12 ms·

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 o

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.
- PragmaticPulp 6y ago
  Misunderstandings like this are part of the problem. Anyone can take out a short position. It's only marginally more complicated than buying a stock. Plenty of retail investors are taking short positions, too. More importantly, the idea that short interest only goes down is a mistake. Anyone, retail or institutional, can close out a short position and re-open a new short position at a higher price. Total short interest remains unchanged, even though earlier shorts have been closed out.
  - shaklee3 6y ago
    That was not a misunderstanding at all. sure, anyone can take a short position. But for the number of outstanding shortage there are, it has to be institutional investors and above. And sure, anyone can close out at a higher position, but that doesn't mean they didn't take a huge loss to do so. I'm not sure why you think that was in misunderstanding.
leghifla 6y ago
"they don't have a good idea of who's benefiting and who's losing" This reminds me of a poker analogy: if you sit at a table and do not recognize the idiot at the table, it's you

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.
PragmaticPulp 6y ago
Misunderstandings like this are part of the problem. Anyone can take out a short position. It's only marginally more complicated than buying a stock. Plenty of retail investors are taking short positions, too. More importantly, the idea that short interest only goes down is a mistake. Anyone, retail or institutional, can close out a short position and re-open a new short position at a higher price. Total short interest remains unchanged, even though earlier shorts have been closed out.
- shaklee3 6y ago
  That was not a misunderstanding at all. sure, anyone can take a short position. But for the number of outstanding shortage there are, it has to be institutional investors and above. And sure, anyone can close out at a higher position, but that doesn't mean they didn't take a huge loss to do so. I'm not sure why you think that was in misunderstanding.

leghifla 6y ago

"they don't have a good idea of who's benefiting and who's losing" This reminds me of a poker analogy: if you sit at a table and do not recognize the idiot at the table, it's you