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I’ve read that the vast majority of GME stock is held by institutions, mainly a dozen or so Wall Street banks. Redditors apparently had enough pull to move the

• omosubi 6y ago
  Why more people don't realize that this is a bubble is beyond me. The banks and hedge funds will come out of this alive and a lot of people who shouldn't be day trading are going to lose a lot of money. It's fun to watch but quite sad at the same time
  • kyawzazaw 6y ago
    some hedge funds will suffer greatly. (Melvin Capital, Citron Capital, Point72, D1 Capital Partners, Maplelane Capital, Candlestick Capital) some benefit (Vanguard Group, SIG, Semvest Mgmt, MUST Asset Mgmt, BlackRock, Fideility Investments, Dimensional Fund Advisors, Maverick Capital) also Micheal Burry as well it is more of a message for that - the power of the commoners can take down a few elites. for some, it is to be part of the history
    • fakedang 6y ago
      Michael Burry sold most of his holding in September last year. It's kind of why he's criticizing the reddit crowd.
      • manigandham 6y ago
        Michael Burry is also a famous short-seller, who bet on the failure of the mortgage market while it went through one of the biggest crashes of the century. It shows how superficial most of these narratives are as they change from a value play in 2019 to turnaround/holiday runup in 2020 to occupy 2.0 by 2021.
  • kortilla 6y ago
    > and a lot of people who shouldn't be day trading Where does this paternalistic attitude come from? Do you go an lecture people throwing money at the craps tables? People on WSB certainly know this is no different than gambling. There is a reason loss porn is a thing. The entire sub mocks the seriousness of “real investors” who have big accounts and pretend they are gambling by reading a blog about the number they pick on the roulette wheel.
    • judge2020 6y ago
      Seasoned readers (or even those only on the sub for a few months) know that, but the influx of WSB readers is coming from average reddit users who are here for the get-rich-quick and "stick it to wall street" theme the GME squeeze has ignited. They'll be the ones disappointed and holding the bag once everyone, including WSB veterans, have cashed out.
      • vmception 6y ago
        yeah but who cares and why do they care I could be in my most empathic state after a heavy acid trip and still wonder where this unnecessary paternalistic attitude comes from what do you guys want to happen, another paragraph added on page 73 of the regulatory disclaimers?
        • throwaway3699 6y ago
          They care because Wall St. fucked over the entire planet in 2008 and these guys are sat around, bored, probably with an extra stimulus lying around, and have been told they can destroy a few hedge funds via GME. I don't know how realistic that is, but the message is certainly powerful.
      • kortilla 6y ago
        > who are here for the get-rich-quick That means you’re there to gamble. You can’t waltz in expecting 1000% returns in a few days and pretend you’re not gambling.
    • TigeriusKirk 6y ago
  • vkou 6y ago
    > Why more people don't realize that this is a bubble is beyond me. I think plenty of people recognize that it is a bubble, but they are planning on offloading to the bigger fools.
    • nradov 6y ago
      They aren't planning on offloading to the bigger fools, but rather to institutional short sellers who will eventually be forced to cover by escalating interest payments. I don't know if that will actually work, but apparently that's the plan.
      • jeffbee 6y ago
        The cost to borrow GME right now is outrageous but it's not unprecedented in the recent history of the stock. If 200% cost to borrow didn't put the shorts out of business last year, why would 50% do it now?
        • jbbae 6y ago
          Because it never traded at $200+
  • anigbrowl 6y ago
    Perhaps because you are ignoring the people who are saying that making a profit is not their motivation. A lot of people bought GME with the willingness to lose their stake.
    • stjohnswarts 6y ago
      I think the fact that it's easy to make infinite accounts on reddit will end up showing this is a mob started by a dozen or so people to profit off of this.
      • anigbrowl 6y ago
        Are you really not able to conceive of any other motivation?
  • lonnyk 6y ago
    > Why more people don't realize that this is a bubble is beyond me. I think most people are just trying to make money and a bubble is a great way to make money. Until it isn't.
• PragmaticPulp 6y ago
  You nailed it. It has been interesting to watch the WSB narrative shift over time. It's a real-time experiment that optimizes for the best messaging to convince casual Redditors to put their money into stocks in ways that benefit earlier WSB members. At this point, they've convinced a lot of people that buying $GME at obviously inflated prices and never selling it is somehow an altruistic move to take down all of Wall Street that might also make them so rich they can retire early. Of course, it should be obvious that no one is going to get rich by never selling the stock, but that message gets buried among the memes. It was fun to watch at first, but now it's just sad to watch so many people pour real money into something that won't generate the outcome they've been promised.
  • risyachka 6y ago
    Everyone who has been on WSB for more than a week perfectly understands that it is a gamble and you can lose it all. Also, vast majority of WSB users (at least up to the last few days) are buying GME not to profit (according to their own words). And all these events obviously will leave a large mark on stock market and probably introduce some new regulations which is a good thing.
    • nearbuy 6y ago
      Many of them are buying because they're being told it's a way to hurt the people who caused the 2008 financial crisis. In reality, they don't have a good idea of who's benefiting and who's losing, nor what those parties may have done to cause the financial crisis.
      • shaklee3 6y ago
        Who could possibly be on the 130% short interest side besides big investment firms?
        • nearbuy 6y ago
          Given the insane volume on both sides, I think Reddit is a small fraction of the buyers. Professional traders and big firms are probably the bulk of both sides. And with the price so high, I'm sure there are plenty of retail investors trying to short it. Basically, both groups are on both sides. But also, the subreddit is trying to weaponize anger against Wall Street for the 2008 crisis into a generalized anger against all hedge funds and investment firms, regardless of whether these firms are actually guilty of anything. Melvin Capital didn't exist until 2014, but it doesn't matter. They're automatically guilty because they're a hedge fund. People on WSB are telling stories about how their families suffered in 2008 and therefore they are never going to sell their GME stock. WSB mods are deleting posts advising against holding GME. There is a pretty concerted effort on the subreddit to get people to buy more GME and to hold. And the people that do so are going to be the ones holding the bag when the bubble ends. If you're cynical, you might wonder if redditors are the "mark", and some of these posters are intentionally trying to screw them out of their money. Regardless, the idea that this specifically hurts the people that caused the financial crisis is unsubstantiated.
• Anon1096 6y ago
  First of all, hedge funds and banks are very different institutions. Banks hold and invest money in more secure ways, hedge funds usually pursue more aggressive strategies in order to hopefully get returns that are uncorrelated with the greater market. Second, the narrative that Reddit drove the short squeeze is mostly a lie that has been repeated over and over again both because it's cute and because people want to believe they have significant power. In reality, many institutions also saw this coming, and when they saw the WallStreetBets subreddit getting ready to pump (yes they watch Reddit), they also piled on. They've mostly done it quietly so as to not disturb the convenient narrative that this is a David vs Goliath story, but really this was driven by big money. It's just a nice side effect that a lot of early retail investors have made a lot of money as well. And yes, it is absolutely true that the end result of this will be retail investors getting slaughtered. Especially because of all the hype on WallStreetBets and elsewhere, there is a LOT of dumb money in the market who have no exit plan, and their lunch will get eaten when the large institutions exit at the top and trigger a GME free fall.
  • challenger-derp 6y ago
    Would be interesting if there were evidence suggestive of non-retail entities having a hand in the squeeze. Attempts at correlating the hype of r/wsb comments and stock price movement have, in multiple past instances, shown that the wsb hype is a lagging, rather than leading, indicator -- that is, wsb is being led by one or more other sources' actions. Looking back, wsb hasn't had consistent success with their bets, though one could argue that it's an open community and anyone can join to talk up a bet. Overall, I think wsb is a worthwhile community to have.
    • Anon1096 6y ago
      I highly highly recommend reading Ranjan Roy's latest piece on GameStop [1]. It paints an amazing picture to dispel the narrative that's prevalent in the media of Reddit et al. driving the short squeeze. Just as an example from the article, there was a single buy order for 187 million dollars. When Reddit is hailing a young trader with 50 million in assets as the next coming of Jesus (not to downplay him, great job!), it's pretty obvious no one from WallStreetBets is capable of making that order. Though that example is only from this week, it's evidence of big money being well into this play, and I don't think it's a stretch at all to say much of the short squeeze was engineered by them. [1] https://themargins.substack.com/p/game-stop https://themargins.substack.com/p/game-stop
• MichaelBurge 6y ago
  It's not even known that Melvin had an unlimited-risk short position. All they disclosed was that they bought $55 million in puts, so for all we know they might've laughed off a 1% loss and are completely unaffected. Not sure about exact pricing, but maybe they even profited: The volatility on puts has risen to insane levels.
  • overcast 6y ago
    Were they actually long PUTs? There big problem was their short stock position. The latter gets crazy quickly, as we've seen.
  • lettergram 6y ago
    They took a $2.7B loan from Citadel early last week (Tuesday). They appeared exposed.
    • deleted 6y ago
      [deleted]
  • zephyr-wind 6y ago
    If it were only $55M in puts, they would not have needed the bailout. What people in the know think is that they sold calls to finance the puts to achieve a net-zero position... which would be an unlimited-risk synthetic short position.
    • MichaelBurge 6y ago
      How do we know it was a bailout? Maybe they just raised extra money to take advantage of a volatile market.
      • zephyr-wind 6y ago
        Word on the street has that Melvin is down 80% YTD, some other L/S funds 20-30%.
• undefined1 6y ago
  > I’ve read that the vast majority of GME stock is held by institutions, mainly a dozen or so Wall Street banks What %? And what's a good source to verify that number?
  • SpicyLemonZest 6y ago
    Gamestop publishes a list (https://news.gamestop.com/stock-information/institutional-ownership https://news.gamestop.com/stock-information/institutional-ow...), with the large non-mutual-fund holders adding up to 74.86% of the company.