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Redditors: complain about alleged market manipulation by "hedgies". Coordinate between one another on subreddits like /r/WallStreetBets, /r/SuperStonk, and /r/G

Redditors: complain about alleged market manipulation by "hedgies". Coordinate between one another on subreddits like /r/WallStreetBets, /r/SuperStonk, and /r/GME. Encouraging thousands of others to "buy and hodl" a particular stock sounds like a coordinated scheme to me. In a democracy that values free speech and the liberty of association, combined with the Internet, it was inevitable, but then the bar for what counts as market manipulation punishable under the law is raised considerably.

DarkWiiPlayer 5y ago
Sooo... market manipulation is wrong if and only if it is being discussed on a public medium like reddit, but not if an entity like a hedge-fund does it on its own? That's an interesting take.
autosharp 5y ago
Yes, you found a contradiction between different Reddit users.
- ziml77 5y ago
  The same people who feel like Wall Street is fighting against small investors and manipulating the market are the same ones who coordinate on /r/wallstreetbets. They are specifically coordinating against the big firms. That was the whole idea behind the GameStop thing. They were purposely trying to ensure that a hedge fund wouldn't be able to buy GameStop shares to cover their massively over-shorted position.
  - DarkWiiPlayer 5y ago
    So what's the point? If one is guilty, everyone is guilty; and I'm pretty sure most of the redditors were going at it from a perspective of "beat them with their own dirty tricks" precisely because playing by the rules while others don't is what people consider unfair.
pajamaw 5y ago
Sure you can call them both coordinated schemes but that's setting up a pretty bad false-equivalency. Funds that own full percentage points in stocks making pure top-down orchestrated moves vs hobby investors reaching out into the void with their info that may or may not gain traction are simply not in the same league.
Jensson 5y ago
A redditor publicly posting "Buy and Hodl" isn't unfair in anyway. Everyone in the world can read that comment at exactly the same time and act based upon it.
- qeternity 5y ago
  Piling into high gamma strikes at the same time to force a dealer squeeze is a bit more than expressing a view that an asset is undervalued. I'm not defending either side here, but Reddit has picked a fight that is absolutely tantamount to market manipulation.
  - Jensson 5y ago
    But how can you tell the difference between people following dumb advice on the internet and people intentionally manipulating the market? It isn't illegal to be an idiot. It is pretty obvious that lots of people try to post on reddit to make their assets more valuable, but I am pretty sure that many of them are conventional investors. There is no reason for any of the old big players to not post these things on reddit, I don't see how having the power of reddit could trump having the power of reddit + the power of controlling the marketplaces. When unwanted things happens based on reddit manipulation they shut down the market, when things go as they want the market stays open, so it seems like they can't lose under the current rules.
    - qeternity 5y ago
      Market manipulation and insider trading are two of the most difficult crimes to prove. I'm not saying it's easy to prove, but I do think it's easy to spot, particularly when you have large /r/wsb threads devoted to trying to bankrupt Citadel Securities.

DarkWiiPlayer 5y ago

Sooo... market manipulation is wrong if and only if it is being discussed on a public medium like reddit, but not if an entity like a hedge-fund does it on its own? That's an interesting take.

autosharp 5y ago

Yes, you found a contradiction between different Reddit users.

ziml77 5y ago
The same people who feel like Wall Street is fighting against small investors and manipulating the market are the same ones who coordinate on /r/wallstreetbets. They are specifically coordinating against the big firms. That was the whole idea behind the GameStop thing. They were purposely trying to ensure that a hedge fund wouldn't be able to buy GameStop shares to cover their massively over-shorted position.
- DarkWiiPlayer 5y ago
  So what's the point? If one is guilty, everyone is guilty; and I'm pretty sure most of the redditors were going at it from a perspective of "beat them with their own dirty tricks" precisely because playing by the rules while others don't is what people consider unfair.

pajamaw 5y ago

Sure you can call them both coordinated schemes but that's setting up a pretty bad false-equivalency. Funds that own full percentage points in stocks making pure top-down orchestrated moves vs hobby investors reaching out into the void with their info that may or may not gain traction are simply not in the same league.

Jensson 5y ago

A redditor publicly posting "Buy and Hodl" isn't unfair in anyway. Everyone in the world can read that comment at exactly the same time and act based upon it.

qeternity 5y ago
Piling into high gamma strikes at the same time to force a dealer squeeze is a bit more than expressing a view that an asset is undervalued. I'm not defending either side here, but Reddit has picked a fight that is absolutely tantamount to market manipulation.
- Jensson 5y ago
  But how can you tell the difference between people following dumb advice on the internet and people intentionally manipulating the market? It isn't illegal to be an idiot. It is pretty obvious that lots of people try to post on reddit to make their assets more valuable, but I am pretty sure that many of them are conventional investors. There is no reason for any of the old big players to not post these things on reddit, I don't see how having the power of reddit could trump having the power of reddit + the power of controlling the marketplaces. When unwanted things happens based on reddit manipulation they shut down the market, when things go as they want the market stays open, so it seems like they can't lose under the current rules.
  - qeternity 5y ago
    Market manipulation and insider trading are two of the most difficult crimes to prove. I'm not saying it's easy to prove, but I do think it's easy to spot, particularly when you have large /r/wsb threads devoted to trying to bankrupt Citadel Securities.