5 ms·
I swear, GME is the feel-good story of the year.
by moolcool 6y ago
I swear, GME is the feel-good story of the year.
- gonzo41 6y agoGotta say I agree, after hearing non crap news for a year. It's nice to see a hedge fund eat their hat.
- swader999 6y agoUntil it cascades like Lehman and AIG with USA citizens holding the bag. In two days we are 33,333 days since the crash of 1929.
- danhak 6y agoThis is nothing like the size of the bubble (US housing market) that precipitated those crashes.
- swader999 6y agoIt is actually. The housing market had real collateral even if it was overly appraised.
- danhak 6y agoNo, it's not. Not even close. The current market cap of GME is $25 billion. Meanwhile, the size of the subprime mortgage market in 2008 was in the neighborhood of $50 trillion.
- swader999 6y agoShorting losses can be infinite. Then add in the derivatives at play. Who backs these trades? Who backs them? What gets triggered when any of these default on their contracts?
- carlmr 6y agoThe bubble may become more visible if a chain reaction is started.
- josephorjoe 6y agoIf that is possible here, there needs to be more regulation on hedge funds so they do not operate in a "heads I win, tails the US govt. bails me out" scenario.
- h_anna_h 6y agoThe solution is simple, do not bail them out.
- throwaway838nq 6y agoThat's the most hilarious part of it. It's a given that someone is going bankrupt big time and someone is going to want to be made whole. They will threaten the stock market until the USG bails them out.
- peterwoerner 6y agohttps://twitter.com/PigeonsK/status/1354824493982773249 https://twitter.com/PigeonsK/status/1354824493982773249 Argument for cascading.
- heartbreak 6y agoThe assumptions in that 4chan screenshot are putting in a lot of work.
- swader999 6y agoWho backs each party isn't that hard to verify. The only assumption is the copy cat trading of Melvin's strategy which seems fairly safe to make.
- heartbreak 6y agoWell, one assumption is that the exposure is actually a meaningful number to an investment bank.
- adamcstephens 6y agoCascading already happened last March and the Fed bailed out the market. That backstopping has clearly helped buoy the market to new highs, while the real economy is contracting. Something like this could trigger a cascade, but that cascade would rest solely on the people who built this bubble.
- PragmaticPulp 6y agoI think the sentiment will shift when people realize that some of these hedge funds invested people's pension money, or university endowments, or any other number of people's funds. WSB has promoted a cartoonish version of Wall Street where hedge funds only hold rich, evil people's money. That's not really how this works. A lot of people are also going to be disappointed to learn that some Wall Street firms profited massively from this situation. And finally, a lot of retail investors who were late to the party are going to lose a lot of money on this. Some of that will flow to early Redditors who got their exit timing right. Some of that will flow to hedge funds who cleverly scooped up the naive money in the chaos. I'd go so far as to bet that journalists are already working on articles with all of these angles. They'll start to trickle out just as soon as the market euphoria wanes.
- pg_bot 6y ago"Pensions and university endowments" are the "women and children" of the financial world. Everyone constantly harps on these classes of people in order to play to your emotions instead of thinking logically. The great thing about America is we allow you to make "stupid" choices. No one should care if you lose all your money by acting stupidly, doesn't matter if you're Harvard or a heroin addict. If you rely on a pension or university endowment for funding you should take up a greater interest in where that money is being invested.
- moolcool 6y agoI hate this sentiment so much. As if it's a bad thing that Wall Street gangster hedge funds are finally feeling the squeeze that they put on everyday working people, just because some of the money they control is pension money or university endowments. It's literally the same rationale people use to justify staying in abusive relationships. Controlling some crumbs of the great unwashed's money gives these billionaires zero moral authority to do the crap they get away with every single day. Fuck them, then fuck them again. They deserve every ounce of this and then some.
- PragmaticPulp 6y ago> As if it's a bad thing that Wall Street gangster hedge funds are finally feeling the squeeze It's categorically false to suggest that Wall Street hedge funds are all suffering from this. Some of them are making massive amounts of money on this situation. Some of that money comes at the expense of casual investors. This idea that Redditors are siphoning money out of hedge funds is just not true for the last round of GME investors. In fact, those latest investors will probably end up funneling their losses right into hedge funds who short this on the way back down.
- ghaff 6y agoThe financial institutions will be fine. Meanwhile some unsophisticated investors who saw this as the financial opportunity of a lifetime will lose their shirts and their homes.
- heartbreak 6y agoI sincerely hope this comment ages well, but I doubt it will. A scenario where a majority of the retail traders in GME right now come out ahead would be surprising.
- ascagnel_ 6y agoAgreed. There's a good reason why so many of these hedge funds held short positions -- $GME is a business facing significant headwinds beyond what you'd see from the pandemic and a typical P&L statement: - Their primary product is used game sales, and the biggest players in that sector are making active moves against such sales (see: the disc-less PS5 and Xbox Series S consoles). - Digital storefronts make purchasing new games much, much easier (and a borderline impulse purchase). - Free-to-play multiplayer games cut Gamestop out of the customer acquisition loop. The most $GME gets is a cut of any prepaid cards, but those cards are commonplace nowadays (my local chain drugstore has an end-cap with dozens of prepaid cards of various types). - Their primary model is to lease space in malls. With the pandemic, malls are either closed or seeing substantially less foot traffic. - Consoles are typically a big driver of purchases, but their limited availability also limits $GME's potential. That said, that can be counterbalanced by very profitable bundles made more attractive by the limited availability of unbundled consoles. I don't play the stock market, but even if I did, $GME wouldn't be something I'd look at in a buy-and-hold strategy.
- holtalanm 6y agotheir online store is pretty damn good, though. Not sure what % of their total revenue it accounts for, but I'd wager it isn't negligible.
- paradox242 6y agoThe stock will resettle at something far lower than it is now, most people realize this. They are trying to ride this thing until the margin calls come in and a substantial number of short positions are closed. If that happens there will be blood in the water and big money for anyone able to sell during the frenzy. After that, it's everyone for themselves.
- 6y ago
- gabriel34 6y agoThe irony of manipulating markets against market manipulators is delicious. This will also punish over exposed players who are probably reviewing their short positions as this unfolds.
- wpasc 6y agoUnfortunately, the hedge funds will be 100% fine and probably capitalize on this event and somehow still come out ahead. The WSB folks who started this have probably already sold out so they're fine. It's average everyday folks who bought into this robin hood (not the app) story and purchased stock at recent prices who will lose a lot of money
- ghaff 6y agoYeah. Most of the firms involved will be fine. A number of retail investors who got in early on have probably made serious dough. People who bought a share or two for the lulz whatever. Others who saw this as a big opportunity to make money they otherwise had no hope of making? At least some will be bankrupt, lost the money they were saving up for a house downpayment, lost retirement savings, etc.
- holtalanm 6y ago> The WSB folks who started this have probably already sold out so they're fine the biggest player in /r/wallstreetbets is /u/DFV, and last I checked he had cashed out a small portion of his position. Still has like 30mill tied up in GME stock though. Crazy story looking at his posts from 2019-now, though. At one point his GME portfolio was only worth 42k, and now it is over 40mill.
- UncleMeat 6y agoThe story isn’t over yet.
- metalliqaz 6y agoWall Street moguls will have their revenge. Count on it.