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WallStreetBets vs WallStreet: It's not about the money anymore

344 points by maddynator 6y ago

Tenoke 6y ago
It's definitely still mostly about the money, sticking it to wallstreet is a real but small factor and more of a fun bonus and rallying cry.
nappy-doo 6y ago
I've read /r/wallstreetbets -- it's about the money.
- fortran77 6y ago
  I see a lot of young get-rich-quickers there. People who want to do things like borrow money to short stocks with.
  - KLexpat 6y ago
    https://www.reddit.com/r/wallstreetbets/comments/l6omry/an_open_letter_to_melvin_capital_cnbc_boomers_and/ https://www.reddit.com/r/wallstreetbets/comments/l6omry/an_o... I'm not so sure
    - netsharc 6y ago
      Populist anger found a new weapon: money. Plus good old social media manipulation.
      - rcxdude 6y ago
        And perhaps money found a new weapon in populist anger.
        boringg 6y ago
        I just hope it doesn't get co-opted by the "alt-right" or other political groups. Also get ready for the 100+ opinion pieces on every media platform about this so everyone can get their ad dollars.
        deleted 6y ago
        [deleted]
        KLexpat 6y ago
        It won't, but the media will blame it on the alt-right. "White privileged mcdonalds workers oppress poor minority new york billionaires with their greedy market manipulation! "
- loceng 6y ago
  Apparently there's an early buyer of one of these stocks who made $40 million off of it; I last read they only sold $14 million of their position so far.
  - giu 6y ago
    Yep, that buyer is https://twitter.com/theroaringkitty https://twitter.com/theroaringkitty Here [0] he talks the first time about the GME stock; the video was uploaded on the 28th of July, 2020 and the stock was at $4.03 back then. Here [1] you can find his latest GME update; he's sitting on $50 Mio. right now, although it's quite volatile. Here [2] you can see a post from his Reddit account on November 2019 showing his GME calls. It's just crazy and fascinating at the same time. [0] https://www.youtube.com/watch?v=GZTr1-Gp74U https://www.youtube.com/watch?v=GZTr1-Gp74U [1] https://www.reddit.com/r/wallstreetbets/comments/eick65/gme_yolo_monthend_update_dec_2019/ https://www.reddit.com/r/wallstreetbets/comments/eick65/gme_... [2] https://www.reddit.com/r/wallstreetbets/comments/e3kpbc/gme_yolo_monthend_update_nov_2019/ https://www.reddit.com/r/wallstreetbets/comments/e3kpbc/gme_...
    - loceng 6y ago
      You just need a single person who's paying attention and understands these arguable flaws, pitfalls in the status quo system, they get rewarded by being able to get in early - and then they can educate a highly organized and motivated group of retail investors who are happy to rally - especially against a system that has fucked over the majority of people.
  - Medox 6y ago
    https://www.reddit.com/user/DeepFuckingValue https://www.reddit.com/user/DeepFuckingValue
waylandsmithers 6y ago
I don't know- there must be institutional players on the long side by now right? Either way, _eventually_ someone will be left holding the bag when the stock comes back down to earth.
- ericmay 6y ago
  Retail traders are literally locked out of buying new shares... they were a scapegoat the whole time. $GME is up 11% as of the writing of this post. Who is buying it? This is actually making me angry to watch. -edit- I had like one share - Robinhood just sold my shares without me ordering it. Dunno what happened there.
  - Osiris 6y ago
    I had a pending market order fill at opening but now by brokerage mobile app won't log me in.
  - dragontamer 6y ago
    I just checked my TD Ameritrade account. I'm able to buy GME just fine (though I didn't hit the "confirm" button). I know RobinHood messed up here. But... they never had a good reputation to begin with. Its an open secret that RobinHood's entire setup is kind of crap.
    - itake 6y ago
      I didn't see a failure on Schwab until I hit "confirm" yesterday. My understanding is TD Ameritrade is only blocking the purchase of stock on margin. If you have the cash, you're allowed to make the purchase.
      - swiley 6y ago
        Oh well that's reasonable. If I were a brokerage you bet your ass I wouldn't lend you money to buy GME.
jonplackett 6y ago
I’m seeing so much news about this but don’t understand what’s happening. Can someone do a recap?
- deleted 6y ago
  [deleted]
- spyspy 6y ago
  Users on r/WallStreetBets have rallied around buying stocks, like GameStop ($GME), that are heavily shorted by the market (generally by larger trading firms). This buying has driven the stock prices up very very quickly, because of the buying itself and other knock-on market forces (google: gamma traps, short squeezes). The players that were short have thus lost a lot of money on their bets. r/WSB has taken a lot of pride in this and using it as a rallying cry to keep buying. It's mostly bs - everyone just wants to get rich - but it's effective and making headlines.
- joss82 6y ago
  It's quite simple really: 1. Big hedge fund bet against GameStop stock (shorted up to 140% of the stock, it's called naked short and everybody thought it was illegal since 2008 but that's another story) 2. Lot of small-to-medium investors coordinated over Reddit to take the opposite "bet" en masse (basically buying a lot of GameStop shares) so that the price will go up and "big hedge fund" lose a lot of money. => The plan worked. It's a first. Hence the news coverage. Edit: Typos and formatting
  - UncleMeat 6y ago
    This isn't a naked short. A naked short is when you short a stock without first borrowing it. It is not the same thing as having shorts past 100% of outstanding shares, since a single share can be lent multiple times.
    - joss82 6y ago
      Thanks for the precision. Which one is more insane?
tenaciousDaniel 6y ago
As someone who is not very educated in finance, I'm curious how to interpret today's events. Is nasdaq/robinhood/everyone else transparently manipulating the market on behalf of hedge funds? Or are these standard mechanisms in place for preventing the stock market from swinging wildly out of control? I don't know if it's standard to completely block trading on one or more stocks.
- nabla9 6y ago
  If you buy stock with the purpose of pushing the price up so that other people will buy it, that’s market manipulation. What WSB crowd is doing is market manipulation. That's illegal. WSB is doing everything openly and even celebrating it. Getting mad when openly breaking the law is not rational response. https://www.law.cornell.edu/uscode/text/15/78i https://www.law.cornell.edu/uscode/text/15/78i Brokers like Robinhood are reacting because they want too keep SEC out of their asses and prevent SEC doing something even worse to their customers. Stock Markets like nasdaq are reacting to volatility, like they usually do in abnormal situation.
  - ignoramous 6y ago
    > What WSB crowd is doing is market manipulation. Shorting GME more than number stocks exist is not market manipulation? HFT isn't? Bailing out greed isn't? Why is this notion of market manipulation such a narrow one-way street?
    - tartoran 6y ago
      And they stop the manipulation by more manipulation? Why isn’t the trade blocked entirely for those stocks? Having the ability to sell seems like an inviting open door towards a specific outcome. I closed my RH account today
      - llampx 6y ago
        Exactly. Good on you. I am with Tastyworks and IB, but IB seems to be playing shenanigans with GME today as well.
Beefin 6y ago
People have had enough, it's not just WSB anymore. The community of retail investors in GME is far beyond WSB. It's people that are frustrated with the 1% getting bailed out time and time again and them not seeing a dime at their tax dollar expense.
- willis936 6y ago
  Occupy Wall Street was just 10 years ago. It was the longest demonstration in a lifetime. Nothing changed. How did nothing change? What message does this send?
  - swiley 6y ago
    The reason nothing changed with OWS is because they couldn't voice a clear message. Everyone knows they're being defrauded but the fraud is complex and difficult to communicate so instead you have this disorganized protest that amounts to very little change.
    - willis936 6y ago
      Tax the rich. Distribute the wealth that was stolen from the backs of the workers. It wasn’t said clearly because we were living in a post 9/11 era where uttering words like “socialism” was still unpopular. Enough is enough. The only thing keeping the guillotines from coming out is a thriving middle class. Oh wait, that’s been stolen. It badly needs fixing and fast.
      - deleted 6y ago
        [deleted]
  - tiborsaas 6y ago
    Investing in stocks/crypto for average people with little to zero experience was not nearly as simple as today compared to 10 years ago.
  - luxuryballs 6y ago
vthallam 6y ago
This is market manipulation 101. I hope they pay for it, but I doubt any lawmaker is interested in investigating them.
- jefflombardjr 6y ago
  Care to explain how this is market manipulation?
  - Sholmesy 6y ago
    Certain brokerages are not allowing buy orders for certain stocks, but are allowing sell orders for the same stock, or other unrelated stock. Certain brokerages also have commercial relationships with the people who are in the short position. Feels like a conflict/abuse of your power.
  - vthallam 6y ago
    Not letting people buy forces everyone to either hold or sell, bringing down the prices. Moving to a new broker takes time for approval, transfer.
    - hhhthrow43 6y ago
      To your transfer point, Robinhood inappropriately rejected my ACATS transfer that I initiated yesterday, which I started anticipating the collapse of their technical infrastructure. I was, of course, borne out correct and now I’m forced to liquidate with an app that barely works. So they’re even locking the transfer door. I’m talking to a lawyer this morning about options. help@ is silent. Canceling orders doesn’t work, market orders on non-memes are up to 20min to execute, my profile page has been a fastfail 500 for four days, but because I held some of these famous securities their “we want you be informed during these uncertain times” (please) notifications work just fine. If you still use Robinhood it’s time to go. Get out while it’s partially working. As an SRE I’m not sure that’s going to last, and that’s even before dissecting the business model.
  - dsaavy 6y ago
isatty 6y ago
This is a poor quality submission to this forum. I've been in WSB for ages, and it was, is and will always be about the money.
- arcturus17 6y ago
  It is mostly about the money, but it is also very much about memes, chicken tenders and fucking with the establishment. What these journalists got wrong or are lying about is wsb being mainly an anti-establishment movement.
  - isatty 6y ago
    Sorry, no. Memes and chicken tenders, sure, but WSB doesn’t push any agenda. Pro or against. Stop misguiding people.
    - arcturus17 6y ago
      We must not be reading the same subreddit then. There are many, many references of fucking with people or "sticking it to the man", and there have been for years. Whether that constitutes "pushing an agenda" (your words, not mine) is up for debate. For example, do political anarchists "push an agenda"? Maybe not, maybe that's an oxymoron in a sense (the agenda is that there's no agenda) - but they are certainly "anti-establishment" (my words). What makes you an authority on wsb or on anything else to be able to mandate that I "stop misguiding people", anyway?
      - hbt 6y ago
        a post to support your comment https://www.reddit.com/r/wallstreetbets/comments/l6omry/an_open_letter_to_melvin_capital_cnbc_boomers_and/ https://www.reddit.com/r/wallstreetbets/comments/l6omry/an_o...
- beervirus 6y ago
  It's about the tendies. And you get tendies for loss porn as well as gainz.
monkeyfacebag 6y ago
This is just a rant. There's no insight, evidence or analysis to be found in the article.
sturza 6y ago
huh. i always thought there wasn’t any money in saving the world. guess i was wrong.
- NonEUCitizen 6y ago
  Moderna has created a few billionaries: https://www.forbes.com/sites/giacomotognini/2020/11/12/mit-scientist-bob-langer-becomes-a-billionaire-thanks-to-moderna-stock-rally/ https://www.forbes.com/sites/giacomotognini/2020/11/12/mit-s...
newacct583 6y ago
I have a lot of trouble with this frame. Yes, hedge funds are bad. Yes, it's hilarious watching those shorts get squeezed. No, WSB are not modern Sherwood bandits trading on Robinhood. They are also engaged in what is pretty clearly a criminal conspiracy to commit securities fraud (and yes, a deliberate attempt to trigger a short squeeze is securities fraud), and they're doing it on an open internet forum. This is not going to end well for anyone involved. Demonizing your enemies and styling yourself a hero of the people does not protect you from prosecution. We just saw that in the capitol not three weeks ago. As for GME? Yes, that stock is coming down. Yes, the hedge fund can probably arrange financing to hold longer than the bandits can. Yes, it's probably going to be the "little guys" holding the bag at the end of this. It's criminals all around as far as I can see.
- mcherm 6y ago
  > yes, a deliberate attempt to trigger a short squeeze is securities fraud Can you provide a source for that statement? > Yes, it's probably going to be the "little guys" holding the bag at the end of this. I agree 100%.
- snickms 6y ago
  I'm not convinced that a plot formed openly on the internet actually qualifies as a conspiracy. I'm sure things would have worked out differently for Nixon had he distributed a press release regarding an up-coming DNC burglary beforehand.
- gnfargbl 6y ago
  Assuming you're correct and this behaviour is illegal, who could the SEC prosecute? The ultimate instigator, u/deepfuckingvalue, posts nothing but screenshots showing his position, without further comment. There don't appear to be any specific organizers within the group, and many posters claim that they are buying simply because they "like the stock." That would be a risible position for an institutional investor, but as these are individual retail investors it seems like it would be tricky to prove malfeasance.
rvz 6y ago
Well the GME short squeeze at least. It's sending a message.
bidirectional 6y ago
Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness. The idea of governments stepping in to bolster hedge funds is ludicrous, the whole point is that the government and SEC is hands off with them. Ultimately, a few medium-sized hedge funds were caught doing something stupid and the market has rightfully taught them a lesson. It's great that retail investors got in on a high-level play like this and made money.
- kev_da_dev 6y ago
  How is disabling purchases and broker-wide outages not bolstering hedge funds? It's government intervention no matter how you look at it. Just because it's not a direct capital infusion does not make it any less bad
  - afavour 6y ago
    Not sure if I missed something but did the government intervene here? I thought it was all private entities that stopped the trading?
    - dalbasal 6y ago
      The line is blurry. There was an immediate and emphatic appeal to the regulators, and the way the SEC works is often by encouraging self regulation. The CEO of the NASDAQ even went on air to ask for more SEC regulation. This isn't unusual, it's pretty much how "government intervention" via the SEC, and a lot of other regulatory bodies, actually works.
      - afavour 6y ago
        So, the SEC is hands off and encourages self regulation, so any instance of self regulation is considered government intervention?
sharker8 6y ago
What's interesting to me is that there is a populist narrative at play, but wouldn't WSB overshort a stock too if they thought they could?
- elindbe3 6y ago
  Nobody would be complaining if they lost a ton of money on a stupid trade. In fact they would be posting loss porn on the front page of the subreddit and laughing about it. In fact, some WSBers did short GME and lost a bunch of money. But when the hedge funders get caught then for some reason it's bad and Reddit or Robinhood or the government needs to step in and fix the situation. Instead, we should all be laughing over Melvin Capital's loss porn.
  - sharker8 6y ago
    How do you know there isn't a russian doll scenario of sock puppets all the way down, and some other hedge fund isn't going to profit in a few months from all of this on a trade we never heard about? After all, the hedge fund industry as a whole does better, not worse, when there is lots of churn, even when that churn means places with names like Melvin every now and then go under. I admit this scenario is not likely, but still, the should statements can be misleading, and I don't recommend them.
tyleo 6y ago
For anyone coming in now, dang’s recap comment provides some resources with background information on what’s happening: https://news.ycombinator.com/item?id=25933543 https://news.ycombinator.com/item?id=25933543
guerby 6y ago
One thing to know about the stock market is that it gives the real time price of a stock, but also the real time price to set the price of a stock (by matching the order book volume up to the price you want to reach, then maintaining it).
boringg 6y ago
Feel like the platforms are helping out hedge funds by making it challenging to put more pressure on the short squeeze before Friday. Sounds a bit like a cartel in co-ordinating activity under the guise of "reducing risk exposure" - shepherded on by the Financial media. Trade itself is no longer on technical merits (except those in early) but have you looked at valuations across the stock market these days -- everything is off given pandemic. So that line of reasoning by all the financial talking heads just proves they don't understand the moment. It's pretty reckless behavior for sure but its more about rage and control then anything imho.
- bluecalm 6y ago
  That everything is off is just your assessment which a lot of people disagree with. When it's difficult to do business and make better use of the money then equites are more attractive place to keep your money. This is especially true with a lot of additional money supply and low interest rates. It makes perfect sense to me why we had the run we had during the pandemic. Anything else would be a big surprise.
  - boringg 6y ago
    Right ... that works until you have decide to move your money out of equities. At which point it is a race to the exit. Once the next rotation happens don't get caught being flat footed. And I disagree - I do think everything is off (not just the markets being highly volatile). With many people making record money this year and human suffering being at the highest levels and considerable outrage everywhere, it feels like something is breaking down in society (at least North America). There is something very amiss right now, which I am sure we will be able to determine with the benefit of hindsight. Hopefully we can pick up and move on quickly post pandemic.
    - bluecalm 6y ago
      I am not attaching a judgement to my assessment. It's just an observation that equites are worth more when money supply increase and new business opportunities are difficult to come by. If you have a box producing 4k usd per year people may want to pay around 100k for it on normal times but when you can't find any other investments and the government is pumping money into the economy then suddenly the box becomes way more valuable. It's after all better to buy it for 150k even if it produces 3k instead of 4k than to just your money in the bedroom mattress. This same mechanism that causes stocks to rally every time a big player (EU or US) announces another QE round
mgr86 6y ago
What I find interesting is that RobhinHood has removed GME, AMC, BB, and other WSB darlings. This immediately caused massive drops before market opening. Why does this read poorly to me? I don't do much trading on RH, but I had been using it to monitor the prices as I passively follow this saga. People are upset, and I get it.
bjourne 6y ago
So you're telling me that by buying GameStop stock, I can help screw over hedge fund managers? I have not bought a single stock in my whole life, but I'm in. How do I start?
- Macha 6y ago
  You're probably late to the party here. Reddit is holding for $1000, but there comes a point where the funds would be so unable to fulfil their shorts that any ones left holding it will declare bankruptcy rather than pay, and you lose yours too. Even if you're willing to risk throwing away some money to "stick it to the man", it will take a while - It may be easier in the US, but I signed up to Degiro to get some shares a couple of months ago and it was a fairly lengthy process even for Europe's closest equivalent to Robinhood. Day long stops in the process for e.g. putting in a verification transaction, or for degiro to do their kyc diligence etc, and the consensus is that the finale to this gamestop thing is friday, one way or the other.
  - antoniuschan99 6y ago
    I was reading last night a few posts saying they have to cover their shorts by Friday or Monday. So will be interesting to see the fallout.
- dagw 6y ago
  I can help screw over hedge fund managers? As long as you are cool with your actions making a bunch of different hedge fund mangers richer at the same time.
- missedthecue 6y ago
  No but you can gift your money to them by doing it. Be my guest.
chaganated 6y ago
Premature gloating. The government can always come in at the last minute with bailouts for wall street and overblown charges against the redditors. I see that you've been HODLing some GME. Sorry bro, have to charge you with economic terrorism. Nothing personal.
- Tenoke 6y ago
  When have hedge funds been bailed out by the government? Especially over a single stock? Even if a small hedge fund or two go bankrupt this doesnt affect the economy much and there is no chance the government will bail them out. This isn't all of wallstreet on the line at all.
  - chaganated 6y ago
    It's all connected. Any little hiccup can trigger a chain reaction of margin calls, or worse. Remember the CDO debacle from 2008. When Goldman, JP Morgan, et al finally take the hit, we all know that DC will rush to their aid. It has happened before, and it will happen again. Nobody is buying these worn-out wall street apologetics.
lordnacho 6y ago
Although there is definitely a David/Goliath fairness scandal in here, this piece doesn't seem to know the difference between market makers, brokers, and hedge funds.
- llampx 6y ago
  They're all acting in concert right now.
  - lordnacho 6y ago
    That's wrong, there's undoubtedly hedge funds who are the same way as WSB.
- recursive 6y ago
  And... what would that be?
  - lordnacho 6y ago
    Market maker: guy who makes money standing in the market all day so that when you come, you don't have to wait hours for a dude who wants to buy your shipment of pork. Broker: offers you access to the market, and often lends you money as well. Needs scale, is often a lot of marketing, both in getting the customers, and in getting the customers to actually trade. Hedge Fund: Umbrella term for an investment company that can do a very wide range of things. They can buy art, or fund litigation. Often we just mean they buy and sell stocks, and take some of the profits when things go well.
    - recursive 6y ago
      So, I am really an outsider to all this, but it's amazing to me that a market maker is a thing. Like, why is that guy not replaced by a computer? They never get tired, and they don't screw up. (usually)
      - 6y ago
chad_strategic 6y ago
"The fastest way to get clicks... write a story about /r/WSB" said every website/media outlet editor.
deleted 6y ago
[deleted]
hannofcart 6y ago
The author seems to have bought in a bit too much into the narrative in the WSB forum. This post reads more like a regurgitation of the grandiose pronouncements you see there rather than an insightful analysis of the situation.
duxup 6y ago
Populism seems to so often miss the point / target and seems as manipulative as anything else this rant of an article is talking about.
leetcrew 6y ago
> With their heads in cloud nine, hedge funds tried to kill GameStop ($GME). They tried to squeeze it so much that it would suffocate and die. They didn't care about the people who will be out of jobs, unable to pay their bills, or even survive. Blinded by greed, all they care about was money. this is a bit much. shorting != trying to kill a business. it can certainly depress the stock price, but so can closing a long position.
- fileeditview 6y ago
  Does not seem far fetched. Killing the business means maximum profit for the shorters. Having a short interest of about 140% is also a good indicator that they would have loved to see GME bankrupt. In the end a short means a future buy and 140% of shares bought in the future means the price will go up eventually..
  - llampx 6y ago
    If the share price goes to 0 because of bankruptcy, shares don't have to be bought back/returned. That was the outcome Melvin Capital was going for.
    - fileeditview 6y ago
      That's what I hinted at with my third sentence.
  - leetcrew 6y ago
    shorts get a bad rap for being one of the more transparent cases of profiting from the misfortune of others in finance. and yes, it does create incentives to do other stuff to kill the company, but similar incentives exist with a long position (one way for a symbol to go up is for competitors to fail). so far I haven't read anything suggesting these hedge funds did anything other than take a large short position in $GME.
  - PeterisP 6y ago
    While the business dying means maximum profit for the shorters, the act of shorting isn't killing the business in any way; the price of shares does not affect the revenues of GME nor their workers jobs, it has some impact on the bonuses of the top managers and that's it. The shorters are predicting that the business will fail (and hoping for their predictions to come true), but they aren't causing the failure, so it's misleading to say that they are trying to kill the business as long as the only thing they're doing is shorting the stock. There's a very big gap between hoping that a rich uncle dies because you'd get some inheritance and actually trying to kill him.
mancerayder 6y ago
They are blocking buying, and only allowing selling GME, BB and others. How is this not evidence of a corrupted free market system? A CEO of one company can call up his connections in retail trading platform firms, CNBC, and Nasdaq and protect his profits? Why is Reddit the scandal and not that? Reddit is full of rocket emojis and YOLO jokes. But what we see here, especially with the moralizing about gambling, is an elitism on full display. The people are sick of it.
- dcolkitt 6y ago
  Robinhood is a free service. The customers don’t pay anything. If the order internalizers decide to stop paying them for their order flow, then they have to route to the exchanges. which charge fees. Trading is still ongoing at the exchanges. It’s just the free platforms, where it’s shut down. If someone wanted guaranteed access to the exchange, then they shouldn’t have used a free broker. Are you saying that Robinhood should be forced to continue providing a free service at a loss?
  - mancerayder 6y ago
    I'm saying they should be sued. So, yes, I am saying that. If you buy securities you can't sell, you're pinned and that's not right, is it. I'm not sure if Robinhood traders signed up to that. Free doesn't matter.
    - lkramer 6y ago
      They still allow selling, just not buying.
      - abootstrapper 6y ago
        Allowing only buying OR selling seems like a good lever to manipulate a stock price.
      - pureliquidhw 6y ago
        But who's buying if you can't buy? Limiting the audience that can buy reduces demand, and thus the price will be negatively impacted.
vsareto 6y ago
This populist narrative that WSB and CNBC are promoting is pretty weak. This looks like forum manipulation with a layer of memes pasted on top. Citron and Melvin were set up as bad guys. Someone started this. It's definitely not organic. That said, it has definitely worked. Any idea that retail investors can't move markets is now gone.
Typhon 6y ago
It's never more about money than when "It's not about the money anymore". I think that with a stock whose worth at this point is the result of pure dutch-tulip-like speculation, the question is where is the tipping point where money just becomes too good to ignore and when people start collectively selling, making the stock inevitably plummet.
razius 6y ago
This sums up what's going on: https://www.youtube.com/watch?v=UcG3XAMIRlI https://www.youtube.com/watch?v=UcG3XAMIRlI
tester34 6y ago
Watching events in USA in last month makes me really worried about relying on computer related stuff from US. Trump's Social Medias, Parler with AWS and the rest, Reddit Warning to WSB so they had to close for a few hour(s), Discord Ban to WSB, RobinHood Scam scam follows scam basically, no wonder people are angry when "just a few" control everything HARD. This land is no full of freedom in any sense
shadowgovt 6y ago
One of the more interesting aspects of this story, IMO, is how many people used Robinhood to grab small amounts of GameStop stock. Robinhood is suspected of having a business model of spying on their clients and selling that data to hedge funds (https://seekingalpha.com/article/4205379-robinhood-is-making-millions-selling-out-millennial-customers-to-high-frequency-traders https://seekingalpha.com/article/4205379-robinhood-is-making...). Essentially, this puts their own clientele at an average disadvantage in all trades; the funds buying their data can set up algorithms to front-run any RH trades and skim a little more value than the people using RH could expect to get. In this situation, it seems it didn't matter. Even if RH sold to the shorting traders "Hey, our clientele is buying the hell out of this near-junk stock," all the signal told them was how fast the train was coming at them, not which way to go to get off the tracks.
deleted 6y ago
[deleted]
dkrich 6y ago
I would really appreciate it if somebody could explain to me how people who sell short a stock are somehow “suffocating it” or “killing jobs.” And I say this as someone who has about 18 years of investing experience. I continue to believe stock shorting is one of the most poorly understood parts of equity markets and the wrong parts are most commonly parroted by people with little to no experience with short selling themselves. And this narrative that somehow the regular Joe is sticking it to the man and using proceeds to pay medical bills makes for good heartwarming stuff, but I take umbrage with the idea that one person’s cause is more worthy than another and so they deserve the profits not this greedy oz character behind the curtain that is likely other retail traders and HFT momentum funds (the same ones that are vilified in this movement) buying it up as it moves higher and becomes more popular. If you make money trading, great but let’s ease up a bit with the saving the world nonsense. It’s not as if gambling your savings on call options is saving the world. It’s a catchy storyline to make people feel more comfortable with the idea of gambling.
- cainxinth 6y ago
  This is what I don't get either. I keep thinking of Danny DeVito's speech at the end "Other People's Money." "You know, at one time there must've been dozens of companies making buggy whips. And I'll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company?" GameStop sells buggy whips. Why shouldn't people bet against them?
  - dkrich 6y ago
    Exactly. And I suppose not too many are aware of the fraud that’s been exposed by short sellers who usually pay the costs associated with investigating fraud. Wirecard or Enron, anyone?
  - StillBored 6y ago
    Last I checked steam/etc doesn't allow one to resell their games. So they do provide a convenient service in that regard.
Ozzie_osman 6y ago
Here's a question. How much of the investors in funds like Melvin are actually wealthy family offices and high-net worth folk, and how much are pension funds, endowments, etc? Because if it's the latter, then the losers here aren't billionaires and Wall Street.
- bluecalm 6y ago
  I sure hope pension funds are not investing in hedge funds focused on shorting stocks.
blake1 6y ago
I think it is about the money. It will definitely be about the debts, which were unwittingly taken on by everyone who bought on margin at these levels. The price will collapse. The other bad assumption in this article is thinking the hedge funds are on one side of this. Some hedge funds made fortunes in the short squeeze.
dreamcompiler 6y ago
The endgame here is fascinating to me. The people who got in early will suffer least when GSE finally crashes and burns. But the poor suckers who bought it at $150 are going to be in big trouble. They're all trying to stay strong and hold long because that's the way to make the hedge funds suffer, but the smarter ones will figure out that their only chance to not lose their shirts is to be in the earliest 5% of scabs to get out, and then it's going to be a bloodbath when everybody gets trampled running for the exit door. Meanwhile a couple of hedge funds go under while the rest just call it Tuesday.
- nlitened 6y ago
  > Meanwhile a couple of hedge funds go under Which means that the money the hedge funds lost is redistributed among all who held the stock. It's not that the money vanishes. That's why people hold until the hedge funds go under.
  - chias 6y ago
    That's not really how the stock market works. The money does indeed "vanish" insofar as it was ever there to begin with.
    - pjc50 6y ago
      Yes. People are really not understanding unrealised gains. It went past on Twitter that the Norwegian pension fund is up half a billion dollars as a result of this, because for some reason they'd been holding Gamestop for a while. Is that going to stick? No.
  - OscarCunningham 6y ago
    > Which means that the money the hedge funds lost is redistributed among all who held the stock. No, the hedge funds are being forced to buy, so their money will be redistributed to whoever sells them the stock. That won't be WSB if they keep buying,
- skocznymroczny 6y ago
pontus 6y ago
The irony of all this is that ultimately people will stop buying and prices will fall. Then all the regular people who participated in this will be stuck holding falling stock. Panicked selling will ensure, crashing the price. At the end of the day then, both institutional and retail investors will get screwed.
fairity 6y ago
I'm really confused why the general public is enraged at the brokerages' decision to stop new buy orders for GME. It's very clear that retail is going to lose their shirts in the end of all of this. By blocking new buy orders, the brokerage is effectively protecting its naive clientele. This isn't some government conspiracy. This is a firm trying its best to operate in the best interest of its clients.
- GVIrish 6y ago
  The brokerage (Robinhood) is absolutely not protecting their clientele. If they were, they would've explained what they were doing when they did it or shortly thereafter. The silence is an indictment.
  - fairity 6y ago
    My guess is they are staying silent to avoid legal liability in the case that the run-up continues onwards in a significant manner.
- dathinab 6y ago
  I think the large majority of the cliente is fully aware that they will lose out on this long term. So it's not about protecting the client. If it would be about protecting your clients it would be like your care (=a utility) not allowing you to drive into the mountains for a hike (=user action) because the weather is bad (=makes action risky). I think no one would say that this is ok or acceptable, but if the utility is a broker and the action is buying stock on a high risk it is ok?
  - fairity 6y ago
    I agree there are some retail traders who are going in with eyes wide open. However, due to the power of greed, a significant portion is not. And, the end result will be people losing their retirement income. So, the difference between your analogy is in the severity of the risk. Your car shouldn't let you drive into the mountains for a hike if it knows there's a 20% chance you're going to lose a limb that prevents you from living a happy life.
anthony_romeo 6y ago
I’d just like to suggest the possibility that there’s nothing noble going on in /r/wallstreetbets and this is all being orchestrated by a small number of people taking advantage of useful idiots. I’m not attempting to proclaim this is the truth, just giving a stray thought of mine.
- abootstrapper 6y ago
  Eh, I’ve seen enough viral memes in my day to believe this happened without an orchestrator.
thih9 6y ago
This article feels very one sided and opinionated to me. I wish it presented the issue in a less emotional and more objective way, focusing perhaps on the details.
rocqua 6y ago
Are there any stats on how big the short positions are for Gamestop, how this is distributed, and whether they are getting margin calls?
Shivetya 6y ago
I am just waiting how long before Reddit itself gets sued over this. Let alone how long before someone comes for the users and gets a court to have reddit surrender information. how this plays out is going to be very interesting and more so for who supports which side
fock 6y ago
And in the shadows, Blackrock and the other institutional investors lending the stock in the first place probably just roll in money from the current situation. And imho they have to initiate the "real squeeze" by wanting their stocks back. But I think they like the current situation, high enough to make the short sellers bleed, but not high enough to knock them over fully, so they can still merrily sell to them (OTC) and Jane Doe, while happily pocketing some sociopaths money for extending the lease on their remaining shares... They don't profit at all from the WSB-proposed rockt-squeeze, where the stock goes up, then trading is stopped for everyone and they can not liquidate everything and they also won't get everything back, when their borrowers default. But this is heaven for them: who could have expected that investing in a company slowly sliding to bankruptcy could be so profitable!
Invictus0 6y ago
It's funny watching the know it alls here on HN bang their heads against the wall trying to explain WSB. In the last couple days I've seen I've seen everything from "lack of sex" to class warfare. It's really not that complicated: it's a short squeeze that became something of a single-minded flash mob to discourage weak-hands from selling before the squeeze is complete. That's it. The politics and everything else is nonsense.
ipsin 6y ago
Are there still people holding or opening active short positions in GME? I'm wondering how many people will be left holding the (overpriced) bag.
jansan 6y ago
I am surprised that the cornering of the silver market in 1980 is not mentioned here. The Hunt brothers had driven the silver price to the moon, so the big guys simply had the rules at COMEX changed, which led to a sudden drop of the silver price. https://en.wikipedia.org/wiki/Silver_Thursday https://en.wikipedia.org/wiki/Silver_Thursday
FabHK 6y ago
The article is very tendentious. I despise HFT as much as the next guy, but it's mostly useless rent seeking, economically, not massive manipulation. There is money on the table in trading, and the HFT firms try to take a bigger part of that pie, rather than letting it go to their competitors or other traders (like funds or retail investors). Next, hedge funds shorting businesses they consider overvalued is a perfectly fine activity that helps price discovery and capital allocation. To the extent that they are deceptive and manipulative, that is a problem, just as deceptively and manipulatively hyping a stock up is a problem. Finally, note that there is no value created here. It's purely a transfer of money. A few hedge funds might lose something (though that remains to be seen - shorts have no expiry, per se, and the borrow cost is absolutely manageable over days, weeks, or even months). But mostly, this will be a huge transfer of money from those that jumped on the long trade late, to those that were in it early. EDIT to add: And, putting a cherry on the fine research that went into the article, the Keynes quote is from A. Gary Shilling from the 1980s. https://quoteinvestigator.com/2011/08/09/remain-solvent/ https://quoteinvestigator.com/2011/08/09/remain-solvent/
grosales 6y ago
I think it's a bit of both, but to be honest, it doesn't feel like sticking it to the man. Why? Because it's a ponzi scheme. People who made money off this already (and are not holding the line) are not the people affected by the man. I don't believe my plumber, my electrician, or the busboy at the restaurant are investing their money on GME stock using Robinhood. Who do I see doing it? My friends, mostly young white collar workers with money to invest/lose in a bid to trying to get rick quick. Your typical reddit user of sorts. I mean, my first few years on this country, while going to college at night, I worked construction. I worked with all kinds of people, from all kinds of lives and believes. When 2008 happened, many of them lost their life savings or their houses. At that point, I was working as a software engineer already, my older colleagues lost a chunk of their 401k - which they probably have regained and built upon by now. Sticking it up to the man? I don't think so. The end of this will be fast and painful to many.
ridaj 6y ago
> With their heads in cloud nine, hedge funds tried to kill GameStop ($GME). They tried to squeeze it so much that it would suffocate and die. They didn't care about the people who will be out of jobs, unable to pay their bills, or even survive. A low stock price doesn't, by itself, kill a business and put people out of jobs. Bad management kills a business, as does being in a bad business to begin with. > Never in their wildest dreams, the hedge funds would have thought this day would come. The tables have finally turned as the hedge funds try to gulp in their last breath of air. We're really not talking about "the hedge funds" in this case. Just a few hedge funds who, indeed, should've seen it coming. It's not like during the subprime crisis where every large financial institution had a large exposure to them. The exposure of the financial industry to GameStop is minuscule at the scale of the system. It's also not new, in the sense that sometimes hedge funds will try to squeeze one another too > I honestly don't believe that people are going to sell their positions on $GME stocks. As I said, they are not in for the money anymore. They are fighting the good fight, and they have the potential to win this WAR. Maybe they won't sell, but there are cases where fundamentals will catch up with the gamers. If/when the business runs out of cash and undergoes restructuring, the stockholders will be left holding pennies. Maybe the CEO of GameStop (notice how he's been quiet?) will be like, f--- this job, I'm selling all my stock and retiring, thanks Internet
AndrewStephens 6y ago
I have watched this mess from afar and the tone of the conversation has changed from "Hey, here is an opportunity to make some money off a mistake some hedge funds are making" to "Smash the system". Exhibit A - this idiotic article. You cannot use the tools of the system to beat the system. Here is the thing about hedge funds - they hedge. They hedge in the morning, hedge in the afternoon, eat some hedge for dinner and get in a few rounds of hedging in down at the hedge club before going to bed dreaming of hedges. The clue is in the name. They don't typically make huge loses or gains for a single stock, they are happy to make a consistent gain every day. The vast majority of hedge funds are making stacks of small gains off this nonsense and anyone who doesn't cash out at the right time is going to be hosed. Do you know when the right time to cash out is? No? Sucks to be you. Honestly I am worried. Mob investing has collapsed economies, brought down governments, and ruined more lives than can be counted during the last 150 years, and I don't see how this is different. This is completely ridiculous and will all end in tears. I am actually glad that some pressure is being put on Reddit and the brokers to cool things off - there are opportunities to cash out big time but a lot of the small players are going to lose money.
- I-M-S 6y ago
  > You cannot use the tools of the system to beat the system I'm wondering if this is true. What would be some examples from history in which precisely this happened?
- alisonkisk 6y ago
  "hedge fund" doesn't really mean hedging. It is just a fancy (high fee) name for "actively managed" that usually uses more exotic strategies than buy and sell based on earnings reports.
deleted 6y ago
[deleted]
ryanmercer 6y ago
The whole thing is incredibly annoying. I'm a moderator of /r/silverbugs and we've been getting slammed all morning with either accounts from either /r/wallstreetbets or accounts trying to make them look bad, with dozens of brand spanking new or barely used accounts spamming to buy various silver related stocks/funds. I've banned more accounts this morning than I have in 2 years and, it really does appear that they are starting to have some impact on the price of silver with their attempts to pump stuff like SLV.

344 points by maddynator 6y ago

It's definitely still mostly about the money, sticking it to wallstreet is a real but small factor and more of a fun bonus and rallying cry.

nappy-doo 6y ago

I've read /r/wallstreetbets -- it's about the money.

fortran77 6y ago
I see a lot of young get-rich-quickers there. People who want to do things like borrow money to short stocks with.
- KLexpat 6y ago
  https://www.reddit.com/r/wallstreetbets/comments/l6omry/an_open_letter_to_melvin_capital_cnbc_boomers_and/ https://www.reddit.com/r/wallstreetbets/comments/l6omry/an_o... I'm not so sure
  - netsharc 6y ago
    Populist anger found a new weapon: money. Plus good old social media manipulation.
    - rcxdude 6y ago
      And perhaps money found a new weapon in populist anger.
      - boringg 6y ago
        I just hope it doesn't get co-opted by the "alt-right" or other political groups. Also get ready for the 100+ opinion pieces on every media platform about this so everyone can get their ad dollars.
        deleted 6y ago
        [deleted]
        KLexpat 6y ago
        It won't, but the media will blame it on the alt-right. "White privileged mcdonalds workers oppress poor minority new york billionaires with their greedy market manipulation! "
loceng 6y ago
Apparently there's an early buyer of one of these stocks who made $40 million off of it; I last read they only sold $14 million of their position so far.
- giu 6y ago
  Yep, that buyer is https://twitter.com/theroaringkitty https://twitter.com/theroaringkitty Here [0] he talks the first time about the GME stock; the video was uploaded on the 28th of July, 2020 and the stock was at $4.03 back then. Here [1] you can find his latest GME update; he's sitting on $50 Mio. right now, although it's quite volatile. Here [2] you can see a post from his Reddit account on November 2019 showing his GME calls. It's just crazy and fascinating at the same time. [0] https://www.youtube.com/watch?v=GZTr1-Gp74U https://www.youtube.com/watch?v=GZTr1-Gp74U [1] https://www.reddit.com/r/wallstreetbets/comments/eick65/gme_yolo_monthend_update_dec_2019/ https://www.reddit.com/r/wallstreetbets/comments/eick65/gme_... [2] https://www.reddit.com/r/wallstreetbets/comments/e3kpbc/gme_yolo_monthend_update_nov_2019/ https://www.reddit.com/r/wallstreetbets/comments/e3kpbc/gme_...
  - loceng 6y ago
    You just need a single person who's paying attention and understands these arguable flaws, pitfalls in the status quo system, they get rewarded by being able to get in early - and then they can educate a highly organized and motivated group of retail investors who are happy to rally - especially against a system that has fucked over the majority of people.
- Medox 6y ago
  https://www.reddit.com/user/DeepFuckingValue https://www.reddit.com/user/DeepFuckingValue

waylandsmithers 6y ago

I don't know- there must be institutional players on the long side by now right? Either way, _eventually_ someone will be left holding the bag when the stock comes back down to earth.

ericmay 6y ago
Retail traders are literally locked out of buying new shares... they were a scapegoat the whole time. $GME is up 11% as of the writing of this post. Who is buying it? This is actually making me angry to watch. -edit- I had like one share - Robinhood just sold my shares without me ordering it. Dunno what happened there.
- Osiris 6y ago
  I had a pending market order fill at opening but now by brokerage mobile app won't log me in.
- dragontamer 6y ago
  I just checked my TD Ameritrade account. I'm able to buy GME just fine (though I didn't hit the "confirm" button). I know RobinHood messed up here. But... they never had a good reputation to begin with. Its an open secret that RobinHood's entire setup is kind of crap.
  - itake 6y ago
    I didn't see a failure on Schwab until I hit "confirm" yesterday. My understanding is TD Ameritrade is only blocking the purchase of stock on margin. If you have the cash, you're allowed to make the purchase.
    - swiley 6y ago
      Oh well that's reasonable. If I were a brokerage you bet your ass I wouldn't lend you money to buy GME.

jonplackett 6y ago

I’m seeing so much news about this but don’t understand what’s happening. Can someone do a recap?

deleted 6y ago
[deleted]
spyspy 6y ago
Users on r/WallStreetBets have rallied around buying stocks, like GameStop ($GME), that are heavily shorted by the market (generally by larger trading firms). This buying has driven the stock prices up very very quickly, because of the buying itself and other knock-on market forces (google: gamma traps, short squeezes). The players that were short have thus lost a lot of money on their bets. r/WSB has taken a lot of pride in this and using it as a rallying cry to keep buying. It's mostly bs - everyone just wants to get rich - but it's effective and making headlines.
joss82 6y ago
It's quite simple really: 1. Big hedge fund bet against GameStop stock (shorted up to 140% of the stock, it's called naked short and everybody thought it was illegal since 2008 but that's another story) 2. Lot of small-to-medium investors coordinated over Reddit to take the opposite "bet" en masse (basically buying a lot of GameStop shares) so that the price will go up and "big hedge fund" lose a lot of money. => The plan worked. It's a first. Hence the news coverage. Edit: Typos and formatting
- UncleMeat 6y ago
  This isn't a naked short. A naked short is when you short a stock without first borrowing it. It is not the same thing as having shorts past 100% of outstanding shares, since a single share can be lent multiple times.
  - joss82 6y ago
    Thanks for the precision. Which one is more insane?

tenaciousDaniel 6y ago

As someone who is not very educated in finance, I'm curious how to interpret today's events. Is nasdaq/robinhood/everyone else transparently manipulating the market on behalf of hedge funds? Or are these standard mechanisms in place for preventing the stock market from swinging wildly out of control? I don't know if it's standard to completely block trading on one or more stocks.

nabla9 6y ago
If you buy stock with the purpose of pushing the price up so that other people will buy it, that’s market manipulation. What WSB crowd is doing is market manipulation. That's illegal. WSB is doing everything openly and even celebrating it. Getting mad when openly breaking the law is not rational response. https://www.law.cornell.edu/uscode/text/15/78i https://www.law.cornell.edu/uscode/text/15/78i Brokers like Robinhood are reacting because they want too keep SEC out of their asses and prevent SEC doing something even worse to their customers. Stock Markets like nasdaq are reacting to volatility, like they usually do in abnormal situation.
- ignoramous 6y ago
  > What WSB crowd is doing is market manipulation. Shorting GME more than number stocks exist is not market manipulation? HFT isn't? Bailing out greed isn't? Why is this notion of market manipulation such a narrow one-way street?
  - tartoran 6y ago
    And they stop the manipulation by more manipulation? Why isn’t the trade blocked entirely for those stocks? Having the ability to sell seems like an inviting open door towards a specific outcome. I closed my RH account today
    - llampx 6y ago
      Exactly. Good on you. I am with Tastyworks and IB, but IB seems to be playing shenanigans with GME today as well.

Beefin 6y ago

People have had enough, it's not just WSB anymore. The community of retail investors in GME is far beyond WSB. It's people that are frustrated with the 1% getting bailed out time and time again and them not seeing a dime at their tax dollar expense.

willis936 6y ago
Occupy Wall Street was just 10 years ago. It was the longest demonstration in a lifetime. Nothing changed. How did nothing change? What message does this send?
- swiley 6y ago
  The reason nothing changed with OWS is because they couldn't voice a clear message. Everyone knows they're being defrauded but the fraud is complex and difficult to communicate so instead you have this disorganized protest that amounts to very little change.
  - willis936 6y ago
    Tax the rich. Distribute the wealth that was stolen from the backs of the workers. It wasn’t said clearly because we were living in a post 9/11 era where uttering words like “socialism” was still unpopular. Enough is enough. The only thing keeping the guillotines from coming out is a thriving middle class. Oh wait, that’s been stolen. It badly needs fixing and fast.
    - deleted 6y ago
      [deleted]
- tiborsaas 6y ago
  Investing in stocks/crypto for average people with little to zero experience was not nearly as simple as today compared to 10 years ago.
- luxuryballs 6y ago

vthallam 6y ago

This is market manipulation 101. I hope they pay for it, but I doubt any lawmaker is interested in investigating them.

jefflombardjr 6y ago
Care to explain how this is market manipulation?
- Sholmesy 6y ago
  Certain brokerages are not allowing buy orders for certain stocks, but are allowing sell orders for the same stock, or other unrelated stock. Certain brokerages also have commercial relationships with the people who are in the short position. Feels like a conflict/abuse of your power.
- vthallam 6y ago
  Not letting people buy forces everyone to either hold or sell, bringing down the prices. Moving to a new broker takes time for approval, transfer.
  - hhhthrow43 6y ago
    To your transfer point, Robinhood inappropriately rejected my ACATS transfer that I initiated yesterday, which I started anticipating the collapse of their technical infrastructure. I was, of course, borne out correct and now I’m forced to liquidate with an app that barely works. So they’re even locking the transfer door. I’m talking to a lawyer this morning about options. help@ is silent. Canceling orders doesn’t work, market orders on non-memes are up to 20min to execute, my profile page has been a fastfail 500 for four days, but because I held some of these famous securities their “we want you be informed during these uncertain times” (please) notifications work just fine. If you still use Robinhood it’s time to go. Get out while it’s partially working. As an SRE I’m not sure that’s going to last, and that’s even before dissecting the business model.
- dsaavy 6y ago

isatty 6y ago

This is a poor quality submission to this forum. I've been in WSB for ages, and it was, is and will always be about the money.

arcturus17 6y ago
It is mostly about the money, but it is also very much about memes, chicken tenders and fucking with the establishment. What these journalists got wrong or are lying about is wsb being mainly an anti-establishment movement.
- isatty 6y ago
  Sorry, no. Memes and chicken tenders, sure, but WSB doesn’t push any agenda. Pro or against. Stop misguiding people.
  - arcturus17 6y ago
    We must not be reading the same subreddit then. There are many, many references of fucking with people or "sticking it to the man", and there have been for years. Whether that constitutes "pushing an agenda" (your words, not mine) is up for debate. For example, do political anarchists "push an agenda"? Maybe not, maybe that's an oxymoron in a sense (the agenda is that there's no agenda) - but they are certainly "anti-establishment" (my words). What makes you an authority on wsb or on anything else to be able to mandate that I "stop misguiding people", anyway?
    - hbt 6y ago
      a post to support your comment https://www.reddit.com/r/wallstreetbets/comments/l6omry/an_open_letter_to_melvin_capital_cnbc_boomers_and/ https://www.reddit.com/r/wallstreetbets/comments/l6omry/an_o...
beervirus 6y ago
It's about the tendies. And you get tendies for loss porn as well as gainz.

monkeyfacebag 6y ago

This is just a rant. There's no insight, evidence or analysis to be found in the article.

sturza 6y ago

huh. i always thought there wasn’t any money in saving the world. guess i was wrong.

NonEUCitizen 6y ago
Moderna has created a few billionaries: https://www.forbes.com/sites/giacomotognini/2020/11/12/mit-scientist-bob-langer-becomes-a-billionaire-thanks-to-moderna-stock-rally/ https://www.forbes.com/sites/giacomotognini/2020/11/12/mit-s...

newacct583 6y ago

I have a lot of trouble with this frame. Yes, hedge funds are bad. Yes, it's hilarious watching those shorts get squeezed. No, WSB are not modern Sherwood bandits trading on Robinhood. They are also engaged in what is pretty clearly a criminal conspiracy to commit securities fraud (and yes, a deliberate attempt to trigger a short squeeze is securities fraud), and they're doing it on an open internet forum. This is not going to end well for anyone involved. Demonizing your enemies and styling yourself a hero of the people does not protect you from prosecution. We just saw that in the capitol not three weeks ago. As for GME? Yes, that stock is coming down. Yes, the hedge fund can probably arrange financing to hold longer than the bandits can. Yes, it's probably going to be the "little guys" holding the bag at the end of this. It's criminals all around as far as I can see.

mcherm 6y ago
> yes, a deliberate attempt to trigger a short squeeze is securities fraud Can you provide a source for that statement? > Yes, it's probably going to be the "little guys" holding the bag at the end of this. I agree 100%.
snickms 6y ago
I'm not convinced that a plot formed openly on the internet actually qualifies as a conspiracy. I'm sure things would have worked out differently for Nixon had he distributed a press release regarding an up-coming DNC burglary beforehand.
gnfargbl 6y ago
Assuming you're correct and this behaviour is illegal, who could the SEC prosecute? The ultimate instigator, u/deepfuckingvalue, posts nothing but screenshots showing his position, without further comment. There don't appear to be any specific organizers within the group, and many posters claim that they are buying simply because they "like the stock." That would be a risible position for an institutional investor, but as these are individual retail investors it seems like it would be tricky to prove malfeasance.

rvz 6y ago

Well the GME short squeeze at least. It's sending a message.

bidirectional 6y ago

Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness. The idea of governments stepping in to bolster hedge funds is ludicrous, the whole point is that the government and SEC is hands off with them. Ultimately, a few medium-sized hedge funds were caught doing something stupid and the market has rightfully taught them a lesson. It's great that retail investors got in on a high-level play like this and made money.

kev_da_dev 6y ago
How is disabling purchases and broker-wide outages not bolstering hedge funds? It's government intervention no matter how you look at it. Just because it's not a direct capital infusion does not make it any less bad
- afavour 6y ago
  Not sure if I missed something but did the government intervene here? I thought it was all private entities that stopped the trading?
  - dalbasal 6y ago
    The line is blurry. There was an immediate and emphatic appeal to the regulators, and the way the SEC works is often by encouraging self regulation. The CEO of the NASDAQ even went on air to ask for more SEC regulation. This isn't unusual, it's pretty much how "government intervention" via the SEC, and a lot of other regulatory bodies, actually works.
    - afavour 6y ago
      So, the SEC is hands off and encourages self regulation, so any instance of self regulation is considered government intervention?

sharker8 6y ago

What's interesting to me is that there is a populist narrative at play, but wouldn't WSB overshort a stock too if they thought they could?

elindbe3 6y ago
Nobody would be complaining if they lost a ton of money on a stupid trade. In fact they would be posting loss porn on the front page of the subreddit and laughing about it. In fact, some WSBers did short GME and lost a bunch of money. But when the hedge funders get caught then for some reason it's bad and Reddit or Robinhood or the government needs to step in and fix the situation. Instead, we should all be laughing over Melvin Capital's loss porn.
- sharker8 6y ago
  How do you know there isn't a russian doll scenario of sock puppets all the way down, and some other hedge fund isn't going to profit in a few months from all of this on a trade we never heard about? After all, the hedge fund industry as a whole does better, not worse, when there is lots of churn, even when that churn means places with names like Melvin every now and then go under. I admit this scenario is not likely, but still, the should statements can be misleading, and I don't recommend them.

tyleo 6y ago

For anyone coming in now, dang’s recap comment provides some resources with background information on what’s happening: https://news.ycombinator.com/item?id=25933543 https://news.ycombinator.com/item?id=25933543

guerby 6y ago

One thing to know about the stock market is that it gives the real time price of a stock, but also the real time price to set the price of a stock (by matching the order book volume up to the price you want to reach, then maintaining it).

boringg 6y ago

Feel like the platforms are helping out hedge funds by making it challenging to put more pressure on the short squeeze before Friday. Sounds a bit like a cartel in co-ordinating activity under the guise of "reducing risk exposure" - shepherded on by the Financial media. Trade itself is no longer on technical merits (except those in early) but have you looked at valuations across the stock market these days -- everything is off given pandemic. So that line of reasoning by all the financial talking heads just proves they don't understand the moment. It's pretty reckless behavior for sure but its more about rage and control then anything imho.

bluecalm 6y ago
That everything is off is just your assessment which a lot of people disagree with. When it's difficult to do business and make better use of the money then equites are more attractive place to keep your money. This is especially true with a lot of additional money supply and low interest rates. It makes perfect sense to me why we had the run we had during the pandemic. Anything else would be a big surprise.
- boringg 6y ago
  Right ... that works until you have decide to move your money out of equities. At which point it is a race to the exit. Once the next rotation happens don't get caught being flat footed. And I disagree - I do think everything is off (not just the markets being highly volatile). With many people making record money this year and human suffering being at the highest levels and considerable outrage everywhere, it feels like something is breaking down in society (at least North America). There is something very amiss right now, which I am sure we will be able to determine with the benefit of hindsight. Hopefully we can pick up and move on quickly post pandemic.
  - bluecalm 6y ago
    I am not attaching a judgement to my assessment. It's just an observation that equites are worth more when money supply increase and new business opportunities are difficult to come by. If you have a box producing 4k usd per year people may want to pay around 100k for it on normal times but when you can't find any other investments and the government is pumping money into the economy then suddenly the box becomes way more valuable. It's after all better to buy it for 150k even if it produces 3k instead of 4k than to just your money in the bedroom mattress. This same mechanism that causes stocks to rally every time a big player (EU or US) announces another QE round

mgr86 6y ago

What I find interesting is that RobhinHood has removed GME, AMC, BB, and other WSB darlings. This immediately caused massive drops before market opening. Why does this read poorly to me? I don't do much trading on RH, but I had been using it to monitor the prices as I passively follow this saga. People are upset, and I get it.

bjourne 6y ago

So you're telling me that by buying GameStop stock, I can help screw over hedge fund managers? I have not bought a single stock in my whole life, but I'm in. How do I start?

Macha 6y ago
You're probably late to the party here. Reddit is holding for $1000, but there comes a point where the funds would be so unable to fulfil their shorts that any ones left holding it will declare bankruptcy rather than pay, and you lose yours too. Even if you're willing to risk throwing away some money to "stick it to the man", it will take a while - It may be easier in the US, but I signed up to Degiro to get some shares a couple of months ago and it was a fairly lengthy process even for Europe's closest equivalent to Robinhood. Day long stops in the process for e.g. putting in a verification transaction, or for degiro to do their kyc diligence etc, and the consensus is that the finale to this gamestop thing is friday, one way or the other.
- antoniuschan99 6y ago
  I was reading last night a few posts saying they have to cover their shorts by Friday or Monday. So will be interesting to see the fallout.
dagw 6y ago
I can help screw over hedge fund managers? As long as you are cool with your actions making a bunch of different hedge fund mangers richer at the same time.
missedthecue 6y ago
No but you can gift your money to them by doing it. Be my guest.

chaganated 6y ago

Premature gloating. The government can always come in at the last minute with bailouts for wall street and overblown charges against the redditors. I see that you've been HODLing some GME. Sorry bro, have to charge you with economic terrorism. Nothing personal.

Tenoke 6y ago
When have hedge funds been bailed out by the government? Especially over a single stock? Even if a small hedge fund or two go bankrupt this doesnt affect the economy much and there is no chance the government will bail them out. This isn't all of wallstreet on the line at all.
- chaganated 6y ago
  It's all connected. Any little hiccup can trigger a chain reaction of margin calls, or worse. Remember the CDO debacle from 2008. When Goldman, JP Morgan, et al finally take the hit, we all know that DC will rush to their aid. It has happened before, and it will happen again. Nobody is buying these worn-out wall street apologetics.

lordnacho 6y ago

Although there is definitely a David/Goliath fairness scandal in here, this piece doesn't seem to know the difference between market makers, brokers, and hedge funds.

llampx 6y ago
They're all acting in concert right now.
- lordnacho 6y ago
  That's wrong, there's undoubtedly hedge funds who are the same way as WSB.
recursive 6y ago
And... what would that be?
- lordnacho 6y ago
  Market maker: guy who makes money standing in the market all day so that when you come, you don't have to wait hours for a dude who wants to buy your shipment of pork. Broker: offers you access to the market, and often lends you money as well. Needs scale, is often a lot of marketing, both in getting the customers, and in getting the customers to actually trade. Hedge Fund: Umbrella term for an investment company that can do a very wide range of things. They can buy art, or fund litigation. Often we just mean they buy and sell stocks, and take some of the profits when things go well.
  - recursive 6y ago
    So, I am really an outsider to all this, but it's amazing to me that a market maker is a thing. Like, why is that guy not replaced by a computer? They never get tired, and they don't screw up. (usually)
    - 6y ago

chad_strategic 6y ago

"The fastest way to get clicks... write a story about /r/WSB" said every website/media outlet editor.

deleted 6y ago

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hannofcart 6y ago

The author seems to have bought in a bit too much into the narrative in the WSB forum. This post reads more like a regurgitation of the grandiose pronouncements you see there rather than an insightful analysis of the situation.

duxup 6y ago

Populism seems to so often miss the point / target and seems as manipulative as anything else this rant of an article is talking about.

leetcrew 6y ago

> With their heads in cloud nine, hedge funds tried to kill GameStop ($GME). They tried to squeeze it so much that it would suffocate and die. They didn't care about the people who will be out of jobs, unable to pay their bills, or even survive. Blinded by greed, all they care about was money. this is a bit much. shorting != trying to kill a business. it can certainly depress the stock price, but so can closing a long position.

fileeditview 6y ago
Does not seem far fetched. Killing the business means maximum profit for the shorters. Having a short interest of about 140% is also a good indicator that they would have loved to see GME bankrupt. In the end a short means a future buy and 140% of shares bought in the future means the price will go up eventually..
- llampx 6y ago
  If the share price goes to 0 because of bankruptcy, shares don't have to be bought back/returned. That was the outcome Melvin Capital was going for.
  - fileeditview 6y ago
    That's what I hinted at with my third sentence.
- leetcrew 6y ago
  shorts get a bad rap for being one of the more transparent cases of profiting from the misfortune of others in finance. and yes, it does create incentives to do other stuff to kill the company, but similar incentives exist with a long position (one way for a symbol to go up is for competitors to fail). so far I haven't read anything suggesting these hedge funds did anything other than take a large short position in $GME.
- PeterisP 6y ago
  While the business dying means maximum profit for the shorters, the act of shorting isn't killing the business in any way; the price of shares does not affect the revenues of GME nor their workers jobs, it has some impact on the bonuses of the top managers and that's it. The shorters are predicting that the business will fail (and hoping for their predictions to come true), but they aren't causing the failure, so it's misleading to say that they are trying to kill the business as long as the only thing they're doing is shorting the stock. There's a very big gap between hoping that a rich uncle dies because you'd get some inheritance and actually trying to kill him.

mancerayder 6y ago

They are blocking buying, and only allowing selling GME, BB and others. How is this not evidence of a corrupted free market system? A CEO of one company can call up his connections in retail trading platform firms, CNBC, and Nasdaq and protect his profits? Why is Reddit the scandal and not that? Reddit is full of rocket emojis and YOLO jokes. But what we see here, especially with the moralizing about gambling, is an elitism on full display. The people are sick of it.

dcolkitt 6y ago
Robinhood is a free service. The customers don’t pay anything. If the order internalizers decide to stop paying them for their order flow, then they have to route to the exchanges. which charge fees. Trading is still ongoing at the exchanges. It’s just the free platforms, where it’s shut down. If someone wanted guaranteed access to the exchange, then they shouldn’t have used a free broker. Are you saying that Robinhood should be forced to continue providing a free service at a loss?
- mancerayder 6y ago
  I'm saying they should be sued. So, yes, I am saying that. If you buy securities you can't sell, you're pinned and that's not right, is it. I'm not sure if Robinhood traders signed up to that. Free doesn't matter.
  - lkramer 6y ago
    They still allow selling, just not buying.
    - abootstrapper 6y ago
      Allowing only buying OR selling seems like a good lever to manipulate a stock price.
    - pureliquidhw 6y ago
      But who's buying if you can't buy? Limiting the audience that can buy reduces demand, and thus the price will be negatively impacted.

vsareto 6y ago

This populist narrative that WSB and CNBC are promoting is pretty weak. This looks like forum manipulation with a layer of memes pasted on top. Citron and Melvin were set up as bad guys. Someone started this. It's definitely not organic. That said, it has definitely worked. Any idea that retail investors can't move markets is now gone.

Typhon 6y ago

It's never more about money than when "It's not about the money anymore". I think that with a stock whose worth at this point is the result of pure dutch-tulip-like speculation, the question is where is the tipping point where money just becomes too good to ignore and when people start collectively selling, making the stock inevitably plummet.

razius 6y ago

This sums up what's going on: https://www.youtube.com/watch?v=UcG3XAMIRlI https://www.youtube.com/watch?v=UcG3XAMIRlI

tester34 6y ago

Watching events in USA in last month makes me really worried about relying on computer related stuff from US. Trump's Social Medias, Parler with AWS and the rest, Reddit Warning to WSB so they had to close for a few hour(s), Discord Ban to WSB, RobinHood Scam scam follows scam basically, no wonder people are angry when "just a few" control everything HARD. This land is no full of freedom in any sense

shadowgovt 6y ago

One of the more interesting aspects of this story, IMO, is how many people used Robinhood to grab small amounts of GameStop stock. Robinhood is suspected of having a business model of spying on their clients and selling that data to hedge funds (https://seekingalpha.com/article/4205379-robinhood-is-making-millions-selling-out-millennial-customers-to-high-frequency-traders https://seekingalpha.com/article/4205379-robinhood-is-making...). Essentially, this puts their own clientele at an average disadvantage in all trades; the funds buying their data can set up algorithms to front-run any RH trades and skim a little more value than the people using RH could expect to get. In this situation, it seems it didn't matter. Even if RH sold to the shorting traders "Hey, our clientele is buying the hell out of this near-junk stock," all the signal told them was how fast the train was coming at them, not which way to go to get off the tracks.

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dkrich 6y ago

I would really appreciate it if somebody could explain to me how people who sell short a stock are somehow “suffocating it” or “killing jobs.” And I say this as someone who has about 18 years of investing experience. I continue to believe stock shorting is one of the most poorly understood parts of equity markets and the wrong parts are most commonly parroted by people with little to no experience with short selling themselves. And this narrative that somehow the regular Joe is sticking it to the man and using proceeds to pay medical bills makes for good heartwarming stuff, but I take umbrage with the idea that one person’s cause is more worthy than another and so they deserve the profits not this greedy oz character behind the curtain that is likely other retail traders and HFT momentum funds (the same ones that are vilified in this movement) buying it up as it moves higher and becomes more popular. If you make money trading, great but let’s ease up a bit with the saving the world nonsense. It’s not as if gambling your savings on call options is saving the world. It’s a catchy storyline to make people feel more comfortable with the idea of gambling.

cainxinth 6y ago
This is what I don't get either. I keep thinking of Danny DeVito's speech at the end "Other People's Money." "You know, at one time there must've been dozens of companies making buggy whips. And I'll bet the last company around was the one that made the best goddamn buggy whip you ever saw. Now how would you have liked to have been a stockholder in that company?" GameStop sells buggy whips. Why shouldn't people bet against them?
- dkrich 6y ago
  Exactly. And I suppose not too many are aware of the fraud that’s been exposed by short sellers who usually pay the costs associated with investigating fraud. Wirecard or Enron, anyone?
- StillBored 6y ago
  Last I checked steam/etc doesn't allow one to resell their games. So they do provide a convenient service in that regard.

Ozzie_osman 6y ago

Here's a question. How much of the investors in funds like Melvin are actually wealthy family offices and high-net worth folk, and how much are pension funds, endowments, etc? Because if it's the latter, then the losers here aren't billionaires and Wall Street.

bluecalm 6y ago
I sure hope pension funds are not investing in hedge funds focused on shorting stocks.

blake1 6y ago

I think it is about the money. It will definitely be about the debts, which were unwittingly taken on by everyone who bought on margin at these levels. The price will collapse. The other bad assumption in this article is thinking the hedge funds are on one side of this. Some hedge funds made fortunes in the short squeeze.

dreamcompiler 6y ago

The endgame here is fascinating to me. The people who got in early will suffer least when GSE finally crashes and burns. But the poor suckers who bought it at $150 are going to be in big trouble. They're all trying to stay strong and hold long because that's the way to make the hedge funds suffer, but the smarter ones will figure out that their only chance to not lose their shirts is to be in the earliest 5% of scabs to get out, and then it's going to be a bloodbath when everybody gets trampled running for the exit door. Meanwhile a couple of hedge funds go under while the rest just call it Tuesday.

nlitened 6y ago
> Meanwhile a couple of hedge funds go under Which means that the money the hedge funds lost is redistributed among all who held the stock. It's not that the money vanishes. That's why people hold until the hedge funds go under.
- chias 6y ago
  That's not really how the stock market works. The money does indeed "vanish" insofar as it was ever there to begin with.
  - pjc50 6y ago
    Yes. People are really not understanding unrealised gains. It went past on Twitter that the Norwegian pension fund is up half a billion dollars as a result of this, because for some reason they'd been holding Gamestop for a while. Is that going to stick? No.
- OscarCunningham 6y ago
  > Which means that the money the hedge funds lost is redistributed among all who held the stock. No, the hedge funds are being forced to buy, so their money will be redistributed to whoever sells them the stock. That won't be WSB if they keep buying,
skocznymroczny 6y ago

pontus 6y ago

The irony of all this is that ultimately people will stop buying and prices will fall. Then all the regular people who participated in this will be stuck holding falling stock. Panicked selling will ensure, crashing the price. At the end of the day then, both institutional and retail investors will get screwed.

fairity 6y ago

I'm really confused why the general public is enraged at the brokerages' decision to stop new buy orders for GME. It's very clear that retail is going to lose their shirts in the end of all of this. By blocking new buy orders, the brokerage is effectively protecting its naive clientele. This isn't some government conspiracy. This is a firm trying its best to operate in the best interest of its clients.

GVIrish 6y ago
The brokerage (Robinhood) is absolutely not protecting their clientele. If they were, they would've explained what they were doing when they did it or shortly thereafter. The silence is an indictment.
- fairity 6y ago
  My guess is they are staying silent to avoid legal liability in the case that the run-up continues onwards in a significant manner.
dathinab 6y ago
I think the large majority of the cliente is fully aware that they will lose out on this long term. So it's not about protecting the client. If it would be about protecting your clients it would be like your care (=a utility) not allowing you to drive into the mountains for a hike (=user action) because the weather is bad (=makes action risky). I think no one would say that this is ok or acceptable, but if the utility is a broker and the action is buying stock on a high risk it is ok?
- fairity 6y ago
  I agree there are some retail traders who are going in with eyes wide open. However, due to the power of greed, a significant portion is not. And, the end result will be people losing their retirement income. So, the difference between your analogy is in the severity of the risk. Your car shouldn't let you drive into the mountains for a hike if it knows there's a 20% chance you're going to lose a limb that prevents you from living a happy life.

anthony_romeo 6y ago

I’d just like to suggest the possibility that there’s nothing noble going on in /r/wallstreetbets and this is all being orchestrated by a small number of people taking advantage of useful idiots. I’m not attempting to proclaim this is the truth, just giving a stray thought of mine.

abootstrapper 6y ago
Eh, I’ve seen enough viral memes in my day to believe this happened without an orchestrator.

thih9 6y ago

This article feels very one sided and opinionated to me. I wish it presented the issue in a less emotional and more objective way, focusing perhaps on the details.

rocqua 6y ago

Are there any stats on how big the short positions are for Gamestop, how this is distributed, and whether they are getting margin calls?

Shivetya 6y ago

I am just waiting how long before Reddit itself gets sued over this. Let alone how long before someone comes for the users and gets a court to have reddit surrender information. how this plays out is going to be very interesting and more so for who supports which side

fock 6y ago

And in the shadows, Blackrock and the other institutional investors lending the stock in the first place probably just roll in money from the current situation. And imho they have to initiate the "real squeeze" by wanting their stocks back. But I think they like the current situation, high enough to make the short sellers bleed, but not high enough to knock them over fully, so they can still merrily sell to them (OTC) and Jane Doe, while happily pocketing some sociopaths money for extending the lease on their remaining shares... They don't profit at all from the WSB-proposed rockt-squeeze, where the stock goes up, then trading is stopped for everyone and they can not liquidate everything and they also won't get everything back, when their borrowers default. But this is heaven for them: who could have expected that investing in a company slowly sliding to bankruptcy could be so profitable!

Invictus0 6y ago

It's funny watching the know it alls here on HN bang their heads against the wall trying to explain WSB. In the last couple days I've seen I've seen everything from "lack of sex" to class warfare. It's really not that complicated: it's a short squeeze that became something of a single-minded flash mob to discourage weak-hands from selling before the squeeze is complete. That's it. The politics and everything else is nonsense.

ipsin 6y ago

Are there still people holding or opening active short positions in GME? I'm wondering how many people will be left holding the (overpriced) bag.

jansan 6y ago

I am surprised that the cornering of the silver market in 1980 is not mentioned here. The Hunt brothers had driven the silver price to the moon, so the big guys simply had the rules at COMEX changed, which led to a sudden drop of the silver price. https://en.wikipedia.org/wiki/Silver_Thursday https://en.wikipedia.org/wiki/Silver_Thursday

FabHK 6y ago

The article is very tendentious. I despise HFT as much as the next guy, but it's mostly useless rent seeking, economically, not massive manipulation. There is money on the table in trading, and the HFT firms try to take a bigger part of that pie, rather than letting it go to their competitors or other traders (like funds or retail investors). Next, hedge funds shorting businesses they consider overvalued is a perfectly fine activity that helps price discovery and capital allocation. To the extent that they are deceptive and manipulative, that is a problem, just as deceptively and manipulatively hyping a stock up is a problem. Finally, note that there is no value created here. It's purely a transfer of money. A few hedge funds might lose something (though that remains to be seen - shorts have no expiry, per se, and the borrow cost is absolutely manageable over days, weeks, or even months). But mostly, this will be a huge transfer of money from those that jumped on the long trade late, to those that were in it early. EDIT to add: And, putting a cherry on the fine research that went into the article, the Keynes quote is from A. Gary Shilling from the 1980s. https://quoteinvestigator.com/2011/08/09/remain-solvent/ https://quoteinvestigator.com/2011/08/09/remain-solvent/

grosales 6y ago

I think it's a bit of both, but to be honest, it doesn't feel like sticking it to the man. Why? Because it's a ponzi scheme. People who made money off this already (and are not holding the line) are not the people affected by the man. I don't believe my plumber, my electrician, or the busboy at the restaurant are investing their money on GME stock using Robinhood. Who do I see doing it? My friends, mostly young white collar workers with money to invest/lose in a bid to trying to get rick quick. Your typical reddit user of sorts. I mean, my first few years on this country, while going to college at night, I worked construction. I worked with all kinds of people, from all kinds of lives and believes. When 2008 happened, many of them lost their life savings or their houses. At that point, I was working as a software engineer already, my older colleagues lost a chunk of their 401k - which they probably have regained and built upon by now. Sticking it up to the man? I don't think so. The end of this will be fast and painful to many.

ridaj 6y ago

> With their heads in cloud nine, hedge funds tried to kill GameStop ($GME). They tried to squeeze it so much that it would suffocate and die. They didn't care about the people who will be out of jobs, unable to pay their bills, or even survive. A low stock price doesn't, by itself, kill a business and put people out of jobs. Bad management kills a business, as does being in a bad business to begin with. > Never in their wildest dreams, the hedge funds would have thought this day would come. The tables have finally turned as the hedge funds try to gulp in their last breath of air. We're really not talking about "the hedge funds" in this case. Just a few hedge funds who, indeed, should've seen it coming. It's not like during the subprime crisis where every large financial institution had a large exposure to them. The exposure of the financial industry to GameStop is minuscule at the scale of the system. It's also not new, in the sense that sometimes hedge funds will try to squeeze one another too > I honestly don't believe that people are going to sell their positions on $GME stocks. As I said, they are not in for the money anymore. They are fighting the good fight, and they have the potential to win this WAR. Maybe they won't sell, but there are cases where fundamentals will catch up with the gamers. If/when the business runs out of cash and undergoes restructuring, the stockholders will be left holding pennies. Maybe the CEO of GameStop (notice how he's been quiet?) will be like, f--- this job, I'm selling all my stock and retiring, thanks Internet

AndrewStephens 6y ago

I have watched this mess from afar and the tone of the conversation has changed from "Hey, here is an opportunity to make some money off a mistake some hedge funds are making" to "Smash the system". Exhibit A - this idiotic article. You cannot use the tools of the system to beat the system. Here is the thing about hedge funds - they hedge. They hedge in the morning, hedge in the afternoon, eat some hedge for dinner and get in a few rounds of hedging in down at the hedge club before going to bed dreaming of hedges. The clue is in the name. They don't typically make huge loses or gains for a single stock, they are happy to make a consistent gain every day. The vast majority of hedge funds are making stacks of small gains off this nonsense and anyone who doesn't cash out at the right time is going to be hosed. Do you know when the right time to cash out is? No? Sucks to be you. Honestly I am worried. Mob investing has collapsed economies, brought down governments, and ruined more lives than can be counted during the last 150 years, and I don't see how this is different. This is completely ridiculous and will all end in tears. I am actually glad that some pressure is being put on Reddit and the brokers to cool things off - there are opportunities to cash out big time but a lot of the small players are going to lose money.

I-M-S 6y ago
> You cannot use the tools of the system to beat the system I'm wondering if this is true. What would be some examples from history in which precisely this happened?
alisonkisk 6y ago
"hedge fund" doesn't really mean hedging. It is just a fancy (high fee) name for "actively managed" that usually uses more exotic strategies than buy and sell based on earnings reports.

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ryanmercer 6y ago

The whole thing is incredibly annoying. I'm a moderator of /r/silverbugs and we've been getting slammed all morning with either accounts from either /r/wallstreetbets or accounts trying to make them look bad, with dozens of brand spanking new or barely used accounts spamming to buy various silver related stocks/funds. I've banned more accounts this morning than I have in 2 years and, it really does appear that they are starting to have some impact on the price of silver with their attempts to pump stuff like SLV.