Once again, this insistence on viewing 'Wall Street' as a monolothic entity. The largest asset management firm on Earth holds over 9 million Gamestop stock, none of the big banks that received bailouts in 08 are affected by this, 99.9% of hedge funds are not affected by this, high frequency traders are probably making a bundle. Institutional money was long Gamestop before this story entered the public consciousness. The idea of governments stepping in to bolster hedge funds is ludicrous, the whole point is that the government and SEC is hands off with them.<p>Ultimately, a few medium-sized hedge funds were caught doing something stupid and the market has rightfully taught them a lesson. It's great that retail investors got in on a high-level play like this and made money.
They are blocking buying, and only allowing selling GME, BB and others.<p>How is this not evidence of a corrupted free market system? A CEO of one company can call up his connections in retail trading platform firms, CNBC, and Nasdaq and protect his profits? Why is Reddit the scandal and not that?<p>Reddit is full of rocket emojis and YOLO jokes. But what we see here, especially with the moralizing about gambling, is an elitism on full display.<p>The people are sick of it.
People have had enough, it's not just WSB anymore. The community of retail investors in GME is far beyond WSB. It's people that are frustrated with the 1% getting bailed out time and time again and them not seeing a dime at their tax dollar expense.
Feel like the platforms are helping out hedge funds by making it challenging to put more pressure on the short squeeze before Friday. Sounds a bit like a cartel in co-ordinating activity under the guise of "reducing risk exposure" - shepherded on by the Financial media.<p>Trade itself is no longer on technical merits (except those in early) but have you looked at valuations across the stock market these days -- everything is off given pandemic. So that line of reasoning by all the financial talking heads just proves they don't understand the moment.<p>It's pretty reckless behavior for sure but its more about rage and control then anything imho.
As someone who is not very educated in finance, I'm curious how to interpret today's events. Is nasdaq/robinhood/everyone else transparently manipulating the market on behalf of hedge funds? Or are these standard mechanisms in place for preventing the stock market from swinging wildly out of control? I don't know if it's standard to completely block trading on one or more stocks.
I have watched this mess from afar and the tone of the conversation has changed from "Hey, here is an opportunity to make some money off a mistake some hedge funds are making" to "Smash the system". Exhibit A - this idiotic article.<p>You cannot use the tools of the system to beat the system.<p>Here is the thing about hedge funds - they hedge. They hedge in the morning, hedge in the afternoon, eat some hedge for dinner and get in a few rounds of hedging in down at the hedge club before going to bed dreaming of hedges. The clue is in the name. They don't typically make huge loses or gains for a single stock, they are happy to make a consistent gain every day.<p>The vast majority of hedge funds are making stacks of small gains off this nonsense and anyone who doesn't cash out at the right time is going to be hosed. Do you know when the right time to cash out is? No? Sucks to be you.<p>Honestly I am worried. Mob investing has collapsed economies, brought down governments, and ruined more lives than can be counted during the last 150 years, and I don't see how this is different.<p>This is completely ridiculous and will all end in tears. I am actually glad that some pressure is being put on Reddit and the brokers to cool things off - there are opportunities to cash out big time but a lot of the small players are going to lose money.
The endgame here is fascinating to me.<p>The people who got in early will suffer least when GSE finally crashes and burns. But the poor suckers who bought it at $150 are going to be in big trouble. They're all trying to stay strong and hold long because that's the way to make the hedge funds suffer, but the smarter ones will figure out that their only chance to not lose their shirts is to be in the earliest 5% of scabs to get out, and then it's going to be a bloodbath when everybody gets trampled running for the exit door.<p>Meanwhile a couple of hedge funds go under while the rest just call it Tuesday.
I don't know- there must be institutional players on the long side by now right? Either way, _eventually_ someone will be left holding the bag when the stock comes back down to earth.
The article is very tendentious.<p>I despise HFT as much as the next guy, but it's mostly useless rent seeking, economically, not massive manipulation. There is money on the table in trading, and the HFT firms try to take a bigger part of that pie, rather than letting it go to their competitors or other traders (like funds or retail investors).<p>Next, hedge funds shorting businesses they consider overvalued is a perfectly fine activity that helps price discovery and capital allocation. To the extent that they are deceptive and manipulative, that is a problem, just as deceptively and manipulatively hyping a stock up is a problem.<p>Finally, note that there is no value created here. It's purely a transfer of money. A few hedge funds might lose something (though that remains to be seen - shorts have no expiry, per se, and the borrow cost is absolutely manageable over days, weeks, or even months).<p>But mostly, this will be a huge transfer of money from those that jumped on the long trade late, to those that were in it early.<p>EDIT to add: And, putting a cherry on the fine research that went into the article, the Keynes quote is from A. Gary Shilling from the 1980s.<p><a href="https://quoteinvestigator.com/2011/08/09/remain-solvent/" rel="nofollow">https://quoteinvestigator.com/2011/08/09/remain-solvent/</a>
Premature gloating. The government can always come in at the last minute with bailouts for wall street and overblown charges against the redditors.<p><i>I see that you've been HODLing some GME. Sorry bro, have to charge you with economic terrorism. Nothing personal.</i>
> With their heads in cloud nine, hedge funds tried to kill GameStop ($GME). They tried to squeeze it so much that it would suffocate and die. They didn't care about the people who will be out of jobs, unable to pay their bills, or even survive.<p>A low stock price doesn't, by itself, kill a business and put people out of jobs. Bad management kills a business, as does being in a bad business to begin with.<p>> Never in their wildest dreams, the hedge funds would have thought this day would come. The tables have finally turned as the hedge funds try to gulp in their last breath of air.<p>We're really not talking about "the hedge funds" in this case. Just a few hedge funds who, indeed, should've seen it coming. It's not like during the subprime crisis where every large financial institution had a large exposure to them. The exposure of the financial industry to GameStop is minuscule at the scale of the system. It's also not new, in the sense that sometimes hedge funds will try to squeeze one another too<p>> I honestly don't believe that people are going to sell their positions on $GME stocks. As I said, they are not in for the money anymore. They are fighting the good fight, and they have the potential to win this WAR.<p>Maybe they won't sell, but there are cases where fundamentals will catch up with the gamers. If/when the business runs out of cash and undergoes restructuring, the stockholders will be left holding pennies.<p>Maybe the CEO of GameStop (notice how he's been quiet?) will be like, f--- this job, <i>I'm</i> selling all my stock and retiring, thanks Internet
The author seems to have bought in a bit too much into the narrative in the WSB forum. This post reads more like a regurgitation of the grandiose pronouncements you see there rather than an insightful analysis of the situation.
One of the more interesting aspects of this story, IMO, is how many people used Robinhood to grab small amounts of GameStop stock.<p>Robinhood is suspected of having a business model of spying on their clients and selling that data to hedge funds (<a href="https://seekingalpha.com/article/4205379-robinhood-is-making-millions-selling-out-millennial-customers-to-high-frequency-traders" rel="nofollow">https://seekingalpha.com/article/4205379-robinhood-is-making...</a>). Essentially, this puts their own clientele at an average disadvantage in all trades; the funds buying their data can set up algorithms to front-run any RH trades and skim a little more value than the people using RH could expect to get.<p>In this situation, it seems it didn't matter. Even if RH sold to the shorting traders "Hey, our clientele is buying the hell out of this near-junk stock," all the signal told them was how fast the train was coming at them, not which way to go to get off the tracks.
What I find interesting is that RobhinHood has removed GME, AMC, BB, and other WSB darlings. This immediately caused massive drops before market opening. Why does this read poorly to me? I don't do much trading on RH, but I had been using it to monitor the prices as I passively follow this saga. People are upset, and I get it.
So you're telling me that by buying GameStop stock, I can help screw over hedge fund managers? I have not bought a single stock in my whole life, but I'm in. How do I start?
It's funny watching the know it alls here on HN bang their heads against the wall trying to explain WSB. In the last couple days I've seen I've seen everything from "lack of sex" to class warfare. It's really not that complicated: it's a short squeeze that became something of a single-minded flash mob to discourage weak-hands from selling before the squeeze is complete. That's it. The politics and everything else is nonsense.
I would really appreciate it if somebody could explain to me how people who sell short a stock are somehow “suffocating it” or “killing jobs.” And I say this as someone who has about 18 years of investing experience. I continue to believe stock shorting is one of the most poorly understood parts of equity markets and the wrong parts are most commonly parroted by people with little to no experience with short selling themselves.<p>And this narrative that somehow the regular Joe is sticking it to the man and using proceeds to pay medical bills makes for good heartwarming stuff, but I take umbrage with the idea that one person’s cause is more worthy than another and so they deserve the profits not this greedy oz character behind the curtain that is likely other retail traders and HFT momentum funds (the same ones that are vilified in this movement) buying it up as it moves higher and becomes more popular. If you make money trading, great but let’s ease up a bit with the saving the world nonsense. It’s not as if gambling your savings on call options is saving the world. It’s a catchy storyline to make people feel more comfortable with the idea of gambling.
I am surprised that the cornering of the silver market in 1980 is not mentioned here. The Hunt brothers had driven the silver price to the moon, so the big guys simply had the rules at COMEX changed, which led to a sudden drop of the silver price.<p><a href="https://en.wikipedia.org/wiki/Silver_Thursday" rel="nofollow">https://en.wikipedia.org/wiki/Silver_Thursday</a>
I think it's a bit of both, but to be honest, it doesn't feel like sticking it to the man.<p>Why? Because it's a ponzi scheme. People who made money off this already (and are not holding the line) are not the people affected by the man. I don't believe my plumber, my electrician, or the busboy at the restaurant are investing their money on GME stock using Robinhood. Who do I see doing it? My friends, mostly young white collar workers with money to invest/lose in a bid to trying to get rick quick. Your typical reddit user of sorts.<p>I mean, my first few years on this country, while going to college at night, I worked construction. I worked with all kinds of people, from all kinds of lives and believes. When 2008 happened, many of them lost their life savings or their houses. At that point, I was working as a software engineer already, my older colleagues lost a chunk of their 401k - which they probably have regained and built upon by now.<p>Sticking it up to the man? I don't think so. The end of this will be fast and painful to many.
I’d just like to suggest the possibility that there’s nothing noble going on in /r/wallstreetbets and this is all being orchestrated by a small number of people taking advantage of useful idiots.<p>I’m not attempting to proclaim this is the truth, just giving a stray thought of mine.
The whole thing is incredibly annoying.<p>I'm a moderator of /r/silverbugs and we've been getting slammed all morning with either accounts from either /r/wallstreetbets or accounts trying to make them look bad, with dozens of brand spanking new or barely used accounts spamming to buy various silver related stocks/funds.<p>I've banned more accounts this morning than I have in 2 years and, it really does appear that they are starting to have some impact on the price of silver with their attempts to pump stuff like SLV.
Although there is definitely a David/Goliath fairness scandal in here, this piece doesn't seem to know the difference between market makers, brokers, and hedge funds.
This article feels very one sided and opinionated to me. I wish it presented the issue in a less emotional and more objective way, focusing perhaps on the details.
I'm really confused why the general public is enraged at the brokerages' decision to stop new buy orders for GME.<p>It's very clear that retail is going to lose their shirts in the end of all of this. By blocking new buy orders, the brokerage is effectively protecting its naive clientele.<p>This isn't some government conspiracy. This is a firm trying its best to operate in the best interest of its clients.
It's never more about money than when "It's not about the money anymore".<p>I think that with a stock whose worth at this point is the result of pure dutch-tulip-like speculation, the question is where is the tipping point where <i>money</i> just becomes too good to ignore and when people start collectively selling, making the stock inevitably plummet.
This populist narrative that WSB and CNBC are promoting is pretty weak. This looks like forum manipulation with a layer of memes pasted on top. Citron and Melvin were set up as bad guys. <i>Someone</i> started this. It's definitely not organic.<p>That said, it has definitely worked. Any idea that retail investors can't move markets is now gone.
I think it is about the money. It will definitely be about the debts, which were unwittingly taken on by everyone who bought on margin at these levels. The price will collapse.<p>The other bad assumption in this article is thinking the hedge funds are on one side of this. Some hedge funds made fortunes in the short squeeze.
The irony of all this is that ultimately people will stop buying and prices will fall. Then all the regular people who participated in this will be stuck holding falling stock. Panicked selling will ensure, crashing the price.<p>At the end of the day then, both institutional and retail investors will get screwed.
For anyone coming in now, dang’s recap comment provides some resources with background information on what’s happening: <a href="https://news.ycombinator.com/item?id=25933543" rel="nofollow">https://news.ycombinator.com/item?id=25933543</a>
I am just waiting how long before Reddit itself gets sued over this. Let alone how long before someone comes for the users and gets a court to have reddit surrender information.<p>how this plays out is going to be very interesting and more so for who supports which side
One thing to know about the stock market is that it gives the real time price of a stock, but also the real time price to set the price of a stock (by matching the order book volume up to the price you want to reach, then maintaining it).
> With their heads in cloud nine, hedge funds tried to kill GameStop ($GME). They tried to squeeze it so much that it would suffocate and die. They didn't care about the people who will be out of jobs, unable to pay their bills, or even survive. Blinded by greed, all they care about was money.<p>this is a bit much. shorting != trying to kill a business. it can certainly depress the stock price, but so can closing a long position.
And in the shadows, Blackrock and the other institutional investors lending the stock in the first place probably just roll in money from the current situation.<p>And imho they have to initiate the "real squeeze" by wanting their stocks back. But I think they like the current situation, high enough to make the short sellers bleed, but not high enough to knock them over fully, so they can still merrily sell to them (OTC) and Jane Doe, while happily pocketing some sociopaths money for extending the lease on their remaining shares... They don't profit at all from the WSB-proposed rockt-squeeze, where the stock goes up, then trading is stopped for everyone and they can not liquidate everything and they also won't get everything back, when their borrowers default. But this is heaven for them: who could have expected that investing in a company slowly sliding to bankruptcy could be so profitable!
Here's a question. How much of the investors in funds like Melvin are actually wealthy family offices and high-net worth folk, and how much are pension funds, endowments, etc?<p>Because if it's the latter, then the losers here aren't billionaires and Wall Street.
Watching events in USA in last month makes me really worried about relying on computer related stuff from US.<p>Trump's Social Medias,<p>Parler with AWS and the rest,<p>Reddit Warning to WSB so they had to close for a few hour(s),<p>Discord Ban to WSB,<p>RobinHood Scam<p>scam follows scam basically, no wonder people are angry when "just a few" control everything HARD.<p>This land is no full of freedom in any sense
I have a lot of trouble with this frame. Yes, hedge funds are bad. Yes, it's hilarious watching those shorts get squeezed. No, WSB are not modern Sherwood bandits trading on Robinhood. They are <i>also</i> engaged in what is pretty clearly a criminal conspiracy to commit securities fraud (and <i>yes</i>, a deliberate attempt to trigger a short squeeze is securities fraud), and they're doing it on an open internet forum. This is not going to end well for anyone involved.<p>Demonizing your enemies and styling yourself a hero of the people does not protect you from prosecution. We just saw that in the capitol not three weeks ago.<p>As for GME? Yes, that stock is coming down. Yes, the hedge fund can probably arrange financing to hold longer than the bandits can. Yes, it's probably going to be the "little guys" holding the bag at the end of this.<p>It's criminals all around as far as I can see.