Gamestop: Reddit vs. Wall St. - Page 1
Forum section: electronics / general

author: DrG
author_rank: Super Contributor
timestamp: January 28, 2021, 07:55:03 pm
content: Not sure if there is much interest in this, but I find it fascinating. My summary is not going to do it justice, but, basically, "users" decided that there was too much shorting going on with Gamestop and, for lack of a better understanding on my part, felt that the price was being manipulated downward by very large entities that were shorting the stock. Collectively, a large number of small time "traders" decided to buy Gamestop but with instruction that the brokers not allow loaning the stock to cover shorts. This drove the price up to mammoth levels and caused a lot of the traditional financial community to balk and call for regulations to stop this activity - the hypocrisy being that similar activities are allowed by big Wall St. - IOW "reverse social justice warriors."Again, I am not doing it justice, but if you are interested, check out the video here, it is long but it is on point..https://thehill.com/policy/finance/536212-reddit-traders-cause-wall-street-havoc-by-buying-gamestopor a shorter article herehttps://www.npr.org/2021/01/28/961349400/gamestop-how-reddit-traders-occupied-wall-streets-turfor just search on "Reddit Gamestop".Now, in my opinion (and this is only my opinion and I have no particular interest in Gamestop or the equity markets in general), someone is going to get burned. I say this because if you screw with people who have a lot of money, they don't just take it. Sticking it to the man is usually expensive, again, in my opinion.But, it sure is an interesting show to watch.I am always on the look out for these "shows", because behavior interests me. Earlier today, I posted a video in a thread on the RPI Pico...Take a look at ~7.05 - 9.05 where they talk about how they got together and kept a secret and without all of the usual Big Chip makers "inconveniences".....they did "what everyone says should be possible" - I think that is the quote.In the same vein as Reddit Users vs. Wall St. now, I am wondering what the Big Chip makers and the cloners will do in reaction.

author: ataradov
author_rank: Super Contributor
timestamp: January 28, 2021, 08:52:00 pm
content: I don't want to defend normal chip makers too much, I hate that kind of behaviour too. But "That's so great, let's not mess this up" only holds for some time and at a certain scale. A some point someone will mess up, may be inadvertently or because of the disgruntled employee.And then the same companies will put some agreements in place. And they will be softer at first, but then with the time they will turn into NDA.And once people start designing your stuff into real products, there are all sorts of legal ramifications that you are not in control of, unless you have strict policies.Regular vendors also did not start with a bunch of lawyers and NDAs. But everyone either folds or ends up there anyway. I don't see why that would be an exception.

author: pickle9000
author_rank: Super Contributor
timestamp: January 28, 2021, 09:13:38 pm
content: This is a great story, super interesting.With luck this will create a more robust / careful sock market. On the other hand every country with the cash may start manipulating the market. Then after some massive losses rules will come that should have been put in place years ago.

author: magic
author_rank: Super Contributor
timestamp: January 28, 2021, 09:30:04 pm
content: Quote from: DrG on January 28, 2021, 07:55:03 pmNo expert either, but I have heard about it and I can't help but see a hole in their argument: there is bound to be reasonable shareholders who are in it for the long game. They know that this peak isn't going to last, so they will take the opportunity to milk the shorters by lending them shares instead. And the shorters will rather pay for that than buy shares for $1k from nerds, expecting the scheme to collapse in near future. Knowing plebbit's attention span, they may not even need to wait for long. Many of those investors are likely of the "buy peak, sell dip" variety

author: Psi
author_rank: Super Contributor
timestamp: January 28, 2021, 09:38:15 pm
content: The big players are throwing their weight around trying all sort of tactics to get the price down.Some small home traders have got emails from their brokers saying they have blocked buying of Gamestop but still allows selling.Not sure how they are doing that legallyLouis Rossmann has some videos on gamestop

author: thm_w
author_rank: Super Contributor
timestamp: January 28, 2021, 10:03:08 pm
content: Quote from: Psi on January 28, 2021, 09:38:15 pmI thought you were referring to the cash only requirements of some brokers instead of margin, but wow, you are right some are outright blocking buying:https://www.wsj.com/articles/online-brokerages-restrict-trading-on-gamestop-amc-amid-frenetic-trading-11611849934Clear manipulation going on here.

author: DrG
author_rank: Super Contributor
timestamp: January 28, 2021, 10:14:18 pm
content: Quote from: ataradov on January 28, 2021, 08:52:00 pmI added on the RP2040 stuff that you are responding to. I think I was channeling my inner "James Burke"https://en.wikipedia.org/wiki/Connections_(TV_series). But, I understand what you are saying and honestly did not consider it at first...someonewillmess up, is a good bet.

author: DrG
author_rank: Super Contributor
timestamp: January 28, 2021, 10:16:18 pm
content: Quote from: Psi on January 28, 2021, 09:38:15 pmI watched that last video. I like that guy

author: langwadt
author_rank: Super Contributor
timestamp: January 28, 2021, 11:08:20 pm
content: Quote from: thm_w on January 28, 2021, 10:03:08 pmwithout paywall,https://www.axios.com/robinhood-gamestop-restrictions-370adfcb-fe22-494d-85e7-eb9c4a98bed7.htmlnot every day you see those politicians agree on something, but I'm sure their true masters have dispatchedan army of lobbyists to reign them in ...

author: raptor1956
author_rank: Frequent Contributor
timestamp: January 28, 2021, 11:25:01 pm
content: The hedge funds engage in gambling that is little different than playing Craps in Vegas except they have the rules arranged in the favor -- they are the house. When a group of little people band together and buy a stock which increases the stock price the hedge funds lose there shit. "You can't play our game ..."Robinhood and other trading platforms being used by these little investors have stopped there own users from buying any more of that stock meanwhile the hedge fund types are free to buy and sell as they see fit. Clearly the big shots are worried that the little guy might learn from this and upset there lucrative apple cart and have applied pressure to have Robinhood and the hosts for Reddit shut down.And, in what is a continuing pattern of duplicity they insist on being able to do as they please with little or no oversight but don't hesitate for a moment to call for regulation to prevent little guys from doing this again.And if that isn't the worst, they are calling for bailouts for the hedge funds involved. If you play craps in Vegas and lose your life savings do you get a bailout -- why no, no you don't.This has exposed the rigged game WS plays but I see little chance anything but handwaving will be done to reign in the abuses they engage in -- at huge profit and invariably at the expense of most everyone else.Brian

author: DrG
author_rank: Super Contributor
timestamp: January 29, 2021, 03:06:36 am
content: I watched an interview with RobinHood's CEO tonight and still can not figure out exactly why they halted buying. A lot of "requirements" lingo but nothing particularly coherent to me. BTW, I have shirts older than that guySame with reading E*Trade's announcement. Buying is supposed to resume on Friday there.I know that the exchange can halt trading of a stock under certain conditions like suspected fraud or or some imminent reveal, but these actions appear to be done by the brokerage houses. So what has happened in 1-2 days of no buying that has fixed everything?

author: Psi
author_rank: Super Contributor
timestamp: January 29, 2021, 06:45:03 am
content: Lets hope this is a turning point.Where small time investors learn they can fight the system and win, and that it changes the landscape for the better.

author: TimNJ
author_rank: Super Contributor
timestamp: January 29, 2021, 06:54:36 am
content: Quote from: DrG on January 29, 2021, 03:06:36 amThis is the email I got from Robinhood. Do I know jack all about SEC regulations? ...No, no I do not, but my initial feeling from reading it was “Hmm, I think they intentionally threw in some big words that they know I don’t know about.”Quote

author: james_s
author_rank: Super Contributor
timestamp: January 29, 2021, 07:00:22 am
content: The whole stock market is a complete mess. It's supposed to be there to allow companies to raise capital they can use to expand. Instead it has transformed into a gigantic casino where people gamble away money hoping to win big and sell.

author: Nominal Animal
author_rank: Super Contributor
timestamp: January 29, 2021, 07:06:27 am
content: The rules are for thee, not for the big banks and hedge funds.

author: floobydust
author_rank: Super Contributor
timestamp: January 29, 2021, 07:09:37 am
content: It's going to be very ugly, Wall Street is really showing its true colours.Janet Yellen was paid by hedge fund Citadel $810,000 to speak at three events in 2019, 2020.US Treasury Secretary for what, two days now, she should recuse herself."The Treasury Department must be an institution that wakes up every morning thinking about the American people.Your jobs, your paychecks. Your struggles, your hopes. Your dignity. And your limitless potential.We will work to restore that public trust and promise."What a crock!

author: Moshly
author_rank: Regular Contributor
timestamp: January 29, 2021, 08:01:29 am
content: Louis made it onto Yahoo finance as a Reddit User.

author: nctnico
author_rank: Super Contributor
timestamp: January 29, 2021, 12:56:26 pm
content: Quote from: james_s on January 29, 2021, 07:00:22 amIMHO short selling is the only real problem on the stock market. Especially when being able to short more shares than that actually exist. The latter means more strict regulation is needed and that seems to be the underlying issue.

author: Stray Electron
author_rank: Super Contributor
timestamp: January 29, 2021, 02:50:30 pm
content: Quote from: floobydust on January 29, 2021, 07:09:37 amAmerican politics is a F U mess! And that includes most or all of the US federal government agencies. That is a CLEAR conflict of interest. when I was US military government contractor we literally couldn't even provide free coffee at meetings because it could have been perceived as some sort of payoff. But Bill Clinton, Janet Yellen and just about every other high level US government employee is allowed to take hundreds of thousands of dollars from the same groups that they're supposed to be regulating for doing next to nothing.

author: DrG
author_rank: Super Contributor
timestamp: January 29, 2021, 04:23:10 pm
content: Quote from: TimNJ on January 29, 2021, 06:54:36 amYeah, that's pretty much what he was sticking to - sounded to me like weasel words. The interviewer (Chris Cuomo) kept coming back to it and it sounded to me like... Q: "do you need more liquidity?", A: "no that's not it, it's <weasel words>" --> repeat until time is up. Instead of: The reason that we temporarily prevented buying of this stock is _______________. What we did to allow buying again is ______________.When they don't do this, I am thinking that the shorts were covered...some how. But, maybe I am wrong. It does not seem to be an unreasonable expectation to receive a specific answer. AMC and a couple of others stocks were in the same boat.Regardless, since these companies are in bad shape from the pandemic, it makes no sense that their fundamentals could support those prices. Like I said in my first post, someone is going to get burned.It pisses people off that when the small investors, acting as a collective (presumably based on internet democratizing of information), squeezed a few hedge funds and the appearance is that the brokers have acted in the best interests of "big money" and not their "little" customers. Even if true, it does not mean it is illegal. Appearances are just that and they can be wrong, but to show that they are wrong we need to see some facts.

author: JohnnyMalaria
author_rank: Super Contributor
timestamp: January 29, 2021, 04:44:37 pm
content: The stock market is like Las Vegas. They will change the house rules when they realize the existing ones are no longer good enough to make sure only the big players win. e.g., the introduction of after-hours trading but only if you are important enough and delayed quotes etc.It's glorified gambling. You'll lose.

author: TimNJ
author_rank: Super Contributor
timestamp: January 29, 2021, 05:05:15 pm
content: "Gambling in a suit" as one of my dad's Wall Street friends put it, back in the 80's.I find it hilarious how tone deaf some of these brokerages are, especially in choice of words on how they explain things to the plebeians. If they just wrote sentences that didn't look like were reviewed by 17 people in a board room, with words hand selected from the corporate dictionary, I'd honestly probably believe them. And I'm not claiming that there's actual criminal wrongdoing by any brokerage, in this case. (I do not understand the system enough to know.) But, they do come off as rather slimy...but I guess we knew that already?

author: DrG
author_rank: Super Contributor
timestamp: January 29, 2021, 06:01:08 pm
content: Quite the ShitStorm going on.Today's statement from the US SEChttps://www.sec.gov/news/public-statement/joint-statement-market-volatility-2021-01-29From the 3RDpph...In addition, we will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws. Market participants should be careful to avoid such activity. Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities."Market participants should be careful to avoid such activity". - WTF? When are "Market participants" supposed to know "when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws" - after the burn?Do all those shorts still exist - yes or no? Holding those shorts costs money (my understanding is that they are not interest-free loans), covering those shorts right now costs a lot of money. Are there still shorts to the tune of 120% of the stock, as was put forth?

author: nctnico
author_rank: Super Contributor
timestamp: January 29, 2021, 06:12:34 pm
content: Quote from: DrG on January 29, 2021, 06:01:08 pmI guess so. Selling short means selling shares you don't own (but rent from a party who does). If they want to 'unshort' then they have to buy the shares back at the current market price. If the shorters where clever they used stock options to guard them against the price rising too far though so someone else may need to cover the bill.

author: DrG
author_rank: Super Contributor
timestamp: January 29, 2021, 06:18:06 pm
content: Quote from: nctnico on January 29, 2021, 06:12:34 pmAre you sure? I don't know, but I am not willing to accept that at face value, even if there are "tax consequences" and even if brokers or money people have specific regulations...again, I don't know, but I think that all trades (covering shorts would be a buy I guess) get recorded - right?https://money.stackexchange.com/questions/27382/am-i-able-to-conduct-a-private-sale-of-public-shares-at-a-price-that-i-determine

author: rsjsouza
author_rank: Super Contributor
timestamp: January 29, 2021, 07:33:09 pm
content: The way I understood, if enough stock volume is held by private investors (perhaps waiting for it to get even more value), the short sellers will have vacuum as collateral. I am still learning about all this, thus don't take my sentence as gospel.In any way to see it, it reeks as one more instantiation of the well known Ponzi/Madoff/Pyramid schemes.

author: nctnico
author_rank: Super Contributor
timestamp: January 29, 2021, 07:40:00 pm
content: Quote from: DrG on January 29, 2021, 06:18:06 pmA very long time ago I to worked at an investment / stock trading firm to get the IT part going so I do know a little bit about it. If you sell short you are selling the shares just as if you own the shares. In the background you 'borrow' the shares from an entity who actually owns those shares. At some point that entity will want the shares back which forces the short seller to buy the shares at the market price. There is more information here:https://www.investopedia.com/terms/s/shortcovering.asp

author: magic
author_rank: Super Contributor
timestamp: January 29, 2021, 07:55:34 pm
content: Quote from: DrG on January 29, 2021, 06:01:08 pmI don't think it's know whose shorts exist or not, but the total amount of shorts has reportedly doubled over recent days. Looks like some players are willing to take the bet that the current pricing won't last for long. Reddit calls it "the hedgies are doubling down" and keeps buying.

author: fourfathom
author_rank: Super Contributor
timestamp: January 29, 2021, 08:10:06 pm
content: As far as price goes, during the huge run-up in oil stocks an advisor I knew liked to say : "The markets can stay irrational longer than you can stay solvent".I assume a lot of those Reddit folks are planning to lose their investment, and see it as the price of "sticking it to the man".

author: DrG
author_rank: Super Contributor
timestamp: January 29, 2021, 08:53:40 pm
content: Quote from: nctnico on January 29, 2021, 07:40:00 pmYes, I think I have an idea of what shorting a stock is. My question was specifically in reference to this part of your quote "at the current market price" as I hoped was clear by the thread that I linked. I don't think you answered that question nor did the link that you posted. It looks to me like I could, in theory and in practice, sell you 100 shares of Gamestop for $1, regardless of the current market price. I don't see any law preventing me from doing that although it would pretty much constitute a bailout of sorts. Not saying this has, or will, happen, I am raising the question.Additionally, I could, conceivably, keep my short position for a very long time as long as there was no margin call and I kept paying interest on the loan. Again, this would sound more like a bailout as margin requirements are set with a brokerage account - at least for the smaller guy, but what about a margin call that would doom a large fund - that is a relevant question in my view.What changed in the short time that buying, not selling, was halted at numerous brokerage firms? Was there an infusion of investor cash that changed RobinHood's mind about allowing buying; did they meet those requirements that quickly- the requirements that the CEO was going on about? Or was their decision to briefly not allow buying out of "an abundance of caution"? Ameritrade's decision was "to mitigate risk for our clients and our company" - which is it primarily?The Reddit group WallStreetBets has spiked from under 1 million to over 5 million members in a CoVid year. The story is on the front page of most US "papers" today and the story is not over. This is something that sounds to me like it will demand answers to a lot of questions.I'm really not trying to to argue about it, but I do have investment experience and those questions come to mind although I will plainly admit that I am no expert. Still, when those shorts no longer exist, you don't have to be a stock expert to speculate on what happens to the price.

author: DrG
author_rank: Super Contributor
timestamp: January 29, 2021, 08:58:14 pm
content: Quote from: fourfathom on January 29, 2021, 08:10:06 pmPersonally, I set a much lower price on thatbut there does seem to be that aspect to the whole thing and when you turn on a big spotlight, roaches scatter.....but that doesn't mean they are gone.Edited to add:https://www.cnn.com/2021/01/29/investing/wallstreetbets-reddit-culture/index.htmlMany celebrated WallStreetBets' war on GameStop short-sellers as a populist campaign against hedge-fund raiders looking to profit off the destruction of a well-known retail brand like GameStop. But unlike many other similar online communities, there is also a clear financial goal for the people in it.and my personal favorite:Enter WallStreetBets for the first time and you'll almost certainly be a bit lost.The forum's language can be difficult to understand, even for someone who knows typical Wall Street jargon. The vocabulary specific to the subreddit is extensive, and it will almost never be explained to a newbie earnestly asking for a term's definition. Posters revel in their crudeness; homophobic epithets are tossed around as terms of affection.I wonder what he would think about this forum?https://www.nytimes.com/2021/01/29/business/elon-musk-gamestop-twitter.htmlOn Tuesday, as GameStop shares skyrocketed, Mr. Musk weighed in with a one-word tweet — “Gamestonk!!” — and a link to the Reddit forum where much of the discussion has unfolded. Mr. Musk’s message was seen as an endorsement of sorts from one of the most powerful figures on the web, and in the days that followed, investors bid up the price of GameStop to new highs.Gamestonk!!https://t.co/RZtkDzAewJ— Elon Musk (@elonmusk) January 26, 2021It is a spectacle tailor made for Mr. Musk’s live-wire online persona. He is at once a capitalist hero, a glossy magazine celebrity and a bomb-throwing troll with 44 million Twitter followers, inhabiting his role as the chief executive of two major companies with a bravado that most corporate leaders wouldn’t dream of. The richest man in the world is also, somehow, a hero to the anti-establishment crowd, riling up the digital masses one tweet at a time.The whole thing has this weird counter-culture, stick it to the man, feel about it, but these don't appear to be like the radical ultra right/left nutjobs, they are probably closer to folks you might see at Harbor-Freight.Time and a computer can be a dangerous combination.

author: Ed.Kloonk
author_rank: Super Contributor
timestamp: January 29, 2021, 10:11:45 pm
content: Quote from: Stray Electron on January 29, 2021, 02:50:30 pmThere was a meme some time back that posed the idea of these individuals being made to wear their sponsor's patches not unlike motor racing drivers.

author: nctnico
author_rank: Super Contributor
timestamp: January 29, 2021, 10:47:34 pm
content: Quote from: DrG on January 29, 2021, 08:53:40 pmYou can. The threat you linked to does raise some good points about taxes because it isn't a loop hole you can exploit to give someone something valuable for free. You can sell me the shares for $1 but I'll have to value them for what they are actually worth (at a certain date) when I fill in my income tax forms.Side note: Stock exchanges will allow you to set any price you want. It is up to the buyers to accept your price or not. When I was working at the stock trading firm they told me three things when it came to testing with trading platforms: 1) make sure you are in the test environment, 2 make sure you are in the test enviroment, 3) make trades with the smallest number of units only for testing. If you can sell 1 share the system will also work with selling 10,000 shares. It has happened that someone made the mistake to open the real trading environment instead of the test environment and tested with large numbers of shares at crazy low prices costing that particular company lots of money. Not all the buyers where so friendly to undo the transactions.QuoteIn theory that is possible but it could be that the short position is covered by an option which expires at some point. Another issue is that the potential loss needs to be covered. I have seen clients of the investment firm to be required to sell at a loss because they couldn't provide the funds to cover the risk of their position. A particular nasty situation was that at some point the bank holding the accounts with the shares and derivatives had identified a new risk with certain derivative products which required several customers to add more cash into their accounts to make sure the risk was covered.QuoteThat is probably why the large funds are doubling up so they have to buy their own shares back.

author: ebclr
author_rank: Super Contributor
timestamp: January 30, 2021, 01:18:01 am
content: "Additionally, I could, conceivably, keep my short position for a very long time "It's not cheap to be short with 1400% against you

author: DrG
author_rank: Super Contributor
timestamp: January 30, 2021, 01:45:02 am
content: QuoteQuoteThere certainly is a strategy to sell short and buy a call option for protection / insurance and at some cost and, yes the option would absolutely have an expiration date (although buying some calls only, in a timely fashion, in the case of GameStop, would have made quite a tidy penny, I would imagine).This is, however, something different than I said, which we both now agree is, in theory, possible.The whole topic is beginning to remind me of years ago - all that crap with buying and selling puts and calls and covered and naked... Black–Scholes....some of the most boring areas I have ever spent time with. To have to do it for a living would have crushed my spirit for sure, but that is me and everyone finds their own way.

author: T3sl4co1l
author_rank: Super Contributor
timestamp: January 30, 2021, 03:47:21 am
content: More news, apparently they ran ads on CNBC "advising" the public that, the shorts had cleared, and, y'know, you can sell your holds, don't worry about it, it's over, you're not screwing us anymore, nothing to see, wink wink nod nod saynomore saynomore.Implying that, yes, they have very good reason to spend cable ad money trying to convince people to sell at this time.Tim

author: wraper
author_rank: Unknown
timestamp: January 30, 2021, 05:49:12 am
content: (Real) Explanation by CEO of Webull why you could not buy certain stocks.

author: bdunham7
author_rank: Super Contributor
timestamp: January 30, 2021, 06:13:31 am
content: Quote from: wraper on January 30, 2021, 05:49:12 amI'm not agreeing with any conspiracy theories, but the explanation here is incomplete. The retail brokerage platforms probably aren't the culprits, but somebody is. The collateral requirements were not a precautionary measure, in my opinion, but rather an emergency measure to deal with a counterparty risk situation thathas already happenedsomewhere in the system. The counterparty risk of not being paid for your stock by a retail investor is not a realistic scenario if the broker is following the rules.I'm guessing that the problem was already baked in somewhere and a major player was allowed to take too much risk. Of course, the specific situation here is a fairly radical one--but not much more ridiculous than the rest of the market right now.

author: wraper
author_rank: Unknown
timestamp: January 30, 2021, 02:20:46 pm
content: Quote from: bdunham7 on January 30, 2021, 06:13:31 amThe risk in the system is that 140% of all existing Gamestop shares were shorted, and around 80% for AMC IIRC. And way way less than 100% of actual shares were in free circulation. And everything piles up from there in chain reaction. Since shorts cannot cover due to meteoritic rise of price and lack of shares to buy and cover short positions. It can be said that reddit traders broke the system, but the flaw which allowed this was too greedy institutionalized short sellers.Simple explanation for anyone who doesn't know what is short position. Basically you borrow a share. Then immediately sell it and keep the money. When you cover (close) short position, you buy the share back and return to lender. If the price drops, you gain profit since you bought the share cheaper than sold, and keep the difference. If price raises, you lose money. And price can rise basically infinitely, so you can be screwed infinitely as well.

author: nctnico
author_rank: Super Contributor
timestamp: January 30, 2021, 02:24:41 pm
content: Quote from: DrG on January 30, 2021, 01:45:02 amTell me about it... I understand about shares but options with straddles, butterflies and 'being at the money' is nothing for me. Though it did gave me respect for my co-workers being on the exchange floor the entire day and working out all these calculations in their heads quickly.

author: bdunham7
author_rank: Super Contributor
timestamp: January 30, 2021, 03:45:00 pm
content: Quote from: wraper on January 30, 2021, 02:20:46 pmI minimize my news consumption to preserve my mental health, so I was not aware that the short interest in GME had exceeded 100%. I'm sure someone took notice of that and understood the opportunity it provided for a crowdsourced short squeeze riot. Allowing this to happen is essentially removing the protections against 'naked' short selling. It is allowing certain players to take risks that other people pay for. As I said, the risk was never that the retail investor from Robinhood would become a counterparty default, and I don't think it was that Webull or Robinhood themselves were the counterparty risk either.Greed and stupidity will always be there, but the real flaw in all of this IMO is the clearing system itself. The fact that a stock trade takes 2 days to settle is absurd. Every share of every stock should have an ID# and every investor entity should have an ID#. The transaction should take place instantly, like Bitcoin before it became popular. Specific share IDs would be have their ownership changed to the new ID# and the appropriate account is credited instantly. If the share you bought is from a short seller, they have to provide specific IDs and the broker and clearinghouse are responsible for verifying that the two parties actually have the funds or rights to sell the specific stocks, whichever is the case. This would eliminate naked shorts and the sort of thing going on right now, plus a lot of other shortcomings in the current system. But those rules would be more difficult to exploit and the big traders would lose some of their arbitrage opportunities.

author: DrG
author_rank: Super Contributor
timestamp: January 31, 2021, 07:31:13 pm
content: Majority Shareholder, Gamestop - SNL~2:11-3:58

author: Ed.Kloonk
author_rank: Super Contributor
timestamp: January 31, 2021, 10:47:11 pm
content: Yawntube says upload has not made video available in my country.

author: DrG
author_rank: Super Contributor
timestamp: February 01, 2021, 12:20:45 am
content: Quote from: Ed.Kloonk on January 31, 2021, 10:47:11 pmThat's surprising to me. This was the "cold open" from the TV show Saturday Night Live (from yesterday in the US). The whole skit is pretty good (although sadly, too true), especially the GameStop part. SNL was a favorite of mine when it first came out and I never thought that the cast thereafter made it to the same level, although it is debatable in a generational context.This article in australianonlinenews even mentions the skithttps://australianonlinenews.com.au/2021/02/01/snl-cold-open-asks-gamestop-traders-marjorie-taylor-greene-and-tom-brady-if-the-us-still-works/

author: ve7xen
author_rank: Super Contributor
timestamp: February 01, 2021, 01:09:25 am
content: Quote from: bdunham7 on January 30, 2021, 03:45:00 pmCorrect me if I'm wrong, but I don't think anyone was naked shorting GME. It seems that if you allow short selling at all, this situation is basically impossible to prevent. Since in a short you immediately sell the borrowed stock back onto the market, that borrowed stock can then (through any number of normal trades) end up in the hands of a market maker that lends it again to support a short trade. So it's not hard for the short interest to exceed the number of shares; fundamentally it's the same thing as if I borrow $100 from Alice to lend to Bob; $200 is owed but there is only actually $100 in the system.You could track each individual share and ensure that each is only part of one uncovered position, but this then creates two classes of shares with different values, that would have to trade separately. Since this means entering a short position you have to sell into the lower value 'uncovered stock' market, I'm not sure how it would work but it'd certainly be very different than what we have today and I suspect it just wouldn't work at all.I still really don't grok the excuses being given by WeBull and others. When I as a retail investor trade a stock, 'somebody' confirms the execution of that trade, and this takes some time. The trade isn't settled immediately, and the price (assuming I have placed a limit order) needs to be determined, so it's not like they're just recording my interest and executing it later - some sense of a trade *is* executed in real-time. So presumably the clearance platform has found a match, and recorded the transaction, regardless of whether the actual assets have been transferred, it is recorded against actual assets, and in effect 'in escrow'. I don't see where the counterparty risk is here - if it's just the volume or something that makes them nervous, then this risk has always existed and it doesn't make sense to stop trading of specific securities and not shut down, rate limit, disallow trades on margin, or do *something* that is neutral to reduce the across-the-board risk. Really not getting how this isn't blatant market manipulation.

author: Marco
author_rank: Super Contributor
timestamp: February 01, 2021, 03:17:39 pm
content: Quote from: nctnico on January 29, 2021, 07:40:00 pmOnly daytraders, the big guys only have to prove they looked up the shares were available for borrowing on the day they went short. They have to buy in somewhere between T+4 to T+13 depending on a couple circumstances in theory ... but in the past they have had tricks to reset the clock and/or pass the short position around. Given that stocks can and will have large amounts of fail to delivers for months, ie. they are on the threshold list, I'm pretty sure the hedgefunds still have tricks to reset the clock and/or pass the short position around.They deliver when they give up hope or when the SEC regulator starts thinking that despite relying on the hedge funds for his future job prospects, they are making him look just a little too bad. But all the risk they accumulate in the mean time, not least of which regulatory, still costs real money ... another hedge fund isn't going to cooperate with what the SEC could start calling securities fraud at any moment for free and the counterparty risk costs money too.

author: Marco
author_rank: Super Contributor
timestamp: February 01, 2021, 03:29:07 pm
content: Quote from: ve7xen on February 01, 2021, 01:09:25 amYou can get a short squeeze even from borrowing, but consistent fail to deliver is a defacto proof of naked shorting. Last I looked Gamestop was still on the NYSE Threshold list, so they are naked shorting. Naked shorting is the standard way to short for the big guys, they borrow at T+4 at the earliest ... but in this case likely T+as long as they can get away with.

author: Scrts
author_rank: Frequent Contributor
timestamp: February 01, 2021, 03:37:40 pm
content: Quote from: Marco on February 01, 2021, 03:29:07 pmThey will push brokers to either let them wait or issue a 2nd round of shorts to cover shorts... so far, that didn't work out, because hedge funds sold many long term investments to cover losses. This resulted in commonly traded stock like Amazon or Tesla going down last week. You can also see that media is extensively pushing some false information that hedge funds exited the shorts.I bought 3 GME shares. Probably going to lose everything (even though I've put contingent order with trailing loss stop), but I still want to f... those funds.

author: Marco
author_rank: Super Contributor
timestamp: February 01, 2021, 03:51:19 pm
content: Quote from: ve7xen on February 01, 2021, 01:09:25 amTheir market makers are massively exposed to their own short positions and the counterparty risk of short positions. Their income comes from routing trades to those market makers, the market makers are their customers and the traders/trades are the commodity being sold.Customer is king.

author: bdunham7
author_rank: Super Contributor
timestamp: February 01, 2021, 04:02:10 pm
content: Quote from: Marco on February 01, 2021, 03:51:19 pmAnd in case anyone didn't get the point, you as a retail trader or pension fund holder are not the customer that is king. You are meat on the platter.

author: Marco
author_rank: Super Contributor
timestamp: February 01, 2021, 04:13:53 pm
content: I can't imagine any reasonably sized pension fund uses a standard brokers any more ... they pay their traders good enough money to know how to use direct market access and the best way to firewall your trading information is to just not do it with a broker with its own trading desk.

author: Syntax Error
author_rank: Frequent Contributor
timestamp: February 01, 2021, 05:28:46 pm
content: Enter the barbarian hoard. Is Reddit is an investment broker or a stage for marionettes who cannot see where their strings are being pulled from? I'm sure the laws of group dynamics make for solid investment fundimentals.Last week Gamestop. This week Silver. Next week... Tether crypto(?)QuoteFor private investors who are burning their own money, be aware of the"dead cat bounce"that can make investments seem a no-brainer. Dead cat what?https://www.investopedia.com/terms/d/deadcatbounce.asp

author: Bud
author_rank: Super Contributor
timestamp: February 01, 2021, 06:29:04 pm
content: And you conveniently did not reference this, from the same source:Quote

author: Marco
author_rank: Super Contributor
timestamp: February 01, 2021, 07:59:59 pm
content: I wouldn't be surprised, even if there's a silver short position it's not like it's due all at once.Stock shorting gets expensive very quickly when the price moves against the shorters, future contracts spread across months and quarters not so much.

author: thm_w
author_rank: Super Contributor
timestamp: February 01, 2021, 10:40:23 pm
content: Quote from: Syntax Error on February 01, 2021, 05:28:46 pmThe only "true" goal right now is to hold GME until shorts cover. Anything else could be the work of greed, bots, etc. as Bud says.The article is a bit of a hyperbole, PSLV is the same price it was august of last year, so prices aren't that crazy. Although maybe physical silver is different?

author: DrG
author_rank: Super Contributor
timestamp: February 01, 2021, 10:55:28 pm
content: Efficient market indeed.

author: tszaboo
author_rank: Super Contributor
timestamp: February 02, 2021, 12:09:26 am
content: So when I was researching how the stock market is working:buy, sell: Ok makes senseoptions, call, put: Ok, you can get some insurance for your investment, ok, makes senseShort: Ok, so you think the price is going down, and if it is going up, you might loose infinite amount of moneyTDT: That's sounds like gambling to me.High frequency trading: OK, so I basically have no chance of ever making money without spending significant amount of time researching everything, because my enemy is a supercomputer, who plays dirty.And then I looked into the details. Insider trading being illegal. Naked shorting being a common practice. Pump and pump. Tesla. Dutch black tulips.None of this makes any sense, and I am very sure, most the things that go on on the stock market should be illegal.

author: Syntax Error
author_rank: Frequent Contributor
timestamp: February 02, 2021, 01:14:54 am
content: @NANDBlog This herd hysteria based on some collective guesstimating of the future, makes as much sense as short selling Bitcoin. News just in. Five ways to short Bitcoin:https://www.investopedia.com/news/short-bitcoin/You can even short a circuit, provided you p*** enough electrolyte all over it.

author: vad
author_rank: Frequent Contributor
timestamp: February 02, 2021, 02:29:20 am
content: Someone, who stocked up shares before starting hysteria on Reddit, made good (1000%+) profit. Good on them. Idiots, who bought at higher than 10-15 per share and continue holding will loose. This company is going belly up anyway, not because of some evil investors shorting their stock, but because the company is loosing money and has no future. As for the Wall Street, at worst they will write off losses. 16B - today’s market cap of GME - maximum they can loose today - is peanuts for them.

author: station240
author_rank: Unknown
timestamp: February 02, 2021, 07:59:44 am
content: The problem is deeper than just a lot of short selling.On the Securities and Exchange Commission website, is a list of all shares that have "fails-to-deliver" at settlement date.So shares that someone has paid for, but couldn't be found.https://www.sec.gov/data/foiadocsfailsdatahtmGet the latest one, "January 2021, first half" cnsfails202101a.zip5,074,937For a company with only 69.75M shares, having 5M shares (7.16%) that cannot be found is odd.Also you have this analysishttps://www.reddit.com/r/wallstreetbets/comments/l9rk78/sec_doj_60_minutes_public_data_suggests_massive/QuoteSo how can this happen, more shares being held than exist ?Simple, one or more hedge funds created counterfeit stock in GME, so it could be shorted.Given the original plan was to bankrupt Gamestop, no one would find out when the shares became worthless.-------------------------As for what started all this, a number of people decided Gamestop had a future, especially more recently.1. PS5 and Xbox Series X|S consoles are selling out, when supply is no longer such an issue, Gamestop can make ever more money.2. With new consoles, people will want to buy games and accessories to go with it, either instore or online.3. Has a new CEO Ryan Cohen, and two other new board members.4. Plans in motion to revamp the company online sales.5. In the process of exiting out of some of the expensive realestate they lease.Most recent figures I could find, it's a mixed baghttps://www.gamespot.com/articles/gamestops-holiday-sales-drop-due-to-covid-19-and-ps5-xbox-series-x-sellouts/1100-6486095/(dated Jan 13 2021)Quote

author: DrG
author_rank: Super Contributor
timestamp: February 02, 2021, 04:12:47 pm
content: Quote from: station240 on February 02, 2021, 07:59:44 amI appreciate the post. Not saying I agree, especially about the "fundamentals" of GameStop, but you are presenting some interesting material.On the call options in one of the quotes- back in the day, I would sell call options (these are contracts, that expire on a certain date, to buy a stock at a certain price). But, I never sold uncovered calls. That is, I could only sell call options where I held the stock. To sell uncovered calls required you to fulfill a bunch of requirements with the brokerage...I never went there (no real reason for me to mention that, but again...memories).From this morninghttps://finance.yahoo.com/news/gamestop-extends-pullback-short-interest-083934905.htmland the priceMy point, if I have one, is that the short selling was, indeed, at the heart of the move...or notPS: Can't wait to watch Katie Porter (House) and Elizabeth Warren (Senate) start questioning the SEC folks.

author: thm_w
author_rank: Super Contributor
timestamp: February 02, 2021, 10:03:25 pm
content: Quote from: vad on February 02, 2021, 02:29:20 am- "lose" for reference- they have 2.8B in assets:https://www.macrotrends.net/stocks/charts/GME/gamestop/total-assetswhich would equal a value of $40/share- everyone knows the company has no long term future, but it can easily survive until the end of the current console generation (5-10 years)- they can't just "write off" borrowed shares, they have to purchase them back first

author: vad
author_rank: Frequent Contributor
timestamp: February 03, 2021, 01:53:54 am
content: Quote from: thm_w on February 02, 2021, 10:03:25 pmOf those 2.8B, 1.06B is property and real estate after depreciation (land is only 18M, BTW), and 860M is inventory. Cash and AR is only 640M. At the same time they posted -794.8M net income in 2019, -464.4M in 2020. Retailer with such fundamentals is doomed.Large market players will write off the losses, not the shares. Idiots who yesterday bought at $225, face today’s -60% correction and will never see their money back again.

author: DrG
author_rank: Super Contributor
timestamp: March 12, 2021, 07:29:19 pm
content: Around now, I figured I would post a graph of the price and use an old video of the BS&T song, "Spinning Wheel" (What goes up, must go down....).Instead I post a price graph that seems to defy gravity.

author: TerraHertz
author_rank: Super Contributor
timestamp: March 16, 2021, 02:28:26 am
content: Quote from: NANDBlog on February 02, 2021, 12:09:26 amYeah, I long ago decided the stock market is too corrupt and convoluted to risk my own money in.And by the way, you left out Front Running - fiddling with communication links to get a few mSec lead on trading notifications, to feed your HFT computers for extra gain.Personally I prefer investments you can hold in your hand. Nice and simple, nothing the government can do make it go poof. All the better if part of a world-wide movement that might actually bring down the whole rotten house of cards.http://everist.org/archives/links/__Silver_squeeze_info.txtA small example:

author: GodIsRealUnless DefinedInt
author_rank: Contributor
timestamp: March 16, 2021, 04:11:52 am
content: So about a year or more ago, after many years of steady decline, GameStop was not doing well and their stock was super low. Then, they hired some new board members and the stock went up. Institutional investors (aka hedge funds) observing the phenomenon decided to "short" GameStop stocks to make a lot of money when it failed. The idea of buying GameStop stock and selling it a few hours later at a fraction of the price you bought it for is the most GameStop turnabout imaginable, if you ever tried selling anything back to them =) I always said its good to be the ruling class (government representatives) but then the financial markets have their own ruling class and all the Reddit David's decided to throw stones.