7 ms·

WallStreetBets coin tanks 90% after insider dumps holding

51 points by haasted 3y ago

jqpabc123 3y ago
Simple pump and dump --- crypto bros must be slow learners.
- dragontamer 3y ago
  WSB is the Reddit community where everyone openly admits to running with pump-and-dump schemes, with the hopes to not be the dumb bagholder at the end. Its a legally grey zone IMO. Its not a traditional pump-and-dump scheme, but the effects are basically the same. They choose a stock, somewhat at random to pump. They use WSB to communicate and coordinate when the pump occurs. The idea is to use a stock that has nostalgic value (Gamestop, AMC, BBBY), but is in dire straights. A shorter term, tactical goal, is to often find highly shorted stocks and/or stocks with high options leverage to cause either a short-squeeze or gamma-squeeze event. Its all public knowledge, legally and morally grey IMO. I wouldn't touch it personally, but obviously you get a whole bunch of pump-and-dumpers together in one location on the internet, they're all going to be competing for the same money on the same forum.
  - smcn 3y ago
    It certainly has that reputation but it is largely unearned in my experience. There is no explicit coordination happening to create pump and dumps. There has, on occasion, been some level of coordination when attempting to trigger a short squeeze but that is mechanically different than a pump and dump. What it does do, though, is spur memetic investment, which can create a short term frenzy for some stocks but it is not a planned event. Thousands of people post stocks each day and every so often a stock will perform well enough to where the community will take hold of it and push it to pretty incredible heights. The most recent one would be TRKA. If you're switched on enough, you can make some pretty massive gains. However don't take this as me defending their crypto scam. That's just downright not okay.
    - dragontamer 3y ago
      > What it does do, though, is spur memetic investment, which can create a short term frenzy for some stocks but it is not a planned event Erm... investing in a security, then trying to create a meme is a pump-and-dump scheme by any other name. You've just changed the name "pump" to "meme", rather than using old-school behaviors like boiler rooms. Its even "meming" the same information: too the moon, or whatever. In the 90s, it was all cold calls over telephone, but today you can use online forums to do this.
      - smcn 3y ago
        I'd argue that is a very simplistic way of looking at it. There is always a narrative as to why a stock will go "to the moon". You say it's explicitly a pump and dump and it's not really, no. Look at GME, the idea was to restrict the float so that when the shorts got exercised, they would be trying to buy shares that didn't exist, creating exponential demand which would increase the price significantly. Not an impossible feat[0]. The "memetic" part of it is purely information exchange. That's all. If that's the barrier for entry for being considered a pump and dump, then I'd say anything which reports on a companys action could be a pump and dump. From Financial Times, to Bloomberg, to Mad Money, to StockTwits, to whomever else. 0: https://internationalbanker.com/history-of-financial-crises/the-volkswagen-short-squeeze-2008/ https://internationalbanker.com/history-of-financial-crises/...
        xsmasher 3y ago
        In what way is this different than a pump and dump? You tout the stock and say it's going to 5x, 10x, whatever because of X. Then the suckers buy. Then you sell.
        smcn 3y ago
        Well, it's different because of whatever X is. X is the reason why the idea can spread through the community. It needs to make sense on some fundamental level in order to get past the onslaught of ridicule that every stock and member is subjected to. If you say "ABC is going to increase 10x because it has a funny name" that obviously won't fly, but if you give a detailed account of why it is possible (this is called DD - due diligence), this has much more potential to excite people. I wouldn't classify open source intelligence as a pump and dump.
- Havoc 3y ago
  More like compulsive gamblers well aware of the con but betting they can get out in time
  - jqpabc123 3y ago
    They're betting on a significant population of slow learners still readily available to be fleeced. Otherwise, it's con artists trying to fleece each other.
yieldcrv 3y ago
I cant wait to the part of the memecoin cycle where the yield farms pop up again community provided liquidity thats is then locked? kind of perfect imo there’s no reason anymore that a $600,000 sale tanks $50m asset by 90%, just a bad system design where there is no liquidity incentive why even give nocoiners cannon fodder? just do the thing that already distributes the load well enough and fits the risk profile of enough people
- klyrs 3y ago
  > why even give nocoiners cannon fodder? Can't tell who you're asking this of, but as a nocoiner I gotta say it made me giggle... we invest in popcorn, not cannon.
soer2021 3y ago
[flagged]
im3w1l 3y ago
What's the relation between the coin and subreddit? Like I get that they share a name, but is it say endorsed on the sub itself? Endorsed by the mods? Is it popular among its users?
deleted 3y ago
[deleted]

51 points by haasted 3y ago

jqpabc123 3y ago

Simple pump and dump --- crypto bros must be slow learners.

dragontamer 3y ago
WSB is the Reddit community where everyone openly admits to running with pump-and-dump schemes, with the hopes to not be the dumb bagholder at the end. Its a legally grey zone IMO. Its not a traditional pump-and-dump scheme, but the effects are basically the same. They choose a stock, somewhat at random to pump. They use WSB to communicate and coordinate when the pump occurs. The idea is to use a stock that has nostalgic value (Gamestop, AMC, BBBY), but is in dire straights. A shorter term, tactical goal, is to often find highly shorted stocks and/or stocks with high options leverage to cause either a short-squeeze or gamma-squeeze event. Its all public knowledge, legally and morally grey IMO. I wouldn't touch it personally, but obviously you get a whole bunch of pump-and-dumpers together in one location on the internet, they're all going to be competing for the same money on the same forum.
- smcn 3y ago
  It certainly has that reputation but it is largely unearned in my experience. There is no explicit coordination happening to create pump and dumps. There has, on occasion, been some level of coordination when attempting to trigger a short squeeze but that is mechanically different than a pump and dump. What it does do, though, is spur memetic investment, which can create a short term frenzy for some stocks but it is not a planned event. Thousands of people post stocks each day and every so often a stock will perform well enough to where the community will take hold of it and push it to pretty incredible heights. The most recent one would be TRKA. If you're switched on enough, you can make some pretty massive gains. However don't take this as me defending their crypto scam. That's just downright not okay.
  - dragontamer 3y ago
    > What it does do, though, is spur memetic investment, which can create a short term frenzy for some stocks but it is not a planned event Erm... investing in a security, then trying to create a meme is a pump-and-dump scheme by any other name. You've just changed the name "pump" to "meme", rather than using old-school behaviors like boiler rooms. Its even "meming" the same information: too the moon, or whatever. In the 90s, it was all cold calls over telephone, but today you can use online forums to do this.
    - smcn 3y ago
      I'd argue that is a very simplistic way of looking at it. There is always a narrative as to why a stock will go "to the moon". You say it's explicitly a pump and dump and it's not really, no. Look at GME, the idea was to restrict the float so that when the shorts got exercised, they would be trying to buy shares that didn't exist, creating exponential demand which would increase the price significantly. Not an impossible feat[0]. The "memetic" part of it is purely information exchange. That's all. If that's the barrier for entry for being considered a pump and dump, then I'd say anything which reports on a companys action could be a pump and dump. From Financial Times, to Bloomberg, to Mad Money, to StockTwits, to whomever else. 0: https://internationalbanker.com/history-of-financial-crises/the-volkswagen-short-squeeze-2008/ https://internationalbanker.com/history-of-financial-crises/...
      - xsmasher 3y ago
        In what way is this different than a pump and dump? You tout the stock and say it's going to 5x, 10x, whatever because of X. Then the suckers buy. Then you sell.
        smcn 3y ago
        Well, it's different because of whatever X is. X is the reason why the idea can spread through the community. It needs to make sense on some fundamental level in order to get past the onslaught of ridicule that every stock and member is subjected to. If you say "ABC is going to increase 10x because it has a funny name" that obviously won't fly, but if you give a detailed account of why it is possible (this is called DD - due diligence), this has much more potential to excite people. I wouldn't classify open source intelligence as a pump and dump.
Havoc 3y ago
More like compulsive gamblers well aware of the con but betting they can get out in time
- jqpabc123 3y ago
  They're betting on a significant population of slow learners still readily available to be fleeced. Otherwise, it's con artists trying to fleece each other.

yieldcrv 3y ago

I cant wait to the part of the memecoin cycle where the yield farms pop up again community provided liquidity thats is then locked? kind of perfect imo there’s no reason anymore that a $600,000 sale tanks $50m asset by 90%, just a bad system design where there is no liquidity incentive why even give nocoiners cannon fodder? just do the thing that already distributes the load well enough and fits the risk profile of enough people

klyrs 3y ago
> why even give nocoiners cannon fodder? Can't tell who you're asking this of, but as a nocoiner I gotta say it made me giggle... we invest in popcorn, not cannon.

soer2021 3y ago

[flagged]

im3w1l 3y ago

What's the relation between the coin and subreddit? Like I get that they share a name, but is it say endorsed on the sub itself? Endorsed by the mods? Is it popular among its users?

deleted 3y ago

[deleted]