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GameStop, 'Reddit rally' stocks slide more, Yellen vows scrutiny
- deleted 6y ago[deleted]
- hrns 6y agoAt this point I'm not sure if the WSB anticipated short squeeze is going to happen, or maybe it has happened already last week.
- baq 6y agoit happened, but new shorts replaced the old shorts and made truckloads of money in the process.
- Dma54rhs 6y agoWasn't it supposed to be that magical last Friday already? At least that was the common topic at the beginning, what changed?
- hrns 6y agoI think that the limits imposed by the RobinHood and other happened in the meantime.
- manderley 6y agoIt's desperate people trying to tell themselves that they're going to be rich soon against all evidence. It's why the date for the supposed squeeze keeps moving.
- jacquesm 6y agoThe Jehova's witness theory of investment.
- swalsh 6y agoIt was never going to happen. Look at the volume of shares that have been trading. There has been ample opportunity to cover any shorts. The conditions to force a squeeze never existed. Furthermore, has anyone actually demonstrated Melvin actually shorted the stock? It would seem like they owned a few puts. Puts don't get squeezed, they just expire out of the money.
- baq 6y agoshort positions do not have to be reported to SEC, so you just can't know. there's ample evidence that melvin's short positions have been closed at about the time GME rose to $150 the first time - a lot of other stocks enjoyed the same general upwards movement indicating somebody closing a diverse lot of shorts.
- tom_mellior 6y agoI find it hilarious that "short squeeze" is a concept that is supposedly well-defined and inevitable if certain market conditions are met, but at the same time so ill-defined that we cannot tell whether it has happened. For whatever it's worth, https://en.wikipedia.org/wiki/GameStop_short_squeeze https://en.wikipedia.org/wiki/GameStop_short_squeeze says it definitely happened, but at the same time it offers zero sources for its claim that "the rush to buy shares to cover those positions as the price rose caused it to rise even further".
- deleted 6y ago[deleted]
- throwaway346434 6y agoOof. Having sat in those communities and seeing media narratives - from reuters as well as others - about "reddit attention shifting to silver" despite a lack of that actually happening to the degree claimed, this is disappointing to see promoted. Objective facts: sentiment has changed, prices have decreased, people have likely lost money. Its frustrating to see a narrative - and not as far as I know out of the SEC themselves - talking about one particular focus of investigation while ignore other dubious areas, even if they arent technically illegal.
- hans1729 6y agoYes, Reuter is immensively disappointing in this whole gig, starting with the doxxing of DFV. The media coverage is absolutely terrible, not only the silver-thing but also the silence on the SEC. It's truly disheartening
- lasagnaphil 6y agoWait, didn't DFV willingly did an interview with WSJ and made himself public? I never thought he was doxxed. (Or is it the situation where he did the interview with anonymity but somehow the WSJ messed it up like the case of SlateStarCodex? From looking at the contents of the interview it really doesn't seem like it.)
- shawabawa3 6y agoMultiple newspapers published his identity before the wsg article
- lasagnaphil 6y agoOh okay, I understand.
- adrianb 6y ago> media narratives - from reuters as well as others - about "reddit attention shifting to silver" That was amazing. It took a few weeks of WSB going on GME before the media noticed, and by that time I was sick of how everything on Reddit was about that. And then one morning all news outlets talk about silver and I had seen nothing of the sort on reddit. This makes me worried the modern reputable media is just an echo chamber, always promoting the same stories with the same views and never investigating anything.
- Beltiras 6y agoIf they removed the trading restrictions on the stock it would shoot back up again.
- RamRodification 6y agoI thought they did. They haven't?
- a254613e 6y agoThey did, few hours ago - markets aren't open yet though. So today will be the first day on RH without restrictions since the price drop.
- RamRodification 6y agoThanks. Will be interesting to see how much of an effect that has at this point.
- hans1729 6y agoI would love to know what events exactly took place during the hype, people and hedges bought in at 60 and sold at 300? And now there is immense uncertainty on wether the squeeze already happened? I don't see GME falling below 40 anytime soon, the core group that started all of this should be holding if anything said until a week ago had any meaning or sincerity at all. Just the people who hold should suffice to keep the stock above 50. How did it drop to 40 Euros yesterday? And whats going on over at wsb? There's astroturfing, trolls, people who bought in at 300, the core that pushed the hold-narrative - who's to be believed? The post on r/stocks about the second squeeze? Man, what a ride.
- WA 6y agoHolding doesn't make the price. You gotta buy if you want to push the price. And nobody got any money for that anymore. The narrative is dead.
- hans1729 6y agoBut the buyers were supposed to be the hedges, desperate to get rid of their short positions. Which is just another dimension: they surely bought more shorts at 300. But can they possibly have covered the majority of their positions? Because if not, this should go above 100 again, right?
- WA 6y agoWhy? If I'm short GME, I'd just wait. Sure, I have to pay borrowing fees, but it doesn't matter if I hold for a week or a few months, if I'm sure it collapses 90% within a year. Of course, I'm oversimplifying stuff like risk management, margin calls etc. but generally speaking, what forces a hedge fund to liquidate its short position?
- DSingularity 6y agoWhere do they get their shares from? They borrow it from people who don’t own it. Those people may want to sell — especially in the event that the share price grows. And when that happens in sufficient volume time to put up because the exchange is not going to fail to deliver.
- WA 6y agoLook at the chart. The VW infinity squeeze already happened in a way. What else do you expect? Old shorts were squeezed out, new shorts entered the bet. Too many people apparently haven't looked at the right side of the VW chart: the steep drop-off from the ATH of ~1,000€. This is /u/Variation-Separate "market makers engineered next leg down all the way to SPX 1,800" all over again. So many people are now holding the bag. They apparently also don't understand that in the stock market, the price is determined by the last transaction. If less people buy (and who should buy, because every gambler is already in), gravity pulls the stock down. Party is over. And Musk should be investigated by the SEC a bit more often. Edit: One thing to add: I refuse to believe that retail ONLY forced the price up. I'd bet some big players participated in the pushing of the price all the way up, selling at the top and now retail is holding the bag, because they thought they make up most of the volume, whereas they have been played.
- Cookingboy 6y agoOn Reddit, especially /r/wsb, many people painted it to be a common folks vs. Wall Street hedge funds story. But I've always thought the reality was that it's a hedge funds vs. hedge funds story where plenty of big players made millions, if not billions last week, then shorted the stock at $3-400 and made millions more on the way down. The retail players were probably just caught between a group of 800lbs fighting gorillas. I wouldn't even be surprised if Melvin Capital made all their money back by shorting near the peak. Additionally I'm beyond disgusted at how "any publicity is good publicity" turned out to be so true and Robinhood came out stronger than ever from this whole debacle: https://www.cnbc.com/2021/02/03/why-investors-were-willing-to-write-robinhood-a-3-billion-check-during-the-gamestop-chaos-.html https://www.cnbc.com/2021/02/03/why-investors-were-willing-t... > “It’s the fastest growing consumer app, and has better engagement than social media,” one investor said. “The majority of those new traders won’t be trading GameStop.” Having "User Engagement" as a benchmark for an investing app is beyond immoral. Robinhood has always been extremely predatory at encouraging users to actively gamble with their investments, and utilizes all kinds of user manipulating tactics such as gamification that has no place in a finance app. They will have a very successful IPO, and the top shareholders/investors will make billions, all from a product named Robinhood that excels at almost nothing but transferring wealth from the masses to the elites. And it will be hailed as a true Silicon Valley success story.
- mucsun 6y agoIf I were a conspiracy theorist I'd say the investment into Robinhood looks like the pay-off for Robinhood halting buys. Buys only, not halting trading the stock. But I'm not a CT so who knows.
- KingOfCoders 6y agoHasn't this been debunked enough? Sure you can believe in conspiracy not in "buy cost collateral/sell is free" but why here on HN? Isn't there a subreddit for that?
- TheAdamAndChe 6y agoOn robinhood, their only sin through this whole situation was poor communication. Several firms had to restrict trading of GME and several other stocks because of clearinghouse restrictions. Robinhood was the first to try to explain publicly why they had to do that, and they explained it absolutely horribly. With regards to treating investing like gambling, there's no real problem with that. There's definitely a market for it, and it's why /r/Wallstreetbets exists.
- DSingularity 6y agoLet her scrutinize, we welcome that. The question is what will her conclusion be? Will it be that social media manipulated the market? Or will it be that when big players got squeezed and got caught with their pants down they changed the rules of the game to avoid losing? Free markets right?
- PartiallyTyped 6y agoRetail can not move markets like that and if you genuinely disagree, take it from somebody like Dr. Michael Burry, in a recent tweet [1]: > The correlation coefficient between $GME and $SAVA today was 0.884648, nearly unity. Video game retailer on one side, biotech on the other. There should be no correlation but for.... Both traded multiple $billions. #BigMoney building you staircases and knocking castles down. This sentiment is repeated in his tweets, though he often deletes them. However, I am certain that the whole story was a ploy for whales to hide behind. But again, what do I know. [1] https://twitter.com/michaeljburry/status/1357528669271388160 https://twitter.com/michaeljburry/status/1357528669271388160
- WA 6y agoI think you're right. Maybe WSB pushed the price initially up to like $38 or whatever on low volume. Then the big players entered, because the narrative was right, price got pushed way up, retail bought more in a maniac frenzy around $300 and big players exited. The idea that Robinhood users can move markets is kinda silly. It's been told again and again for 6-9 months now. But a back of the napkin calculation shows that it's not very plausible: Even if 100 million Americans put their $1,200 stimulus check into stocks, that'd be only $120 billion, which isn't that much of the daily volume of the stock market. And most of them probably don't sell/trade on a daily basis, they rather baghold TSLA, AAPL and then a bit of GME.
- insert_coin 6y agoRobinhood users move markets because they generate “free” publicity literally worth billions, not because of the volume of their transactions. The excitement generated towards a stock, the momentum they build, is almost invaluable even if just for a few days, no matter your business or the price of your stock. Money can’t buy that.
- WA 6y agoYes, but my point is: is it so unlikely that big players see the sentiment, hop on the train and actually drive up the price instead of retail?
- rmm 6y agoWhat happens to the shares of all the people who install Robin Hood, lose their money and just delete the all. Do they just go stagnant?
- jcims 6y agoNot sure about anywhere else but in the US RobinHood requires your SSN to sign up. No idea how well they validate it.
- teekert 6y agoI really hate how big hedge funds can consistently pull money out of the market using tools normal people don't have access to. When it bites them because they get caught with their hands in the cooky jar, they call the market "irrational" or that the "market is disturbed". But their profits are disturbed by people that play "their" game by the rules. Nobody likes to see a a billionaire get even more rich just by shuffling money around while the rest of us are down here providing real value to the world in the form or goods and services. They should be happy it's just a short squeeze and not a full blown revolution.
- lasagnaphil 6y agoYeah, regardless of the results of the event, public trust for financial institutions are plunging down at a rapid rate. Your comment on the morality of the stock markets reminds me Slavoj Zizek's article "Corruption for everybody!": https://spectator.us/topic/corruption-for-everybody-slavoj-zizek-wallstreetbets/ https://spectator.us/topic/corruption-for-everybody-slavoj-z...
- SilasX 6y agoYep, especially the Nasdaq CEO's suggestion to halt trading so the big players can "recalibrate their positions" (groan): https://investorsnews.net/2021/01/27/nasdaq-ceo-suggests-halt-to-trading-to-allow-big-investors-to-recalibrate-their-positions-to-combat-reddit-users/ https://investorsnews.net/2021/01/27/nasdaq-ceo-suggests-hal...
- teekert 6y agoAh.. halting seems like a nice tool for to use! Please halt trading during the next crash so us normies can recalibrate our positions. We need all the money we can get to bail out too-big-to-fail financial institutions afterwards. It would only be fair, right? Level the playing field.
- ckastner 6y agoI've occasionally browsed WSB over the last few days, and it became just too depressing to read. There are vast numbers of financially illiterate people pouring what little money they have into this pipe dream that a short squeeze can still be effected. And these people are fueled by incessant bullshit that approaches, and in some cases even exceeds, the level of QAnon. The facts of the matter are that (1) the cat was out of the bag last Wednesday and (2) since then, WSB has been playing poker with their cards face-up, calling every single raise thrown at them. This is a hedge fund's dream come true. You have an army of saps still willing to pay you $60 for a stock that is worth $20 or so, and they simple won't stop.
- jacquesm 6y agoExactly. They are just there to supply some liquidity and as a final resting place for bad bets.
- pjc50 6y ago> fueled by incessant bullshit that approaches, and in some cases even exceeds, the level of QAnon. To me, it doesn't seem that this is entirely coincidental with the aftermath of the storming of the Capitol; having lost one avenue for delusion-based marketing, everyone involved - mainstream and social media alike - had to find a new thing to hype. Wonder what's next? Find out in a couple of weeks.