16 ms·

Chamath Palihapitiya on Wallstreetbets [audio]

181 points by dave_aiello 6y ago

sirffuzzylogik 6y ago
> Social Capital’s Chamath Palihapitiya jumped into the controversial name, saying in a Tuesday tweet that he bought GameStop call options betting the stock will go higher. His tweet seemed to intensify the rally in the previous session. The stock ended the day 92% higher at $147.98. This is growing into a bigger problem. The thought of Twitter influencers (example with E. Musk / Etsy, yesterday [1]) heavily moving the value of stocks with a simple tweet is not really reassuring. The SEC should start investigating properly into it, from personal benefits to bigger company wide fraud, the regulators need to act before this is the new norm. [1] https://edition.cnn.com/2021/01/26/investing/elon-musk-etsy-twitter/index.html https://edition.cnn.com/2021/01/26/investing/elon-musk-etsy-...
kcbigring 6y ago
pretty good arguments from both sides here and lots to learn; although, Chamath has many valid points he is also really good at skirting around some of the questions. hubris on both ends.
dave_aiello 6y ago
Here is a link to the audio podcast version of CNBC's "The Halftime" report. The link puts you 11 minutes into the show, where the interview with Chamath Palihapitiya begins. Palihapitiya is a regular guest on this show, but was invited to appear today because of the extraordinary price action in the common stocks of GameStop ($GME) and AMC Entertainment ($AMC) resulting from short squeezes on each stock. The remarkable thing about what Palihapitiya says is that he criticizes the institutional investment community which operates hedge funds who use excessive leverage to bet against small investors who-- in this case-- have bet that the stock is oversold. At one point today 140% of the total number of shares of $GME stock had been shorted (meaning it was borrowed and sold to others, with the expectation that the investors who borrowed the stock would be able to buy the stock back as shares of $GME fell from inflated levels). The interview makes extensive reference to the /r/wallstreetbets, https://www.reddit.com/r/wallstreetbets https://www.reddit.com/r/wallstreetbets, subreddit and constructive analysis of the trade setups for these stocks. According to a related CNBC article, https://www.cnbc.com/2021/01/27/chamath-palihapitiya-closes-gamestop-position-but-defends-individual-investors-right-to.html https://www.cnbc.com/2021/01/27/chamath-palihapitiya-closes-...: "Instead of having ‘idea dinners’ or quiet whispered conversations amongst hedge funds in the Hamptons these kids have the courage to do it transparently in a forum,” he said. “What it proves is this retail [investor] phenomenon is here to stay. There are 2.7 million people inside wallstreetbets. I think they are as important as any hedge or collection of hedge funds.” "Palihapitiya claimed the best research on stocks done by retail investors inside wallstreetbets is nearly indistinguishable from the best research on Wall Street. “That edge is gone. Now all of a sudden, retail can be on the same footing and they don’t have to be the ‘bag-holder’ to Wall Street.” I think a lot of people in this community will be interested in the idea that members of a subreddit can compete with institutional investors when the institutional investors' theses about a stock are either incorrect or so crowded that almost no one can make money trading with the institutional investors' strategy.
- chovybizzass 6y ago
  Best interview on boomer network ever. $AMC
  - dave_aiello 6y ago
    I thought it was incredible. At one point Palihapitiya criticized CNBC host Scott Wopner for defending the way things have always been done on Wall Street at the expense of the Robinhood investment crowd. Palihapitiya argues that the Robinhood crowd, the /r/wallstreetbets subscribers, should win and the institutional investment community should lose when the "smart money" gets the trade this wrong. I agree with him.
    - xtiansimon 6y ago
      > "I thought it was incredible. [...] ...the "smart money" gets the trade this wrong." I assume you're referring to the ' '. Whether GME is worth $5 or $30, the stock rose to $500, and that's not fundamentally a misunderstanding of value. funds cooked the grenade too long (to use another ), and and the crowd slapped it out of their hand before they could throw it. Boom. No?
soybean 6y ago
one of us!
runawaybottle 6y ago
I really thought this was a good articulation on Chamath’s part and would love HN to chime in with their perspective. Edit: Couple of stand-out comments he made, paraphrasing: ‘The best wsb due diligence can be indistinguishable from top hedge fund due diligence, the funds don’t have an edge’. Right. It doesn’t take a genius to know GameStop will have a hard time in a cd-less world and full digital download marketplace. It also doesn’t take a genius to know GameStop will not go to zero dollars (so don’t short to that level). Love the defense of the intellect of the retail investor and a group that doesn’t need to be coddled, great defense against the patronizing and condescending suggestions. Second edit: Jim Cramer recently peddled Raytheon’s earnings up. I’m not a genius but they got the earnings from laying off 16k people. Ok, how many quarters can you do that for? This is a play someone can consider (in either direction). We’ve got brains I think too.
- Layke1123 6y ago
  He is exactly right. The powers that be (dark money) have long sought to remain in control of their subjects. Just because we don't have monarchies doesn't mean we don't have a few elite who few themselves as rightful directors and owners other all things on Earth. They have manipulated markets through various institutions and making knowledge so hard to come by without going into massive debt in order to maintain their elevated status. In their arrogance though, they thought they could reverse the trend of the democratization of their power to the masses, and have literally tried to move heaven and earth in order to remain in power and reverse the trend. My curious position is I think they are realizing that the trend is irreversible, that power eventually will always diffuse to the masses eventually as no system is perfect, there will always be leaky abstractions, and I have no doubt they have a nuclear option in their back pockets to try and quell the massive shift of power that seems inevitable at this point. Question is, what is that nuclear option?
  - f430 6y ago
    SEC is apparently now investigating. If they take the side of hedge funds then there's going to be another occupy wall street movement, this time with millions of pissed off retailers, robin hood, ready to take class action lawsuits.
breck 6y ago
I watched this after seeing it called "a must watch" https://twitter.com/rsg/status/1354513379529027584 https://twitter.com/rsg/status/1354513379529027584 And definitely agree. The other famous Chamath video was also great, but this one was just fantastic. Spot on with what's going on. I also took notes on how effective it can be to remain cool as a cucumber and calmly explain a fundamentally sound mathematical position against an emotional attack. Note: I also wouldn't be surprised if some smart folks on Wall Street are now doing a clever counterattack where they are going long momentum and the short is a decoy, and then will pull the long profits and then also profit on the short. So I think smart Wall Street money will profit off this more than average retail, but no one will make out better than that reddit user who started the whole thing (forget their name)
- runawaybottle 6y ago
  Yeah, felt inspired and compelled enough to get some discussion on this going here.
xwdv 6y ago
The part about transparency and speaking openly really struck a chord with me. Every time I have tried to be transparent about investing and speculation here on HN I’ve been shot down with downvotes, despite that anyone following my advice over the years would have made massive amounts of money. I think people just get scared when you talk about money so openly.
dang 6y ago
The stack on this story so far (newest ones at the bottom—if I've missed any, can you let me know at hn@ycombinator.com? this is sort of an experiment and we may eventually write software to support building lists like this collaboratively): https://news.ycombinator.com/item?id=25932598 https://news.ycombinator.com/item?id=25932598 ("Chamath Palihapitiya on Wallstreetbets [audio]" <-- you are here https://news.ycombinator.com/item?id=25904779 https://news.ycombinator.com/item?id=25904779 ("How WallStreetBets Pushed GameStop Shares to the Moon") 2 days ago https://news.ycombinator.com/item?id=25908084 https://news.ycombinator.com/item?id=25908084 ("The nihilism of r/wallstreetbets") 2 days ago https://news.ycombinator.com/item?id=25868680 https://news.ycombinator.com/item?id=25868680 ("r/wallstreetbets set to private after increased media coverage") 5 days ago Edit: This story is breaking my stack metaphor, and a graph metaphor would be too complicated. These are all significant threads with interesting articles that are different enough from each other that I don't think we'll merge them: https://news.ycombinator.com/item?id=25930214 https://news.ycombinator.com/item?id=25930214 ("GameStop Is Rage Against the Financial Machine") <-- currently on the front page https://news.ycombinator.com/item?id=25930488 https://news.ycombinator.com/item?id=25930488 ("How r/WallStreetBets gamed the stock of GameStop") https://news.ycombinator.com/item?id=25929443 https://news.ycombinator.com/item?id=25929443 ("Robinhood, Trading 212 and others go down amid AMC and GameStop stock frenzy") https://news.ycombinator.com/item?id=25929110 https://news.ycombinator.com/item?id=25929110 ("GameStop Opened at $300+ Today") - not an interesting article but the thread is better https://news.ycombinator.com/item?id=25926953 https://news.ycombinator.com/item?id=25926953 ("The GameStop Fiasco Proves We’re in a ‘Meme Stock’ Bubble") https://news.ycombinator.com/item?id=25927254 https://news.ycombinator.com/item?id=25927254 ("GameStop Short-Sellers Reload Bets After $6B Loss") Edit 2: these just in: https://news.ycombinator.com/item?id=25934186 https://news.ycombinator.com/item?id=25934186 ("Nasdaq says they will halt trading if a stock has unusual social media chatter") https://news.ycombinator.com/item?id=25933581 https://news.ycombinator.com/item?id=25933581 ("GameStop Mania Reveals Power Shift on Wall Street") Edit 3: and now this: https://news.ycombinator.com/item?id=25935511 https://news.ycombinator.com/item?id=25935511 ("Discord bans the r/WallStreetBets server") https://news.ycombinator.com/item?id=25935746 https://news.ycombinator.com/item?id=25935746 ("WSB Went Private on Reddit") Edit 4: https://news.ycombinator.com/item?id=25936521 https://news.ycombinator.com/item?id=25936521 ("Where do we go from here and who is going to step up to help us?") https://news.ycombinator.com/item?id=25937396 https://news.ycombinator.com/item?id=25937396 ("Ask HN: What the heck is happening with GameStop?") Edit 5 (the next day): https://news.ycombinator.com/item?id=25957748 https://news.ycombinator.com/item?id=25957748 ("Statement of SEC Regarding Recent Market Volatility") https://news.ycombinator.com/item?id=25941431 https://news.ycombinator.com/item?id=25941431 ("Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop") https://news.ycombinator.com/item?id=25945447 https://news.ycombinator.com/item?id=25945447 ("We Are Preparing a Class Action Lawsuit Against Robinhood") https://news.ycombinator.com/item?id=25942240 https://news.ycombinator.com/item?id=25942240 ("WallStreetBets vs WallStreet: It's not about the money anymore") https://news.ycombinator.com/item?id=25942863 https://news.ycombinator.com/item?id=25942863 ("Reddit's GameStop, AMC surge is the new Occupy movement") https://news.ycombinator.com/item?id=25944051 https://news.ycombinator.com/item?id=25944051 ("GameStop: Anger as trading in GameStop shares is restricted") https://news.ycombinator.com/item?id=25942790 https://news.ycombinator.com/item?id=25942790 ("An Elegant Revolution Followed by Slaughter") What will become of us? where will it all lead? Edit 6: well, it's leading here next: https://news.ycombinator.com/item?id=25948391 https://news.ycombinator.com/item?id=25948391 ("Robinhood is automatically initiating GME sell orders on users' behalf") https://news.ycombinator.com/item?id=25947814 https://news.ycombinator.com/item?id=25947814 ("Class Action Lawsuit Filed Against Robinhood") https://news.ycombinator.com/item?id=25947697 https://news.ycombinator.com/item?id=25947697 ("Robinhood now has a 1-Star rating on the Google Play Store") https://news.ycombinator.com/item?id=25949618 https://news.ycombinator.com/item?id=25949618 ("An Update on Market Volatility") https://news.ycombinator.com/item?id=25950685 https://news.ycombinator.com/item?id=25950685 ("Robinhood is said to draw on bank credit lines amid tumult") https://news.ycombinator.com/item?id=25951390 https://news.ycombinator.com/item?id=25951390 ("Robinhood Play Store listing went from 329K reviews to 180K in few hours") https://news.ycombinator.com/item?id=25952659 https://news.ycombinator.com/item?id=25952659 ("Facebook shuts popular stock trading group amid GameStop frenzy") Edit 7 (another day): https://news.ycombinator.com/item?id=25957748 https://news.ycombinator.com/item?id=25957748 ("Statement of SEC Regarding Recent Market Volatility") https://news.ycombinator.com/item?id=25958639 https://news.ycombinator.com/item?id=25958639 ("Robinhood denies claims that it sold GameStop shares out from under its traders") https://news.ycombinator.com/item?id=25957923 https://news.ycombinator.com/item?id=25957923 ("Interview with u/DeepFuckingValue, who drove the GameStop Reddit mania") https://news.ycombinator.com/item?id=25956329 https://news.ycombinator.com/item?id=25956329 ("Ask HN: How is GME not a pump-and-dump?") Edits 8/9 merged: https://news.ycombinator.com/item?id=25954539 https://news.ycombinator.com/item?id=25954539 ("Robinhood, in Need of Cash, Raises $1B from Its Investors") https://news.ycombinator.com/item?id=25952300 https://news.ycombinator.com/item?id=25952300 ("Suck it, Wall Street" – a Taibbi title) https://news.ycombinator.com/item?id=25979673 https://news.ycombinator.com/item?id=25979673 ("Why Robinhood disabled buys but not sells")
f430 6y ago
Here's my comment I wrote earlier in my submission that was removed because it was a "dupe" (and I seem to have been throttled as a result of this transgression): I'm a bit of a centrist leaning to WSB: - I will agree the fundamentals are off. AMC, BB, GS compared to its industry competitors market cap and valuation doesn't make sense. - Counter to the above argument, it shows the cracks in the system: Many stocks are simply valued based on votes that traditionally has been in the favor of large institutional investors who are also guilty of market manipulation and closer, faster access to new information that the retail investors do not have. Overall, I am very worried that we are on the final stretch of the equity bubble that started as a result of the Feds printing money, buying up corporate debt, violating the US constitution. We are witnessing a departure from fundamental valuation and straight into a manic stage. - I disagree that retail investors have an edge in information rather that existing fundamental analysts employed by large firms never had an edge at all and simply a mouthpiece for whatever price is desired by a select group of institutional hedge funds. TLDR: I am pleased the little guys are winning but also very worried that we are on the final manic phase of a classic equity bubble we've witnessed two decades ago. edit: HN is throttling my comments after my CNBC video was removed for being a duplicate so to answer: "Why is it different now we've been in a bubble for the past 5 years" Take a look at the M3 supply https://fred.stlouisfed.org/series/MABMM301USM189S https://fred.stlouisfed.org/series/MABMM301USM189S do you see that vertical line right at the beginning of 2020? that's what is different now. We are now in a bubble withi in a bubble.
- simantel 6y ago
  People have been saying the everything bubble is about to pop for 5+ years. Why is now different?
- pashamur 6y ago
  This is just the latest version - there was the crypto bubble in 2017, then the MJ bubble in 2018 (and XIV volatility collapse), now this. I think crypto proved to us that you don't need any sort of fundamentals - price action beats all (and defines the narrative) in the short term. We've also become a meme-based and tweet-based economy (and Donald Trump / the pandemic surely help speed that along)
paxys 6y ago
Wall Street is a large scale gambling operation with a public-backed safety net. Apparently they don't like it when people call this out. And they definitely hate it more when outsiders start beating them at their game.
- xadhominemx 6y ago
  Nonsense
  - thunkshift1 6y ago
    No, its not. Have you forgotten the bailouts already?
    - xadhominemx 6y ago
      Equity holders of defunct financial institutions were not bailed out in 2009. They suffered massive losses.
      - typon 6y ago
        That's a slimy way of summarizing the situation
        xadhominemx 6y ago
        Why?
      - paxys 6y ago
        What about equity holders of hundreds of close-to-defunct financial institutions who were able to bounce back only due to government intervention?
        xadhominemx 6y ago
        One of the roles of the fed is to prevent financial markets from suffering liquidity induced meltdowns. It’s a basic service that benefits everyone, like roads or the post office.
curiousgal 6y ago
I think the funniest part of this entire phenomenon is that Robinhood is now taking money from the rich and distributing it to the masses in a more literal sense. At least for now. On a more serious note, I don't get how a stock can be 140% shorted. Does that mean once you return a portion of the shares you borrowed you have to rebuy part of it and return it again? Also when would these short sellers get margin called?
- xadhominemx 6y ago
  Yea money is flowing from hedge funds who are short to retail investors as the stock runs up, but once it inevitably moves back down it will be the retail bag holders inflicted with massive losses.
  - curiousgal 6y ago
    Wouldn't the short sellers have to buy all of what they shorted from the retail investors?
    - xadhominemx 6y ago
      Short sellers cover their borrowed shares. They are not left with any stock after they close their trade.
  - ericmay 6y ago
    People say that, but plenty of hedge funds and other investors will lose money too. It’s not “hedge fund win, retail loses”. There is a mix. Not just do some of the shorts (maybe many?) lose money, some of the hedge funds on the buy side will get caught too if this comes down fast enough.
- taylorwc 6y ago
  Here's a pretty good explanation of that how that can happen: https://nope-its-lily.medium.com/gamestop-power-to-the-market-players-part-1-d8863f2f8604 https://nope-its-lily.medium.com/gamestop-power-to-the-marke...
in3d 6y ago
He didn’t have any answer as to the fate of new bag holders he created with his tweet. That was irresponsible. His plan to make hedge funds disclose their positions daily as some kind of a solution to overleverage makes no sense whatsoever. And he’s delusional about research skills of WSB posters as compared to Wall Street analysts.
- tequila_shot 6y ago
  um, I don't follow wsb, but based purely on what you said, you don't back your comments either. So much for taking the high-horse. Chamath at least has the$$ to show for.
- paulgb 6y ago
  I anticipate ours won’t be a popular opinion on here, because the whole “stick it to the man” narrative is tempting, but I have to agree. I listened in on a Clubhouse room today where people were teaching each other how to options trade and I couldn’t help but think, these are the people, not Wall Street, who are going to be left holding the bag.
  - jgalt212 6y ago
    very true. I often think of Blackstone's mega home run trade with Hilton Hotels. They bought it at the wrong price at the wrong time (pre GFC). But someone, they were able to over-default on the debt and still retain control and when they ended up selling it was a huge home run for Blackstone. Of course, the original bond holders got the shaft.
  - pnathan 6y ago
    > I listened in on a Clubhouse room today where people were teaching each other how to options trade oh no. that's really bad. Options is one of the really fast ways to lose your shirt. I mean, they are known for that. I expect they were talking about doing it on margin too. :-/
  - chrledntsurf 6y ago
    there is always someone left holding the bag. welcome to life.
systemvoltage 6y ago
I disagree with Chamath’s take. Chamath sounds intelligent but it’s misplaced. It’s like analyzing Black Friday stampedes with the rationality of product quality assessment, better customer service, and overall better shopping experience. No. That’s not why these people are rushing in. Black Friday stampedes are a cascading phenomenon of FOMO + price trickery. It’s a giant mob with irrational behavior. Let’s not polish it too much. WSB is a cesspool (even after sterilizing it) of awful logic and herd thinking. The real losers are going to be average Joe’s who jumped into this with their Robinhood accounts and got their savings wiped out. Chamath, Naval, Elon etc all belong to the narrative of decentralization and crypto with their own vested interests. Just the other day I was listening to Naval’s interview with a New Zealand media house - dude is literally urging people to buy Bitcoin. Unrelated, but I’m going full bonds/cash after seeing the insanity today’s market is, not just GME but look at TSLA, etc. I can stay irrational longer.
- runawaybottle 6y ago
  It’s really not a cesspool. Outside of the frenzy, they do a solid job (when things are quiet) of finding cheap stocks with a potential to move within a year. Even GME, before the phenomenon, the subreddit was mostly targeting 40 dollars around April earnings. The short squeeze was a real tactical play, but most people weren’t 100% on that as the main catalyst (as in, most people really thought the ps5/Xbox sales would be realized at earnings time beyond the ridiculous short position of bankruptcy). It’s a pretty sensible subreddit.
  - systemvoltage 6y ago
    I’ve been following it for 7-8 years now. Lots great DDs that didn’t turn out as well. After sterilization (ignoring 99% of the nonsense comments), I just see more guess work than anything else. Before GME, there was RiteAid, we all know how that panned out.
    - runawaybottle 6y ago
      So we can’t knock a community for throwing ideas out there. I’ve gotten ideas from WSB that have led me to other ideas. It’s an alright subreddit, but to disparage them as dumbasses is a little much (they do enough of that to themselves as is).
deleted 6y ago
[deleted]
electriclove 6y ago
Wow, anyone else irritated by the interviewer and his bias?
epistasis 6y ago
Not a huge Chamath fan, but holy crap does destroy these utterly worthless CNBC questions. > "It doesn't mean that the investors that were short the stock were fundamentally wrong" - at around 28:00 Did he not hear that 136% of the shares were short? Anybody, LITERALLY ANYBODY who shorted past 100% deserves to lose everything. It's fundamentally stupid and fundamentally wrong. The shorts are not getting screwed, they deserve what they get from this. Then he goes on to retail investors being the ones who are sometimes going to get hurt? How did such terrible, poor, awful analysis get a position on TV? If he had any point, he never ever made it.
- UncleMeat 6y ago
  But it isn't different to be the one who shorted past 100% and to be the one who shorted earlier when other people shorted past 100%.
  - epistasis 6y ago
    The short positions were at huge multiples of float for a long long long time before the stock price started to rise, allowing them to unwind their short position, no? This is not a new, sudden situation, it's been planned for a long long long time.
christophilus 6y ago
Chamath has the best take I've heard on it. The people in WSB do know they're playing a wildly risky game. They know it's wild. They know it's gambling. They know there will be bagholders. There were also plenty of savvy people on this early, understanding the bull case that Michael Burry pointed out and the potential for a short squeeze. It was the hedge funds who went over 100% short who were foolish here, not the momentum trading WSB crowd who helped cause the squeeze. The interviewer and just about everyone else I've heard are missing the squeeze part of this. Yes, GME isn't worth $20+ billion. But Volkswagen shouldn't have been the most valuable company in the world in 2008, but it was. Short squeezes are just part of the market. Good on WSB for piling in.
hnburnsy 6y ago
Anyone remember Iomega and zip drives? This same thing happened iomega stock price which was driven up by Yahoo message boards/Motley Fool. "At the close of trading Wednesday, Utah-based Iomega was worth more than Hershey Foods and had twice the market value of Apple Computer." https://www.deseret.com/1996/5/23/19244215/fools-rush-in-send-iomega-stock-soaring https://www.deseret.com/1996/5/23/19244215/fools-rush-in-sen...
- chubot 6y ago
  Yeah I remember this article 20 years ago (!) pretty vividly. It was a 15 year old kid who made hundreds of thousands of dollars pumping up stocks on Yahoo message boards. I think somewhere in this article is where I learned that the stock market is a pretty efficient mechanism of transferfing wealth from the middle class to the rich ... https://www.nytimes.com/2001/02/25/magazine/jonathan-lebed-s-extracurricular-activities.html https://www.nytimes.com/2001/02/25/magazine/jonathan-lebed-s... -- Huh didn't realize this article was by Michael Lewis, makes sense https://www.nytimes.com/2000/09/21/business/sec-says-teenager-had-after-school-hobby-online-stock-fraud.html https://www.nytimes.com/2000/09/21/business/sec-says-teenage... https://en.wikipedia.org/wiki/Jonathan_Lebed https://en.wikipedia.org/wiki/Jonathan_Lebed -- wow he was the first minor prosecuted by the SEC!
trhway 6y ago
to me it looks like a virtual "Occupy WallStreet". To scare and make squeal the fat hedge funds shorts. Kind of fun. It wouldn't last for long, though the shorts will probably be looking over their shoulders for years to come. The movement's rank-and-file will probably get hurt while the leaders will probably do fine. "Investing" is just not an applicable term here - i mean you aren't investing buying a ticket for rollercoaster ride, you're buying fun and amusement. Or a chance to make your voice and discontent heard. At least that is what seems to be sold to the rank-and-file. Old school view here would probably see classic "pump-and-dump" by the few "leaders" who incited that frenzy. SEC though seems to lag far behind in understanding and dealing with the power of social media. (Anyway, thanks for the surprisingly nice AMC ride, i happened to have a bit in a gamble that they would survive the lockdown. )
nceqs3 6y ago
The Chamath Craze is ridiculous. The guy is a stock promoter through and through. It's really sad to see people fall into this guys trap. He has an incredibly story (coming from nothing) but lets look at his career: He "leaves" (aka fired) Facebook for being a D*ck head. Nobody is willing to work with him because he is rude and a jerk. His direct reports would cry regularly. Steven Levy talked about this in his book on Facebook. He starts a VC fund. The fund has no "major" wins. For a guy writing checks in 2011 he didn't get any of the big wins. The VC fund literally "burns down" as Axios put it because he divorced his wife and was chasing a girl in Italy rather than being in the office. Now he SPACs worthless companies selling them off to retail traders who think he is Warren Buffett. He is a salesman. The guy is on CNBC every other day. I get the "holding truth to power" narrative is attractive but Chamath is not our saviour. I would argue he is just as bad as any other hedge fund manager. Taking advantage of retail investors. Chamath talking about protecting the little guy is like Steve Cohen talking about respecting securities laws.
- 99_00 6y ago
  Just to be clear, you aren't disagreeing with the argument he is making in this clip? Correct?
  - nceqs3 6y ago
    Yes, I am pretty pro WSB just like chamath. I think he is wrong about the "research" that is happening though. There is a bull case but not a $25 bil mkt cap one.
    - paxys 6y ago
      Chamath's comment was that there is a lot of great market analysis happening on WSB every day, on par with that of large hedge funds, so it isn't wise to treat the forum as just a joke. The interviewer twisted that into him saying that WSB thinks $350 is the correct price for GameStop. No one – least of all WSB – thinks that. This is purely a play for squeezing the shorts.
      - 6y ago
IkmoIkmo 6y ago
What I don't get is that, if this trade (140% short) was really so obviously wrong. Could a wealthy hedge fund not simply have made the same bet as the million strong WSB army, but even more pronounced? Why isn't a Carl Icahn short squeezing these guys if it's so easy and obvious? Simply buying calls and buying stocks and forcing a short squeeze, could a bigger established fund have made this bet? I think the general answer would be no, because at the end this fund would be a bagholder of $350 stock that's worth about $30, and when trying to get rid of it the price would crash down. My question then is, how are we somehow thinking that WSB doesn't have the same problem? The only issue is that the bagholders will be retail. It's being played off like some giant win to WSB. When really, those who have closed their positions have won, probably a select few. There's probably a lot more that are bagholders who're yet to feel the pain, which inevitably comes as everyone agrees that outside of the temporary short squeeze, this stock is not worth much more than $30.
- Ataraxy 6y ago
  They realistically are. It's pure media fiction (and scapegoating) that a bunch of regular people are somehow moving markets. In practice they're just the smoke screen for the actual wealth making plays against their peers that screwed up in this scenario.
  - jdjfktkrnj 6y ago
    Retail is 25% of the market these days. Google it.
  - ericmay 6y ago
    This, 100%. Even if WSB users and other retail holders held like, 30%, Burry holders 3%, and Cohen holds 10%, there is still more than 50% out there which may be bought by others. There aren’t enough interested Americans to buy the rest of the company. Other hedge funds and big investors are in on the action. These shorts got caught in a bad spot and now they are paying for it. Once all the retail traders get screwed in the media, others on Wall Street will quietly take their bonuses and go out for drinks or a new car. Nobody will report how much money they made. Why would they?
99_00 6y ago
What is the single, most persuasive argument against Wallstreetbets?
- thewileyone 6y ago
  Poor people are going to tap into rich peoples' billions ... Just kidding, there's no persuasive argument against WSB.
ibraheemdev 6y ago
Is it likely that Chamath's "antics" lately have been to fuel his CA governor campaign?
zpwe 6y ago
I was one of the first if not the first people to post weekly options yolo on WSB that gained traction years ago, I get a bit more into it in other posts. Most of these top firms have a specific pipelines from top ivy schools, they are very very selective for a specific person usually from an upper class upbringing. I think Chamath has a point in that there's a lot more people capable of understanding the dynamics of options than are given credit for. There still seems to exist this hubris in wall street that unless you went to those top schools you aren't capable of understanding derivatives and most of those institutions won't even interview you for a position if your CV isn't prestigious enough. Yet time and time again you see these funds blow up. That being said its amusing how people just ran with the caricature of a fresh out of high school, blue collar upbringing, degenerate CBOE options pit trader who you would find smoking weed during trading hours and coked out pounding drinks at Ceres after hours with an autistic antisocial 4chan twist(heard stories from people who knew floor traders like this). It seems like a lot of the professionals can't see past the tongue in cheek self deprecating humor to realize its an act that people play up.
- cwkoss 6y ago
  degenerate traders: smoke weed during trading hours and do coke after hours institutional traders: do coke during trading hours and smoke weed after hours
- shuckles 6y ago
  Isn’t this just Zero Hedge at scale? ZH at least tries to formally ape analyst reports.
  - zpwe 6y ago
    In my opinion Zero Hedge is more doom and gloom boomer centric and racist/hate filled. Despite Wall Street Bets use of what would be considered foul and derogatory language, giving back and donating to charities is encouraged. There was a post showing a donation of $420.69 encouraging others to donate gains to an autism charity given how freely the term is thrown around and how the majority of the community is a self proclaimed autist.
hchz 6y ago
Most of this is misdirection intended to confuse the case around his recent pumping. Perhaps Chamath had reflected on why a celebrity shouldn't be pumping a derivatives trade on Twitter.
sizt 6y ago
Scott Wapner, host if Halftime Report. Could anyone be so duplicitous? What a ridiculous argument. https://www.cnbc.com/scott-wapner/ https://www.cnbc.com/scott-wapner/
mindfulplay 6y ago
Haven't listened to the audio, but why is this dude chamath still 'popular'? He seems like a modern day hedge fund trader who successfully navigates twitter but hasn't produced much of any value? Seems like he is riding the FB hate train like any good marketing/snakeoil sales professional would. Really wish the new tech platforms provide a better soapbox and speakerphone than hacks such as this person. He is simply not worth listening to.
anm89 6y ago
I get the vibe that this guy pays people to write articles labeling him as a billionaire because I see ten things across the web a day about "billionaire investor Chamath Palihapitiya". Not saying he is or is not a billionaire but it seems more like a brand that he sells in the way Trump did back in the day. He doesn't usually have any deep insights when I listen to him talk.
chovybizzass 6y ago
- https://upvotocracy.com/a/wallstreetbets https://upvotocracy.com/a/wallstreetbets - https://www.reddit.com/r/Wallstreetbetsnew/ https://www.reddit.com/r/Wallstreetbetsnew/ - https://ruqqus.com/+wallstreetbets https://ruqqus.com/+wallstreetbets - /join ##wallstreetbets on freenode You cut off the head, a dozen more emerge.
DeonPenny 6y ago
Lol why do they invite him back. Cause every single time hes way to honest and ends up slandering their network. Its like a coin flip at this point.
- sumedh 6y ago
  I guess he his good for ratings and viewership.
dataminer 6y ago
Something that doesn't make sense to me, the images I have seen on internet show that Melvin Capital used PUTs to short GME. Those options may have become worthless by now, but they don't seem to be worth 2.5 or 3 billion dollars. Looks like Melvin Capital's downside was limited, or am I missing something?
thewileyone 6y ago
The host, whoever he is, keeps bringing up risk to the retail trader, i.e. who's going to buy the shares. But if the stock is shorted 140%, the shorters HAVE to buy the shares to cover their positions so the risk is minimal. That's my 5 year old understanding anyway.

181 points by dave_aiello 6y ago

> Social Capital’s Chamath Palihapitiya jumped into the controversial name, saying in a Tuesday tweet that he bought GameStop call options betting the stock will go higher. His tweet seemed to intensify the rally in the previous session. The stock ended the day 92% higher at $147.98. This is growing into a bigger problem. The thought of Twitter influencers (example with E. Musk / Etsy, yesterday [1]) heavily moving the value of stocks with a simple tweet is not really reassuring. The SEC should start investigating properly into it, from personal benefits to bigger company wide fraud, the regulators need to act before this is the new norm. [1] https://edition.cnn.com/2021/01/26/investing/elon-musk-etsy-twitter/index.html https://edition.cnn.com/2021/01/26/investing/elon-musk-etsy-...

kcbigring 6y ago

pretty good arguments from both sides here and lots to learn; although, Chamath has many valid points he is also really good at skirting around some of the questions. hubris on both ends.

dave_aiello 6y ago

Here is a link to the audio podcast version of CNBC's "The Halftime" report. The link puts you 11 minutes into the show, where the interview with Chamath Palihapitiya begins. Palihapitiya is a regular guest on this show, but was invited to appear today because of the extraordinary price action in the common stocks of GameStop ($GME) and AMC Entertainment ($AMC) resulting from short squeezes on each stock. The remarkable thing about what Palihapitiya says is that he criticizes the institutional investment community which operates hedge funds who use excessive leverage to bet against small investors who-- in this case-- have bet that the stock is oversold. At one point today 140% of the total number of shares of $GME stock had been shorted (meaning it was borrowed and sold to others, with the expectation that the investors who borrowed the stock would be able to buy the stock back as shares of $GME fell from inflated levels). The interview makes extensive reference to the /r/wallstreetbets, https://www.reddit.com/r/wallstreetbets https://www.reddit.com/r/wallstreetbets, subreddit and constructive analysis of the trade setups for these stocks. According to a related CNBC article, https://www.cnbc.com/2021/01/27/chamath-palihapitiya-closes-gamestop-position-but-defends-individual-investors-right-to.html https://www.cnbc.com/2021/01/27/chamath-palihapitiya-closes-...: "Instead of having ‘idea dinners’ or quiet whispered conversations amongst hedge funds in the Hamptons these kids have the courage to do it transparently in a forum,” he said. “What it proves is this retail [investor] phenomenon is here to stay. There are 2.7 million people inside wallstreetbets. I think they are as important as any hedge or collection of hedge funds.” "Palihapitiya claimed the best research on stocks done by retail investors inside wallstreetbets is nearly indistinguishable from the best research on Wall Street. “That edge is gone. Now all of a sudden, retail can be on the same footing and they don’t have to be the ‘bag-holder’ to Wall Street.” I think a lot of people in this community will be interested in the idea that members of a subreddit can compete with institutional investors when the institutional investors' theses about a stock are either incorrect or so crowded that almost no one can make money trading with the institutional investors' strategy.

chovybizzass 6y ago
Best interview on boomer network ever. $AMC
- dave_aiello 6y ago
  I thought it was incredible. At one point Palihapitiya criticized CNBC host Scott Wopner for defending the way things have always been done on Wall Street at the expense of the Robinhood investment crowd. Palihapitiya argues that the Robinhood crowd, the /r/wallstreetbets subscribers, should win and the institutional investment community should lose when the "smart money" gets the trade this wrong. I agree with him.
  - xtiansimon 6y ago
    > "I thought it was incredible. [...] ...the "smart money" gets the trade this wrong." I assume you're referring to the ' '. Whether GME is worth $5 or $30, the stock rose to $500, and that's not fundamentally a misunderstanding of value. funds cooked the grenade too long (to use another ), and and the crowd slapped it out of their hand before they could throw it. Boom. No?

soybean 6y ago

one of us!

runawaybottle 6y ago

I really thought this was a good articulation on Chamath’s part and would love HN to chime in with their perspective. Edit: Couple of stand-out comments he made, paraphrasing: ‘The best wsb due diligence can be indistinguishable from top hedge fund due diligence, the funds don’t have an edge’. Right. It doesn’t take a genius to know GameStop will have a hard time in a cd-less world and full digital download marketplace. It also doesn’t take a genius to know GameStop will not go to zero dollars (so don’t short to that level). Love the defense of the intellect of the retail investor and a group that doesn’t need to be coddled, great defense against the patronizing and condescending suggestions. Second edit: Jim Cramer recently peddled Raytheon’s earnings up. I’m not a genius but they got the earnings from laying off 16k people. Ok, how many quarters can you do that for? This is a play someone can consider (in either direction). We’ve got brains I think too.

Layke1123 6y ago
He is exactly right. The powers that be (dark money) have long sought to remain in control of their subjects. Just because we don't have monarchies doesn't mean we don't have a few elite who few themselves as rightful directors and owners other all things on Earth. They have manipulated markets through various institutions and making knowledge so hard to come by without going into massive debt in order to maintain their elevated status. In their arrogance though, they thought they could reverse the trend of the democratization of their power to the masses, and have literally tried to move heaven and earth in order to remain in power and reverse the trend. My curious position is I think they are realizing that the trend is irreversible, that power eventually will always diffuse to the masses eventually as no system is perfect, there will always be leaky abstractions, and I have no doubt they have a nuclear option in their back pockets to try and quell the massive shift of power that seems inevitable at this point. Question is, what is that nuclear option?
- f430 6y ago
  SEC is apparently now investigating. If they take the side of hedge funds then there's going to be another occupy wall street movement, this time with millions of pissed off retailers, robin hood, ready to take class action lawsuits.

breck 6y ago

I watched this after seeing it called "a must watch" https://twitter.com/rsg/status/1354513379529027584 https://twitter.com/rsg/status/1354513379529027584 And definitely agree. The other famous Chamath video was also great, but this one was just fantastic. Spot on with what's going on. I also took notes on how effective it can be to remain cool as a cucumber and calmly explain a fundamentally sound mathematical position against an emotional attack. Note: I also wouldn't be surprised if some smart folks on Wall Street are now doing a clever counterattack where they are going long momentum and the short is a decoy, and then will pull the long profits and then also profit on the short. So I think smart Wall Street money will profit off this more than average retail, but no one will make out better than that reddit user who started the whole thing (forget their name)

runawaybottle 6y ago
Yeah, felt inspired and compelled enough to get some discussion on this going here.

xwdv 6y ago

The part about transparency and speaking openly really struck a chord with me. Every time I have tried to be transparent about investing and speculation here on HN I’ve been shot down with downvotes, despite that anyone following my advice over the years would have made massive amounts of money. I think people just get scared when you talk about money so openly.

dang 6y ago

The stack on this story so far (newest ones at the bottom—if I've missed any, can you let me know at hn@ycombinator.com? this is sort of an experiment and we may eventually write software to support building lists like this collaboratively): https://news.ycombinator.com/item?id=25932598 https://news.ycombinator.com/item?id=25932598 ("Chamath Palihapitiya on Wallstreetbets [audio]" <-- you are here https://news.ycombinator.com/item?id=25904779 https://news.ycombinator.com/item?id=25904779 ("How WallStreetBets Pushed GameStop Shares to the Moon") 2 days ago https://news.ycombinator.com/item?id=25908084 https://news.ycombinator.com/item?id=25908084 ("The nihilism of r/wallstreetbets") 2 days ago https://news.ycombinator.com/item?id=25868680 https://news.ycombinator.com/item?id=25868680 ("r/wallstreetbets set to private after increased media coverage") 5 days ago Edit: This story is breaking my stack metaphor, and a graph metaphor would be too complicated. These are all significant threads with interesting articles that are different enough from each other that I don't think we'll merge them: https://news.ycombinator.com/item?id=25930214 https://news.ycombinator.com/item?id=25930214 ("GameStop Is Rage Against the Financial Machine") <-- currently on the front page https://news.ycombinator.com/item?id=25930488 https://news.ycombinator.com/item?id=25930488 ("How r/WallStreetBets gamed the stock of GameStop") https://news.ycombinator.com/item?id=25929443 https://news.ycombinator.com/item?id=25929443 ("Robinhood, Trading 212 and others go down amid AMC and GameStop stock frenzy") https://news.ycombinator.com/item?id=25929110 https://news.ycombinator.com/item?id=25929110 ("GameStop Opened at $300+ Today") - not an interesting article but the thread is better https://news.ycombinator.com/item?id=25926953 https://news.ycombinator.com/item?id=25926953 ("The GameStop Fiasco Proves We’re in a ‘Meme Stock’ Bubble") https://news.ycombinator.com/item?id=25927254 https://news.ycombinator.com/item?id=25927254 ("GameStop Short-Sellers Reload Bets After $6B Loss") Edit 2: these just in: https://news.ycombinator.com/item?id=25934186 https://news.ycombinator.com/item?id=25934186 ("Nasdaq says they will halt trading if a stock has unusual social media chatter") https://news.ycombinator.com/item?id=25933581 https://news.ycombinator.com/item?id=25933581 ("GameStop Mania Reveals Power Shift on Wall Street") Edit 3: and now this: https://news.ycombinator.com/item?id=25935511 https://news.ycombinator.com/item?id=25935511 ("Discord bans the r/WallStreetBets server") https://news.ycombinator.com/item?id=25935746 https://news.ycombinator.com/item?id=25935746 ("WSB Went Private on Reddit") Edit 4: https://news.ycombinator.com/item?id=25936521 https://news.ycombinator.com/item?id=25936521 ("Where do we go from here and who is going to step up to help us?") https://news.ycombinator.com/item?id=25937396 https://news.ycombinator.com/item?id=25937396 ("Ask HN: What the heck is happening with GameStop?") Edit 5 (the next day): https://news.ycombinator.com/item?id=25957748 https://news.ycombinator.com/item?id=25957748 ("Statement of SEC Regarding Recent Market Volatility") https://news.ycombinator.com/item?id=25941431 https://news.ycombinator.com/item?id=25941431 ("Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop") https://news.ycombinator.com/item?id=25945447 https://news.ycombinator.com/item?id=25945447 ("We Are Preparing a Class Action Lawsuit Against Robinhood") https://news.ycombinator.com/item?id=25942240 https://news.ycombinator.com/item?id=25942240 ("WallStreetBets vs WallStreet: It's not about the money anymore") https://news.ycombinator.com/item?id=25942863 https://news.ycombinator.com/item?id=25942863 ("Reddit's GameStop, AMC surge is the new Occupy movement") https://news.ycombinator.com/item?id=25944051 https://news.ycombinator.com/item?id=25944051 ("GameStop: Anger as trading in GameStop shares is restricted") https://news.ycombinator.com/item?id=25942790 https://news.ycombinator.com/item?id=25942790 ("An Elegant Revolution Followed by Slaughter") What will become of us? where will it all lead? Edit 6: well, it's leading here next: https://news.ycombinator.com/item?id=25948391 https://news.ycombinator.com/item?id=25948391 ("Robinhood is automatically initiating GME sell orders on users' behalf") https://news.ycombinator.com/item?id=25947814 https://news.ycombinator.com/item?id=25947814 ("Class Action Lawsuit Filed Against Robinhood") https://news.ycombinator.com/item?id=25947697 https://news.ycombinator.com/item?id=25947697 ("Robinhood now has a 1-Star rating on the Google Play Store") https://news.ycombinator.com/item?id=25949618 https://news.ycombinator.com/item?id=25949618 ("An Update on Market Volatility") https://news.ycombinator.com/item?id=25950685 https://news.ycombinator.com/item?id=25950685 ("Robinhood is said to draw on bank credit lines amid tumult") https://news.ycombinator.com/item?id=25951390 https://news.ycombinator.com/item?id=25951390 ("Robinhood Play Store listing went from 329K reviews to 180K in few hours") https://news.ycombinator.com/item?id=25952659 https://news.ycombinator.com/item?id=25952659 ("Facebook shuts popular stock trading group amid GameStop frenzy") Edit 7 (another day): https://news.ycombinator.com/item?id=25957748 https://news.ycombinator.com/item?id=25957748 ("Statement of SEC Regarding Recent Market Volatility") https://news.ycombinator.com/item?id=25958639 https://news.ycombinator.com/item?id=25958639 ("Robinhood denies claims that it sold GameStop shares out from under its traders") https://news.ycombinator.com/item?id=25957923 https://news.ycombinator.com/item?id=25957923 ("Interview with u/DeepFuckingValue, who drove the GameStop Reddit mania") https://news.ycombinator.com/item?id=25956329 https://news.ycombinator.com/item?id=25956329 ("Ask HN: How is GME not a pump-and-dump?") Edits 8/9 merged: https://news.ycombinator.com/item?id=25954539 https://news.ycombinator.com/item?id=25954539 ("Robinhood, in Need of Cash, Raises $1B from Its Investors") https://news.ycombinator.com/item?id=25952300 https://news.ycombinator.com/item?id=25952300 ("Suck it, Wall Street" – a Taibbi title) https://news.ycombinator.com/item?id=25979673 https://news.ycombinator.com/item?id=25979673 ("Why Robinhood disabled buys but not sells")

f430 6y ago

Here's my comment I wrote earlier in my submission that was removed because it was a "dupe" (and I seem to have been throttled as a result of this transgression): I'm a bit of a centrist leaning to WSB: - I will agree the fundamentals are off. AMC, BB, GS compared to its industry competitors market cap and valuation doesn't make sense. - Counter to the above argument, it shows the cracks in the system: Many stocks are simply valued based on votes that traditionally has been in the favor of large institutional investors who are also guilty of market manipulation and closer, faster access to new information that the retail investors do not have. Overall, I am very worried that we are on the final stretch of the equity bubble that started as a result of the Feds printing money, buying up corporate debt, violating the US constitution. We are witnessing a departure from fundamental valuation and straight into a manic stage. - I disagree that retail investors have an edge in information rather that existing fundamental analysts employed by large firms never had an edge at all and simply a mouthpiece for whatever price is desired by a select group of institutional hedge funds. TLDR: I am pleased the little guys are winning but also very worried that we are on the final manic phase of a classic equity bubble we've witnessed two decades ago. edit: HN is throttling my comments after my CNBC video was removed for being a duplicate so to answer: "Why is it different now we've been in a bubble for the past 5 years" Take a look at the M3 supply https://fred.stlouisfed.org/series/MABMM301USM189S https://fred.stlouisfed.org/series/MABMM301USM189S do you see that vertical line right at the beginning of 2020? that's what is different now. We are now in a bubble withi in a bubble.

simantel 6y ago
People have been saying the everything bubble is about to pop for 5+ years. Why is now different?
pashamur 6y ago
This is just the latest version - there was the crypto bubble in 2017, then the MJ bubble in 2018 (and XIV volatility collapse), now this. I think crypto proved to us that you don't need any sort of fundamentals - price action beats all (and defines the narrative) in the short term. We've also become a meme-based and tweet-based economy (and Donald Trump / the pandemic surely help speed that along)

paxys 6y ago

Wall Street is a large scale gambling operation with a public-backed safety net. Apparently they don't like it when people call this out. And they definitely hate it more when outsiders start beating them at their game.

xadhominemx 6y ago
Nonsense
- thunkshift1 6y ago
  No, its not. Have you forgotten the bailouts already?
  - xadhominemx 6y ago
    Equity holders of defunct financial institutions were not bailed out in 2009. They suffered massive losses.
    - typon 6y ago
      That's a slimy way of summarizing the situation
      - xadhominemx 6y ago
        Why?
    - paxys 6y ago
      What about equity holders of hundreds of close-to-defunct financial institutions who were able to bounce back only due to government intervention?
      - xadhominemx 6y ago
        One of the roles of the fed is to prevent financial markets from suffering liquidity induced meltdowns. It’s a basic service that benefits everyone, like roads or the post office.

curiousgal 6y ago

I think the funniest part of this entire phenomenon is that Robinhood is now taking money from the rich and distributing it to the masses in a more literal sense. At least for now. On a more serious note, I don't get how a stock can be 140% shorted. Does that mean once you return a portion of the shares you borrowed you have to rebuy part of it and return it again? Also when would these short sellers get margin called?

xadhominemx 6y ago
Yea money is flowing from hedge funds who are short to retail investors as the stock runs up, but once it inevitably moves back down it will be the retail bag holders inflicted with massive losses.
- curiousgal 6y ago
  Wouldn't the short sellers have to buy all of what they shorted from the retail investors?
  - xadhominemx 6y ago
    Short sellers cover their borrowed shares. They are not left with any stock after they close their trade.
- ericmay 6y ago
  People say that, but plenty of hedge funds and other investors will lose money too. It’s not “hedge fund win, retail loses”. There is a mix. Not just do some of the shorts (maybe many?) lose money, some of the hedge funds on the buy side will get caught too if this comes down fast enough.
taylorwc 6y ago
Here's a pretty good explanation of that how that can happen: https://nope-its-lily.medium.com/gamestop-power-to-the-market-players-part-1-d8863f2f8604 https://nope-its-lily.medium.com/gamestop-power-to-the-marke...

in3d 6y ago

He didn’t have any answer as to the fate of new bag holders he created with his tweet. That was irresponsible. His plan to make hedge funds disclose their positions daily as some kind of a solution to overleverage makes no sense whatsoever. And he’s delusional about research skills of WSB posters as compared to Wall Street analysts.

tequila_shot 6y ago
um, I don't follow wsb, but based purely on what you said, you don't back your comments either. So much for taking the high-horse. Chamath at least has the$$ to show for.
paulgb 6y ago
I anticipate ours won’t be a popular opinion on here, because the whole “stick it to the man” narrative is tempting, but I have to agree. I listened in on a Clubhouse room today where people were teaching each other how to options trade and I couldn’t help but think, these are the people, not Wall Street, who are going to be left holding the bag.
- jgalt212 6y ago
  very true. I often think of Blackstone's mega home run trade with Hilton Hotels. They bought it at the wrong price at the wrong time (pre GFC). But someone, they were able to over-default on the debt and still retain control and when they ended up selling it was a huge home run for Blackstone. Of course, the original bond holders got the shaft.
- pnathan 6y ago
  > I listened in on a Clubhouse room today where people were teaching each other how to options trade oh no. that's really bad. Options is one of the really fast ways to lose your shirt. I mean, they are known for that. I expect they were talking about doing it on margin too. :-/
- chrledntsurf 6y ago
  there is always someone left holding the bag. welcome to life.

systemvoltage 6y ago

I disagree with Chamath’s take. Chamath sounds intelligent but it’s misplaced. It’s like analyzing Black Friday stampedes with the rationality of product quality assessment, better customer service, and overall better shopping experience. No. That’s not why these people are rushing in. Black Friday stampedes are a cascading phenomenon of FOMO + price trickery. It’s a giant mob with irrational behavior. Let’s not polish it too much. WSB is a cesspool (even after sterilizing it) of awful logic and herd thinking. The real losers are going to be average Joe’s who jumped into this with their Robinhood accounts and got their savings wiped out. Chamath, Naval, Elon etc all belong to the narrative of decentralization and crypto with their own vested interests. Just the other day I was listening to Naval’s interview with a New Zealand media house - dude is literally urging people to buy Bitcoin. Unrelated, but I’m going full bonds/cash after seeing the insanity today’s market is, not just GME but look at TSLA, etc. I can stay irrational longer.

runawaybottle 6y ago
It’s really not a cesspool. Outside of the frenzy, they do a solid job (when things are quiet) of finding cheap stocks with a potential to move within a year. Even GME, before the phenomenon, the subreddit was mostly targeting 40 dollars around April earnings. The short squeeze was a real tactical play, but most people weren’t 100% on that as the main catalyst (as in, most people really thought the ps5/Xbox sales would be realized at earnings time beyond the ridiculous short position of bankruptcy). It’s a pretty sensible subreddit.
- systemvoltage 6y ago
  I’ve been following it for 7-8 years now. Lots great DDs that didn’t turn out as well. After sterilization (ignoring 99% of the nonsense comments), I just see more guess work than anything else. Before GME, there was RiteAid, we all know how that panned out.
  - runawaybottle 6y ago
    So we can’t knock a community for throwing ideas out there. I’ve gotten ideas from WSB that have led me to other ideas. It’s an alright subreddit, but to disparage them as dumbasses is a little much (they do enough of that to themselves as is).

deleted 6y ago

[deleted]

electriclove 6y ago

Wow, anyone else irritated by the interviewer and his bias?

epistasis 6y ago

Not a huge Chamath fan, but holy crap does destroy these utterly worthless CNBC questions. > "It doesn't mean that the investors that were short the stock were fundamentally wrong" - at around 28:00 Did he not hear that 136% of the shares were short? Anybody, LITERALLY ANYBODY who shorted past 100% deserves to lose everything. It's fundamentally stupid and fundamentally wrong. The shorts are not getting screwed, they deserve what they get from this. Then he goes on to retail investors being the ones who are sometimes going to get hurt? How did such terrible, poor, awful analysis get a position on TV? If he had any point, he never ever made it.

UncleMeat 6y ago
But it isn't different to be the one who shorted past 100% and to be the one who shorted earlier when other people shorted past 100%.
- epistasis 6y ago
  The short positions were at huge multiples of float for a long long long time before the stock price started to rise, allowing them to unwind their short position, no? This is not a new, sudden situation, it's been planned for a long long long time.

christophilus 6y ago

Chamath has the best take I've heard on it. The people in WSB do know they're playing a wildly risky game. They know it's wild. They know it's gambling. They know there will be bagholders. There were also plenty of savvy people on this early, understanding the bull case that Michael Burry pointed out and the potential for a short squeeze. It was the hedge funds who went over 100% short who were foolish here, not the momentum trading WSB crowd who helped cause the squeeze. The interviewer and just about everyone else I've heard are missing the squeeze part of this. Yes, GME isn't worth $20+ billion. But Volkswagen shouldn't have been the most valuable company in the world in 2008, but it was. Short squeezes are just part of the market. Good on WSB for piling in.

hnburnsy 6y ago

Anyone remember Iomega and zip drives? This same thing happened iomega stock price which was driven up by Yahoo message boards/Motley Fool. "At the close of trading Wednesday, Utah-based Iomega was worth more than Hershey Foods and had twice the market value of Apple Computer." https://www.deseret.com/1996/5/23/19244215/fools-rush-in-send-iomega-stock-soaring https://www.deseret.com/1996/5/23/19244215/fools-rush-in-sen...

chubot 6y ago
Yeah I remember this article 20 years ago (!) pretty vividly. It was a 15 year old kid who made hundreds of thousands of dollars pumping up stocks on Yahoo message boards. I think somewhere in this article is where I learned that the stock market is a pretty efficient mechanism of transferfing wealth from the middle class to the rich ... https://www.nytimes.com/2001/02/25/magazine/jonathan-lebed-s-extracurricular-activities.html https://www.nytimes.com/2001/02/25/magazine/jonathan-lebed-s... -- Huh didn't realize this article was by Michael Lewis, makes sense https://www.nytimes.com/2000/09/21/business/sec-says-teenager-had-after-school-hobby-online-stock-fraud.html https://www.nytimes.com/2000/09/21/business/sec-says-teenage... https://en.wikipedia.org/wiki/Jonathan_Lebed https://en.wikipedia.org/wiki/Jonathan_Lebed -- wow he was the first minor prosecuted by the SEC!

trhway 6y ago

to me it looks like a virtual "Occupy WallStreet". To scare and make squeal the fat hedge funds shorts. Kind of fun. It wouldn't last for long, though the shorts will probably be looking over their shoulders for years to come. The movement's rank-and-file will probably get hurt while the leaders will probably do fine. "Investing" is just not an applicable term here - i mean you aren't investing buying a ticket for rollercoaster ride, you're buying fun and amusement. Or a chance to make your voice and discontent heard. At least that is what seems to be sold to the rank-and-file. Old school view here would probably see classic "pump-and-dump" by the few "leaders" who incited that frenzy. SEC though seems to lag far behind in understanding and dealing with the power of social media. (Anyway, thanks for the surprisingly nice AMC ride, i happened to have a bit in a gamble that they would survive the lockdown. )

nceqs3 6y ago

The Chamath Craze is ridiculous. The guy is a stock promoter through and through. It's really sad to see people fall into this guys trap. He has an incredibly story (coming from nothing) but lets look at his career: He "leaves" (aka fired) Facebook for being a D*ck head. Nobody is willing to work with him because he is rude and a jerk. His direct reports would cry regularly. Steven Levy talked about this in his book on Facebook. He starts a VC fund. The fund has no "major" wins. For a guy writing checks in 2011 he didn't get any of the big wins. The VC fund literally "burns down" as Axios put it because he divorced his wife and was chasing a girl in Italy rather than being in the office. Now he SPACs worthless companies selling them off to retail traders who think he is Warren Buffett. He is a salesman. The guy is on CNBC every other day. I get the "holding truth to power" narrative is attractive but Chamath is not our saviour. I would argue he is just as bad as any other hedge fund manager. Taking advantage of retail investors. Chamath talking about protecting the little guy is like Steve Cohen talking about respecting securities laws.

99_00 6y ago
Just to be clear, you aren't disagreeing with the argument he is making in this clip? Correct?
- nceqs3 6y ago
  Yes, I am pretty pro WSB just like chamath. I think he is wrong about the "research" that is happening though. There is a bull case but not a $25 bil mkt cap one.
  - paxys 6y ago
    Chamath's comment was that there is a lot of great market analysis happening on WSB every day, on par with that of large hedge funds, so it isn't wise to treat the forum as just a joke. The interviewer twisted that into him saying that WSB thinks $350 is the correct price for GameStop. No one – least of all WSB – thinks that. This is purely a play for squeezing the shorts.
    - 6y ago

IkmoIkmo 6y ago

What I don't get is that, if this trade (140% short) was really so obviously wrong. Could a wealthy hedge fund not simply have made the same bet as the million strong WSB army, but even more pronounced? Why isn't a Carl Icahn short squeezing these guys if it's so easy and obvious? Simply buying calls and buying stocks and forcing a short squeeze, could a bigger established fund have made this bet? I think the general answer would be no, because at the end this fund would be a bagholder of $350 stock that's worth about $30, and when trying to get rid of it the price would crash down. My question then is, how are we somehow thinking that WSB doesn't have the same problem? The only issue is that the bagholders will be retail. It's being played off like some giant win to WSB. When really, those who have closed their positions have won, probably a select few. There's probably a lot more that are bagholders who're yet to feel the pain, which inevitably comes as everyone agrees that outside of the temporary short squeeze, this stock is not worth much more than $30.

Ataraxy 6y ago
They realistically are. It's pure media fiction (and scapegoating) that a bunch of regular people are somehow moving markets. In practice they're just the smoke screen for the actual wealth making plays against their peers that screwed up in this scenario.
- jdjfktkrnj 6y ago
  Retail is 25% of the market these days. Google it.
- ericmay 6y ago
  This, 100%. Even if WSB users and other retail holders held like, 30%, Burry holders 3%, and Cohen holds 10%, there is still more than 50% out there which may be bought by others. There aren’t enough interested Americans to buy the rest of the company. Other hedge funds and big investors are in on the action. These shorts got caught in a bad spot and now they are paying for it. Once all the retail traders get screwed in the media, others on Wall Street will quietly take their bonuses and go out for drinks or a new car. Nobody will report how much money they made. Why would they?

99_00 6y ago

What is the single, most persuasive argument against Wallstreetbets?

thewileyone 6y ago
Poor people are going to tap into rich peoples' billions ... Just kidding, there's no persuasive argument against WSB.

ibraheemdev 6y ago

Is it likely that Chamath's "antics" lately have been to fuel his CA governor campaign?

zpwe 6y ago

I was one of the first if not the first people to post weekly options yolo on WSB that gained traction years ago, I get a bit more into it in other posts. Most of these top firms have a specific pipelines from top ivy schools, they are very very selective for a specific person usually from an upper class upbringing. I think Chamath has a point in that there's a lot more people capable of understanding the dynamics of options than are given credit for. There still seems to exist this hubris in wall street that unless you went to those top schools you aren't capable of understanding derivatives and most of those institutions won't even interview you for a position if your CV isn't prestigious enough. Yet time and time again you see these funds blow up. That being said its amusing how people just ran with the caricature of a fresh out of high school, blue collar upbringing, degenerate CBOE options pit trader who you would find smoking weed during trading hours and coked out pounding drinks at Ceres after hours with an autistic antisocial 4chan twist(heard stories from people who knew floor traders like this). It seems like a lot of the professionals can't see past the tongue in cheek self deprecating humor to realize its an act that people play up.

cwkoss 6y ago
degenerate traders: smoke weed during trading hours and do coke after hours institutional traders: do coke during trading hours and smoke weed after hours
shuckles 6y ago
Isn’t this just Zero Hedge at scale? ZH at least tries to formally ape analyst reports.
- zpwe 6y ago
  In my opinion Zero Hedge is more doom and gloom boomer centric and racist/hate filled. Despite Wall Street Bets use of what would be considered foul and derogatory language, giving back and donating to charities is encouraged. There was a post showing a donation of $420.69 encouraging others to donate gains to an autism charity given how freely the term is thrown around and how the majority of the community is a self proclaimed autist.

hchz 6y ago

Most of this is misdirection intended to confuse the case around his recent pumping. Perhaps Chamath had reflected on why a celebrity shouldn't be pumping a derivatives trade on Twitter.

sizt 6y ago

Scott Wapner, host if Halftime Report. Could anyone be so duplicitous? What a ridiculous argument. https://www.cnbc.com/scott-wapner/ https://www.cnbc.com/scott-wapner/

mindfulplay 6y ago

Haven't listened to the audio, but why is this dude chamath still 'popular'? He seems like a modern day hedge fund trader who successfully navigates twitter but hasn't produced much of any value? Seems like he is riding the FB hate train like any good marketing/snakeoil sales professional would. Really wish the new tech platforms provide a better soapbox and speakerphone than hacks such as this person. He is simply not worth listening to.

anm89 6y ago

I get the vibe that this guy pays people to write articles labeling him as a billionaire because I see ten things across the web a day about "billionaire investor Chamath Palihapitiya". Not saying he is or is not a billionaire but it seems more like a brand that he sells in the way Trump did back in the day. He doesn't usually have any deep insights when I listen to him talk.

chovybizzass 6y ago

- https://upvotocracy.com/a/wallstreetbets https://upvotocracy.com/a/wallstreetbets - https://www.reddit.com/r/Wallstreetbetsnew/ https://www.reddit.com/r/Wallstreetbetsnew/ - https://ruqqus.com/+wallstreetbets https://ruqqus.com/+wallstreetbets - /join ##wallstreetbets on freenode You cut off the head, a dozen more emerge.

DeonPenny 6y ago

Lol why do they invite him back. Cause every single time hes way to honest and ends up slandering their network. Its like a coin flip at this point.

sumedh 6y ago
I guess he his good for ratings and viewership.

dataminer 6y ago

Something that doesn't make sense to me, the images I have seen on internet show that Melvin Capital used PUTs to short GME. Those options may have become worthless by now, but they don't seem to be worth 2.5 or 3 billion dollars. Looks like Melvin Capital's downside was limited, or am I missing something?

thewileyone 6y ago

The host, whoever he is, keeps bringing up risk to the retail trader, i.e. who's going to buy the shares. But if the stock is shorted 140%, the shorters HAVE to buy the shares to cover their positions so the risk is minimal. That's my 5 year old understanding anyway.