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No, WallStreetBets isn’t robbing Wall Street to help the little guy
- Fjolsvith 6y agoJen Psaki's brother is portfolio manager at Citadel.
- ojnabieoot 6y agoCan we get this comment flagged for misinformation? Jen Psaki doesn't even have any brothers, just two sisters [1]. The fact that somebody at Citadel is also named "Psaki" does not in fact mean they are siblings. I sincerely hate everyone involved in this stupid story. Liars and con artists, from HN to Reddit to Wall Street. [1] https://www.stamfordadvocate.com/news/article/Greenwich-High-alum-resigns-White-House-job-2182565.php https://www.stamfordadvocate.com/news/article/Greenwich-High... ("eldest of three daughters")
- ratsmack 6y agoGuilty by association is a disease that pervades all social platform's and is destructive no matter who is doing it.
- DataWorker 6y agoThis is simply false reporting. The play had a everything to do with Ryan Cohen. Arstechnica is long since being credible. They’re owned by conde naste and it shows.
- karmakaze 6y agoI read the article expecting that it might be very one sided. What I found was that in seemed incomplete perhaps but pretty balanced. > And if you were lucky enough to get into GameStop days or weeks ago, you should seriously consider selling. At a minimum, sell enough to recoup your initial investment. Because not everyone who made big paper profits will see those gains realized. That could if I was a conspiracy theorist, serve the interests of the firms, but if individuals put in money they can't afford to lose and are up multiples, selling just enough to cover the initial buy seems very sensible advice. What the article doesn't cover is the revolution that many small fish that are coordinated can outweigh the decisions made by the few sitting at a proverbial table. Even those with deep pockets discovered that they are not in control and reached levels of risk they couldn't weather. How disconnected from reality of using the stock market as money making vehicles rather than investing in the success of underlying companies is what's on display and needs to be shaken up.
- monopoledance 6y ago> buy seems very sensible advice. It is. However, I think the situation right now is a prisoner's dilemma where this type of "snitching" means most people will lose. If nobody sells, a lot of people will win and the hedgefonds will lose. The hedgefonds are very much trying to provoke "sensible" decisions at all costs right now. They need people to be predictable and afraid. > How disconnected from reality of using the stock market as money making vehicles rather than investing in the success of underlying companies is what's on display and needs to be shaken up. This. WSB isn't the problem, they just highlight it. The naked shortselling is the malicious part. The hedgefonds weren't just speculating against GME, they were inducing Gamespot bankruptcy. That is fucked up. That shouldn't be allowed. Nobody should be allowed to bet on someone losing, especially if they got all-powerful money at their hands. I think most people just don't realize how much a billion dollars really is: More than 1,600,000 stimulus checks. And they game with it like it's nothing.
- tom_mellior 6y ago> The hedgefonds weren't just speculating against GME, they were inducing Gamespot bankruptcy. Could you elaborate on how this was supposed to happen?
- monopoledance 6y agoI can try from my limited understanding I gathered in the last few days. They pick stocks of companies struggling, which only need a little push. Mostly their financial powers means they can speak self-fulfilling prophecies, I think. "Advice" stock holders. But they also can "attack" stocks directly teaming up, like the short ladder attack we've seen the last few days. Bad press and media manipulation do the rest. Crashing a stock probably means influencing the companies liquidity and if they don't make profit at the moment, that may be the end. Or one of their friends buys then the majority of the company's shares. You know, mafia shit, but with numbers. Overall you can ask yourself: Is it a good idea to allow anybody speculating on someone's loss, when they got enough financial power to make everyone jump? Respective bankruptcy hugely increases the win on betting against a stock, since they don't have to buy back the shares they borrowed. They arrogantly went all in on GME, business as usual... or so they thought :) Just to make this clear, I don't buy into the narrative of wealth redistribution as those profiting are probably in the top 1-2% anyway. But I like to see some of these assholes losing a lot, maybe someone going to prison over this. And well Gamestop and AMC just got a second life in this game. If they get their shit together, they will have a more epic "almost bankrupt" story than Apple. And who know, maybe this will unite people under the clear view who their real enemies are, that it's neither ethnicity, culture or religion dividing them; all their struggles are caused by billionaires playing God.
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- uniqueid 6y agoThis is your brain on internet populism.
- robertoandred 6y agoSpot on. The idea that this is some sort of history-changing revolution is just laughable.
- tinus_hn 6y agoThe stock will of course go down again but it remains to be seen if these hedge funds can recover from their 60 billion dollar losses. It is no question whether this event will have far reaching consequences. With the SEC reacting to actions directed by common people something has changed fundamentally.
- robertoandred 6y agoHedge funds have not lost $60 billion on GameStop.
- tinus_hn 6y agohttps://www.reuters.com/article/us-retail-trading-shortbets-idUSKBN29X1SW https://www.reuters.com/article/us-retail-trading-shortbets-...
- robertoandred 6y ago> Its data also showed that estimated losses from shorting GameStop at $1.03 billion year-to-date That’s not $60 billion.
- BoorishBears 6y agoAnd gains for hedge funds playing this frenzy are probably higher than 1 billion
- chokeartist 6y agoNot yet, but it has the potential to be at the current clip (price). That's why this is a huge game of chicken. Will r/WSB buckle, or will the Hedge Funds?
- iamacyborg 6y agoRetail investors are going to be left holding some heavy bags.
- ratsmack 6y agoThey'll be fine if they don't lose faith. hopefully their not using their grocery money to fund their accounts.
- iamacyborg 6y agoFaith has very little to do with it once this thing starts dropping
- fancyfredbot 6y agoWatching this escapade has really helped me to understand bitcoin.
- cung 6y agoCould you elaborate?
- imtringued 6y agoBitcoin is just a deflationary asset like gold. Except it hasn't gained the same widespread popularity of gold. Every bubble was the result of a new class of investors joining the market. GME is just a meme stock that people buy to get involved in a movement.
- baryphonic 6y agoWhat kind of propagandistic crap is this? Sorry, Tim Lee (adding the "B" has always felt like a fraudulent way to trade on the credibility of Tim Berners-Lee), the ink spilt in other corners of the Internet and in publications much more mainstream than yours is frankly just more in depth. (See for example Matt Levine at Bloomberg. [1]) If this is what passes for explanation from tech "journalists" these days, then it's a good indication of why I've stopped reading a lot of it. It's usually BS, from the condescending think piece headlines to the simplistic and ignorant but still highly know-it-all attitude. No, Ars Technica doesn't actually publish much quality work anymore. I get much more enjoyment and enlightenment from the much more interesting Jon Stokes on Twitter.[2] He was one of the Ars' founders before they became a typical 6th Avenue publication with a 6th Avenue editorial stance, that is, the journalistic equivalent of neutron degenerate matter, the kind of shop that tells you to sell, but pretends not to offer financial advice (not that anyone would prosecute anyway). Yeah, no thanks. [1] https://www.bloomberg.com/opinion/articles/2021-01-25/the-game-never-stops https://www.bloomberg.com/opinion/articles/2021-01-25/the-ga... [2] https://twitter.com/jonstokes https://twitter.com/jonstokes
- vasco 6y ago> Sooner or later, GameStop's stock is going to return to normal levels. I'd like to schedule an appointment with the crystal ball that generated this insight, on which the whole article is predicated.
- jon-wood 6y agoIt really doesn’t take a crystal ball to come the conclusion that the stock value for a dying company isn’t going to remain high. Even less so for the liquidated remains of Bed, Baths, and Beyond.
- goo 6y agoWell they make 5 billion revenue a year, are close to profitable, and their online revenue is up 34% in 2020 to more than a billion. And now they can print money with share dilution, and they’ve become a household name and are touted as a weapon in a class war. So IDK if dying is the right word for it.
- babyshake 6y agoI've seen a number of suggestions that they take this as an opportunity to pivot to something (crypto?) intended to keep the mania going.
- jjk166 6y agoThe efficient market hypothesis - that over the long term prices will reflect what something is actually worth - is the core underpinning assumption of pretty much all finance.
- ummonk 6y agoYes and those people have been predicting TSLA's decline for several years now. How long term is the "long term"?
- 6y ago
- awillen 6y ago"Some redditors believe that a short squeeze was part of the reason that GameStop's stock rose so rapidly over the last week." No, the active thesis on WSB is that while a few shorts closed their positions, active shorts are still >100% of float. The short squeeze has yet to happen. Thus the reason they're all holding - shorts are paying huge amounts of interest every day, so the point is to hold until they're forced to give up on their positions, which will lead to the short squeeze. The squeeze hasn't been squoze yet.
- nostrademons 6y agoChances are the shorts got replaced by other shorts. Someone who shorted @20 gets squeezed when it goes up to $100, they're forced to buy, they end up buying from someone else who is shorting @100. That person gets squeezed @300, they're replaced by someone else who sold short @300. That next person isn't going to get squeezed until $600-1000. Ultimately the big winners are those who bought @10 and sold @300, or those who shorted @300 and cover @10. Everybody in between gets rekt. That's going to include a bunch of retail buyers and a few shorts as well.
- awillen 6y agoThat's fine though - there are still a lot of shorts paying a tremendous amount of interest, regardless of where they bought in. The point is that as long as the WSB crew doesn't sell, the shorts will have to cover (or continue paying a ton of interest forever) and the price won't go down (or at least it won't go down and stay there for an extended period).
- nostrademons 6y agoProblem is that stock prices are set by the marginal buyer - the one that is buying right now. If the WSB crowd (and hangers on) runs out of money, then suddenly the buyers left in the general public might think the stock is worth $10 rather than $300 and adjust their orders accordingly. The result will be no buyers left, plus a lot of retail traders that bought at $250-325 hoping to ride it to the moon and desperate to get out before the price reverses. Shorts cover easily, at whatever price they name, and longs lose their shirt. I'm hearing borrow fees are at about 80-100% annualized now. That works out to around 0.2-0.3% daily, so carrying a $10K position costs you $20-30/day, a $1M position costs $2-3K, etc. Someone with enough money to stomach that kind of risk can easily afford that.
- ummonk 6y agoFirst, WSB people are aware that the short squeeze hasn't happened yet, since short interest remains very high. Second, the WSB consensus is starting to build around sacrificially holding stocks through the short squeeze and subsequent decline to ensure bandwagoning retail investors are able to get back out and extract the profits from short sellers covering.
- tom_mellior 6y ago> short interest remains very high Of course it does, since the stock is ridiculously overvalued. What does the WSB crystal ball have to say about when the squeeze will happen? How would we be able to tell when it has happened? > sacrificially holding stocks through the short squeeze and subsequent decline This is a noble goal. It will be interesting to see if it works out, tragedy of the commons and all. If everyone else holds, nobody will mind if I sell my shares, I do so need that Ferrari...
- ratsmack 6y ago> ... overvalued ... This really has nothing to do with it.
- ummonk 6y agoNo one knows when or even if the squeeze will happen. It was on the verge of happening on Thursday when the DTCC raised the collateral requirements to stop retail investors from buying more shares. Now everyone is guessing it will probably happen some time next week. The signs should be pretty clear - there will be a rapid spike in the price as the squeeze snowballs.
- tom_mellior 6y ago> No one knows when or even if the squeeze will happen. Well. $GME closed at -100 dollars (-31%) yesterday, and it's currently down another ~95 dollars from that in the pre-market. I guess we will not go to space today.
- monopoledance 6y ago
- enos_feedler 6y ago"Any short sellers who maintained their short positions through the bubble will make back most of what they lost." Isn't part of the issue not pure short positions, but short dated options? you can only hold those until expiration. If the bubble lasts longer..
- imtringued 6y agoShort positions have to pay interest. The idea is that you just hold the stock for weeks until the interest bankrupts the short sellers.
- coldtea 6y agoNo, but it gives Wall Street a taste of their own medicine, and that's just as well...
- jerglingu 6y agoThe nuance this article, and perhaps many commenters on HN, is missing is the latent nihilism powering much of the WSB-GME phenomenon. The same way some stubborn older people can't grasp that a minimum wage job can reliably pay rent and monthly bills, outside observers can't understand that a not insignificant number of these Redditors are willing to financially self immolate to just be given the chance to help pound billion-dollar firms to dust. Take a tour of these WSB threads, and underneath the party atmosphere of self-deprecating humor/memes/irrational hope, is a thick sense of contempt and vengeance at hedge funds and big players of the financial market. Some of the hate is brought to the surface, for example in the recollections of the collapse of '08 and how peoples' families and futures were reduced to near nothing.
- dang 6y agoThere was a thread about this actually: https://news.ycombinator.com/item?id=25908084 https://news.ycombinator.com/item?id=25908084
- awillen 6y agoI think you meant to say "minimum wage job can't", not can.
- easton 6y agoBest summarized in the motto “We can remain retarded longer than they can remain solvent.”