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The Reddit GME short squeeze game plan (143 days old)

166 points by omarhaneef 6y ago

anonuser123456 6y ago
Serious question for someone that understands securities law: Is WSB essentially a crime scene for a widespread market manipulation fraud and conspiracy? From what I've read on the SEC site: "Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal." https://www.sec.gov/investor/pubs/regsho.htm https://www.sec.gov/investor/pubs/regsho.htm
- anupamchugh 6y ago
  I don’t think so... if WSB is being criticised for market manipulation, then so should be hedge fund managers. Everyday we see institutional investors setting new price targets for certain stocks—which definitely drives up the price. People are just criticising WSB since newbie investors backed dumb stocks.
  - grepthisab 6y ago
    Someone else committing a crime isn't really a defense to one's own crime though.
    - b3kart 6y ago
      No, but if a law is applied inconsistently it raises questions about whether 1) the law is sensible 2) the regulatory system is unbiased. Pointing to such inconsistencies is a perfectly reasonable thing to do.
      - VWWHFSfQ 6y ago
        Resolving those inconsistencies in the law because of uneven enforcement would come quite a long time after the fact. But as the law stands now, this is probably illegal. I doubt anyone will be prosecuted for it, though.
  - anonuser123456 6y ago
    This seems to be the sentiment of a lot of people, but the SEC has in fact prosecuted hedge fund managers for just this tactic in the past. It is generally hard to prosecute because smart hedge fund managers don't leave a paper trail and leave a trail of plausible deniability. But in this case, people are literally admitting "Yes, I would like to engage in your proposed felony." Even manipulation aside... conspiracy itself is a crime. I don't think conspiracies suddenly become legal just because they were very large.
    - whomst 6y ago
      The key distinction AFAICT is that r/WSB isn't commanding people to buy, nor does it have any assets of its own. This is just a stochastic result of mania and individual investors doing what they believe to be in their best interest.
      - snet0 6y ago
        > r/WSB isn't commanding people to buy ehhhhhh... I've seen plenty of BUY BUY BUY posts. Unless I'm missing your point. I understand what WSB isn't a corporation or entity in and of itself, but it is still a (somewhat) organised group of uh... "investors".
        anupamchugh 6y ago
        True... except they don’t call themselves investors. They relish using terms like autists, degenerates. Basically they enjoy sending across a message more than making a fortune today.. it’s like a cult
        sircastor 6y ago
        But aren’t there plenty of “BUY BUY BUY” posts that result in nothing? My understanding prior to this was that r/WSB was typically a lot of hot air being blown around trying to drum up enthusiasm. No different than your uncle saying at the table “I’ve invested in... and it’s going sky high!” The bar to qualify this random association of people as organized seems pretty high.
  - cm2187 6y ago
    I am not white washing hedge fund managers, but any hedge fund manager that would put in writing in an auditable system that he is considering manufacturing a short squeeze to hurt specific investors and went ahead and did it would have a tough time in court. No one with half a brain would do that (not that in recent history there hasn't been a handful of sub-half-brain bankers who documented their misdeeds in writing).
    - fma 6y ago
      Yeah, but if you're Bill Ackman you can do it on front of millions of people on CNBC. "During the epic verbal battle between Icahn and Ackman that was televised on CNBC in January, Icahn predicted that Ackman’s Herbalife investment could produce the “mother of all short squeezes.” Shortly after that incident, it became clear that Icahn had taken a big position in Herbalife’s stock. He has since expanded that position, bought 16.5% of the outstanding shares and gotten two representatives on Herbalife’s board." https://www.forbes.com/sites/nathanvardi/2013/07/22/carl-icahn-is-squeezing-bill-ackman-to-death-with-herbalife-trade/ https://www.forbes.com/sites/nathanvardi/2013/07/22/carl-ica...
- im3w1l 6y ago
  My hot take is that what they are doing is illegal, but when it comes down to it rulings are done by people, and the extent of their sympathy for the little guy will determine the outcome.
  - nrmitchi 6y ago
    I agree with this. In my opinion, if you have to state multiple times in your plan that what you're planning isn't illegal/manipulation, it's very grey at best. The fact that one of the premises presented here for the price going up is "We buy a bunch of options, to force (ie, manipulate) someone else into buying the stock, so that the price can go up" doesn't boad well for a "it's not market manipuation" argument either. Straight from this post: > It looks like this: RH Call Option buying -> MM Delta hedging/share purchase -> short squeezing -> Greater retail/RHers price action chasing/call option buying -> MM Delta hedging/share purchase -> short squeezing -> Institutional and new channels flip the script -> GME to $400+ They've presented a chain of events that starts only with "We try to buy a lot of it", has a bunch of "other people have to buy based directly on our actions", they even through in a "other people see the price going up and try to pile in" (ie, screw the rest of retail). > the extent of their sympathy for the little guy will determine the outcome I don't see the masses of people ending up facing consequences here. I wouldn't be surprised if a group of WSB pushers who made out like bandits do see consequences. I also think it's going to be difficult to consider them the little guy if they make a bunch of money, and the much larger mass of non-WSB retail lose their shirts.
    - swimfar 6y ago
      " if you have to state multiple times in your plan that what you're planning isn't illegal/manipulation, it's very grey at best." I don't think this is logical. One could also say, "If people are accusing you of doing something illegal/manipulative and you don't respond by stating that it's not illegal, it's very grey at best."
    - vagrantJin 6y ago
      > much larger mass of non-WSB retail lose their shirts. Can we agree this is hyperbole?
- fountainofage 6y ago
  That same page also says "Investors and prospective investors should be cautious of rumors on chat rooms where the intent of nameless and faceless computer users is in doubt." So it'd be a question of which is it? Is it don't trust internet forums or is it people shit posting memes is a coordinated attack? Logically and morally you can't have it both ways. But we're seeing how morals don't matter when you go after the money.
  - anonuser123456 6y ago
    An internet forum can be both full of rumors, and used for a conspiracy. I imagine people planning the US capital riots also posted a lot of rumors and memes. That statement is just advisory for investors to 'be cautious'.
- deleted 6y ago
  [deleted]
- eternalny1 6y ago
  Absolutely not, it's just an open discussion of ideas. Straight from this post ... > This is not fraud. There is no manipulation here. We aren’t forcing anyone to do anything. It’s going to happen with or without us. But I want to ride.
  - snet0 6y ago
    Well, if they say it's not fraud, who am I to say otherwise! Joking aside, the "we just like the stock" "this is not financial advice" stuff is as much a defence as the Someone Who Isn't Me thing I remember seeing on drug-related forums years back. You feel like it's protection because you're not getting prosecuted for admitting something you know is at least in the ballpark of law-breaking, but in reality you're just small-fry that nobody cares about. The moment a big-time dealer is under the spotlight, no amount of SWIM is protection. I don't expect anyone from WSB to receive repercussions for this, but afaik this is dangerous legal territory and their defensive phrasing is a facade.
    - eternalny1 6y ago
      To me, it seems like people just noticed something absurd in the market (a short % over 100) and were pointing it out. It was a perfect set-up for a historical short squeeze if the right catalyst came along. And that catalyst wasn't simply the people on WSB, there were other catalysts such as the Chewey founder coming in, and then earnings reports. Once those factors played out, the people who noticed the precarious position the hedge funds had put themselves in got to watch their exact predicitions come true. I don't see how that can be confused with a pump-and-dump scheme or any sort of market manipulation.
      - snet0 6y ago
        I think if it turns out that (and I have no idea if this could be the case) some of the "key" figures in riling up WSB were holding GME prior, and sold like 2 days ago, that would be a pump-and-dump, right? I'm not totally sure, but I believe that fits the criteria.
- cm2187 6y ago
  Not a lawyer but I would also be surprised that adding something like "let's discuss hypothetically..." at the top would be a defense against being accused of market manipulation if it is proven the person actually went ahead and transacted per the post.
anupamchugh 6y ago
If you look up WSB, there are plenty of game plans— PLTR, PLUG, NIO. GME was just trapped and the institutional investors underestimated the power of one subreddit.
- overcast 6y ago
  The real squeeze is when the rest of wall street saw blood in the water, after Monday. This was not in the hands of WSB after that point. Big names got involved, and destroyed those funds.
  - anupamchugh 6y ago
    Exactly, everyone jumped in when they realised the WSB memes actually made sense
    - Finnucane 6y ago
      Or if not quite 'sense', could be used to advantage. Like now the company that processes Robinhood's trades ends up owning a chunk of the hedge fund wsb targeted.
    - cblconfederate 6y ago
      Actually, they jumped after it made sense. There is a cohort of twitter people who are jumping on anything that is making the news to appear to be edgy.
  - amrx101 6y ago
    Especially Elon Musk. He had gears to grind with short sellers and he did.
    - anupamchugh 6y ago
      True... he actually got involved to give the short sellers a taste of their own medicine.. prior to this TSLA was the favourite stock of short sellers... Musk calls short selling as scam. Though shorting ensures market equilibrium and was brought into the system to prevent such short squeezes.. It’s just some big guys were taking too much leverage and are now facing repercussions.
caseysoftware 6y ago
I started following WSB just before this one.. it was calm then. There was also a post along the lines of "there are ~50M public shares, 2M of us, if everyone bought 25 shares, we own GME!" At that stage, it was trading between $5-10 so for ~$250, it was silly but not impossible. But the point is that NONE of this information or analysis was secret, conducted in back rooms, or even hard to find. If you didn't know the terminology and implications, it might be hard to decipher without someone else doing the heavy lifting but that's no different than any other market analysis. For WSB, this is a perfect positive black swan. The downside was capped ($250 at the time) and the upside is unlimited. CNBC, et al need to look past the shitposting and see this is a new creature.
- cblconfederate 6y ago
  No more information asymmetry, something that only crypto had so far.
- anupamchugh 6y ago
  Yup, interesting... I coincidentally wrote an article yesterday calling GME the Black Swan of Wall Street https://anupamchugh.medium.com/gamestop-is-the-black-swan-of-wall-street-c1d6e3f9181f?sk=1afaf82bd802fea2e57dd476504500de https://anupamchugh.medium.com/gamestop-is-the-black-swan-of...
- titzer 6y ago
  Yep, it's really great that markets can create speculation that are not tied at all to the fundamentals of a security. That doesn't create bubbles, volatility, or open the door for endless shenanigans at all. Sorry to be a bit snarky, but fad-based bubbles are not what markets need. They don't need social justice either. If you want to trade stocks, do some research and invest wisely for the long term. I am personally weary of 24/7 outrage.
  - xkeysc0re 6y ago
    Who are you to arbiter who gets to trade stock and on what terms? Isn't this play literally about fundamentals? The stock was undervalued and overshorted so Redditors saw an opportunity to crowd source a short squeeze. WallStreetBets is full of jokes and memes, sure, but there's also consistently top voted posts explaining the logic and due diligence behind GME. There's nothing untoward happening here except the insane outrage and hypocrisy of Wall St CNBC types.
artemonster 6y ago
Every other news outlet throws claims like "retail investors own hedge funds" and "hedge funds lost billions on reckless shorts", but is there any evidence of that? I am a total layman here, but can someone point me to a source where we can see that someone "shorted 150% of all available stock". Else it seems like a manipulation by someone who has heavily invested and lost and tried to "memefy" the stock.
- aikinai 6y ago
  There are plenty of sources, but here’s a recent one that touches on a few points: https://www.cnbc.com/2021/01/29/gamestop-short-sellers-are-still-not-surrendering-despite-nearly-20-billion-in-losses-this-year.html https://www.cnbc.com/2021/01/29/gamestop-short-sellers-are-s... The main hedge fund known for shorting GME already had to sell a major stake in their company for 1.5 billion to survive last week.
- jackhalford 6y ago
  Short interests are public info [1], e.g [2]. The days to cover is more of an estimate though, with current volume it's more likely to be in the range of a few hours. [1] https://www.investopedia.com/ask/answers/06/shortedstock.asp https://www.investopedia.com/ask/answers/06/shortedstock.asp [2] https://financhill.com/most-heavily-shorted-stocks-today https://financhill.com/most-heavily-shorted-stocks-today
  - fma 6y ago
    Short interest is public info, but the price that they shorted is not. A fund could short from $10 and cover $100 to lose $90...then short again at $300 and now the price is $200. Short interest would remain the same but they'd be up $10 (with having spent more money on the borrow cost at $300, of course). Short interest is not enough to know how damaged the funds are. As a matter of fact, since these hedge fund employee the smartest people in the world (supposedly?) it would not surprise me if they are taking advantage of the GME sentiment and profiting from this sentiment.
- overcast 6y ago
  Current estimate is around 70 billion lost so far, which of course the vast majority of that went to other Wall Street firms. The only ones that will win at the end of this is Wall Street and the few retail that got in VERY early. Retailers will get left holding this bag. The great irony out of all this is that all this volume in trading, just made them even richer.
endisneigh 6y ago
Is there any way GameStop, the company, can take advantage of this hysteria? Perhaps announce they're going to do a major rebrand, partner with Starbucks and become some game cafe of sorts? I imagine GameStop, if their management is up for it, wants to create the expectation that their new true value is greater than their value a month ago and less than what it is now. If they can issue new shares at the difference and revitalize their company perhaps something meaningful could come from this for them.
- outoftheabyss 6y ago
  See AMC https://www.polygon.com/movies/2021/1/29/22256360/amc-stock-price-reddit-rally-robinhood-debt-conversion https://www.polygon.com/movies/2021/1/29/22256360/amc-stock-...
  - xkeysc0re 6y ago
    Honestly, AMC is an interesting long play if only due to pent up demand for "normal" things like going to the movies. This is definitely a part of GME as well, I think, the nostalgic attachment. If it wasn't specifically Gamestop, which is kind of a meme in of itself, would it have taken off like it did? I'm not so sure
    - anupamchugh 6y ago
      People are now trying to look for the next GME to get quickly rich.. this can be a dangerous bubble in itself with the last one left holding the bag. IMO, it’ll be hard to do such a short squeeze ever again as the institutional investors know the repurcussions.
    - snet0 6y ago
      I think it absolutely wouldn't have. If this wasn't Gamestop, but was some random wheelchair-tech company from MI, I don't think the community would've jumped at the chance. Some of the sentiments from comments are literally just "these guys thought Gamestop was dead? fuck them, we won't let it die"
- 6y ago
deleted 6y ago
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cronix 6y ago
This all seems like a nice attack vector for a nation state or large group of organized hackers. Flood a forum with bots spouting pro-stock x and "stick it to the man" messages, buy a bunch of shares and sit back and wait. Sell at 4-5x, Profit, Rinse, Repeat and leave the suckers holding the bag. There will be suckers. We just haven't hit that point yet.
- throwawaywsb 6y ago
  I believe that the fascinating thing about WSB is how they are communicating. Using invented language and rapidly changing memes makes it very hard for an actor to do spam/bots at scale. Maybe this is the future of language that is resistant to misinformation, symbols/word change so fast and the only way to communicate is to use the most community accepted viral alphabet.
- cvhashim 6y ago
  Why are we not funding this?
- nus07 6y ago
  Sure, but aren’t we all adults and isn’t this a free market . Somehow when hedge funds do it in secret then no one is to blame but now that game has caught in somehow people not in suits are to be blamed . Either way there were always suckers and always will be . I would rather have information out and then decide rather than a bunch of hedge fund bro’s frat secret.
  - trianglem 6y ago
    No “we’re all adults” and “we can think for ourselves” clearly doesn’t work. You need hard government regulation on foreign direct investment.
- CivBase 6y ago
  > This all seems like a nice attack vector for a nation state I keep seeing stuff like this but I don't understand the motivation. What would a rival to the US have to gain by bankrupting a handfull of US hedge funds?
mancerayder 6y ago
Here's the question that we are all hanging on: was the WSB sub engaged in manipulation of the price of securities. For this they (we) need to decide: - is the 'game plan' above evidence of that. - when someone posts a screenshot of their position and emojis of rocketships, and a bunch of people respond with This is the way. and other meme-y jokes, is that manipulation? If the second is true, we're in for a rocky road ahead. We are going to have to decide as a society how far we wish to go. People post Buy This, Sell That, I did this, I did that, all over the place and not least on retail financial news sites like Seeking Alpha. There are comments there, too. Should we ban all comments and news from non official channels out of fear of getting sued or investigated for securities fraud? A dystopian possibility is Reddit shuts all stock subs. Seeking Alpha turns off comments. HN bans talk of securities. YouTube pulls stock analyst videos and comments. Google fiddles with results to avoid people who aren't CNBC or an approved site getting hits. Remember how they banned crypto YouTube videos?
- vagrantJin 6y ago
  > when someone posts a screenshot of their position and emojis of rocketships, and a bunch of people respond with This is the way. and other meme-y jokes, is that manipulation? Its hard to take WSB in earnest as a criminal element. If SEC or FED respond disproportinately, ut mught lead to the global "high finance" becoming a meme.
- mike00632 6y ago
  Imagine a world where stock price manipulation is illegal and everyone cares if I try to defraud new investors out of their money. Do I want to live in a world with such censorship? That would be such a dystopian hellscape.
  - mancerayder 6y ago
    Sarcasm noted. Now, is your suggestion to ban all comments and discussion of stocks to avert this defrauding of new investors?
    - 6y ago
andrenotgiant 6y ago
A bit pedantic, but: We don't actually know that this exact text was written 143 days ago. The text part of a self-post on reddit can be edited by the OP even after the thread gets archived, and you can see from the asterisk that this one has been edited. I'm not sure if reddit exposes the "last edit date" anywhere, maybe in an API? The other way would be to look at an internet archive snapshot.
- byroot 6y ago
  The old.reddit.com UI shows the last edit date: https://old.reddit.com/r/wallstreetbets/comments/ip6jnv/the_real_greatest_short_burn_of_the_century/ https://old.reddit.com/r/wallstreetbets/comments/ip6jnv/the_... This post was last edited 4 months ago.
himurajing 6y ago
With market manipulation being so vague and up for interpretation, you might as well ban every CEO and any possible influential individual from voicing their opinion (tweeting, upvoting, chiming in) since their reputation and personas will impact the market value of the stock. People who trust in say Elon, Jeff Bezos, Trump, etc. will be likely to buy up shares of a company because these influential leaders pick sides. What is and isn't stock market manipulation is very nuance and there will be no laws that elites/hedge funds can't bypass simply with a bit of elbow grease to the lobbyist and law makers. Law makers and market markets are in the bed simply because it's almost a guaranteed successful ROI on anything they do. In the end the retail investors are stuck holding the bags.

166 points by omarhaneef 6y ago

Serious question for someone that understands securities law: Is WSB essentially a crime scene for a widespread market manipulation fraud and conspiracy? From what I've read on the SEC site: "Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal." https://www.sec.gov/investor/pubs/regsho.htm https://www.sec.gov/investor/pubs/regsho.htm

anupamchugh 6y ago
I don’t think so... if WSB is being criticised for market manipulation, then so should be hedge fund managers. Everyday we see institutional investors setting new price targets for certain stocks—which definitely drives up the price. People are just criticising WSB since newbie investors backed dumb stocks.
- grepthisab 6y ago
  Someone else committing a crime isn't really a defense to one's own crime though.
  - b3kart 6y ago
    No, but if a law is applied inconsistently it raises questions about whether 1) the law is sensible 2) the regulatory system is unbiased. Pointing to such inconsistencies is a perfectly reasonable thing to do.
    - VWWHFSfQ 6y ago
      Resolving those inconsistencies in the law because of uneven enforcement would come quite a long time after the fact. But as the law stands now, this is probably illegal. I doubt anyone will be prosecuted for it, though.
- anonuser123456 6y ago
  This seems to be the sentiment of a lot of people, but the SEC has in fact prosecuted hedge fund managers for just this tactic in the past. It is generally hard to prosecute because smart hedge fund managers don't leave a paper trail and leave a trail of plausible deniability. But in this case, people are literally admitting "Yes, I would like to engage in your proposed felony." Even manipulation aside... conspiracy itself is a crime. I don't think conspiracies suddenly become legal just because they were very large.
  - whomst 6y ago
    The key distinction AFAICT is that r/WSB isn't commanding people to buy, nor does it have any assets of its own. This is just a stochastic result of mania and individual investors doing what they believe to be in their best interest.
    - snet0 6y ago
      > r/WSB isn't commanding people to buy ehhhhhh... I've seen plenty of BUY BUY BUY posts. Unless I'm missing your point. I understand what WSB isn't a corporation or entity in and of itself, but it is still a (somewhat) organised group of uh... "investors".
      - anupamchugh 6y ago
        True... except they don’t call themselves investors. They relish using terms like autists, degenerates. Basically they enjoy sending across a message more than making a fortune today.. it’s like a cult
      - sircastor 6y ago
        But aren’t there plenty of “BUY BUY BUY” posts that result in nothing? My understanding prior to this was that r/WSB was typically a lot of hot air being blown around trying to drum up enthusiasm. No different than your uncle saying at the table “I’ve invested in... and it’s going sky high!” The bar to qualify this random association of people as organized seems pretty high.
- cm2187 6y ago
  I am not white washing hedge fund managers, but any hedge fund manager that would put in writing in an auditable system that he is considering manufacturing a short squeeze to hurt specific investors and went ahead and did it would have a tough time in court. No one with half a brain would do that (not that in recent history there hasn't been a handful of sub-half-brain bankers who documented their misdeeds in writing).
  - fma 6y ago
    Yeah, but if you're Bill Ackman you can do it on front of millions of people on CNBC. "During the epic verbal battle between Icahn and Ackman that was televised on CNBC in January, Icahn predicted that Ackman’s Herbalife investment could produce the “mother of all short squeezes.” Shortly after that incident, it became clear that Icahn had taken a big position in Herbalife’s stock. He has since expanded that position, bought 16.5% of the outstanding shares and gotten two representatives on Herbalife’s board." https://www.forbes.com/sites/nathanvardi/2013/07/22/carl-icahn-is-squeezing-bill-ackman-to-death-with-herbalife-trade/ https://www.forbes.com/sites/nathanvardi/2013/07/22/carl-ica...
im3w1l 6y ago
My hot take is that what they are doing is illegal, but when it comes down to it rulings are done by people, and the extent of their sympathy for the little guy will determine the outcome.
- nrmitchi 6y ago
  I agree with this. In my opinion, if you have to state multiple times in your plan that what you're planning isn't illegal/manipulation, it's very grey at best. The fact that one of the premises presented here for the price going up is "We buy a bunch of options, to force (ie, manipulate) someone else into buying the stock, so that the price can go up" doesn't boad well for a "it's not market manipuation" argument either. Straight from this post: > It looks like this: RH Call Option buying -> MM Delta hedging/share purchase -> short squeezing -> Greater retail/RHers price action chasing/call option buying -> MM Delta hedging/share purchase -> short squeezing -> Institutional and new channels flip the script -> GME to $400+ They've presented a chain of events that starts only with "We try to buy a lot of it", has a bunch of "other people have to buy based directly on our actions", they even through in a "other people see the price going up and try to pile in" (ie, screw the rest of retail). > the extent of their sympathy for the little guy will determine the outcome I don't see the masses of people ending up facing consequences here. I wouldn't be surprised if a group of WSB pushers who made out like bandits do see consequences. I also think it's going to be difficult to consider them the little guy if they make a bunch of money, and the much larger mass of non-WSB retail lose their shirts.
  - swimfar 6y ago
    " if you have to state multiple times in your plan that what you're planning isn't illegal/manipulation, it's very grey at best." I don't think this is logical. One could also say, "If people are accusing you of doing something illegal/manipulative and you don't respond by stating that it's not illegal, it's very grey at best."
  - vagrantJin 6y ago
    > much larger mass of non-WSB retail lose their shirts. Can we agree this is hyperbole?
fountainofage 6y ago
That same page also says "Investors and prospective investors should be cautious of rumors on chat rooms where the intent of nameless and faceless computer users is in doubt." So it'd be a question of which is it? Is it don't trust internet forums or is it people shit posting memes is a coordinated attack? Logically and morally you can't have it both ways. But we're seeing how morals don't matter when you go after the money.
- anonuser123456 6y ago
  An internet forum can be both full of rumors, and used for a conspiracy. I imagine people planning the US capital riots also posted a lot of rumors and memes. That statement is just advisory for investors to 'be cautious'.
deleted 6y ago
[deleted]
eternalny1 6y ago
Absolutely not, it's just an open discussion of ideas. Straight from this post ... > This is not fraud. There is no manipulation here. We aren’t forcing anyone to do anything. It’s going to happen with or without us. But I want to ride.
- snet0 6y ago
  Well, if they say it's not fraud, who am I to say otherwise! Joking aside, the "we just like the stock" "this is not financial advice" stuff is as much a defence as the Someone Who Isn't Me thing I remember seeing on drug-related forums years back. You feel like it's protection because you're not getting prosecuted for admitting something you know is at least in the ballpark of law-breaking, but in reality you're just small-fry that nobody cares about. The moment a big-time dealer is under the spotlight, no amount of SWIM is protection. I don't expect anyone from WSB to receive repercussions for this, but afaik this is dangerous legal territory and their defensive phrasing is a facade.
  - eternalny1 6y ago
    To me, it seems like people just noticed something absurd in the market (a short % over 100) and were pointing it out. It was a perfect set-up for a historical short squeeze if the right catalyst came along. And that catalyst wasn't simply the people on WSB, there were other catalysts such as the Chewey founder coming in, and then earnings reports. Once those factors played out, the people who noticed the precarious position the hedge funds had put themselves in got to watch their exact predicitions come true. I don't see how that can be confused with a pump-and-dump scheme or any sort of market manipulation.
    - snet0 6y ago
      I think if it turns out that (and I have no idea if this could be the case) some of the "key" figures in riling up WSB were holding GME prior, and sold like 2 days ago, that would be a pump-and-dump, right? I'm not totally sure, but I believe that fits the criteria.
cm2187 6y ago
Not a lawyer but I would also be surprised that adding something like "let's discuss hypothetically..." at the top would be a defense against being accused of market manipulation if it is proven the person actually went ahead and transacted per the post.

anupamchugh 6y ago

If you look up WSB, there are plenty of game plans— PLTR, PLUG, NIO. GME was just trapped and the institutional investors underestimated the power of one subreddit.

overcast 6y ago
The real squeeze is when the rest of wall street saw blood in the water, after Monday. This was not in the hands of WSB after that point. Big names got involved, and destroyed those funds.
- anupamchugh 6y ago
  Exactly, everyone jumped in when they realised the WSB memes actually made sense
  - Finnucane 6y ago
    Or if not quite 'sense', could be used to advantage. Like now the company that processes Robinhood's trades ends up owning a chunk of the hedge fund wsb targeted.
  - cblconfederate 6y ago
    Actually, they jumped after it made sense. There is a cohort of twitter people who are jumping on anything that is making the news to appear to be edgy.
- amrx101 6y ago
  Especially Elon Musk. He had gears to grind with short sellers and he did.
  - anupamchugh 6y ago
    True... he actually got involved to give the short sellers a taste of their own medicine.. prior to this TSLA was the favourite stock of short sellers... Musk calls short selling as scam. Though shorting ensures market equilibrium and was brought into the system to prevent such short squeezes.. It’s just some big guys were taking too much leverage and are now facing repercussions.

caseysoftware 6y ago

I started following WSB just before this one.. it was calm then. There was also a post along the lines of "there are ~50M public shares, 2M of us, if everyone bought 25 shares, we own GME!" At that stage, it was trading between $5-10 so for ~$250, it was silly but not impossible. But the point is that NONE of this information or analysis was secret, conducted in back rooms, or even hard to find. If you didn't know the terminology and implications, it might be hard to decipher without someone else doing the heavy lifting but that's no different than any other market analysis. For WSB, this is a perfect positive black swan. The downside was capped ($250 at the time) and the upside is unlimited. CNBC, et al need to look past the shitposting and see this is a new creature.

cblconfederate 6y ago
No more information asymmetry, something that only crypto had so far.
anupamchugh 6y ago
Yup, interesting... I coincidentally wrote an article yesterday calling GME the Black Swan of Wall Street https://anupamchugh.medium.com/gamestop-is-the-black-swan-of-wall-street-c1d6e3f9181f?sk=1afaf82bd802fea2e57dd476504500de https://anupamchugh.medium.com/gamestop-is-the-black-swan-of...
titzer 6y ago
Yep, it's really great that markets can create speculation that are not tied at all to the fundamentals of a security. That doesn't create bubbles, volatility, or open the door for endless shenanigans at all. Sorry to be a bit snarky, but fad-based bubbles are not what markets need. They don't need social justice either. If you want to trade stocks, do some research and invest wisely for the long term. I am personally weary of 24/7 outrage.
- xkeysc0re 6y ago
  Who are you to arbiter who gets to trade stock and on what terms? Isn't this play literally about fundamentals? The stock was undervalued and overshorted so Redditors saw an opportunity to crowd source a short squeeze. WallStreetBets is full of jokes and memes, sure, but there's also consistently top voted posts explaining the logic and due diligence behind GME. There's nothing untoward happening here except the insane outrage and hypocrisy of Wall St CNBC types.

artemonster 6y ago

Every other news outlet throws claims like "retail investors own hedge funds" and "hedge funds lost billions on reckless shorts", but is there any evidence of that? I am a total layman here, but can someone point me to a source where we can see that someone "shorted 150% of all available stock". Else it seems like a manipulation by someone who has heavily invested and lost and tried to "memefy" the stock.

aikinai 6y ago
There are plenty of sources, but here’s a recent one that touches on a few points: https://www.cnbc.com/2021/01/29/gamestop-short-sellers-are-still-not-surrendering-despite-nearly-20-billion-in-losses-this-year.html https://www.cnbc.com/2021/01/29/gamestop-short-sellers-are-s... The main hedge fund known for shorting GME already had to sell a major stake in their company for 1.5 billion to survive last week.
jackhalford 6y ago
Short interests are public info [1], e.g [2]. The days to cover is more of an estimate though, with current volume it's more likely to be in the range of a few hours. [1] https://www.investopedia.com/ask/answers/06/shortedstock.asp https://www.investopedia.com/ask/answers/06/shortedstock.asp [2] https://financhill.com/most-heavily-shorted-stocks-today https://financhill.com/most-heavily-shorted-stocks-today
- fma 6y ago
  Short interest is public info, but the price that they shorted is not. A fund could short from $10 and cover $100 to lose $90...then short again at $300 and now the price is $200. Short interest would remain the same but they'd be up $10 (with having spent more money on the borrow cost at $300, of course). Short interest is not enough to know how damaged the funds are. As a matter of fact, since these hedge fund employee the smartest people in the world (supposedly?) it would not surprise me if they are taking advantage of the GME sentiment and profiting from this sentiment.
overcast 6y ago
Current estimate is around 70 billion lost so far, which of course the vast majority of that went to other Wall Street firms. The only ones that will win at the end of this is Wall Street and the few retail that got in VERY early. Retailers will get left holding this bag. The great irony out of all this is that all this volume in trading, just made them even richer.

endisneigh 6y ago

Is there any way GameStop, the company, can take advantage of this hysteria? Perhaps announce they're going to do a major rebrand, partner with Starbucks and become some game cafe of sorts? I imagine GameStop, if their management is up for it, wants to create the expectation that their new true value is greater than their value a month ago and less than what it is now. If they can issue new shares at the difference and revitalize their company perhaps something meaningful could come from this for them.

outoftheabyss 6y ago
See AMC https://www.polygon.com/movies/2021/1/29/22256360/amc-stock-price-reddit-rally-robinhood-debt-conversion https://www.polygon.com/movies/2021/1/29/22256360/amc-stock-...
- xkeysc0re 6y ago
  Honestly, AMC is an interesting long play if only due to pent up demand for "normal" things like going to the movies. This is definitely a part of GME as well, I think, the nostalgic attachment. If it wasn't specifically Gamestop, which is kind of a meme in of itself, would it have taken off like it did? I'm not so sure
  - anupamchugh 6y ago
    People are now trying to look for the next GME to get quickly rich.. this can be a dangerous bubble in itself with the last one left holding the bag. IMO, it’ll be hard to do such a short squeeze ever again as the institutional investors know the repurcussions.
  - snet0 6y ago
    I think it absolutely wouldn't have. If this wasn't Gamestop, but was some random wheelchair-tech company from MI, I don't think the community would've jumped at the chance. Some of the sentiments from comments are literally just "these guys thought Gamestop was dead? fuck them, we won't let it die"
6y ago

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cronix 6y ago

This all seems like a nice attack vector for a nation state or large group of organized hackers. Flood a forum with bots spouting pro-stock x and "stick it to the man" messages, buy a bunch of shares and sit back and wait. Sell at 4-5x, Profit, Rinse, Repeat and leave the suckers holding the bag. There will be suckers. We just haven't hit that point yet.

throwawaywsb 6y ago
I believe that the fascinating thing about WSB is how they are communicating. Using invented language and rapidly changing memes makes it very hard for an actor to do spam/bots at scale. Maybe this is the future of language that is resistant to misinformation, symbols/word change so fast and the only way to communicate is to use the most community accepted viral alphabet.
cvhashim 6y ago
Why are we not funding this?
nus07 6y ago
Sure, but aren’t we all adults and isn’t this a free market . Somehow when hedge funds do it in secret then no one is to blame but now that game has caught in somehow people not in suits are to be blamed . Either way there were always suckers and always will be . I would rather have information out and then decide rather than a bunch of hedge fund bro’s frat secret.
- trianglem 6y ago
  No “we’re all adults” and “we can think for ourselves” clearly doesn’t work. You need hard government regulation on foreign direct investment.
CivBase 6y ago
> This all seems like a nice attack vector for a nation state I keep seeing stuff like this but I don't understand the motivation. What would a rival to the US have to gain by bankrupting a handfull of US hedge funds?

mancerayder 6y ago

Here's the question that we are all hanging on: was the WSB sub engaged in manipulation of the price of securities. For this they (we) need to decide: - is the 'game plan' above evidence of that. - when someone posts a screenshot of their position and emojis of rocketships, and a bunch of people respond with This is the way. and other meme-y jokes, is that manipulation? If the second is true, we're in for a rocky road ahead. We are going to have to decide as a society how far we wish to go. People post Buy This, Sell That, I did this, I did that, all over the place and not least on retail financial news sites like Seeking Alpha. There are comments there, too. Should we ban all comments and news from non official channels out of fear of getting sued or investigated for securities fraud? A dystopian possibility is Reddit shuts all stock subs. Seeking Alpha turns off comments. HN bans talk of securities. YouTube pulls stock analyst videos and comments. Google fiddles with results to avoid people who aren't CNBC or an approved site getting hits. Remember how they banned crypto YouTube videos?

vagrantJin 6y ago
> when someone posts a screenshot of their position and emojis of rocketships, and a bunch of people respond with This is the way. and other meme-y jokes, is that manipulation? Its hard to take WSB in earnest as a criminal element. If SEC or FED respond disproportinately, ut mught lead to the global "high finance" becoming a meme.
mike00632 6y ago
Imagine a world where stock price manipulation is illegal and everyone cares if I try to defraud new investors out of their money. Do I want to live in a world with such censorship? That would be such a dystopian hellscape.
- mancerayder 6y ago
  Sarcasm noted. Now, is your suggestion to ban all comments and discussion of stocks to avert this defrauding of new investors?
  - 6y ago

andrenotgiant 6y ago

A bit pedantic, but: We don't actually know that this exact text was written 143 days ago. The text part of a self-post on reddit can be edited by the OP even after the thread gets archived, and you can see from the asterisk that this one has been edited. I'm not sure if reddit exposes the "last edit date" anywhere, maybe in an API? The other way would be to look at an internet archive snapshot.

byroot 6y ago
The old.reddit.com UI shows the last edit date: https://old.reddit.com/r/wallstreetbets/comments/ip6jnv/the_real_greatest_short_burn_of_the_century/ https://old.reddit.com/r/wallstreetbets/comments/ip6jnv/the_... This post was last edited 4 months ago.

himurajing 6y ago

With market manipulation being so vague and up for interpretation, you might as well ban every CEO and any possible influential individual from voicing their opinion (tweeting, upvoting, chiming in) since their reputation and personas will impact the market value of the stock. People who trust in say Elon, Jeff Bezos, Trump, etc. will be likely to buy up shares of a company because these influential leaders pick sides. What is and isn't stock market manipulation is very nuance and there will be no laws that elites/hedge funds can't bypass simply with a bit of elbow grease to the lobbyist and law makers. Law makers and market markets are in the bed simply because it's almost a guaranteed successful ROI on anything they do. In the end the retail investors are stuck holding the bags.