4 ms·

I’m surprised this sort of attack has never be carried out before. Is it just because no one ever thought there’d be a crazy army of retail investors that could

by xwdv 6y ago

I’m surprised this sort of attack has never be carried out before. Is it just because no one ever thought there’d be a crazy army of retail investors that could be so coordinated and so irrational and large enough to matter?

garmaine 6y ago
...it has though? This isn’t a new thing. Happened with VW in 2008, for example.
- cvhashim 6y ago
  This is definitely bigger than 12 years ago considering the proliferation of phones and easy access to the markets with apps.
  - brummm 6y ago
    With respect to what metric? I am pretty sure that the VW was way bigger with regards to market cap and corrected for inflation, etc.
jeffbee 6y ago
There have been many attempted short squeezes, notoriously the attempt by the founder of Piggly Wiggly to squeeze shorts 100 years ago. He ended up broke, of course, because cornering the market on shares that you pumped to a ridiculous price is never a great idea. More recently there was a cartel that tried to squeeze Volkswagen shorts in 2008.
- msandford 6y ago
  Tried? I always though they succeeded. https://moxreports.com/vw-infinity-squeeze/ https://moxreports.com/vw-infinity-squeeze/
- xxpor 6y ago
  The only reason the Piggly Wiggly guy ended up broke is because they changed the settlement rules out from under him. It was extremely legally questionable.
  - alasdair_ 6y ago
    Same thing when those two brothers tried to corner the silver market.
    - smabie 6y ago
      *three brothers
  - jeffbee 6y ago
    I think we should clarify here that trying to corner the market isn't some kind of by-the-book playing, it's an immoral scheme and whatever happens to such people is well-deserved.
    - recursive 6y ago
      Immoral? Why is it that morality is only the responsibility of the grocer?
  - antoniuschan99 6y ago
    I read this today about the Piggly Wiggly story was fascinating! https://twitter.com/dollarsanddata/status/1354561444780646401 https://twitter.com/dollarsanddata/status/135456144478064640...
- blackrock 6y ago
  I’ve never heard of Piggly Wiggly before.
anigbrowl 6y ago
'Rational' investors try to make money off each other. That operating in pursuit of a class interest is considered irrational suggests there might be some shortcomings in mainstream economic theory.
- tom_mellior 6y ago
  I'll buy the "operating in pursuit of the class interest" angle rather than the "make money off each other" angle when the bubble properly bursts and we see the media stories about the early moving millionaires bailing out the late movers who lost their life savings. I'm not betting on that. The people who architected this bubble had a fair share of self-interest.
  - anigbrowl 6y ago
    I think it's a mix. Some people certainly wanted a profit and planned to get out early, others bought in with the appreciation that they might suffer a loss when the price falls back down, but like the idea of pushing a hedge fund into bankruptcy. I have had conversations with both sorts of buyers in recent days. BTW I am not holding any positions in these stocks myself.
    - nr2x 6y ago
      I consider the money I've spent on GME as equivalent to paying for comedy club admission. This is amusing.
TheGrassyKnoll 6y ago
Free government money, a free trading platform & a lot of people stuck at home.
paxys 6y ago
Short squeezes and similar battles happen all the time. Normally it is one Wall Street behemoth vs another, and the winner gets lauded as being a genius. The Herbalife saga is a good recent example. The only difference this time around is that there is a completely new and unknown outside entity involved. The average retail investors and consumers, social media, mainstream news etc. have all just never been this deeply involved.
vga805 6y ago
Finance bro martin shrkeli pulled off a pretty epic short squeeze on KBIO
hardwaresofton 6y ago
Be careful not to fall into the narrative the mainstream US media is selling, though it shifted drastically yesterday -- this is not a coordinated attack. WSB is full of people shilling all types of tickers for all types of reasons, but there is a large amount of people there who understand (or at least pretend to) the dynamics of a gamma + short squeeze, and are in it for that reason. The person who posted one of the earliest bull case research for this (referred to by his YT channel name RoaringKitty or his reddit username u/deepfuckingvalue) has been into GME since last year. He was holding LEAPs (long-dated call options) and shares and has been holding for the last year. He was ridiculed in the original post, because everyone still believed Gamestop was Blockbuster v2. Gamestop is not Blockbuster v2 (I used to think it was), but what's happening right now is not about fundamentals (and if you see anyone arguing that, they are trying to trick you by reframing), it is about the mechanics of a combination of a gamma and short squeeze happening at the same time. Hedge funds do this kind of attack when they realize the opportunity is there -- you don't hear about it because it doesn't make the news, and because the news makes up a rationalization. Here's an example -- a bunch of stocks that were essentially left for dead (heavily shorted) popped yesterday and the rationalization was retail jumping in. That makes sense, unless you take a second and think about it -- how can the retail that's all still all-in on GME be simultaneously moving huge amounts of market cap of smaller companies? Yes those companies were cheap but they're cheap because they were shorted -- this means anyone could move them. Don't forget that ~90% of all stocks are owned by the top 30% or something like that. Retail can possibly cause gamma squeezes (see TSLA last year), but institutions have to take part for it to go anywhere. It is 140% the fault of the short sellers that didn't take profit last year (assuming some rode GME from 45 to 5, this is a ~10x position If i understand correctly) that this short squeeze had the chance to happen. Greed got them.
- DSingularity 6y ago
  > Here's an example -- a bunch of stocks that were essentially left for dead (heavily shorted) popped yesterday and the rationalization was retail jumping in. Which ones? The AMC, EXPR and so on?
  - hardwaresofton 6y ago

by xwdv 6y ago

garmaine 6y ago

...it has though? This isn’t a new thing. Happened with VW in 2008, for example.

cvhashim 6y ago
This is definitely bigger than 12 years ago considering the proliferation of phones and easy access to the markets with apps.
- brummm 6y ago
  With respect to what metric? I am pretty sure that the VW was way bigger with regards to market cap and corrected for inflation, etc.

jeffbee 6y ago

There have been many attempted short squeezes, notoriously the attempt by the founder of Piggly Wiggly to squeeze shorts 100 years ago. He ended up broke, of course, because cornering the market on shares that you pumped to a ridiculous price is never a great idea. More recently there was a cartel that tried to squeeze Volkswagen shorts in 2008.

msandford 6y ago
Tried? I always though they succeeded. https://moxreports.com/vw-infinity-squeeze/ https://moxreports.com/vw-infinity-squeeze/
xxpor 6y ago
The only reason the Piggly Wiggly guy ended up broke is because they changed the settlement rules out from under him. It was extremely legally questionable.
- alasdair_ 6y ago
  Same thing when those two brothers tried to corner the silver market.
  - smabie 6y ago
    *three brothers
- jeffbee 6y ago
  I think we should clarify here that trying to corner the market isn't some kind of by-the-book playing, it's an immoral scheme and whatever happens to such people is well-deserved.
  - recursive 6y ago
    Immoral? Why is it that morality is only the responsibility of the grocer?
- antoniuschan99 6y ago
  I read this today about the Piggly Wiggly story was fascinating! https://twitter.com/dollarsanddata/status/1354561444780646401 https://twitter.com/dollarsanddata/status/135456144478064640...
blackrock 6y ago
I’ve never heard of Piggly Wiggly before.

anigbrowl 6y ago

'Rational' investors try to make money off each other. That operating in pursuit of a class interest is considered irrational suggests there might be some shortcomings in mainstream economic theory.

tom_mellior 6y ago
I'll buy the "operating in pursuit of the class interest" angle rather than the "make money off each other" angle when the bubble properly bursts and we see the media stories about the early moving millionaires bailing out the late movers who lost their life savings. I'm not betting on that. The people who architected this bubble had a fair share of self-interest.
- anigbrowl 6y ago
  I think it's a mix. Some people certainly wanted a profit and planned to get out early, others bought in with the appreciation that they might suffer a loss when the price falls back down, but like the idea of pushing a hedge fund into bankruptcy. I have had conversations with both sorts of buyers in recent days. BTW I am not holding any positions in these stocks myself.
  - nr2x 6y ago
    I consider the money I've spent on GME as equivalent to paying for comedy club admission. This is amusing.

TheGrassyKnoll 6y ago

Free government money, a free trading platform & a lot of people stuck at home.

paxys 6y ago

Short squeezes and similar battles happen all the time. Normally it is one Wall Street behemoth vs another, and the winner gets lauded as being a genius. The Herbalife saga is a good recent example. The only difference this time around is that there is a completely new and unknown outside entity involved. The average retail investors and consumers, social media, mainstream news etc. have all just never been this deeply involved.

vga805 6y ago

Finance bro martin shrkeli pulled off a pretty epic short squeeze on KBIO

hardwaresofton 6y ago

Be careful not to fall into the narrative the mainstream US media is selling, though it shifted drastically yesterday -- this is not a coordinated attack. WSB is full of people shilling all types of tickers for all types of reasons, but there is a large amount of people there who understand (or at least pretend to) the dynamics of a gamma + short squeeze, and are in it for that reason. The person who posted one of the earliest bull case research for this (referred to by his YT channel name RoaringKitty or his reddit username u/deepfuckingvalue) has been into GME since last year. He was holding LEAPs (long-dated call options) and shares and has been holding for the last year. He was ridiculed in the original post, because everyone still believed Gamestop was Blockbuster v2. Gamestop is not Blockbuster v2 (I used to think it was), but what's happening right now is not about fundamentals (and if you see anyone arguing that, they are trying to trick you by reframing), it is about the mechanics of a combination of a gamma and short squeeze happening at the same time. Hedge funds do this kind of attack when they realize the opportunity is there -- you don't hear about it because it doesn't make the news, and because the news makes up a rationalization. Here's an example -- a bunch of stocks that were essentially left for dead (heavily shorted) popped yesterday and the rationalization was retail jumping in. That makes sense, unless you take a second and think about it -- how can the retail that's all still all-in on GME be simultaneously moving huge amounts of market cap of smaller companies? Yes those companies were cheap but they're cheap because they were shorted -- this means anyone could move them. Don't forget that ~90% of all stocks are owned by the top 30% or something like that. Retail can possibly cause gamma squeezes (see TSLA last year), but institutions have to take part for it to go anywhere. It is 140% the fault of the short sellers that didn't take profit last year (assuming some rode GME from 45 to 5, this is a ~10x position If i understand correctly) that this short squeeze had the chance to happen. Greed got them.

DSingularity 6y ago
> Here's an example -- a bunch of stocks that were essentially left for dead (heavily shorted) popped yesterday and the rationalization was retail jumping in. Which ones? The AMC, EXPR and so on?
- hardwaresofton 6y ago