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How much evidence is there that the "reddit onslaught" actually moved the price, as opposed to them being the stalking horse for more sophisticated actors with

How much evidence is there that the "reddit onslaught" actually moved the price, as opposed to them being the stalking horse for more sophisticated actors with more capital exercising a vanilla short squeeze strategy?

londons_explore 6y ago
My experience of reddit is you can get a "wildly successful" meme or post, yet rarely that translates into more than a few thousand dollars of cash being spent on anything. All the "wildly successful" kickstarters and stuff seem to have commercial backers lined up to make the social media buzz effect appear bigger than it is. I suspect the same happened here.
- Judgmentality 6y ago
  > All the "wildly successful" kickstarters and stuff seem to have commercial backers lined up to make the social media buzz effect appear bigger than it is. This is interesting (and not at all surprising). Do you have a link to more information or is this just something you've noticed?
- ClumsyPilot 6y ago
  'spending' on random kickstarter products and investing your savings is obviously quite different. So you can't use one to judge the other
ihunter2839 6y ago
Could you elaborate a bit on what you mean by this? I have seen similar comments elsewhere but don't really understand what is being suggested.
- julianandjuliet 6y ago
  A strat that quant funds use are algorithms that look for movement in the market. When they noticed an uptick in gamestop they bought in. When they buy in the price goes up which signals to other algorithms to also buy in. Thus raising the price and causing a tsunami.
- mmahemoff 6y ago
  The media portrays it as "Redditors take on hedge funds". In reality, the volume indicates there's hedge funds, as well as a broad group of retail investors from outside Reddit, who have all jumped on the train. Hedge funds are on both sides of this.
  - rantwasp 6y ago
    yes, there are large whales that are long on gme. yes, a lot of retail investors have jumped on it. reddit is the propaganda machine that ignited the fire
cortesoft 6y ago
Yeah, Matt Levine pointed this out in an article last week... the total buy and sell numbers for ‘retail investors' was actually pretty well matched (meaning retails investors bought and sold roughly the same number of shares) This is not a just simple “Redditors keep buying shares” story
mclightning 6y ago
I don't know if you're right. But that definitely sounds like a good game plan for state to pretend to be on the side of the little guy, and do what they like to do... Create a bigger, more sinister enemy...and you can have the crowds on your side.
jnordonez 6y ago
This has been my question as well. Especially when you overlay the charts for gme and amc and bb, they move almost identically. I really struggle to believe it's all gressroots. This entire thing was astroturfed if you ask me.
- rantwasp 6y ago
  word on the wall street bets street is that there are a couple of big whales that are long on gme,amc and they are trying to generate a squeeze. at this point in time it’s basically a battle of the trading bots with the whole world watching.
A12-B 6y ago
Well, what's the evidence of that then? I think the reddit behaviour explains what happened much better, and then everyone jumped on the train because of the groundwork they set.
robbomacrae 6y ago
So many conspiracy theories on both sides these days. Don't forget Ocram's razor. I don't think there are many sophisticated actors here at all. I'm speaking as one who did DD on GME back in September and throw some money in (thought it was a great opportunity mainly because of Cohen + the upcoming console super cycle with a tiny chance of squeeze thrown in) It was a smart discovery by WSB and got a bit more than average attention but then it kept growing.. every week more DD's posted and more attention. Now the entire sub is so dedicated to GME its actually annoying. I think it really is the simple dumb story of a really bad bet by a hedge fund getting called out online and a with more and more jumping on the wagon and with the hedge fund making more and more dumb mistakes. And everyone is underestimating the redditors who, behind the emojis and crap talk, are actually pretty smart. Collectively they can, and did, cause this.. no need to invent other actors to explain it.
- deleted 6y ago
  [deleted]
- dataflow 6y ago
  I wouldn't call it a conspiracy theory or call this out as an example of Occam's razor. > Collectively they can, and did, cause this.. no need to invent other actors to explain it. The thing is, people imagine this requires a lot of capital to pull off. How did WSB get so many people to invest so much into GME as to hit a hedge fund so hard? Do so many people really have that much money just to throw away? There is a need to explain this, and inventing other big actors does explain this much better for people.
  - nprz 6y ago
    I mean the WSB user count has grown from 2.2m on Monday to now 7.5m. If 5 million of those users all bought $100 worth of GME that's half a billion, if they bought $1000, that's 5 billion.
    - SpicyLemonZest 6y ago
      Over 700 million shares were traded last week, so even if every WSB user bought 10 shares, that wouldn't account for close to a majority of the activity.
lr4444lr 6y ago
The enormous trading volume suggests that it wasn't a small rarified group.
wdn 6y ago
Of course there are other big players that drive it. Retail investors are in no way able to move price.
- gnarbarian 6y ago
  Half of all robinhood accounts held GME. Nevermind this is incorrect.
  - Doolan 6y ago
    So?
  - SpicyLemonZest 6y ago
    I believe this is false. The Vice story that started that rumor (https://www.vice.com/en/article/m7ak7y/robinhood-stops-users-from-trading-gamestop-stocks-other-reddit-yolo-picks https://www.vice.com/en/article/m7ak7y/robinhood-stops-users...) has retracted the claim.
np_tedious 6y ago
You're not the only one thinking this. https://www.bloomberg.com/opinion/articles/2021-01-29/reddit-traders-on-robinhood-are-on-both-sides-of-gamestop https://www.bloomberg.com/opinion/articles/2021-01-29/reddit...
ogre_codes 6y ago
I don't think the big players attack each other like this. Its too traceable and if word gets out, it can come back and bite them.
zz865 6y ago
Lots of pros can spot a short squeeze, I'm sure there is a bunch of smart money too.
jussij 6y ago
The thing that moved the share price up was simple supply and demand. From what I've read the short sellers had taken a short interest that exceeded 100% of the available GameStop shares. But remember these are short sellers are selling something they don't yet own. They are selling a promise to sell shares at some time in the future for given price. When that future date turns up the they are forced into the market to buy shares at what ever price just so they can full fill their original promise to sell shares. They have no choice in this as it was the contract they signed. Now because shareholders weren't prepared to sell, that created massive buying pressure which then drove up the price. I suspect where reddit played it's part is they spread the word that the shore sellers had taken up such a massive short position, adding to the buy pressure and effectively killing off any sell pressure, which then makes that short sell position even worse..
- PragmaticPulp 6y ago
  > From what I've read the short sellers had taken a short interest that exceeded 100% of the available GameStop shares. When someone shorts a stock, it creates a new long position as well. The term is "short sell" because the borrowed shares are sold to someone else. The new buyer is also long. Long interest is always greater than short interest for this reason. This is why short interest can be greater than 100%. The facts didn't really matter in this pump, though. The running joke on Reddit was that no one was reading the "DD" anyway, just hopping on the bandwagon.
  - jussij 6y ago
    That 'borrowed' position has to unwind sometime in the future and to unwind it requires a share purchase. Now if no one is selling where do the shares required to fulfill these burrowed position come from? If it was not that buy pressure created by the excessive short selling, what did drive up the share price?

londons_explore 6y ago

My experience of reddit is you can get a "wildly successful" meme or post, yet rarely that translates into more than a few thousand dollars of cash being spent on anything. All the "wildly successful" kickstarters and stuff seem to have commercial backers lined up to make the social media buzz effect appear bigger than it is. I suspect the same happened here.

Judgmentality 6y ago
> All the "wildly successful" kickstarters and stuff seem to have commercial backers lined up to make the social media buzz effect appear bigger than it is. This is interesting (and not at all surprising). Do you have a link to more information or is this just something you've noticed?
ClumsyPilot 6y ago
'spending' on random kickstarter products and investing your savings is obviously quite different. So you can't use one to judge the other

ihunter2839 6y ago

Could you elaborate a bit on what you mean by this? I have seen similar comments elsewhere but don't really understand what is being suggested.

julianandjuliet 6y ago
A strat that quant funds use are algorithms that look for movement in the market. When they noticed an uptick in gamestop they bought in. When they buy in the price goes up which signals to other algorithms to also buy in. Thus raising the price and causing a tsunami.
mmahemoff 6y ago
The media portrays it as "Redditors take on hedge funds". In reality, the volume indicates there's hedge funds, as well as a broad group of retail investors from outside Reddit, who have all jumped on the train. Hedge funds are on both sides of this.
- rantwasp 6y ago
  yes, there are large whales that are long on gme. yes, a lot of retail investors have jumped on it. reddit is the propaganda machine that ignited the fire

cortesoft 6y ago

Yeah, Matt Levine pointed this out in an article last week... the total buy and sell numbers for ‘retail investors' was actually pretty well matched (meaning retails investors bought and sold roughly the same number of shares) This is not a just simple “Redditors keep buying shares” story

mclightning 6y ago

I don't know if you're right. But that definitely sounds like a good game plan for state to pretend to be on the side of the little guy, and do what they like to do... Create a bigger, more sinister enemy...and you can have the crowds on your side.

jnordonez 6y ago

This has been my question as well. Especially when you overlay the charts for gme and amc and bb, they move almost identically. I really struggle to believe it's all gressroots. This entire thing was astroturfed if you ask me.

rantwasp 6y ago
word on the wall street bets street is that there are a couple of big whales that are long on gme,amc and they are trying to generate a squeeze. at this point in time it’s basically a battle of the trading bots with the whole world watching.

A12-B 6y ago

Well, what's the evidence of that then? I think the reddit behaviour explains what happened much better, and then everyone jumped on the train because of the groundwork they set.

robbomacrae 6y ago

So many conspiracy theories on both sides these days. Don't forget Ocram's razor. I don't think there are many sophisticated actors here at all. I'm speaking as one who did DD on GME back in September and throw some money in (thought it was a great opportunity mainly because of Cohen + the upcoming console super cycle with a tiny chance of squeeze thrown in) It was a smart discovery by WSB and got a bit more than average attention but then it kept growing.. every week more DD's posted and more attention. Now the entire sub is so dedicated to GME its actually annoying. I think it really is the simple dumb story of a really bad bet by a hedge fund getting called out online and a with more and more jumping on the wagon and with the hedge fund making more and more dumb mistakes. And everyone is underestimating the redditors who, behind the emojis and crap talk, are actually pretty smart. Collectively they can, and did, cause this.. no need to invent other actors to explain it.

deleted 6y ago
[deleted]
dataflow 6y ago
I wouldn't call it a conspiracy theory or call this out as an example of Occam's razor. > Collectively they can, and did, cause this.. no need to invent other actors to explain it. The thing is, people imagine this requires a lot of capital to pull off. How did WSB get so many people to invest so much into GME as to hit a hedge fund so hard? Do so many people really have that much money just to throw away? There is a need to explain this, and inventing other big actors does explain this much better for people.
- nprz 6y ago
  I mean the WSB user count has grown from 2.2m on Monday to now 7.5m. If 5 million of those users all bought $100 worth of GME that's half a billion, if they bought $1000, that's 5 billion.
  - SpicyLemonZest 6y ago
    Over 700 million shares were traded last week, so even if every WSB user bought 10 shares, that wouldn't account for close to a majority of the activity.

lr4444lr 6y ago

The enormous trading volume suggests that it wasn't a small rarified group.

wdn 6y ago

Of course there are other big players that drive it. Retail investors are in no way able to move price.

gnarbarian 6y ago
Half of all robinhood accounts held GME. Nevermind this is incorrect.
- Doolan 6y ago
  So?
- SpicyLemonZest 6y ago
  I believe this is false. The Vice story that started that rumor (https://www.vice.com/en/article/m7ak7y/robinhood-stops-users-from-trading-gamestop-stocks-other-reddit-yolo-picks https://www.vice.com/en/article/m7ak7y/robinhood-stops-users...) has retracted the claim.

np_tedious 6y ago

You're not the only one thinking this. https://www.bloomberg.com/opinion/articles/2021-01-29/reddit-traders-on-robinhood-are-on-both-sides-of-gamestop https://www.bloomberg.com/opinion/articles/2021-01-29/reddit...

ogre_codes 6y ago

I don't think the big players attack each other like this. Its too traceable and if word gets out, it can come back and bite them.

zz865 6y ago

Lots of pros can spot a short squeeze, I'm sure there is a bunch of smart money too.

jussij 6y ago

The thing that moved the share price up was simple supply and demand. From what I've read the short sellers had taken a short interest that exceeded 100% of the available GameStop shares. But remember these are short sellers are selling something they don't yet own. They are selling a promise to sell shares at some time in the future for given price. When that future date turns up the they are forced into the market to buy shares at what ever price just so they can full fill their original promise to sell shares. They have no choice in this as it was the contract they signed. Now because shareholders weren't prepared to sell, that created massive buying pressure which then drove up the price. I suspect where reddit played it's part is they spread the word that the shore sellers had taken up such a massive short position, adding to the buy pressure and effectively killing off any sell pressure, which then makes that short sell position even worse..

PragmaticPulp 6y ago
> From what I've read the short sellers had taken a short interest that exceeded 100% of the available GameStop shares. When someone shorts a stock, it creates a new long position as well. The term is "short sell" because the borrowed shares are sold to someone else. The new buyer is also long. Long interest is always greater than short interest for this reason. This is why short interest can be greater than 100%. The facts didn't really matter in this pump, though. The running joke on Reddit was that no one was reading the "DD" anyway, just hopping on the bandwagon.
- jussij 6y ago
  That 'borrowed' position has to unwind sometime in the future and to unwind it requires a share purchase. Now if no one is selling where do the shares required to fulfill these burrowed position come from? If it was not that buy pressure created by the excessive short selling, what did drive up the share price?