4 ms·

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 a

• 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.
    • dragontamer 3y ago
      You mean like 'Save the stock market from big banks by buying GME?' It was the biggest crock of $$$$ I've ever heard, no element of truth to it. But it meme'd really well.
      • smcn 3y ago
        I don't think anyone was trying to save the stock market. The general vibe was more fire and brimstone.
        • dragontamer 3y ago
          They made up a story about how short sellers were ruining the stock market and then tried to say that punishing them would save the stock market. Or am I wrong in my assessment? Then the crowds ate it up and GME mooned. The pumpers then dumped and RoaringKitty became a millionaire.
          • smcn 3y ago
            Yes I'd say that you're wrong with that. To start, it wasn't that short sellers were ruining the market. If you spent any time there, you'd see that they, too, short stocks. Second, it definitely wasn't made up. GME was tremendously shorted. And there were more shares shorted than existed. This is not a unique phenomenon and is possible due to a concept called "naked shorting". It also didn't stop going up because people pumping it stopped. They literally disabled the ability for people to buy more. That is what killed the momentum. https://www.cnbc.com/2021/01/28/robinhood-interactive-brokers-restrict-trading-in-gamestop-s.html https://www.cnbc.com/2021/01/28/robinhood-interactive-broker...
            • dragontamer 3y ago
              Yeah, no one is going to change short selling rules any time soon because it's all jus t made up crap and rumors from WSB to pump GME. Hate to break it to ya, but you're getting played of you actually think the problem here was short selling. The problem is that skittery online retail can be so openly manipulated to believe such conspiracies and that this leads to the profits of the small leaders of the crowd.
              • smcn 3y ago
                Nobody is trying to change short selling rules. Like I said, this wasn't a rebellion against short selling. Also, this is all verifiable information. I'd encourage you to confirm what it is that I'm saying. Benjamin Graham said that in the short term, the stock market is a voting machine, and in the long term a weighing machine. None of this is anything new. It's just the speed at which information travels that has changed.
    • UncleEntity 3y ago
      You buy a stock, post some “open source intelligence” to convince people they should also buy the stock and sell your shares before eventually you run out of people to convince to buy and the stock returns to “market value”. I’m no Wall Street guru but that doesn’t sound like a pump and dump scheme at all. Some of the other stuff they do is kind of funny in a “some people just want to watch the world burn” kind of way.
      • smcn 3y ago
        People certainly try but I don't think the community gets the credit it deserves. While it is certainly true that the majority are not seasoned investors, there are plenty in there that are able to be dissenting voices to these obvious attempts and these voices are heard and do shut down the threads. It's not easy to make up artificial reasons as you will be forced to provide evidence for your claims. You need a solid base to build your argument and you better believe that you'll be fact checked in very aggressive ways. But you don't need an account to view WSB, you are able to go browse it right now and see that it's mostly just stock market/economic news.
      • lupire 3y ago
        Your first paragraph explicitly describes a pump and a dump.
    • dragonwriter 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. All pump-and-dumps have an X. Having a narrative of how the thing you are pumping will go up is not a difference from other pump-and-dump schemes.
      • smcn 3y ago
        It definitely is. A pump and dump is a coordinated effort to artificially raise the price of a stock. Posting technical analysis and/or positive news that encourages people to take a position is not a pump and dump. No more than any financial article that has ever been written.
        • dragonwriter 3y ago
          > A pump and dump is a coordinated effort to artificially raise the price of a stock. And with what methods are such coordinated efforts carried out? By communicating a narrative intended to convince people that the stock will go up, so that the audience buys it and it does go up. The narrative is the central element of the pump of a pump and dump.
          • smcn 3y ago
            There is a big difference between a coordinated effort and open source intelligence which is what most people are performing on WSB.
            • dragonwriter 3y ago
              Most pump and dump schemes present themselves as intelligence/analysis; there is no content-based objective differentiation, just intent and good-faith. But, actually, some of the WSB stuff is openly coordinated strategy, not intelligence, overtly seeking to manipulate enough action to cause an outcome, not providing intelligence/analysis on what os likely to occur without active intervention