8 ms·

No, they didn't pitch it as a BTC or Tesla. Clearly you haven't been following at all what is happening. The pitch was to cause a short squeeze and then selling

by Geee 6y ago

No, they didn't pitch it as a BTC or Tesla. Clearly you haven't been following at all what is happening. The pitch was to cause a short squeeze and then selling when it happens. So that only losers would be the short selling hedge funds.

allenu 6y ago
So the idea is everyone who buys late can sell high and jump off the ship at the same time? Maybe I'm missing something, but if a whole bunch of people offload a stock, wouldn't that drive the price down, meaning a lot of people outside of the original short-sellers would still lose money?
- icelancer 6y ago
  The idea is the short sellers have to cover first due to margin calls at a huge loss, then the retail investors unload.
  - MSM 6y ago
    Again though, the retail investors unload to who? Everyone knows GME is over valued by an insane amount, who do people expect to be snapping up shares at $500?
    - thebean11 6y ago
      The short sellers. They are short so they must buy the stock to close out their positions. (not saying this is indeed what would happen, just explaining the though process)
      - notyourday 6y ago
        > The short sellers. They are short so they must buy the stock to close out their positions. This is incorrect. Short sellers only need to close out their positions if: 1. They cannot maintain them. If they can raise funds ( which they did ) they can maintain the positions. In fact they are probably shorting more, short averaging up if they can get a locate. GME yesterday was on a hard to borrow not on non-borrowable list. 2. Their shares are called back. GME looks like a crazy stock around 1998/1999 ADEP(?), I think, which went from sub 3 to over 75 two days before Thanksgiving peaking with a couple of trades over 97 followed by a quick crash into teens and a really slow side into pennies. Some of the short sellers covered by putting up classified ads buying stock certificates from the cause the short squeeze by asking to deliver the certificates crowd a few years later.
        thebean11 6y ago
        I think you misinterpreted what I said. Rephrased: "in order to close out their positions, they must buy the stock". I didn't intend to state that they would close them. I will say though, price going up forcing short sellers to close out (due to margin calls, fear, whatever) is not some made up thing..it's called a short squeeze. I do not know what will happen with GME.
        notyourday 6y ago
        > I think you misinterpreted what I said. Rephrased: "in order to close out their positions, they must buy the stock". I didn't intend to state that they would close them. They do not need to close out their positions until the stock becomes non-borrowable, causing their position to be called in.
        deleted 6y ago
        [deleted]
        katbyte 6y ago
        > They cannot maintain them. If they can raise funds ( which they did ) they can maintain the positions I think at this point for a lot of people its "hold until they can't maintain, this isn't about money it's about screwing over the man!!!!" - as they say the market can remain irrational longer than you can remain solvent.
        notyourday 6y ago
        "The man" is much more liquid and much more capable of raising funds to maintain its positions compared to the WSB buyers of last several days. Margin calls after today's close are going to be brutal.
        sokoloff 6y ago
        Two days ago, the view (of some) was "WSB can remain irrational longer than short-sellers can remain solvent..."
- cj 6y ago
  > everyone who buys late [...] Maybe I'm missing something The narrative on WSB was that you wouldn't be "late" buying in even late last week at $350, because the goal post was raised to $1000. Many people guessing it would go to $5000. Others saying $10,000. Followed by lots of rocket emojis. Considering how people have witnessed the recent crypto rally generate insane returns, I can see how new / naive investors might think they're getting in early at $350. Especially when it was all over the news late last week and a giant billboard encouraging people to buy GME in time square just yesterday. Edit: The timesquare billboard was actually last Friday. And only ran for 1 hour.
  - decafninja 6y ago
    With cries of TO THE MOON! HODL! TO VALHALLA!
  - redisman 6y ago
    Cryptos at least have (somewhat theoretical) use cases with many unknowns that Gamestop Stock does not. In the end you will own stock in a dying retail game company and a pump and dump isn't going to keep its value up very long.
afavour 6y ago
And then the hedge funds said they did indeed sell their short positions, but no-one believed them and the rise continues. There is no way the only losers will be hedge funds at this point, lots of retail investors will lose money.
- Tenoke 6y ago
  Believe them or not, they can easily confirm whether GME still has > 100% shorts[0], which it does. 0. https://www.highshortinterest.com/ https://www.highshortinterest.com/
  - mpalczewski 6y ago
    from that site "Database last updated on January 29, 2021" Typically these stats are updated slowly.
    - deleted 6y ago
      [deleted]
  - dragontamer 6y ago
    Yeah. So a bunch of shorts closed their position at maybe $50 when the price was skyrocketing, and then reopened their position at $300 or $400 (if they timed it with the peak). I'm not sure why people expect the short interest to change at all. If shorts thought it was worth shorting at $15, they sure as hell would be shorting at $300 or $400.
    - celticninja 6y ago
      The cost of shorting the stock is a percentage of the cost of the stock on top of the stock price.
      - deleted 6y ago
        [deleted]
      - 6y ago
fhrow4484 6y ago
> only losers would be the short selling hedge fund That's true for when stock went from $4 to $350, but who are the "losers" when stock goes from $350 to, let's say $7? Also, who are the "winners" on that $350 -> $7 journey?
- 35fbe7d3d5b9 6y ago
  > but who are the "losers" when stock goes from $350 to, let's say $7? Nonsavvy retail investors who believed in the hype and bought when the stock was significantly overpriced. Sane retail investors who are about to enter a whole new world of requirements to get a margin account. > Also, who are the "winners" on that $350 -> $7 journey? The hedge funds who were willing to bet on the stock price dropping from $20 and who would've almost certainly increased those bets when the stock was in the $300s.
  - bilbo0s 6y ago
    That's the irony, the hedge funds they were targeting, unless they were run by borderline imbeciles, increased their short bets. It's like WSB designed this attack never having heard of short averaging. People will say that the hedge funds cheated somehow to come out whole, but the reality is that the attack was extremely poorly designed. (And that's being charitable and assuming that this was an attack and not simply an out and out pump and dump.)
lm28469 6y ago
Time will tell but my little finger told me that there will be plenty of losers, that the wall street people supposedly "owned" will be 100% bailed out, and that nothing of interest will change at wallstreet. The only thing that will change is that mobile trading apps will get major nerfs > No, they didn't pitch it as a BTC or Tesla It was a figure of speech, "we'll transform your $300 in $10000 in 2 weeks". People internally think about all the past opportunities they missed, we're talking about life changing money for a lot of people
- MPSimmons 6y ago
  I think the promise of money being the driving factor for this is probably a strawman argument, at least as far as the WSB community itself. If you browse it, you'll see 'lossporn', with people posting screenshots of their personal losses on the stock performance. I don't think anyone prefers that to lose, but there are very definitely true believers. Of course, as soon as it was covered by the news media, it draws people in who don't share that mindset and do stupid things. so... yeah
- fractionalhare 6y ago
  Banks are prone to bailouts, hedge funds are not (in the traditional sense of taxpayer money, not private investment). Many banks control trillions of dollars. Hedge funds almost always have less than $50B, usually by one or two orders of magnitude. If a bank fails, it's actually a problem for the government. If a hedge fund fails, it's barely a blip. If the limited partner was smart, it will also only cause them a single digit percentage decrease in their portfolio. Hedge funds can amplify a systemic risk, but they would not really be targets for a bailout, the banks would be.
mam2 6y ago
The current (and historical pitch has always be to "cause a short squeeze and hold indefinetely...). Literally every other message is about "do not sell"
- sokoloff 6y ago
  If one were, hypothetically, trying to execute a pump and dump, what message/advice would be ideally the most common?
  - mam2 6y ago
    i understand what you mean, but why would you say that when it's dumping ?
    - sokoloff 6y ago
      Anyone who is long any stock has an incentive to encourage others to "not sell", whether the stock is going up or down. (The pump-n-dumpers are still incentivized to "pump" all the time, even while they're dumping.)
lm28469 6y ago
Update: they're actually doing it now, https://www.reddit.com/r/wallstreetbets/comments/lbdi8m/message_from_a_tsla_veteran_shut_the_fuck_up_and/ https://www.reddit.com/r/wallstreetbets/comments/lbdi8m/mess...

by Geee 6y ago

allenu 6y ago

So the idea is everyone who buys late can sell high and jump off the ship at the same time? Maybe I'm missing something, but if a whole bunch of people offload a stock, wouldn't that drive the price down, meaning a lot of people outside of the original short-sellers would still lose money?

icelancer 6y ago
The idea is the short sellers have to cover first due to margin calls at a huge loss, then the retail investors unload.
- MSM 6y ago
  Again though, the retail investors unload to who? Everyone knows GME is over valued by an insane amount, who do people expect to be snapping up shares at $500?
  - thebean11 6y ago
    The short sellers. They are short so they must buy the stock to close out their positions. (not saying this is indeed what would happen, just explaining the though process)
    - notyourday 6y ago
      > The short sellers. They are short so they must buy the stock to close out their positions. This is incorrect. Short sellers only need to close out their positions if: 1. They cannot maintain them. If they can raise funds ( which they did ) they can maintain the positions. In fact they are probably shorting more, short averaging up if they can get a locate. GME yesterday was on a hard to borrow not on non-borrowable list. 2. Their shares are called back. GME looks like a crazy stock around 1998/1999 ADEP(?), I think, which went from sub 3 to over 75 two days before Thanksgiving peaking with a couple of trades over 97 followed by a quick crash into teens and a really slow side into pennies. Some of the short sellers covered by putting up classified ads buying stock certificates from the cause the short squeeze by asking to deliver the certificates crowd a few years later.
      - thebean11 6y ago
        I think you misinterpreted what I said. Rephrased: "in order to close out their positions, they must buy the stock". I didn't intend to state that they would close them. I will say though, price going up forcing short sellers to close out (due to margin calls, fear, whatever) is not some made up thing..it's called a short squeeze. I do not know what will happen with GME.
        notyourday 6y ago
        > I think you misinterpreted what I said. Rephrased: "in order to close out their positions, they must buy the stock". I didn't intend to state that they would close them. They do not need to close out their positions until the stock becomes non-borrowable, causing their position to be called in.
        deleted 6y ago
        [deleted]
      - katbyte 6y ago
        > They cannot maintain them. If they can raise funds ( which they did ) they can maintain the positions I think at this point for a lot of people its "hold until they can't maintain, this isn't about money it's about screwing over the man!!!!" - as they say the market can remain irrational longer than you can remain solvent.
        notyourday 6y ago
        "The man" is much more liquid and much more capable of raising funds to maintain its positions compared to the WSB buyers of last several days. Margin calls after today's close are going to be brutal.
        sokoloff 6y ago
        Two days ago, the view (of some) was "WSB can remain irrational longer than short-sellers can remain solvent..."
cj 6y ago
> everyone who buys late [...] Maybe I'm missing something The narrative on WSB was that you wouldn't be "late" buying in even late last week at $350, because the goal post was raised to $1000. Many people guessing it would go to $5000. Others saying $10,000. Followed by lots of rocket emojis. Considering how people have witnessed the recent crypto rally generate insane returns, I can see how new / naive investors might think they're getting in early at $350. Especially when it was all over the news late last week and a giant billboard encouraging people to buy GME in time square just yesterday. Edit: The timesquare billboard was actually last Friday. And only ran for 1 hour.
- decafninja 6y ago
  With cries of TO THE MOON! HODL! TO VALHALLA!
- redisman 6y ago
  Cryptos at least have (somewhat theoretical) use cases with many unknowns that Gamestop Stock does not. In the end you will own stock in a dying retail game company and a pump and dump isn't going to keep its value up very long.

afavour 6y ago

And then the hedge funds said they did indeed sell their short positions, but no-one believed them and the rise continues. There is no way the only losers will be hedge funds at this point, lots of retail investors will lose money.

Tenoke 6y ago
Believe them or not, they can easily confirm whether GME still has > 100% shorts[0], which it does. 0. https://www.highshortinterest.com/ https://www.highshortinterest.com/
- mpalczewski 6y ago
  from that site "Database last updated on January 29, 2021" Typically these stats are updated slowly.
  - deleted 6y ago
    [deleted]
- dragontamer 6y ago
  Yeah. So a bunch of shorts closed their position at maybe $50 when the price was skyrocketing, and then reopened their position at $300 or $400 (if they timed it with the peak). I'm not sure why people expect the short interest to change at all. If shorts thought it was worth shorting at $15, they sure as hell would be shorting at $300 or $400.
  - celticninja 6y ago
    The cost of shorting the stock is a percentage of the cost of the stock on top of the stock price.
    - deleted 6y ago
      [deleted]
    - 6y ago

fhrow4484 6y ago

> only losers would be the short selling hedge fund That's true for when stock went from $4 to $350, but who are the "losers" when stock goes from $350 to, let's say $7? Also, who are the "winners" on that $350 -> $7 journey?

35fbe7d3d5b9 6y ago
> but who are the "losers" when stock goes from $350 to, let's say $7? Nonsavvy retail investors who believed in the hype and bought when the stock was significantly overpriced. Sane retail investors who are about to enter a whole new world of requirements to get a margin account. > Also, who are the "winners" on that $350 -> $7 journey? The hedge funds who were willing to bet on the stock price dropping from $20 and who would've almost certainly increased those bets when the stock was in the $300s.
- bilbo0s 6y ago
  That's the irony, the hedge funds they were targeting, unless they were run by borderline imbeciles, increased their short bets. It's like WSB designed this attack never having heard of short averaging. People will say that the hedge funds cheated somehow to come out whole, but the reality is that the attack was extremely poorly designed. (And that's being charitable and assuming that this was an attack and not simply an out and out pump and dump.)

lm28469 6y ago

Time will tell but my little finger told me that there will be plenty of losers, that the wall street people supposedly "owned" will be 100% bailed out, and that nothing of interest will change at wallstreet. The only thing that will change is that mobile trading apps will get major nerfs > No, they didn't pitch it as a BTC or Tesla It was a figure of speech, "we'll transform your $300 in $10000 in 2 weeks". People internally think about all the past opportunities they missed, we're talking about life changing money for a lot of people

MPSimmons 6y ago
I think the promise of money being the driving factor for this is probably a strawman argument, at least as far as the WSB community itself. If you browse it, you'll see 'lossporn', with people posting screenshots of their personal losses on the stock performance. I don't think anyone prefers that to lose, but there are very definitely true believers. Of course, as soon as it was covered by the news media, it draws people in who don't share that mindset and do stupid things. so... yeah
fractionalhare 6y ago
Banks are prone to bailouts, hedge funds are not (in the traditional sense of taxpayer money, not private investment). Many banks control trillions of dollars. Hedge funds almost always have less than $50B, usually by one or two orders of magnitude. If a bank fails, it's actually a problem for the government. If a hedge fund fails, it's barely a blip. If the limited partner was smart, it will also only cause them a single digit percentage decrease in their portfolio. Hedge funds can amplify a systemic risk, but they would not really be targets for a bailout, the banks would be.

mam2 6y ago

The current (and historical pitch has always be to "cause a short squeeze and hold indefinetely...). Literally every other message is about "do not sell"

sokoloff 6y ago
If one were, hypothetically, trying to execute a pump and dump, what message/advice would be ideally the most common?
- mam2 6y ago
  i understand what you mean, but why would you say that when it's dumping ?
  - sokoloff 6y ago
    Anyone who is long any stock has an incentive to encourage others to "not sell", whether the stock is going up or down. (The pump-n-dumpers are still incentivized to "pump" all the time, even while they're dumping.)

lm28469 6y ago

Update: they're actually doing it now, https://www.reddit.com/r/wallstreetbets/comments/lbdi8m/message_from_a_tsla_veteran_shut_the_fuck_up_and/ https://www.reddit.com/r/wallstreetbets/comments/lbdi8m/mess...