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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

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.
  - titzer 6y ago
    I am just sick of all the outrage, frankly. Now, not only is the stock market all f'd up, we gotta listen to one inane story after another about a market riot. Not only that, you gotta now worrying if your investments will suddenly and inexplicably become the target of some online mob's ire and get spiked for absolutely no reason. And don't be fooled. These things will absolutely be gamed by botnets, astroturfing, and smear campaigns until kingdom come. It's just another landmine that makes the whole background of life suck even more. But yeah, let's get them CNBC types! Burn it down!
    - xkeysc0re 6y ago
      You're all over the place. GME is a black swan aberration borne out of current market conditions BECAUSE of hedge funds and institutional players. Retail investors involved in short squeezes like GME are not going to cause a crash. In fact, I would argue the GME episode has made life suck a lot less for plenty of people - some made money but a lot of people have just had fun laughing, making memes, and putting some money in because, well, what else are you gonna do? The stock market is not F'd up because of retail investors. What should we do - just sit on our hands and hope the free Ford stock Robin Hood gave us goes up? Why not have fun and dream a little and learn about the market in the process?
    - kaczordon 6y ago
      Lol it’s not the people on Reddit’s fault for exploiting an opportunity. Maybe your anger should be directed at the hedge funds who were shorted 140% OF AVAILABLE FLOAT. Wanna know where the instability is coming from? The hedge funds don’t want to pay up and lose money. Redirect your anger towards the proper people.
  - ploika 6y ago
    I'm not American so I don't know what CNBC's coverage is like, but I'm not seeing any outrage or hypocrisy from the Financial Times, the Economist or the various Business sections of Irish media outlets. Maybe I'm missing something. The worst I've seen is maybe a paternalistic attitude of "some inexperienced day traders are now at risk of being taken for greater fools," which I find hard to disagree with, to be honest. Or else they're slightly sniffily pointing out that short selling is not inherently immoral, and that many Wall Street firms are actually delighted with the windfall in fees from all this extra market activity.
- swixi 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. Speculation is a huge part of the market, and "sophisticated investors" take part in it all the time. Tell me why certain popular tech stocks are trading at P/E ratios of more than 1000, or pulling in negative income year after year. Be sure to justify your answer using "fundamentals".
  - titzer 6y ago
    Do you think that I think that that is a good thing? Speculation is good for a lucky few and very bad for lots of people when it goes off the rails. Which is the whole point of having governing bodies regulate the market. Are you proposing that we rein in speculation in a wider sense? Then please, sign me up! But let's not do this with mobs and all the screaming, please.
    - swixi 6y ago
      I don't think it's that simple. Of course the Gamestop situation is a unique one, but speculation is the entire point of the stock market. You can justify (and lower) the risk you take by examining fundamentals, or by investing in "safe" funds, but you are always speculating that the price will eventually go up and not down. An example: One could argue that TSLA's current price is almost entirely speculation divorced from current fundamentals. Are you sure it will be "good for a lucky few and very bad for lots of people when it goes off the rails"? It's possible, but what should we do about that? Restrict people's ability to trade TSLA? In the case of Gamestop, I agree with you, it will be bad for lots of people who get in late. I think more people should be informed about risk before entering the stock market, but I don't know if I agree with you that we need more government regulation in the market to do this. What would that look like?
  - fortran77 6y ago
    But that’s fine and why I don’t buy GME or Tesla! It’s just not the type of investing for me. It would be hard to see how anyone was hurts by GME speculation or organized buying. (Assuming nobody gets government bailouts.)
- Majromax 6y ago
  > Yep, it's really great that markets can create speculation that are not tied at all to the fundamentals of a security. To take the other side of the argument, the linked post is not about a value "not tied to the fundamentals of a security." In particular, it claims: >> For reference: if $GME was trading at the same P/S multiple as $CHWY, the share price would be $420. Now, this argument is wildly speculative to me, but it is in fact an argument about the long-term proper value of the company based on a fundamental. The most recent hype train of "hold diamond hands to the moon rocket" is indeed disconnected from the value, but note that the current stock price is still within a small multiple of the above-quoted long-term level. > If you want to trade stocks, do some research and invest wisely for the long term. That's undoubtedly the safest advice, but this does not make short-term investment illegitimate. Stocks reach long-term value as a series of short-term movements, after all.
- iso1631 6y ago
  > They don't need social justice either Taxpayers have been pumping cash to share owners for the last decade. If a frickin pandemic can't cause shareowners to stop increasing their net worth, what will? Because while non-shareholders are working on treadmill living and majorly suffering, there's something seriously wrong. Either fix the market and the wealth disparity, or some people will just say "ah fuck it" and watch the world burn.
elliekelly 6y ago
> But the point is that NONE of this information or analysis was secret, conducted in back rooms, or even hard to find. There seems to be a massive misunderstanding that somehow because these discussions happened publicly on reddit everything is fine and dandy. It seems people are conflating insider trading (which has nothing to do with the $GME short squeeze unless you’re wearing a tinfoil hat) and market manipulation. I would be surprised if the SEC went after redditors (this time, at least) but there is no “we did it openly and conspicuously” safe harbor or defense when it comes to charges of market manipulation or securities fraud. There’s a reason market commentary comes with a whole bunch of disclaimers in the footnotes with language like “not intended as investment advice” and “references to specific securities and issuers are not intended to be, and should not be interpreted as, recommendations to purchase or sell securities”.
- maxerickson 6y ago
  It's rich that coordinated behavior is manipulation but investing in a targeted managed fund isn't. Or that "I'm buying to squeeze the shorts" is manipulation and "I'm buying because the shorts are overextended" isn't.
  - deleted 6y ago
    [deleted]
  - nrmitchi 6y ago
    > I'm buying to squeeze the shorts You are buying in specifically to manipulate the price of availability of an asset in the market. > I'm buying because the shorts are overextended You're buying in based on some perception of the market, but not attempting your action of "buying in" to have a direct impact. Ya, they can be very similar, but as with a lot of legal aspects, intent matters (but is still hard to prove). Regarding investing in a targeted managed fund, I think it's different because the rules are sort of different. A fund has to have an exit strategy that is a net positive for the whole fund. A fund can't make a profit for half of it's investors, and a lose for the other half of it's investors, on the same position. If there is no exit strategy, the position/play/trade/whatever doesn't make sense. The current WSB exit strategy seems to be "hope to make it out before everyone else loses money".
deleted 6y ago
[deleted]
nojito 6y ago
There’s nothing new about this. This strategy has been used for penny stocks for decades. It’s just with the scale and reach of social media these days combined with the ability for things to get viral, makes it possible to target larger stocks.
alexpetralia 6y ago
Doesn't this miss the fact that you couldn't _actually_ buy 50M shares at $5-10? The price would be bid up as sellers refuse to sell their shares at such low prices, and that is exactly what we've seen.

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.
- titzer 6y ago
  I am just sick of all the outrage, frankly. Now, not only is the stock market all f'd up, we gotta listen to one inane story after another about a market riot. Not only that, you gotta now worrying if your investments will suddenly and inexplicably become the target of some online mob's ire and get spiked for absolutely no reason. And don't be fooled. These things will absolutely be gamed by botnets, astroturfing, and smear campaigns until kingdom come. It's just another landmine that makes the whole background of life suck even more. But yeah, let's get them CNBC types! Burn it down!
  - xkeysc0re 6y ago
    You're all over the place. GME is a black swan aberration borne out of current market conditions BECAUSE of hedge funds and institutional players. Retail investors involved in short squeezes like GME are not going to cause a crash. In fact, I would argue the GME episode has made life suck a lot less for plenty of people - some made money but a lot of people have just had fun laughing, making memes, and putting some money in because, well, what else are you gonna do? The stock market is not F'd up because of retail investors. What should we do - just sit on our hands and hope the free Ford stock Robin Hood gave us goes up? Why not have fun and dream a little and learn about the market in the process?
  - kaczordon 6y ago
    Lol it’s not the people on Reddit’s fault for exploiting an opportunity. Maybe your anger should be directed at the hedge funds who were shorted 140% OF AVAILABLE FLOAT. Wanna know where the instability is coming from? The hedge funds don’t want to pay up and lose money. Redirect your anger towards the proper people.
- ploika 6y ago
  I'm not American so I don't know what CNBC's coverage is like, but I'm not seeing any outrage or hypocrisy from the Financial Times, the Economist or the various Business sections of Irish media outlets. Maybe I'm missing something. The worst I've seen is maybe a paternalistic attitude of "some inexperienced day traders are now at risk of being taken for greater fools," which I find hard to disagree with, to be honest. Or else they're slightly sniffily pointing out that short selling is not inherently immoral, and that many Wall Street firms are actually delighted with the windfall in fees from all this extra market activity.
swixi 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. Speculation is a huge part of the market, and "sophisticated investors" take part in it all the time. Tell me why certain popular tech stocks are trading at P/E ratios of more than 1000, or pulling in negative income year after year. Be sure to justify your answer using "fundamentals".
- titzer 6y ago
  Do you think that I think that that is a good thing? Speculation is good for a lucky few and very bad for lots of people when it goes off the rails. Which is the whole point of having governing bodies regulate the market. Are you proposing that we rein in speculation in a wider sense? Then please, sign me up! But let's not do this with mobs and all the screaming, please.
  - swixi 6y ago
    I don't think it's that simple. Of course the Gamestop situation is a unique one, but speculation is the entire point of the stock market. You can justify (and lower) the risk you take by examining fundamentals, or by investing in "safe" funds, but you are always speculating that the price will eventually go up and not down. An example: One could argue that TSLA's current price is almost entirely speculation divorced from current fundamentals. Are you sure it will be "good for a lucky few and very bad for lots of people when it goes off the rails"? It's possible, but what should we do about that? Restrict people's ability to trade TSLA? In the case of Gamestop, I agree with you, it will be bad for lots of people who get in late. I think more people should be informed about risk before entering the stock market, but I don't know if I agree with you that we need more government regulation in the market to do this. What would that look like?
- fortran77 6y ago
  But that’s fine and why I don’t buy GME or Tesla! It’s just not the type of investing for me. It would be hard to see how anyone was hurts by GME speculation or organized buying. (Assuming nobody gets government bailouts.)
Majromax 6y ago
> Yep, it's really great that markets can create speculation that are not tied at all to the fundamentals of a security. To take the other side of the argument, the linked post is not about a value "not tied to the fundamentals of a security." In particular, it claims: >> For reference: if $GME was trading at the same P/S multiple as $CHWY, the share price would be $420. Now, this argument is wildly speculative to me, but it is in fact an argument about the long-term proper value of the company based on a fundamental. The most recent hype train of "hold diamond hands to the moon rocket" is indeed disconnected from the value, but note that the current stock price is still within a small multiple of the above-quoted long-term level. > If you want to trade stocks, do some research and invest wisely for the long term. That's undoubtedly the safest advice, but this does not make short-term investment illegitimate. Stocks reach long-term value as a series of short-term movements, after all.
iso1631 6y ago
> They don't need social justice either Taxpayers have been pumping cash to share owners for the last decade. If a frickin pandemic can't cause shareowners to stop increasing their net worth, what will? Because while non-shareholders are working on treadmill living and majorly suffering, there's something seriously wrong. Either fix the market and the wealth disparity, or some people will just say "ah fuck it" and watch the world burn.

elliekelly 6y ago

> But the point is that NONE of this information or analysis was secret, conducted in back rooms, or even hard to find. There seems to be a massive misunderstanding that somehow because these discussions happened publicly on reddit everything is fine and dandy. It seems people are conflating insider trading (which has nothing to do with the $GME short squeeze unless you’re wearing a tinfoil hat) and market manipulation. I would be surprised if the SEC went after redditors (this time, at least) but there is no “we did it openly and conspicuously” safe harbor or defense when it comes to charges of market manipulation or securities fraud. There’s a reason market commentary comes with a whole bunch of disclaimers in the footnotes with language like “not intended as investment advice” and “references to specific securities and issuers are not intended to be, and should not be interpreted as, recommendations to purchase or sell securities”.

maxerickson 6y ago
It's rich that coordinated behavior is manipulation but investing in a targeted managed fund isn't. Or that "I'm buying to squeeze the shorts" is manipulation and "I'm buying because the shorts are overextended" isn't.
- deleted 6y ago
  [deleted]
- nrmitchi 6y ago
  > I'm buying to squeeze the shorts You are buying in specifically to manipulate the price of availability of an asset in the market. > I'm buying because the shorts are overextended You're buying in based on some perception of the market, but not attempting your action of "buying in" to have a direct impact. Ya, they can be very similar, but as with a lot of legal aspects, intent matters (but is still hard to prove). Regarding investing in a targeted managed fund, I think it's different because the rules are sort of different. A fund has to have an exit strategy that is a net positive for the whole fund. A fund can't make a profit for half of it's investors, and a lose for the other half of it's investors, on the same position. If there is no exit strategy, the position/play/trade/whatever doesn't make sense. The current WSB exit strategy seems to be "hope to make it out before everyone else loses money".

deleted 6y ago

[deleted]

nojito 6y ago

There’s nothing new about this. This strategy has been used for penny stocks for decades. It’s just with the scale and reach of social media these days combined with the ability for things to get viral, makes it possible to target larger stocks.

alexpetralia 6y ago

Doesn't this miss the fact that you couldn't _actually_ buy 50M shares at $5-10? The price would be bid up as sellers refuse to sell their shares at such low prices, and that is exactly what we've seen.