Incase you haven't caught up yet, a subreddit with 2 million users decided to Bognadof the Gamespot stock, so much that 3 days ago it closed $40 US dollars, then yesterday it was $75 and just now when the market closed it was $145 US. Gamespot is now worth 10 billion dollars, the first time ever in it's history and Melvin Investment, a hedgefund that was short selling the stock has lost an estimated 6 billion dollars, after receiving a 2.75 billion bailout yesterday from 2 other investment firms. This really is entertaining to watch and is costing someone rich a lot of money.
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I've been somewhat aware of it. Jim's friend has been putting out some really funny content about the whole affair.
I bought some about a year ago when Reggie joined the company. I think it was at like $3/share. I figured he'd at least do something.
Sold a lot of it at $40/share, because I don't believe it's worth that much.
Sold most of the rest of it yesterday at $70/share, because obviously it's not worth that much.
Still just laughing every time I check its price now. As far as I'm concerned, short selling isn't investing. It's gambling. Fuck the people who choose to gamble, and especially fuck them for forcing everybody to participate in their game because they've made every other form of investment unaffordable or uncompetitive.
The official song of sane GameStop investors everywhere
Well, fair enough, except that's still just a shell game where someone else is left holding the bag when there's a problem. It doesn't actually solve any problem, it just shuffles it off to someone else who's just unlucky or not as savvy.
I'm actually not a big fan of commodities futures either for the same reason: it's just gambling. It's literally counting chickens before they hatch.
You are describing insurance. Insurance is not purchased on the stock market.
Insurance is a bet just as stock gambling is.
Well sure, that's one way to look at it. Other people use shorts and options as tools/insurance.
This, I don't get. I don't get why people get so upset about contracts, options, etc. Some people want that risk/reward. I'm not into that personally, I buy and hold stuff very long term, and that's worked out very well for me. But nothing is free here, they are accepting the risk that they get wiped out. I mean, did you see the panic like a year or two with oil? Where the contracts went negative 'cause people were going to have to take delivery of hundreds of barrels of crude, and there was nowhere to store it? It was hilarious, people were paid thousands of dollars to take the oil.
It's not the contracts in themselves, per se. My objection is more the last part of the sentence you quoted: that there are obscene amounts of money to be made simply by shuffling money around. They've effectively forced me to put a large chunk of my savings into their gambling process through laws around taxing income vs. not taxing contributions to approved retirement investment accounts. There is an entire parasitic system built around the stock market and finance in general that contributes nothing tangible to society, yet has forced itself into our lives and some sort of indispensable service that we can't disengage from.
So perhaps my disgust isn't 100% correctly placed, but until there's somewhere more specific and concrete to direct it, I still stand by it: fuck these guys. Get a real job. I'll enjoy watching them fail, and hopefully the investment firms that are desperately lending them money to keep them afloat fail as well. At this point they're propping up a shell game and they'll get what they deserve.
"Shuffling money around" is the backbone of any economy that has private ownership. It's an important role of banks, for example, and the phrase I'm familiar with that helps show it's benefits is "transferring funds from those who want to save money to those who want to borrow it" (i.e. from trader to "owner"). I think the problem with it stems from the fact that it's being done by huge companies that get to write their own rules and put themselves in too-big-to-fail scenarios. Don't knock actual individual investors, tho, because it's a super interesting way to make money while helping the economy function.
Yeah, I think your ire is somewhat misplaced. All these contracts have 2 sides to them. This stuff might all seem really abstract, with people trading contracts and doing it all on credit, but people aren't just printing money here. There are (normally) real consequences for fucking up, bad analysis, bad planning, bad luck, stupidity.
Having said that, real problems start when the government bails people out (or there's an expectation that they will), because it distorts the market. People start doing irresponsible risky stuff that they'd never do otherwise, because hey, free money basically (since risk is a cost, and lower risk = lower cost). And yes, everyone is paying for that. So maybe that's what you are getting at.
So this is what I'm describing with the parasitic system built around the stock market and finance in general that we're forced to engage with.
I said I don't have a problem with the contracts, and I don't even fundamentally have a problem with people gambling. I have a problem with the fact that they've forced us all to gamble with them, and as you agree, that I'm forced to bail them out when they fail, but we don't get the same bailout if we fail.
Absolutely hilarious. I hope more of this sort of thing happens.
It's funny, but the guy who made $22 million is going to jail. Won't matter that the big timers do the same thing; SEC has enforcement discretion and can just pull a "no reasonable prosecutor" excuse.
Yep.
Why is he going to jail?
I wouldn't be surprised if they try to get him for some sort of "pump and dump" scheme, but the real reason will be bankrupted members of the "club" in a rather unique way that illustrates some of the absurdities of the market.
Yeah, I don't see how they can outlaw it either. What could they possibly do? Make it illegal to convince a large number of people to invest in a stock? Never gonna happen.
rofl
His argument is literally "1%er hedge fund managers can do this, plebs must be stopped."
Man how new are you? Direct linking 4chan baka desu
If anything, the regulatory result will likely be prohibiting naked short selling (short-selling a stock without a standing agreement to borrow an existing share). The brokerages that permitted this knew what they were doing was dangerous, and they did it anyways.
Shades of the junk bond bullshit of the '80s?
Shades of -$20/barrel oil this past spring, for a more topical example.
Reddit finally did something good.
We did it Reddit!
The internet has a (no pun intended) short attention span. You can probably "safely" short the stock now.
Libel is now basically legal due to the impossibility of identifying libelers that have deep enough pockets to repair damage to one's reputation, so it makes sense that stock manipulation is now basically legal.
Who is buying stock in a company that Amazon made obsolete 5 years ago?
I would have shorted it too, it's going down to zero once this all ends.
You would've shorted 147% of the available shares? The people getting short squeezed here deserve it.
I couldn't afford that, but a small short position where I wouldn't lose too much would be a good choice.
I don't think this is about the viability of GameStop as much as just people saying to Wall Street "You can't bankrupt a company for profit".
That’s 100% the reasoning behind the whole Scheme to my knowledge
You're right of course, but if you lose all your money in the process being early is the same as being wrong.
True. I rarely short. I thought about shorting based on the fact Biden will fuck everything up, but I decided against it. Would have lost quite a bit.
Still, anyone who thinks GameStop will survive the pandemic is optimistic.
I'm not sure anyone really believes that. There's people who want to fuck over a hedge fund, and there's people who see the stock go up 100% in a day and want a piece of that while hoping to not be left holding the bag when it goes bust.
Everyone else is probably taking their money and running before it goes back to $20, and preparing to retire.
Just when you thought 2020 was the weirdest year ever.
2021: Hold my fucking beer.
"doomp eet"
Wolf Richter did a column yesterday, https://wolfstreet.com/2021/01/25/after-skyrocketing-in-majestic-short-squeeze-gamestop-shares-collapse-54-in-hours-the-zoo-has-gone-nuts/
This aged poorly. It's at $200 now in after hours.
Who is buying this stock? They can't know anything about markets.
Quite literal autistic retards.
Doomp eet!
It's all about "proving" to Wall Street that they can't force companies into bankruptcy. This short position was literally a play that it would crash to zero.
And if they would have stopped at $5 instead of counting on being able to curb stomp it to zero they wouldn't have gotten their dick stuck in the cookie jar (to quote Mac Fix Man).
But here we are with them trying to explain the crumbs in their urethra.
Autists at the wall street bets subreddit.
Anyone who is short and must buy shares to cover their margin, and morons chasing easy money.
By this logic, it must be heading for a huge collapse eventually.
Read up on VW 2008. Similar thing happening here.
I hear there's a lot of money to be made shorting $GME...
Ah, the circle of life.
Can Melvin make the money back if they re-short it or is it really gone?
In other words, is it just a paper loss for them or is it realized?
The thing about Melvin is they short traded the stock.
Now replace Tesla with Gamestop and $20 - $150
It's really gone. They've "borrowed" the stock at $20 from their broker just last week but now it's worth $150 meaning they have to pay that much for the stock itself. They've burnt through 6 billion and a 2.75 billion bailout, if the price stays like this on Friday, they simply won't have the capital to pay for the stocks and they'll have to declare bankruptcy.
I think. I'm just seeing how this plays out.
Lmao. I mean that sucks for them, but they fucked up.
Could. Probably won't. Definitely shouldn't try.
"The market can remain irrational longer than you can remain solvent." -JMK
Mind you, I think JMK was a moron. But on that one he was right and it's hilarious to turn it back on them.
Yes it is.
Hey, I should jump in, not knowing shit, and lose all my money!
The government has another bug to squash it seems.