the initial surge of GameStop stock purchases was due to his involvement in the company. Initial investment into the stock wasn't even majorly about the shorted stock.

Now add that with the enormous amount of PR and financial injection GameStop have they are definitely likely to transition their success and fortune into a successful eCommerce business. This whole business has probably just lined them up with a massively dedicated, loyal and newly wealthy customer base too.

Whilst their current price is definitely going to come crashing down to a more reasonable level, there is no cause to think bankruptcy or insolvency is in their future.

Quote from: Babel Time on January 27, 2021, 10:39:01 pm

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.

I wouldn't say "a bit of money". Melvin Capital, the main instigators in this short have already had to have a $2.75billion bailout on Monday. That $2.75billion doesn't even cover todays gain if they had to close out their positions at this price. They will literally owe over $10billion right now on GameStop stock, and if something major doesn't happen and the stock fall they are will be filing for bankruptcy very soon. They're not the only ones.

Max_powers · « **Reply #44 on:** January 28, 2021, 04:51:44 am »

I am not fully clued in on the how this particular scenario came to be, but isn't this pretty much a Pump and Dump scheme and thus illegal, no matter what the motivation is behind it?

Also r/wallstreetbets has some history of these type of schemes that border on securities frauds.

Now I hate the Hedgefunds as much as the next guy but when its all over, many are gonna lose money over it, including many average joes and redditors too.

kavah · « **Reply #45 on:** January 28, 2021, 04:53:58 am »

Quote from: rodderzzz on January 27, 2021, 08:35:17 pm

Anyone else following this? It's absolutely mental.

Right, mad story.

Quote from: Jiminy Cricket on January 27, 2021, 08:49:10 pm

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).

Yea same here, something seems rotten about the whole practice of shorts selling.

Although it got me thinking about Soros making Billions when sterling was in the ERM in the 80s - when it was overvalued. So I suppose you have to trust the market to find the right price, maybe that's what we'll find in this more connected age - more efficient markets with less space for a small number of hedge funds to control things.

It's called Price efficiency - I just googled - I studied economics for a bit but never mastered the vocabulary or the mechanics of it.

rodderzzz · « **Reply #46 on:** January 28, 2021, 06:18:10 am »

Quote from: Max_powers on January 28, 2021, 04:51:44 am

I am not fully clued in on the how this particular scenario came to be, but isn't this pretty much a Pump and Dump scheme and thus illegal, no matter what the motivation is behind it?

Also r/wallstreetbets has some history of these type of schemes that border on securities frauds.

Now I hate the Hedgefunds as much as the next guy but when its all over, many are gonna lose money over it, including many average joes and redditors too.

The difference here is this isnt a pump and dump based on misleading statements. Everyone knows what they're doing, buy in to short the hedgefunders out of millions/billions and bounce out again. Nobody is misleading anyone on why the share price has been dramatically inflated.

They stopped trading four times this morning on GameStop while the markets tried to figure out what the fuck was happening and how they could slow it down and when they realised they couldn't wall street shit the bed and started moaning.

Reddit is going fuckin nuts tonight, Blackberry and AMC will skyrocket tomorrow after market opens. I bought into both today.

kavah · « **Reply #47 on:** January 28, 2021, 06:26:27 am »

^ and tootsie rolls I just read too

rodderzzz · « **Reply #48 on:** January 28, 2021, 06:43:48 am »

Quote from: kavah on January 28, 2021, 06:26:27 am

^ and tootsie rolls I just read too

And Nokia,

Anything that heavily backed by hedgefuners shortselling is getting rocked. This is fuckin payback for 2008 babayyyyy

leroy · « **Reply #49 on:** January 28, 2021, 06:59:04 am »

No sympathy for the hedge fund wankers but cant help but assume that there will be a load of late to the party schmucks left holding the bag when the price falls through the floor.

rodderzzz · « **Reply #50 on:** January 28, 2021, 07:21:45 am »

Quote from: leroy on January 28, 2021, 06:59:04 am

No sympathy for the hedge fund wankers but cant help but assume that there will be a load of late to the party schmucks left holding the bag when the price falls through the floor.

There’ll be a few, but if everyone holds on GameStop, AMC and Blackberry until Friday when the shorts are called everyone can win. If you’ve never traded before and you’re starting here you could come unstuck but I’d say you also probably wouldn’t have the balls of steel needed to sit it out and will probably still make a little bit

No666 · « **Reply #51 on:** January 28, 2021, 08:11:43 am »

I'm wondering what I spend on small bets each year and thinking I could simply add it all together and join the Redditers. Would be more fun and probably a better chance of making money.

TepidT2O · « **Reply #52 on:** January 28, 2021, 08:13:26 am »

The CEO of Nasdaq wants trading suspended so big investors can recalibrate their positions.

Extraordinary! Talk about rigging the market...

https://www.mediaite.com/news/nasdaq-ceo-suggests-halt-to-trading-to-allow-big-investors-to-recalibrate-their-positions-to-combat-reddit-users/

So, it’s ok for investment companies to buy and sell shares merely to make a profit, but as soon as anyone wants to buy and sell shares because they actually want to protect a company... nope....

That’s messed up.

Red-Soldier · « **Reply #53 on:** January 28, 2021, 08:22:29 am »

Quote from: TepidT2O on January 28, 2021, 08:13:26 am

The CEO of Nasdaq wants trading suspended so big investors can recalibrate their positions.

Extraordinary! Talk about rigging the market...

https://www.mediaite.com/news/nasdaq-ceo-suggests-halt-to-trading-to-allow-big-investors-to-recalibrate-their-positions-to-combat-reddit-users/

So, it’s ok for investment companies to buy and sell shares merely to make a profit, but as soon as anyone wants to buy and sell shares because they actually want to protect a company... nope....

That’s messed up.

It's always been a rigged system. That's the point (and major problem).

Not that Gareth · « **Reply #54 on:** January 28, 2021, 08:49:33 am »

Quote from: Red-Soldier on January 28, 2021, 08:22:29 am

It's always been a rigged system. That's the point (and major problem).

Completely rigged, that is what makes this so funny. Watching these guys cry foul play is hilarious. When they pulled the peg on swiss franc/EUR these same institutions had no problem, it bankrupted countless people and put brokerages out of business but hey ho, part of the game right? Now they cry, well forgive me for not shedding a tear. They routinely prop up stocks only to then short and pull the rug, now they are on the receiving end want some sort of clemency, nah. I hope the little folks involved in this pull it off. There will definitely be some left holding the bag which sucks, but that happens everyday when they do it and no one seems to bat an eyelid then.

rafathegaffa83 · « **Reply #55 on:** January 28, 2021, 11:44:20 am »

Quote from: Not that Gareth on January 28, 2021, 08:49:33 am

Completely rigged, that is what makes this so funny. Watching these guys cry foul play is hilarious.

They weren't complaining in 2008 when their antics destroyed the livelihoods of millions.

bryanod · « **Reply #56 on:** January 28, 2021, 12:00:17 pm »

Gas if Melvin just default.

thaddeus · « **Reply #57 on:** January 28, 2021, 12:05:32 pm »

More broadly does this make short selling unviable in the future?

bryanod · « **Reply #58 on:** January 28, 2021, 12:06:44 pm »

Quote from: thaddeus on January 28, 2021, 12:05:32 pm

More broadly does this make short selling unviable in the future?

No, just a quirk of reporting requirements that public knowledge of level of shorts.

OOS · « **Reply #59 on:** January 28, 2021, 12:44:17 pm »

So who is going to be holding the bag when the price crashes. Whats the end goal here?

From reading around a bit, other hedge funds have jumped in (why wouldn't they). Shouldnt have overexposed themselves shorting that much. but it just seems like a modern pump n dump, with a few short traders getting fucked over (no tears here).

kloppismydad · « **Reply #60 on:** January 28, 2021, 01:48:47 pm »

Robinhood, TDI Ameritrade not allowing the small players to buy more stocks. This whole saga is exposing to the common man the crooks that the hedge fund folks are and it's an open battle.

Come on Papa Elon and Chamath. Give these hedgefund assholes hell!

I'm also very happy to see how people who have made gains are using the money to do good to the society.

TO THE MOON

(I'm not invested but rooting for the good folks here)

Rob Dylan · « **Reply #61 on:** January 28, 2021, 01:58:10 pm »

Quote from: rodderzzz on January 27, 2021, 09:40:11 pm

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

What's the best platform to use? I've heard a lot about Robinhood but isn't that unavailable in the UK?

Rob Dylan · « **Reply #62 on:** January 28, 2021, 02:01:08 pm »

Quote from: thaddeus on January 28, 2021, 12:05:32 pm

More broadly does this make short selling unviable in the future?

I was wondering this - once this particular round is over what's to stop this happening again, could they just pick another company and do the same thing?

Andy82lfc · « **Reply #63 on:** January 28, 2021, 02:10:47 pm »

Quote from: Rob Dylan on January 28, 2021, 01:58:10 pm

What's the best platform to use? I've heard a lot about Robinhood but isn't that unavailable in the UK?

I think the equivalent in the UK is maybe Freetrade app, Roderz or Mainstream know a better one possibly.

Freetrade is free but for Gameshop specifically I think you need the plus account as it is a smaller company or something (I'm so clued up

) which is £9.99.

Goes without saying if you are not sure of what you are doing don't risk anything on anything like this! Read up first, if you miss the boat it's better to be standing on shore more informed and waiting for the next one rather than drowning in a sea of shit.

rafathegaffa83 · « **Reply #64 on:** January 28, 2021, 02:12:53 pm »

Rich coming from this prick given the way his dad was tanking stocks via a tweet

Donald Trump Jr.@DonaldJTrumpJr
It took less than a day for big tech, big government and the corporate media to spring into action and begin colluding to protect their hedge fund buddies on Wall Street. This is what a rigged system looks like, folks! #RobinHood #RedditArmy #GME #GMEtothemoon

Lone Star Red · « **Reply #65 on:** January 28, 2021, 02:19:24 pm »

Appalling from Robinhood. I’m pulling everything from the app except my Nokia stock. They’ve been exposed. “Democratizing finance for all” my ass.

I’ve seen people talking up another app, Webull, as an FYI. Haven’t done any research yet.

kloppismydad · « **Reply #66 on:** January 28, 2021, 02:19:57 pm »

Quote from: rafathegaffa83 on January 28, 2021, 02:12:53 pm

Rich coming from this prick given the way his dad was tanking stocks via a tweet

Donald Trump Jr.@DonaldJTrumpJr
It took less than a day for big tech, big government and the corporate media to spring into action and begin colluding to protect their hedge fund buddies on Wall Street. This is what a rigged system looks like, folks! #RobinHood #RedditArmy #GME #GMEtothemoon

This event has united the left and the right. AOC tweeting against the crackdown, Donald Trump Jr too.

Ray K · « **Reply #67 on:** January 28, 2021, 02:46:37 pm »

Quote from: kloppismydad on January 28, 2021, 01:48:47 pm

Robinhood, TDI Ameritrade not allowing the small players to buy more stocks. This whole saga is exposing to the common man the crooks that the hedge fund folks are and it's an open battle.

Come on Papa Elon and Chamath. Give these hedgefund assholes hell!

I'm also very happy to see how people who have made gains are using the money to do good to the society.

TO THE MOON

(I'm not invested but rooting for the good folks here)

Qston · « **Reply #68 on:** January 28, 2021, 02:56:34 pm »

Quote from: No666 on January 28, 2021, 08:11:43 am

I'm wondering what I spend on small bets each year and thinking I could simply add it all together and join the Redditers. Would be more fun and probably a better chance of making money.

I am thinking the same thing. I just wish someone had a spare 30 mins to show me how it all works ! I get how shorting works but more generally how the hell you go about buying the right stock, which platform to use and so on.

Rob Dylan · « **Reply #69 on:** January 28, 2021, 03:00:18 pm »

Quote from: Qston on January 28, 2021, 02:56:34 pm

I am thinking the same thing. I just wish someone had a spare 30 mins to show me how it all works ! I get how shorting works but more generally how the hell you go about buying the right stock, which platform to use and so on.

Me too, been meaning to get into it for a while but never got round to it and always assumed it was really complex and you need to start off with at least a few thousand, but it seems like the apps you can get these days make it easier and allow you to trade with smaller amounts. But don't really know where to start!

Elmo! · « **Reply #70 on:** January 28, 2021, 03:02:15 pm »

I think Trading212 is the cheapest place. I don't do it but I've read about it, think they don't charge a fee for trades. I've alse read of people being suspicious of them so probably don't want to put all you life savings in it.

Actually just read Trading212 have banned trading on all "memestocks".

Callum Burroughs
@CallumBurroughs
Robinhood follows Trading 212 in banning purchases of ‘memestocks’ such as GameStop, Nokia, AMC, and Blackberry. #wallstreetbets

Qston · « **Reply #71 on:** January 28, 2021, 03:05:51 pm »

Quote from: Rob Dylan on January 28, 2021, 03:00:18 pm

Me too, been meaning to get into it for a while but never got round to it and always assumed it was really complex and you need to start off with at least a few thousand, but it seems like the apps you can get these days make it easier and allow you to trade with smaller amounts. But don't really know where to start!

I think what I may do mate is just get one of those free apps (like Freetrade) and put in what I can easily afford and invest in something basic/well known just to get a feel for it all. Got to start somewhere I suppose and with interest on savings being meaningless at the moment, and with things like an ISA you can trade from and pay no tax if you make anything, it is perhaps easier to contribute small amounts to that with a level I can afford. That's my thinking anyway.

With this whole reddit thing I have been reading about I always get the feeling that whilst I can see how the hedgefunders have got burned (good), I am sure there will be plenty of ordinarily people who will as well.

I will try and stick with the maxim, if it looks too good to be true then it almost certainly is !

Red-Soldier · « **Reply #72 on:** January 28, 2021, 03:21:51 pm »

More proof that it's a rigged system!

We wont address any of the major global issues unless we tackle these systems that are designed to just syphon money to the wealthy.

Rob Dylan · « **Reply #73 on:** January 28, 2021, 03:55:01 pm »

Quote from: Qston on January 28, 2021, 03:05:51 pm

I think what I may do mate is just get one of those free apps (like Freetrade) and put in what I can easily afford and invest in something basic/well known just to get a feel for it all. Got to start somewhere I suppose and with interest on savings being meaningless at the moment, and with things like an ISA you can trade from and pay no tax if you make anything, it is perhaps easier to contribute small amounts to that with a level I can afford. That's my thinking anyway.

Think I'll try the same.

Quote from: Just Elmo? on January 28, 2021, 03:02:15 pm

I think Trading212 is the cheapest place. I don't do it but I've read about it, think they don't charge a fee for trades. I've alse read of people being suspicious of them so probably don't want to put all you life savings in it.

Actually just read Trading212 have banned trading on all "memestocks".

Callum Burroughs
@CallumBurroughs
Robinhood follows Trading 212 in banning purchases of ‘memestocks’ such as GameStop, Nokia, AMC, and Blackberry. #wallstreetbets

Cheers, I'll look into that one.

What I don't understand with these platforms stopping people from buying certain stocks is, what's to stop the same people who've done this just picking another company and doing something similar next week? Could they not do this over and over again, the platforms can't just keep banning the purchase of those stocks every time, you'd end up with hardly any that you were actually allowed to buy.

bryanod · « **Reply #74 on:** January 28, 2021, 04:11:33 pm »

GME, AMC and BB all down over 40% on day.....uhoh.

CraigDS · « **Reply #75 on:** January 28, 2021, 04:17:26 pm »

Quote from: bryanod on January 28, 2021, 04:11:33 pm

GME, AMC and BB all down over 40% on day.....uhoh.

Let's be honest - was this ever anything more than a group causing a rush on a load of shares they held at low prices so they could dump them when they got high? Great if you got in early but for all those who jumped in later thinking this was more than that they're likely to get burned.

bryanod · « **Reply #76 on:** January 28, 2021, 04:22:33 pm »

Quote from: Craig [emoji848] on January 28, 2021, 04:17:26 pm

Let's be honest - was this ever anything more than a group causing a rush on a load of shares they held at low prices so they could dump them when they got high? Great if you got in early but for all those who jumped in later thinking this was more than that they're likely to get burned.

Was massive Ponzi scheme yeah, end game was late entrants always get fucked. Trying even get GME price is mental it looks like suspended at 126 down from nearly 500 earlier.

Max_powers · « **Reply #77 on:** January 28, 2021, 04:25:37 pm »

Quote from: TepidT2O on January 28, 2021, 08:13:26 am

The CEO of Nasdaq wants trading suspended so big investors can recalibrate their positions.

Extraordinary! Talk about rigging the market...

https://www.mediaite.com/news/nasdaq-ceo-suggests-halt-to-trading-to-allow-big-investors-to-recalibrate-their-positions-to-combat-reddit-users/

So, it’s ok for investment companies to buy and sell shares merely to make a profit, but as soon as anyone wants to buy and sell shares because they actually want to protect a company... nope....

That’s messed up.

But I don't think most of the people are buying this share to protect Gamestop. Gamestop is a terrible company that refused to adapt to a changing video games market. It also has a terrible record with how it treats its employees and consumers. Most jobs it creates are minimum wage. I would rather give my money to a local business.

It seems the main driver of this rally is the urge to stick it to the Hedgefunds and also profit. Just because its a grass-root pump and dump that doesn't make it great.

Quote from: rodderzzz on January 28, 2021, 06:18:10 am

The difference here is this isnt a pump and dump based on misleading statements. Everyone knows what they're doing, buy in to short the hedgefunders out of millions/billions and bounce out again. Nobody is misleading anyone on why the share price has been dramatically inflated.

They stopped trading four times this morning on GameStop while the markets tried to figure out what the fuck was happening and how they could slow it down and when they realised they couldn't wall street shit the bed and started moaning.

Reddit is going fuckin nuts tonight, Blackberry and AMC will skyrocket tomorrow after market opens. I bought into both today.

It does seem though people are being misled. Blackberry and AMC are both dropping today.

There are others in this thread hoping to buy stocks for 10-30X their market price (pre-manipulation) in companies that are largely unprofitable and declining, hoping to time the market and turn a profit.

Chakan · « **Reply #78 on:** January 28, 2021, 04:37:11 pm »

So buying of the stock was halted and people panicked and sold up? Is that why the stock price is dropping?

Schmidt · « **Reply #79 on:** January 28, 2021, 04:37:56 pm »

The push to buy Blackberry and AMC seemed to largely be down to bots trying to distract the hundreds of thousands rushing to check out /r/WallStreetBets, I think the majority of the people who started this are focusing only on Gamestop still.

I'm not sure the "pump and dump" description is accurate, since the idea is that hedge funds are obliged to buy up a lot of these shares and so everyone can profit off them if timed right. It seems like a ton of people new to this all have bought in on the hype though and then panicked when the price dropped due to some trading companies blocking new buys.