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.
The point is that any single redditor can easily afford to throw away a $600 check they may not have been counting on in their budget. It’s “free money”. The hedge funds can’t really afford to lose billions of dollars.
So if you can, relatively painlessly, inflict a lot of pain on someone you view as a mortal enemy, then why not?
Spot on
I think this shows how harmful Naked Shorts are to a market where hedge fund manager can collude and decide which company dies this week.
“The Times They Are A-Changin’”
Come gather ‘round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You’ll be drenched to the bone
If your time to you is worth savin’
Then you better start swimmin’
Or you’ll sink like a stone
For the times they are a-changin’
Come writers and critics
Who prophesize with your pen
And keep your eyes wide
The chance won’t come again
And don’t speak too soon
For the wheel’s still in spin
And there’s no tellin’ who that it’s namin’
For the loser now
Will be later to win
For the times they are a-changin’
Come senators, congressmen
Please heed the call
Don’t stand in the doorway
Don’t block up the hall
For he that gets hurt
Will be he who has stalled
The battle outside ragin’
Will soon shake your windows
And rattle your walls
For the times they are a-changin’
Come mothers and fathers
Throughout the land
And don’t criticize
What you can’t understand
Your sons and your daughters
Are beyond your command
Your old road is rapidly agin’
Please get out of the new one
If you can’t lend your hand
For the times they are a-changin’
The line it is drawn
The curse it is cast
The slow one now
Will later be fast
As the present now
Will later be past
The order is rapidly fadin’
And the first one now
Will later be last
For the times they are a-changin’
first class action suit was just filed in N.Y......Georgia filing next...
It certainly beats having to hang the banksters from lampposts.
Which means The Deep State can decide which company dies this week. You think they are just going to give up that kind of power?
You mean, "fellow white males".
Robinhood.....Reddit were the guys who started this.....
I was just curious, someone here was hoping Reddit would get sued for something..Sueing Robinhood, that’s good news, I hope it comes to something before it’s too late to stop Wall St from stealing this opportunity.
word is that a bunch of guys on Reddit took their 600 dollar stimulus checks and planned this...im not kidding!!...they saw the hedgies were going after GameStop...and they just all started buying and it was off to the races...heh...went from 23 a share to 347...
Nobody knows the true value of Gamestop if the shorters are pressuring the stock down.
The short interest on GME was about 140% — meaning there were more shares shorted than the number available.
Naked shorting, in other words. Illegal.
saw that and I hope the redactors win this and the hedge fund jerks lose BIGLY.
Reddit folks...not redactors
some “funds” lost billions yesterday...they were getting torched and they knew it... As of now, you can only sell..not buy certain stock..just flat out illegal, thats how scared they got...
Keep them scared...
Exactly. I learned this lesson the hard way by observing my employer’s stock price during the oil price crash. People like to think there’s a direct 1:1 correlation between the price of a stock and the company behind it, but that’s nowhere near the case (TESLA anyone?). A company can be cashflow positive, release positive earnings reports, and the stock sometimes just goes down the next day. Ultimately the price of a stock is driven by supply and demand, just like anything else. Gamestop and the rest increase in price so much because of the increased demand initially by retail investors (reddit), followed by the demand increases from hedge funds covering their shorts, causing supply to drop even more.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.