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The GameStop Hedge Fund fiasco, explained. No, this isn’t a bad thing. Some are trying to position the GameStop populist uprising as something bad, even a "Ponzi Scheme." It's not.
NOQ Report ^ | 01/28/2021 | Carl Durrek

Posted on 01/28/2021 8:54:41 AM PST by SeekAndFind

A subreddit, r/WallStreetBets, has caused mass hysteria in the financial markets as many hedge funds and Wall Street elites have lost billions as a result of their GameStop play. Was what they did “market manipulation?” Absolutely. Is that inherently wrong or even illegal. Absolutely not.

Briefly, members of the subreddit noticed that most of the active shares for GameStop were in a short position, meaning hedge funds were betting that the stock price would drop dramatically, making them a lot of money. So, the Redditors put out the word to buy Gamestop stocks and drive the price up. It worked. One can argue it worked better than any other price pumping play in history that wasn’t attached to actual news about a company.

Politicians, trading companies, and Wall Street analysts have called for a moratorium on trades of the stocks until market volatility subsides. In other words, they’re trying to buy time for those who have shorted and even continue to short the stock to get their ducks in order to mitigate damage. It’s a play that works against the little guy in favor of the big guys.



JD talked about this in-depth on his latest episode of Conservative News Briefs (in its triumphant return after months of being offline). For those who want a shorter breakdown, here’s a brief explainer video from Anything Goes (explicit language):

They’re working against the short squeeze to protect assets, oftentimes their own. THIS is the only thing that’s bad about all of this. Is shorting stocks bad? No. It’s part of the gamble, and anyone who says the stock market isn’t legalized gambling is delusional. Is pumping the stock the way the subreddit did bad? No. Again, it’s all a gamble.

Hedge fund managers are claiming they don’t like volatility. The truth is they don’t like volatility they don’t control. This action by the masses driven by the “little guys” isn’t in the hedge fund managers’ playbook, which is why they’re trying to quash it.

CLICK ABOVE ARTICLE LINK FOR THE VIDEO



TOPICS: Business/Economy; Computers/Internet; Society
KEYWORDS: gamestop; hedgefunds; reddit; stockmarket
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To: SamAdams76
If I understand correctly, if the Reddit buyers all stick together and refuse to sell, the hedge fund guys are screwed as they need to return all those shares they "borrowed" or face a margin call - which they evidently cannot afford.

It's even worse than that. If the Reddit buyers all stick together, the hedge fund guys may be forced to buy the GameStop shares at $5,000/share instead of just the super-inflated price of $380/share it reached yesterday. LOL.

141 posted on 01/28/2021 11:15:42 AM PST by Alberta's Child ("There's somebody new and he sure ain't no rodeo man.")
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To: Alberta's Child
That sounds like what we used to call "float" in checking accounts in the olde days of snail mail.

People would overdraft their accounts, and there was an allowance of time for the check to be delivered, deposited in the recipient's bank, and then send the check back to the holder's bank to be cleared.

So, in the days of millisecond trading, there is a float period while shares are in the middle of trading?

-PJ

142 posted on 01/28/2021 11:16:44 AM PST by Political Junkie Too (Freedom of the press is the People's right to publish, not CNN's right to the 1st question.)
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To: RinaseaofDs

If the management of GME was smart they’d issue millions of new shares and list them tomorrow in a closed sale to the hedge funds for $2,000/share.


143 posted on 01/28/2021 11:17:29 AM PST by Alberta's Child ("There's somebody new and he sure ain't no rodeo man.")
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To: basalt

I hope so. I have AAL stock.


144 posted on 01/28/2021 11:21:00 AM PST by okkev68
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To: RockyTx

They weren’t just betting against gme. They were betting they could manipulate the price down and make millions by killing gamestop. HF’s do it all the time and we get screwed.


145 posted on 01/28/2021 11:23:40 AM PST by okkev68
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To: okkev68
"They were betting they could manipulate the price down and make millions by killing gamestop"

YES - which is what they tried to do on CNBC yesterday, publicly in plain site...
146 posted on 01/28/2021 11:30:54 AM PST by The Louiswu (HOLD ON GME)
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To: BenLurkin
Akin to teens ransacking a shopping mall.

Not quite.

Think more Penny Auctions of the 1930s.

It was people moving to protect a company they valued and not wanting to see it broken.

Game Stop is not the only game in town but it is a big player, allowing people to buy and sell games that they did not want any more.

They annoy CommiZon.

And young people like games.

And the dear little hedge fund managers can just eat it. No mustard.

147 posted on 01/28/2021 11:36:28 AM PST by Harmless Teddy Bear (May their path be strewn with Legos, may they step on them with bare feet until they repent. )
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To: Political Junkie Too

So they illegally sell more stock than what’s available (Citadel). Now they are preventing people from buying more of it from other people, in the hopes that people will dump shares before tomorrow to lock in their gains.

Citadel somehow owns Robin Hood, right?

Is that correct?


148 posted on 01/28/2021 11:38:30 AM PST by RinaseaofDs
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To: Boogieman
Automobiles offer a perfect illustration of where "convenience" isn't always a good thing.

As technology advances, you may eventually pass the point of diminishing returns for the conveniences you've added to the product you are selling. This is exactly where autonomous cars are right now. They've been "right around the corner" for decades now. The biggest hurdle they are facing is that they've been able to automate cars to the point where they are actually MORE DANGEROUS today than they were 25 years ago. And they are more dangerous because they've become so heavily automated but are not yet 100% automated -- which means people can drive them without much skill at all. That's great for the 99% of the time when everything works fine, but for that last 1% of the time the driver has become so conditioned to driving half-assed that he's totally unprepared to deal with an out-of-the-ordinary situation on the road in front of him.

I work professionally in a field where we deal with vehicle safety regularly, and I can honestly say we would be better off going BACKWARDS in vehicle technology. If it were up to me, I'd start by outlawing the automatic transmission entirely.

149 posted on 01/28/2021 11:39:29 AM PST by Alberta's Child ("There's somebody new and he sure ain't no rodeo man.")
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To: RinaseaofDs
I think so.

However, I don't think Citadel owns RobinHood. Citadel has an agreement with RobinHood to process 65% of the trades that RobinHood makes. It's RobinHood's backend system.

-PJ

150 posted on 01/28/2021 11:43:26 AM PST by Political Junkie Too (Freedom of the press is the People's right to publish, not CNN's right to the 1st question.)
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To: Alberta's Child
Ford-MAX?

-PJ

151 posted on 01/28/2021 11:45:43 AM PST by Political Junkie Too (Freedom of the press is the People's right to publish, not CNN's right to the 1st question.)
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To: okkev68

perhaps you can be specific as to ‘manipulation’

everybody starts rumors.
longs are going to hype a stock up.
shorters going to trashtalk a stock down

just the way it is


152 posted on 01/28/2021 11:46:19 AM PST by RockyTx
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To: Political Junkie Too

Wow. Their back end?

This is going to be very interesting.


153 posted on 01/28/2021 11:52:29 AM PST by RinaseaofDs
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To: RinaseaofDs
From the article I linked to above:

-PJ

154 posted on 01/28/2021 11:58:00 AM PST by Political Junkie Too (Freedom of the press is the People's right to publish, not CNN's right to the 1st question.)
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To: Political Junkie Too

Now that is another damn interesting wrinkle to this story.


155 posted on 01/28/2021 12:08:08 PM PST by KC Burke (If all the world is a stage, I would like to request my lighting be adjusted.)
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To: Alberta's Child

Automatic Transmissions?

Why? When I broke my collar bone I was very happy to have an auto shifter.

Though it would eliminate texting and driving.


156 posted on 01/28/2021 12:22:26 PM PST by redgolum (If this culture today is civilization, I will be the barbarian )
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To: redgolum
Though it would eliminate texting and driving.

Exactly.

And eating and driving ... and reading and driving ... and putting on makeup while driving ... etc., etc.

In other words, it would force the motorist to actually DRIVE THE CAR. Imagine that! :-)

157 posted on 01/28/2021 12:27:04 PM PST by Alberta's Child ("There's somebody new and he sure ain't no rodeo man.")
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To: Alberta's Child

I do miss my old manual pickup.

A lot.

Also my Dad’s glasspack exhaust.


158 posted on 01/28/2021 12:34:09 PM PST by redgolum (If this culture today is civilization, I will be the barbarian )
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To: SeekAndFind

I just tried to ‘short sell’ GME on my Schwab account and got this message from Schwab:

“””Your request to enter a short sale cannot currently be processed, as there are not sufficient shares available.”””


159 posted on 01/28/2021 12:35:17 PM PST by Presbyterian Reporter
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To: Alberta's Child

Ok, I’ll bite. What’s so bad about an automatic transmission?


160 posted on 01/28/2021 12:37:43 PM PST by Boogieman
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