5 ms·

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

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.
    - belltaco 6y ago
      Volume is meaningless, as the same share might be traded back and forth several times, e.g HFT or order flow buyers flipping stocks within microseconds.
      - SpicyLemonZest 6y ago
        Would HFT traders flip a stock 10 times among each other just to fulfill a single Redditor's buy order? (Honest question, I don't know enough about standard HFT practices to confidently guess.)
    - gruez 6y ago
      Indeed, figures from citadel shows retail volumes at around 30%. 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...
  - nl 6y ago
    > the WSB user count has grown from 2.2m on Monday to now 7.5m. If 5 million of those users all... Is 5/7.5M users of any forum did anything it would be some kind of record level conversion, let alone speculating $100.
    - malandrew 6y ago
      On average I don't think $100 is that crazy. Most haven't YOLO-ed anything. While many YOLO-ed for 1-2 shares, there are many who have YOLO-ed for thousands to tens of thousands of dollars.
      - 6y ago
- pureliquidhw 6y ago
  COVID created a bored populous with stimulus checks to blow. Recent retail investing has moved more tickers than just GME.
- caseysoftware 6y ago
  As I noted in a similar thread a couple days ago.. When all of this started last fall, the price was bouncing between $5-10. Therefore, with as little as $500 (aka less than a stimulus check), you get 50-100 shares. Even as recently as ~3 weeks ago, it was $20-25/share. It cost more to buy in but still within reach for all but the smallest investors. And that's not considering the options side. As of the 19th (aka 12 days ago), you could still buy $35 calls for $12 with a Feb 19th expiration. That $1200 is worth upwards of $12-15k now. Now multiply any of those by a couple hundred thousand investors, some with much more to put in.. and we still haven't touched the medium, let alone the BIG players.
  - brokensegue 6y ago
    number of shares shouldn't matter much though. especially now that all these brokerages offer fractional shares. I guess it does matter a little more for options since those lots are bigger and fixed.
- gnarbarian 6y ago
  A lot of us have a few thousand to yolo. I made money on it too. I'd say most of us were in it for the lulz. who cares if we lose.
  - malandrew 6y ago
    This. A lot of my immediate co-workers have YOLO-ed on this because it's entertaining and we like the stock.
- Doolan 6y ago
  Reddit users would be an amount of the capital in the GME situation, but far from the majority. There's a huge amount of other hedge funds who actually control the vast majority of the capital screwing over Melvin at the moment. This whole scenario is hedge funds making money off of other hedge funds and a bunch of retail investors making a small amount but risking huge amounts when GME inevitably collapses.
rantwasp 6y ago
this is a classic example of a positive feedback loop. wsb did not do all of this but they were the spark that created the fire.
- sroussey 6y ago
  Feedback loop for sure. A movie will be made on this. YOLO! I can see GameStop putting an end to some of this by issuing non-voting shares to one of the hedge funds that is current shorting, giving them a known out and pocketing a huge investment for M&A.
  - sroussey 6y ago
    That wouldn’t be as fun though...
  - keeganpoppen 6y ago
    that's what i've been thinking about too-- at what point is it economically expedient for GameStop to sell shares directly to the shorts to bail them out? doesn't seem much weirder than all the credit default swap silliness that's happened for the past few years.
    - rantwasp 6y ago
      they cannot just make whatever stocks they want up. they are limited there on the number they can emit. plus, not sure if they get to choose who gets to buy the shares. also, why would gamestop bail out the same people that wanted to drive it into the ground?
      - sroussey 6y ago
        So they benefit. It’s stock is up, but that doesn’t help their business.
BoorishBears 6y ago
20B in volume in a single trading day and people still think this is just retail. Sheesh.
- sroussey 6y ago
  It’s the retail volume that is breaking things, but yeah other are riding momentum.
  - BoorishBears 6y ago
    Exactly as I said... this is not just retail. Not 20B in a single trading day.
    - wyre 6y ago
      That’s 4 million people averaging $5000. It could be?
      - sekai 6y ago
        Not really, few percentage points of that sub are actually investing. Loud minority.
    - xiphias2 6y ago
      Retail has 10x leverqge with out of money call options, don't forget that. Of course hedge funds need to sell and hedge those options that create the huge volume
- bugzz 6y ago
  2-3 weeks ago when share prices were around $17, GME had a market cap of less than 1.2B. WSB has 7.6 million users now, but I assume it went up a lot recently. Say 2 million of them bought some GME. To buy 50% of the shares a couple weeks ago it would have only taken $296 each. So they could ABSOLUTELY get prices moving significantly. Now of course lots more people have jumped on now. But that 20B volume number is after they got the price to ramp up!
jcfrei 6y ago
It's virtually guaranteed that this stock popped up on the radars of the funds who run momentum trading strategies. And it would be very weird for a lot of them not to jump on that bandwagon (at the very least because it's their mandate to do so).
- toomuchtodo 6y ago
  This is apparent from the level 2 market data and the size of share blocks that have been moving.
worik 6y ago
I do not agree that Occum's razor is much help here. AFAIK this is completely unprecedented. A crowd of whomever and bankers with clients money at stake, disagreeing so absolutely about fundamental values. A mass action making the third corner of a very strange triangle. The explanation you offer (it's sensible, except it is not one hedge fund) is no more or less complex than a conspiracy. What ever is going on there are a lot of moving parts. I am not making predictions!

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.
  - belltaco 6y ago
    Volume is meaningless, as the same share might be traded back and forth several times, e.g HFT or order flow buyers flipping stocks within microseconds.
    - SpicyLemonZest 6y ago
      Would HFT traders flip a stock 10 times among each other just to fulfill a single Redditor's buy order? (Honest question, I don't know enough about standard HFT practices to confidently guess.)
  - gruez 6y ago
    Indeed, figures from citadel shows retail volumes at around 30%. 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...
- nl 6y ago
  > the WSB user count has grown from 2.2m on Monday to now 7.5m. If 5 million of those users all... Is 5/7.5M users of any forum did anything it would be some kind of record level conversion, let alone speculating $100.
  - malandrew 6y ago
    On average I don't think $100 is that crazy. Most haven't YOLO-ed anything. While many YOLO-ed for 1-2 shares, there are many who have YOLO-ed for thousands to tens of thousands of dollars.
    - 6y ago
pureliquidhw 6y ago
COVID created a bored populous with stimulus checks to blow. Recent retail investing has moved more tickers than just GME.
caseysoftware 6y ago
As I noted in a similar thread a couple days ago.. When all of this started last fall, the price was bouncing between $5-10. Therefore, with as little as $500 (aka less than a stimulus check), you get 50-100 shares. Even as recently as ~3 weeks ago, it was $20-25/share. It cost more to buy in but still within reach for all but the smallest investors. And that's not considering the options side. As of the 19th (aka 12 days ago), you could still buy $35 calls for $12 with a Feb 19th expiration. That $1200 is worth upwards of $12-15k now. Now multiply any of those by a couple hundred thousand investors, some with much more to put in.. and we still haven't touched the medium, let alone the BIG players.
- brokensegue 6y ago
  number of shares shouldn't matter much though. especially now that all these brokerages offer fractional shares. I guess it does matter a little more for options since those lots are bigger and fixed.
gnarbarian 6y ago
A lot of us have a few thousand to yolo. I made money on it too. I'd say most of us were in it for the lulz. who cares if we lose.
- malandrew 6y ago
  This. A lot of my immediate co-workers have YOLO-ed on this because it's entertaining and we like the stock.
Doolan 6y ago
Reddit users would be an amount of the capital in the GME situation, but far from the majority. There's a huge amount of other hedge funds who actually control the vast majority of the capital screwing over Melvin at the moment. This whole scenario is hedge funds making money off of other hedge funds and a bunch of retail investors making a small amount but risking huge amounts when GME inevitably collapses.

rantwasp 6y ago

this is a classic example of a positive feedback loop. wsb did not do all of this but they were the spark that created the fire.

sroussey 6y ago
Feedback loop for sure. A movie will be made on this. YOLO! I can see GameStop putting an end to some of this by issuing non-voting shares to one of the hedge funds that is current shorting, giving them a known out and pocketing a huge investment for M&A.
- sroussey 6y ago
  That wouldn’t be as fun though...
- keeganpoppen 6y ago
  that's what i've been thinking about too-- at what point is it economically expedient for GameStop to sell shares directly to the shorts to bail them out? doesn't seem much weirder than all the credit default swap silliness that's happened for the past few years.
  - rantwasp 6y ago
    they cannot just make whatever stocks they want up. they are limited there on the number they can emit. plus, not sure if they get to choose who gets to buy the shares. also, why would gamestop bail out the same people that wanted to drive it into the ground?
    - sroussey 6y ago
      So they benefit. It’s stock is up, but that doesn’t help their business.

BoorishBears 6y ago

20B in volume in a single trading day and people still think this is just retail. Sheesh.

sroussey 6y ago
It’s the retail volume that is breaking things, but yeah other are riding momentum.
- BoorishBears 6y ago
  Exactly as I said... this is not just retail. Not 20B in a single trading day.
  - wyre 6y ago
    That’s 4 million people averaging $5000. It could be?
    - sekai 6y ago
      Not really, few percentage points of that sub are actually investing. Loud minority.
  - xiphias2 6y ago
    Retail has 10x leverqge with out of money call options, don't forget that. Of course hedge funds need to sell and hedge those options that create the huge volume
bugzz 6y ago
2-3 weeks ago when share prices were around $17, GME had a market cap of less than 1.2B. WSB has 7.6 million users now, but I assume it went up a lot recently. Say 2 million of them bought some GME. To buy 50% of the shares a couple weeks ago it would have only taken $296 each. So they could ABSOLUTELY get prices moving significantly. Now of course lots more people have jumped on now. But that 20B volume number is after they got the price to ramp up!

jcfrei 6y ago

It's virtually guaranteed that this stock popped up on the radars of the funds who run momentum trading strategies. And it would be very weird for a lot of them not to jump on that bandwagon (at the very least because it's their mandate to do so).

toomuchtodo 6y ago
This is apparent from the level 2 market data and the size of share blocks that have been moving.

worik 6y ago

I do not agree that Occum's razor is much help here. AFAIK this is completely unprecedented. A crowd of whomever and bankers with clients money at stake, disagreeing so absolutely about fundamental values. A mass action making the third corner of a very strange triangle. The explanation you offer (it's sensible, except it is not one hedge fund) is no more or less complex than a conspiracy. What ever is going on there are a lot of moving parts. I am not making predictions!