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I think the Bitcoin example was exactly what the investors were thinking. A stock that magically always goes up and everybody gets rich. With a real stock, som
by SamBam 6y ago
I think the Bitcoin example was exactly what the investors were thinking. A stock that magically always goes up and everybody gets rich.
With a real stock, somebody has to be left holding the bag at the end. (Probably with BitCoin as well, but that's a separate discussion.)
My understanding was that, with the short squeeze, for a certain number of those stocks the buyer would be the hedge funds. But it seems like at this point there must be way more stocks that the buyers have bought than the hedge funds have shorted, no?
- Apocryphon 6y agoI mean, that's exactly what's been happening with Tesla for months.
- SamBam 6y agoDo you believe that the Tesla buyers are trying to manipulate the market, and have no expectation that the company itself is valuable?
- Apocryphon 6y agoDo you believe that GameStop buyers think that the company is as doomed as the short-sellers did? The origin for this whole thing was a DD post that argued that it was a value stock that was over-shorted. And there were institutional investors and analysts like Michael Burry who also saw this happening.
- SamBam 6y agoI don't know if they thought it was doomed, but I highly doubt a single one of the buyers think it's worth $500+ a share. That's not why they're buying it. Unless there's some other scheme that I'm unaware of, I think Tesla buyers do think it's worth that much, though they may be wrong about that.
- Apocryphon 6y agoI doubt that a majority of Tesla buyers realistically think the company is worth as much as most of the rest of the auto industry. In both cases you have overvalued meme stocks, it's just with GameStop there's an ideological/activism motivation.