11 ms·

Obviously? The company was bankrupt. People who bought HRTZ after bankruptcy had to have known it was a game of financial musical chairs, much like GME, TSLA

• tacheiordache 6y ago
  GME is not bankrupt yet (it is indeed overpriced and comparable to HRTZ), but TSLA and BTC? They don't belong to the same categories. TSLA and BTC will see a lot of gains to come. Eventually without a definite date what goes up comes down but it'd be silly to not take a piece of the pie yourself and keep your savings in cash...
  • airstrike 6y ago
    BTC is not a stock so I really don't follow why people keep treating it like it has some underlying value
    • Dirlewanger 6y ago
      It has value because, again, other people think it has value. Otherwise it wouldn't be trading at ~$54k.
    • croes 6y ago
      Like most stocks BTC's value depends on the buyers hope of a rise of the value. Buy low and sell high. For the original function of stocks, support a company and get a share of the profit, you are right about BTC.
      • deleted 6y ago
        [deleted]
      • PragmaticPulp 6y ago
        That’s not really an accurate comparison. Stocks are ownership in a company, which is still subject to all of the realities of operating a company. We can’t simply continue trading Hertz stock as a speculative gamble when the company goes under. Yes, cycles of hype and supply and demand do distort stock prices, but it’s still a capital allocation market. GameStop can choose to sell shares into the hot market, much as AMC did, to raise money. Buyers of those shares are allocating capital into the company. One of the draws of Bitcoin as a speculative instrument is that there are no fundamentals. Without fundamentals, there is no mechanism to suggest if it’s undervalued or overvalued. The only thing a Bitcoin purchase funds is more energy expenditure on mining.
        • deleted 6y ago
          [deleted]
        • thaumasiotes 6y ago
          > We can’t simply continue trading Hertz stock as a speculative gamble when the company goes under. What? Why not? Not only can we continue to trade stock in a defunct corporation, we do. Take a look over here: https://www.liveauctioneers.com/item/85889867_imperial-india-company-stock-certificate-from-1723 https://www.liveauctioneers.com/item/85889867_imperial-india...
          • gruez 6y ago
            That's trading the stock certificates, not the stock itself. Nowadays there aren't any stock certificates anymore so that point is kind of moot. I doubt you can still trade enron shares, for instance.
            • thaumasiotes 6y ago
              The certificates still exist; the fact that you don't get one when you buy stock just reflects the fact that you don't technically own the stock. US stocks were not dematerialized.
        • MrMan 6y ago
          I don't mean to quibble but I would say that even though bit coin is not a quote unsuited real currency you can apply purchasing powrr parity valuation to it and compare purchasing power of bitcoin compared to other currency like instruments additionally the cost to mint a bit coin is not meaningless, just easy to neglect.
      • saalweachter 6y ago
        The "original function" of stocks hasn't gone away. The S&P 500 paid out half a trillion dollars in dividends last year, and performed another half trillion or so in stock buy-backs. Trading happens on the pure derivative of stock prices, yeah, and people get rich off of it, sure, but ignoring the trillion dollars a year that flows from the profits on the economic activities of the S&P 500 back to the investors in the stock is ... oversimplifying things.
        • pbhjpbhj 6y ago
          How does that come with the sum of all monies lost on trading with S&P500 shares? Serious question.
          • jfengel 6y ago
            The sum of all monies lost trading S&P500 shares should be negative, since the index as a whole was up. Which isn't to say it'll be up forever, but over a scale of years it has historically always been up. Even if you lost money trading S&P 500 shares, somebody else made more, which is why the index is up. Even so, that figure isn't really relevant to the GP's point. Their point was that in addition to the price of the stocks, people who owned those stocks got cash money paid into their pockets, via dividends. That amounts to about 1.1% interest on money you spend buying the shares[1]. (That's not actually a great number. 2% is more common over the last 20 years. It suggests that as of right now the market is overpriced. But that's also for 2020, which is not a typical year. So far for 2021, it's more like 1.5%) [1] https://www.multpl.com/s-p-500-dividend-yield https://www.multpl.com/s-p-500-dividend-yield
            • saalweachter 6y ago
              When you factor in stock buybacks -- which are sort of but not quite the same as dividends -- it's "sort of" like 3%. (My vague understanding is that for complicated and silly reasons, many more companies have preferred stock buybacks to dividends in recent decades, but it's still money flowing back from companies to investors.)
    • baq 6y ago
      BTC is a commodity and trades like one. fundamental value is hashed electricity... not much, but guess it counts as something for somebody. for traders, it's something that has a ticker, a price and some volume. whatever works.
      • this_user 6y ago
        Production costs don't equal value of the product. You can certainly spend more on making something than it is worth. BTC has no intrinsic value. It has some utility, but mostly in the realm of illegal activities. But that is not the same thing as intrinsic value.
    • rsynnott 6y ago
      I mean, there's an argument for viewing Tesla and Gamestop similar to bitcoin; they clearly have _some_ underlying value, but it seems largely secondary to hype-induced valuation.
    • NickM 6y ago
      It sort of has underlying value, in that owning bitcoin lets you write entries in an extraordinarily inefficient append-only database. (It seems clear to me that this isn't a valuable enough capability to justify the current price of BTC, but I guess that's a separate discussion.)
  • Judgmentality 6y ago
    At the end of the day, people are betting on what they believe (or throwing away their money for the lulz). I genuinely, no bullshit, think TSLA is more irrational than GME, and has been for years. I put my money where my mouth is and I'm up 5x in 2 weeks. I know it won't last, but hey TSLA is crashing too. Nothing lasts forever.
    • deleted 6y ago
      [deleted]
    • tacheiordache 6y ago
      Indeed nothing lasts forever but TSLA at least has something to show while GME's business is passé. TSLA is overpriced but at the moment it crashed and will jump back to new heights. Why not take advantage of the notoriety and make a gain yourself?
      • Judgmentality 6y ago
        I think it's obvious that I am holding a substantial amount of GME right now, and I think I should disclose that. Ryan Cohen, the guy who founded Chewy, is on the board for GME and leading an initiative to transform Gamestop into an e-commerce store. In other words he wants to compete directly with Steam, and while many don't realize it yet, Amazon. And this is one of the only people in history who has successfully beat Amazon in a product category before. Chewy absolutely dominated the pet market for e-commerce. What I think Gamestop should do is compete directly with twitch, and set up an online game store on top of that. Basically do what twitch is doing but better, because twitch is shockingly bad for an Amazon acquisition. Then Gamestop could host online game tournaments, and they could even draw attention at local brick-and-mortar stores. They've got the real estate, they've got the brand recognition, and they've got the goodwill of the public right now (which is something you can't even buy, Amazon doesn't have that even with a trillion dollar market cap). I don't think this will happen. But if it did, GME would be ridiculously undervalued right now.
        • waprin 6y ago
  • agumonkey 6y ago
    crypto is still bubblish.. new field, massive returns ... everybody with a bit of mileage know it will feel bad for the last week buyer before the top. musical chair.
• dgellow 6y ago
  [deleted]
  • eloff 6y ago
    No, GME has a failing business. They were losing money on their physical stores before the pandemic. They basically have to pivot into ecommerce and somehow compete effectively with Sony, Microsoft, and Valve. I don't give them good odds of success there, even with Ryan Cohen.
    • deleted 6y ago
      [deleted]
• Mc_Big_G 6y ago
  Hit me up when BTC goes bankrupt.
  • camjohnson26 6y ago
    BTC’s version of bankrupt is when transaction fees aren’t worth enough to incentivize mining.
    • dustingetz 6y ago
      that has almost happened multiple times and those times correlate with massive tether prints
      • camjohnson26 6y ago
        I think it’s extremely likely that Tether isn’t backed and is responsible for most of the BTC price increases. Got any links for these events?
    • fogof 6y ago
      What do you mean by "not enough to incentivize mining"? Mining works on a system where the fewer miners there are the larger a portion of the total transaction fee share each miner gets. Even if the there were no exchanges or people sending transactions, I'm sure there would be at least a few nerds who would mine on their desktop computers for shits and giggles. A better criterion would be "when transaction fees aren't worth enough to incentivize enough mining to keep the network secure". But even that isn't a very clear concept because you can always just wait longer for more blocks to confirm.
      • camjohnson26 6y ago
        Well if the hash rate drops far enough all that unused ASIC firepower could easily fork the network a million different directions and transactions would take forever to get through, I don't think waiting would produce that much more security because the real chain getting mined on the desktops would be a lot shorter than the ASIC mined ones.
• chrismeller 6y ago
  That seems like a bit of a simplistic view spurred on by people who don’t know what Chapter 11 is. It’s not “we don’t have any more money” or “we aren’t making any money”, it’s “we need a little court-mandated breathing room (from our creditors) to change x, y, and z, and then we’ll be ok”.
  • gregschlom 6y ago
    "and then we'll be ok" More like: "and then we'll pay back as much as we can to our creditors, and then if there's still money left at the end we might be ok"
    • chrismeller 6y ago
      Well, in this case perhaps. The shareholders may be screwed, but at least it gives them (Hertz as well as shareholders) a fighting chance, rather than just saying “yep, we had a good run” and washing their hands of everything.
  • tablespoon 6y ago
    > That seems like a bit of a simplistic view spurred on by people who don’t know what Chapter 11 is. > It’s not “we don’t have any more money” or “we aren’t making any money”, it’s “we need a little court-mandated breathing room (from our creditors) to change x, y, and z, and then we’ll be ok”. It really depends on which "we" you're talking about: 1. What you said is probably true, from the perspective of the organization itself (which includes its officers). 2. It's almost always false, from the perspective of the current shareholders. They're going to get wiped out.
    • chrismeller 6y ago
      Yes, the we were Hertz in that case, not shareholders.
• jboog 6y ago
  If you read some of the posts on WSB a huge number of people just really have no clue about capital markets, investing, or basic business sense. I don't know how many times I saw people claiming GME would go to $1000 because the new CEO has a brilliant new scheme to turn the company around by going digital! Why "going digital" in 2021 means your company is worth 100X what it was a few months ago I'll never quite understand. I guess no one had yet discovered the opportunity of these computer machines and the World Wide Web! Or "it's the short squeeze" By people who didn't even know what a short was 72 hours before, long after the shorts had covered their positions. Sure some people acknowledge they are essentially gambling in equities, but tons of people truly think they have some stunning insight into a business because of some anonymous WSB shitpost they read this morning.
  • karmelapple 6y ago
    Would you say those same people who just learned the phrase “short” or “short squeeze” are likely the same kind of people going to the casino and thinking they can successfully count cards? As mentioned elsewhere in here, it’s ultimately gambling. It’s putting money up, exposing it to risk that could completely wipe you out. If someone doesn’t understand that about stock investing, I think they’re very similar to someone not realizing a casino could wipe out your money. But making sure everyone fully understands this - educating people who are risking money - certainly seems like a thoughtful thing for countries to incentivize. But unless all the financial websites have to be styled to look like a casino, or areas of a physical bank space put up neon lights and blinking signs to emulate Vegas casinos, I don’t know if we can ever drive the point home clearly enough.
    • scatters 6y ago
      RobinHood is styled like a gambling app. That doesn't put people off; more the reverse.
    • jboog 6y ago
      Yeah, I agree it's totally gambling. There's also the thing where buying equity in a company can seem very simple because you see something like Apple where they made a cool thing and obviously their stock went up. People just have no idea about how complex the markets are. They also don't remember the very smart people who claimed the Iphone would be quickly overtaken by Android and other cheaper alternatives (Clay Christensen predicted this a guy generally very smart on tech/business) Hindsight always makes it seem like it was easy to pick the great companies that were OBVIOUSLY going to do well. They don't understand how incredibly sophisticated professional investors are who dedicate their lives to it, and on average even THOSE people don't 'beat the market'.