7 ms·

The Irony in the GameStop Story

59 points by gabriel34 6y ago

sschueller 6y ago
Off topic but I noticed a large number of large empty white spaces. Then I realised that my browser is blocking all those ads. Kind of sad how much of that page is ads.
- markwkw 6y ago
  And some of the adds are of the “this stock will be 35 times bigger than amazon” kind. Adding to the irony
  - kmeisthax 6y ago
    99% of all investor relations is black-hat.
- martin_a 6y ago
  WOW, those are some serious ad spaces... If anyone wonders, this is what the page looks like on Firefox with uBlock Origin: https://imgur.com/bvrLMTv https://imgur.com/bvrLMTv
  - h_anna_h 6y ago
    Kinda weird that Nasdaq needs ads to survive, or is it just out of greed?
moolcool 6y ago
I swear, GME is the feel-good story of the year.
- gonzo41 6y ago
  Gotta say I agree, after hearing non crap news for a year. It's nice to see a hedge fund eat their hat.
  - PragmaticPulp 6y ago
    I think the sentiment will shift when people realize that some of these hedge funds invested people's pension money, or university endowments, or any other number of people's funds. WSB has promoted a cartoonish version of Wall Street where hedge funds only hold rich, evil people's money. That's not really how this works. A lot of people are also going to be disappointed to learn that some Wall Street firms profited massively from this situation. And finally, a lot of retail investors who were late to the party are going to lose a lot of money on this. Some of that will flow to early Redditors who got their exit timing right. Some of that will flow to hedge funds who cleverly scooped up the naive money in the chaos. I'd go so far as to bet that journalists are already working on articles with all of these angles. They'll start to trickle out just as soon as the market euphoria wanes.
    - pg_bot 6y ago
      "Pensions and university endowments" are the "women and children" of the financial world. Everyone constantly harps on these classes of people in order to play to your emotions instead of thinking logically. The great thing about America is we allow you to make "stupid" choices. No one should care if you lose all your money by acting stupidly, doesn't matter if you're Harvard or a heroin addict. If you rely on a pension or university endowment for funding you should take up a greater interest in where that money is being invested.
    - moolcool 6y ago
      I hate this sentiment so much. As if it's a bad thing that Wall Street gangster hedge funds are finally feeling the squeeze that they put on everyday working people, just because some of the money they control is pension money or university endowments. It's literally the same rationale people use to justify staying in abusive relationships. Controlling some crumbs of the great unwashed's money gives these billionaires zero moral authority to do the crap they get away with every single day. Fuck them, then fuck them again. They deserve every ounce of this and then some.
      - PragmaticPulp 6y ago
- wpasc 6y ago
  Unfortunately, the hedge funds will be 100% fine and probably capitalize on this event and somehow still come out ahead. The WSB folks who started this have probably already sold out so they're fine. It's average everyday folks who bought into this robin hood (not the app) story and purchased stock at recent prices who will lose a lot of money
  - ghaff 6y ago
    Yeah. Most of the firms involved will be fine. A number of retail investors who got in early on have probably made serious dough. People who bought a share or two for the lulz whatever. Others who saw this as a big opportunity to make money they otherwise had no hope of making? At least some will be bankrupt, lost the money they were saving up for a house downpayment, lost retirement savings, etc.
  - holtalanm 6y ago
    > The WSB folks who started this have probably already sold out so they're fine the biggest player in /r/wallstreetbets is /u/DFV, and last I checked he had cashed out a small portion of his position. Still has like 30mill tied up in GME stock though. Crazy story looking at his posts from 2019-now, though. At one point his GME portfolio was only worth 42k, and now it is over 40mill.
    - cvak 6y ago
      He has not "cashed out", some of his options expired ITM.
      - holtalanm 6y ago
        he literally sold 300 of his options the other day...
- heartbreak 6y ago
  I sincerely hope this comment ages well, but I doubt it will. A scenario where a majority of the retail traders in GME right now come out ahead would be surprising.
  - ascagnel_ 6y ago
    Agreed. There's a good reason why so many of these hedge funds held short positions -- $GME is a business facing significant headwinds beyond what you'd see from the pandemic and a typical P&L statement: - Their primary product is used game sales, and the biggest players in that sector are making active moves against such sales (see: the disc-less PS5 and Xbox Series S consoles). - Digital storefronts make purchasing new games much, much easier (and a borderline impulse purchase). - Free-to-play multiplayer games cut Gamestop out of the customer acquisition loop. The most $GME gets is a cut of any prepaid cards, but those cards are commonplace nowadays (my local chain drugstore has an end-cap with dozens of prepaid cards of various types). - Their primary model is to lease space in malls. With the pandemic, malls are either closed or seeing substantially less foot traffic. - Consoles are typically a big driver of purchases, but their limited availability also limits $GME's potential. That said, that can be counterbalanced by very profitable bundles made more attractive by the limited availability of unbundled consoles. I don't play the stock market, but even if I did, $GME wouldn't be something I'd look at in a buy-and-hold strategy.
    - holtalanm 6y ago
      their online store is pretty damn good, though. Not sure what % of their total revenue it accounts for, but I'd wager it isn't negligible.
    - paradox242 6y ago
      The stock will resettle at something far lower than it is now, most people realize this. They are trying to ride this thing until the margin calls come in and a substantial number of short positions are closed. If that happens there will be blood in the water and big money for anyone able to sell during the frenzy. After that, it's everyone for themselves.
  - 6y ago
- gabriel34 6y ago
  The irony of manipulating markets against market manipulators is delicious. This will also punish over exposed players who are probably reviewing their short positions as this unfolds.
- UncleMeat 6y ago
  The story isn’t over yet.
- metalliqaz 6y ago
  Wall Street moguls will have their revenge. Count on it.
zinekeller 6y ago
I agree that Citron and especially Left is indeed ironic in this situation (and the refreshing reminder that a: American English is derived from English English and b: the internet is not just Americans). The small-scale market (as a group) is doing the exact things as him in other instances, but the call for restrictions is, to say the least, confusing.
user_error 6y ago
> Left claims that the “mob” has overstepped the mark and harassed him and even his family in a way that is actually illegal. If that is true, shame on them, and those involved should be prosecuted. This must be condemned without hesitation; nothing excuses that type of behavior. Online harassment of those with different opinions, particularly in pursuit of profit, is disgusting and becoming all too common, and standing up against it is important. (...) I'm a bit lost with this article. What have an "angry mob" been doing to Andrew Left and his family in an "actually illegal way"? Seems to me this article is swaying to some type of narrative someone wants to propagate rather than aiming to be somewhat objective regarding current events.
- loganfrederick 6y ago
  They probably don't want to share details for the sake of the family's privacy. I assume it's the typical online harassment stuff: threats to the family's physical safety because of Left's opinions.
- zinekeller 6y ago
  > Seems to me this article is swaying to some type of narrative someone wants to propagate rather than aiming to be somewhat objective regarding current events. Note the "If". Left had indeed claimed that there were attacks on his personal peers, and I agree that if it were true it is overstepping their right to privacy and probably life if the claimed attacks were death threats. HOWEVER, if it turns out that Left is lying I will agree that Left have commited defamation against a group of possibly hundreds of thousands of people and I would really suggest to him at that moment (apart from what the law thinks appropriate, which is a somewhat long prison time) to really apologise and permanently stay outside of the stock market. He is English and I knew from reading their (in a country sense) opinion pieces that they tend to put distance in unsure or unverified information, possibly because of the much stricter libel/defamation laws there (see as an example https://youtu.be/z49LjJj3VTI https://youtu.be/z49LjJj3VTI that discusses why there is avoidance on the phrase "tired and emotional" which acquired a different meaning in UK). I guess that this is just an unintentional carryover especially that American opinion pieces don't really delinate fact from opinion in their writing.
drewcon 6y ago
I still feel like these stories are missing a core distinction. If these WSB folks rallied around GME because they were true believers of a beloved brand with faith in a turn around plan, god love em. I think that’s an interesting phenomenon that upgrades retail collective trading in much the same ways mutual funds behave on behalf of loads of retail investors. But that’s not what happened. The brand is irrelevant. It’s just math and vengeance and in the end...a lot of retail folks are going to be left holding the bag as prices drop down to earth. That cannot be a good outcome for anyone. I don’t think we want a system to function like this.
- cheph 6y ago
  > But that’s not what happened. The brand is irrelevant. It’s just math and vengeance and in the end...a lot of retail folks are going to be left holding the bag as prices drop down to earth. That cannot be a good outcome for anyone. I don’t think we want a system to function like this. Not sure what you suggest be done about it. Hopefully people learn their lessons but it is not like we can eliminate the possibility of doing dumb things, and doing so would be quite illiberal.
- briefcomment 6y ago
  I'm pretty sure bringing up fundamentals is intentional FUD. Nobody is investing in any of these because of fundamentals. It's the public vs hedge funds and GME et al is the battlefield. The more people take part and have strong hands, the more the losses will be democratized, on the way to the real desired outcome against naked shorting hedge funds. I don't mind losing a couple hundred bucks investment for this.
  - tosser0001 6y ago
    I'm sure there is some core set of people that want to "stick it to Wall Street" but the vast majority are probably just along for the ride. The irony is, once this stock finally comes crashing down, it will be the small retail investors losing a lot of money, and a different set of Wall Street investors will be the ones reaping the reward.
NKosmatos 6y ago
Nice post, with clear language and a very good explanation of what is happening :-)
MontagFTB 6y ago
This article claims the catalyst for GME’s meteoric rise was a change to their board altering the company’s narrative. Josh Gross claims it’s because u/DFV liked their 10-Qs. So which is it? One? Both? Neither? https://twitter.com/endtwist/status/1354547622133051393?s=20 https://twitter.com/endtwist/status/1354547622133051393?s=20
- holtalanm 6y ago
  Josh Gross pretty much nailed the summary of what has happened.
- TameAntelope 6y ago
  Wow, I didn’t know u/DFV saw this before Burry, I thought he was tipped to it by movement from Burry! I am very suspicious of WSB generally, but just like with Anonymous, there apparently are some skilled folks in the horde...
- fakedang 6y ago
  I've seen way too much rationalization of this from mainstream financial media "pundits". Lol'd when I heard Andrew Ross Sorkin's take on it. I do know that the DFV post was the match, but I think stimulus + people generally wanting to take revenge + the WSB post that revealed that Melvin was shorting GME, so let's fuck it up + Robinhood's post-pandemic popularity were the reasons for this to go out of control unlike other previous movements. One thing it has shown is how much vulnerable the US financial system is. Although this time it was retail investors left holding the bag, this situation could be destructive very easily. Imagine now, if Russia wanted to take down the US economy. They could create a buffer hedge fund, maybe 3-5B, which would be obliterating itself anyways. Then get some bots to bump up activity around a particular stock, maybe generate fake short interest against GS (smallest big 6 bank, so I chose it). Then create a CtA on WSB, calling for a mass short to dethrone GS based on fake information, and pump it up with bots. Retail starts shorting, Algobots might pick up on the momentum and join the trend, followed by traditional HFs joining the crowd. In the end, you'll have GS being shorted for no particular reason, but enough to cause some serious damage momentarily. Price goes down, they get deemed overlevered, and they're forced to take a bailout (highly damaging to the politicians in Congress who support it) or led to fail (which would cause shockwaves across the street). It's likely the politicians will sacrifice themselves for a cushy job post politics, but the current ruling party would lose all legitimacy in front of its voters. I imagine such a scenario would be easily plausible in Europe, where the banks are much weaker financially (save for the Swiss ones).
vga805 6y ago
Andrew Left of Citron Research today announced that Citron will no longer research and invest in shorts. They will now cover long positions. He's trying to reverse his image with WallStreetBets. I hope it is in good faith, he likely just sees an opportunity.
- JohnJamesRambo 6y ago
  A child could see through that.
nabla9 6y ago
Double irony. The story is not over. When the GameStop valuation jumped to ridiculous levels, it was obviously noticed by others who started shorting. The end result of this is that some in the WallStreet are making even more profits than Citron Research. This time it's on the backside of those retail investors who think "holding the stock" is protecting it's price. Citron Research was caught on surprise by WSB, these new speculators have the benefit of weighting and analyzing WSB group action. They can take account possible short squeeze risk and duration and take a long view. https://isthesqueezesquoze.com/ https://isthesqueezesquoze.com/ >GME shorts have not begun to close their positions in substantial numbers. >the situation (1/28 5 PM ET): >- short interest: 100% of float by Ortex, 123.25% of float by S3 Shortsight >- change in short share availability: +9,000 Matt Levine covers all scenarios nicely, must read as always: https://www.bloomberg.com/opinion/articles/2021-01-28/knowing-when-to-sell-gamestop-stock-at-the-top-is-impossible https://www.bloomberg.com/opinion/articles/2021-01-28/knowin...
ChrisRR 6y ago
I'm English, and I don't know what point he's trying to make about being English
adamcstephens 6y ago
Ahh I love financial reporters. Just because Left has never lost a court case doesn’t mean he isn’t doing anything illegal. There are two tiers of justice in this country, and the rich can by their way out of crime.
bloqs 6y ago
How are people missing that the original bet on this was founded around the newest generation of consoles shipping with Optical Drives? That was the entire basis on which Gamestop reapproaching retail with a new mindset and new investment led to wsb getting behind it in the first place. Source, u/DeepFuckingValues earliest comments on reddit on GME around Mark Cubans involvement
flerchin 6y ago
I keep seeing folks saying that retail will be left holding the bag. Retail folks are buying GME and holding. Worst case they're out their initial investment. GME shorts like Melvin Capital are out many multiples of their initial investment, their losses are unbounded. Retail (r/wsb) understands this, and is willing to lose their $600 or whatever to screw over the institutions.
- bilbo0s 6y ago
  The institutions can game all the way up though. The mistake the retail guys made in this instance was not accounting for the other institutional vultures Who had no prior interest in it, but would opportunistically pile in. It’s becoming clear that a better designed attack was necessary. Unless government steps in, this attack will enrich market makers and a lot of hedge funds, while cleaning out retails who may not have fully understood the dynamics of this attack. In my view though, that’s the market. It’s a learning process. Retailers will gain more understanding and the next attack will be better designed.
SilasX 6y ago
This feels like "damning with faint praise": "Yeah, yeah, sometimes they break the rules but they say there's no significant court case they lost." >They are very open about the fact that they or their clients may already have short positions in the stocks concerned and as I said, most of what they say is publicly available information. Clearly, they are not doing anything illegal, or even underhand. They have been sanctioned a few times by regulatory authorities and lost legal battles overseas but, as founder and Executive Editor Andrew Left has frequently pointed out, they have never lost a significant court case in America.
JW_00000 6y ago
This story is constantly being framed as "the angry mob" vs "Wall Street hedge funds". But surely other professional investors ((hedge) funds, high frequency traders, algorithmic traders) are also jumping on the bandwagon, to (1) eliminate a competitor and (2) make a profit themselves on the way. I read yesterday that (at least one platform for) algorithmic traders have been monitoring subreddits like /r/WallStreetBets since the start of 2020, to immediately buy what is mentioned favorably there before retailers bring the price up. The way I see it, is that among the professional investors, one will lose hard (Citron), while most others will profit. When the sell-off starts, they'll be able to sell first, thanks to their sub-ms connections to exchanges, algorithms that monitor media in real time (including reddit!), and employees that are constantly monitoring this whenever the markets are open (as opposed to retailers doing this in their free time). Among the retailers, a few will win big (/u/DFV), while most will lose. They'll either stubbornly "HODL" if they're in it to "get a message across", or if they're in it for profit, they'll notice the sell-off too late and act too late, probably exacerbated by RobinHood suffering outages at that point. So my prediction is that in the end one hedge fund will go down while others will profit from it... Most retailers will lose. Then what was the point?
- SilasX 6y ago
  So much this. I've been rolling my eyes at the "fight the power" narrative, since I assume there are other hedge funds or shadowy figures taking the other side of the bet, and stoking the short squeeze.
- cannabis_sam 6y ago
  > Then what was the point? I mostly agree with your analysis, and I don’t have any money invested in GME (I usually do private investments). But at the same time, I think there is incredible value in exposing how much of a lie “the free market” is...

59 points by gabriel34 6y ago

Off topic but I noticed a large number of large empty white spaces. Then I realised that my browser is blocking all those ads. Kind of sad how much of that page is ads.

markwkw 6y ago
And some of the adds are of the “this stock will be 35 times bigger than amazon” kind. Adding to the irony
- kmeisthax 6y ago
  99% of all investor relations is black-hat.
martin_a 6y ago
WOW, those are some serious ad spaces... If anyone wonders, this is what the page looks like on Firefox with uBlock Origin: https://imgur.com/bvrLMTv https://imgur.com/bvrLMTv
- h_anna_h 6y ago
  Kinda weird that Nasdaq needs ads to survive, or is it just out of greed?

moolcool 6y ago

I swear, GME is the feel-good story of the year.

gonzo41 6y ago
Gotta say I agree, after hearing non crap news for a year. It's nice to see a hedge fund eat their hat.
- PragmaticPulp 6y ago
  I think the sentiment will shift when people realize that some of these hedge funds invested people's pension money, or university endowments, or any other number of people's funds. WSB has promoted a cartoonish version of Wall Street where hedge funds only hold rich, evil people's money. That's not really how this works. A lot of people are also going to be disappointed to learn that some Wall Street firms profited massively from this situation. And finally, a lot of retail investors who were late to the party are going to lose a lot of money on this. Some of that will flow to early Redditors who got their exit timing right. Some of that will flow to hedge funds who cleverly scooped up the naive money in the chaos. I'd go so far as to bet that journalists are already working on articles with all of these angles. They'll start to trickle out just as soon as the market euphoria wanes.
  - pg_bot 6y ago
    "Pensions and university endowments" are the "women and children" of the financial world. Everyone constantly harps on these classes of people in order to play to your emotions instead of thinking logically. The great thing about America is we allow you to make "stupid" choices. No one should care if you lose all your money by acting stupidly, doesn't matter if you're Harvard or a heroin addict. If you rely on a pension or university endowment for funding you should take up a greater interest in where that money is being invested.
  - moolcool 6y ago
    I hate this sentiment so much. As if it's a bad thing that Wall Street gangster hedge funds are finally feeling the squeeze that they put on everyday working people, just because some of the money they control is pension money or university endowments. It's literally the same rationale people use to justify staying in abusive relationships. Controlling some crumbs of the great unwashed's money gives these billionaires zero moral authority to do the crap they get away with every single day. Fuck them, then fuck them again. They deserve every ounce of this and then some.
    - PragmaticPulp 6y ago
wpasc 6y ago
Unfortunately, the hedge funds will be 100% fine and probably capitalize on this event and somehow still come out ahead. The WSB folks who started this have probably already sold out so they're fine. It's average everyday folks who bought into this robin hood (not the app) story and purchased stock at recent prices who will lose a lot of money
- ghaff 6y ago
  Yeah. Most of the firms involved will be fine. A number of retail investors who got in early on have probably made serious dough. People who bought a share or two for the lulz whatever. Others who saw this as a big opportunity to make money they otherwise had no hope of making? At least some will be bankrupt, lost the money they were saving up for a house downpayment, lost retirement savings, etc.
- holtalanm 6y ago
  > The WSB folks who started this have probably already sold out so they're fine the biggest player in /r/wallstreetbets is /u/DFV, and last I checked he had cashed out a small portion of his position. Still has like 30mill tied up in GME stock though. Crazy story looking at his posts from 2019-now, though. At one point his GME portfolio was only worth 42k, and now it is over 40mill.
  - cvak 6y ago
    He has not "cashed out", some of his options expired ITM.
    - holtalanm 6y ago
      he literally sold 300 of his options the other day...
heartbreak 6y ago
I sincerely hope this comment ages well, but I doubt it will. A scenario where a majority of the retail traders in GME right now come out ahead would be surprising.
- ascagnel_ 6y ago
  Agreed. There's a good reason why so many of these hedge funds held short positions -- $GME is a business facing significant headwinds beyond what you'd see from the pandemic and a typical P&L statement: - Their primary product is used game sales, and the biggest players in that sector are making active moves against such sales (see: the disc-less PS5 and Xbox Series S consoles). - Digital storefronts make purchasing new games much, much easier (and a borderline impulse purchase). - Free-to-play multiplayer games cut Gamestop out of the customer acquisition loop. The most $GME gets is a cut of any prepaid cards, but those cards are commonplace nowadays (my local chain drugstore has an end-cap with dozens of prepaid cards of various types). - Their primary model is to lease space in malls. With the pandemic, malls are either closed or seeing substantially less foot traffic. - Consoles are typically a big driver of purchases, but their limited availability also limits $GME's potential. That said, that can be counterbalanced by very profitable bundles made more attractive by the limited availability of unbundled consoles. I don't play the stock market, but even if I did, $GME wouldn't be something I'd look at in a buy-and-hold strategy.
  - holtalanm 6y ago
    their online store is pretty damn good, though. Not sure what % of their total revenue it accounts for, but I'd wager it isn't negligible.
  - paradox242 6y ago
    The stock will resettle at something far lower than it is now, most people realize this. They are trying to ride this thing until the margin calls come in and a substantial number of short positions are closed. If that happens there will be blood in the water and big money for anyone able to sell during the frenzy. After that, it's everyone for themselves.
- 6y ago
gabriel34 6y ago
The irony of manipulating markets against market manipulators is delicious. This will also punish over exposed players who are probably reviewing their short positions as this unfolds.
UncleMeat 6y ago
The story isn’t over yet.
metalliqaz 6y ago
Wall Street moguls will have their revenge. Count on it.

zinekeller 6y ago

I agree that Citron and especially Left is indeed ironic in this situation (and the refreshing reminder that a: American English is derived from English English and b: the internet is not just Americans). The small-scale market (as a group) is doing the exact things as him in other instances, but the call for restrictions is, to say the least, confusing.

user_error 6y ago

> Left claims that the “mob” has overstepped the mark and harassed him and even his family in a way that is actually illegal. If that is true, shame on them, and those involved should be prosecuted. This must be condemned without hesitation; nothing excuses that type of behavior. Online harassment of those with different opinions, particularly in pursuit of profit, is disgusting and becoming all too common, and standing up against it is important. (...) I'm a bit lost with this article. What have an "angry mob" been doing to Andrew Left and his family in an "actually illegal way"? Seems to me this article is swaying to some type of narrative someone wants to propagate rather than aiming to be somewhat objective regarding current events.

loganfrederick 6y ago
They probably don't want to share details for the sake of the family's privacy. I assume it's the typical online harassment stuff: threats to the family's physical safety because of Left's opinions.
zinekeller 6y ago
> Seems to me this article is swaying to some type of narrative someone wants to propagate rather than aiming to be somewhat objective regarding current events. Note the "If". Left had indeed claimed that there were attacks on his personal peers, and I agree that if it were true it is overstepping their right to privacy and probably life if the claimed attacks were death threats. HOWEVER, if it turns out that Left is lying I will agree that Left have commited defamation against a group of possibly hundreds of thousands of people and I would really suggest to him at that moment (apart from what the law thinks appropriate, which is a somewhat long prison time) to really apologise and permanently stay outside of the stock market. He is English and I knew from reading their (in a country sense) opinion pieces that they tend to put distance in unsure or unverified information, possibly because of the much stricter libel/defamation laws there (see as an example https://youtu.be/z49LjJj3VTI https://youtu.be/z49LjJj3VTI that discusses why there is avoidance on the phrase "tired and emotional" which acquired a different meaning in UK). I guess that this is just an unintentional carryover especially that American opinion pieces don't really delinate fact from opinion in their writing.

drewcon 6y ago

I still feel like these stories are missing a core distinction. If these WSB folks rallied around GME because they were true believers of a beloved brand with faith in a turn around plan, god love em. I think that’s an interesting phenomenon that upgrades retail collective trading in much the same ways mutual funds behave on behalf of loads of retail investors. But that’s not what happened. The brand is irrelevant. It’s just math and vengeance and in the end...a lot of retail folks are going to be left holding the bag as prices drop down to earth. That cannot be a good outcome for anyone. I don’t think we want a system to function like this.

cheph 6y ago
> But that’s not what happened. The brand is irrelevant. It’s just math and vengeance and in the end...a lot of retail folks are going to be left holding the bag as prices drop down to earth. That cannot be a good outcome for anyone. I don’t think we want a system to function like this. Not sure what you suggest be done about it. Hopefully people learn their lessons but it is not like we can eliminate the possibility of doing dumb things, and doing so would be quite illiberal.
briefcomment 6y ago
I'm pretty sure bringing up fundamentals is intentional FUD. Nobody is investing in any of these because of fundamentals. It's the public vs hedge funds and GME et al is the battlefield. The more people take part and have strong hands, the more the losses will be democratized, on the way to the real desired outcome against naked shorting hedge funds. I don't mind losing a couple hundred bucks investment for this.
- tosser0001 6y ago
  I'm sure there is some core set of people that want to "stick it to Wall Street" but the vast majority are probably just along for the ride. The irony is, once this stock finally comes crashing down, it will be the small retail investors losing a lot of money, and a different set of Wall Street investors will be the ones reaping the reward.

NKosmatos 6y ago

Nice post, with clear language and a very good explanation of what is happening :-)

MontagFTB 6y ago

This article claims the catalyst for GME’s meteoric rise was a change to their board altering the company’s narrative. Josh Gross claims it’s because u/DFV liked their 10-Qs. So which is it? One? Both? Neither? https://twitter.com/endtwist/status/1354547622133051393?s=20 https://twitter.com/endtwist/status/1354547622133051393?s=20

holtalanm 6y ago
Josh Gross pretty much nailed the summary of what has happened.
TameAntelope 6y ago
Wow, I didn’t know u/DFV saw this before Burry, I thought he was tipped to it by movement from Burry! I am very suspicious of WSB generally, but just like with Anonymous, there apparently are some skilled folks in the horde...
fakedang 6y ago
I've seen way too much rationalization of this from mainstream financial media "pundits". Lol'd when I heard Andrew Ross Sorkin's take on it. I do know that the DFV post was the match, but I think stimulus + people generally wanting to take revenge + the WSB post that revealed that Melvin was shorting GME, so let's fuck it up + Robinhood's post-pandemic popularity were the reasons for this to go out of control unlike other previous movements. One thing it has shown is how much vulnerable the US financial system is. Although this time it was retail investors left holding the bag, this situation could be destructive very easily. Imagine now, if Russia wanted to take down the US economy. They could create a buffer hedge fund, maybe 3-5B, which would be obliterating itself anyways. Then get some bots to bump up activity around a particular stock, maybe generate fake short interest against GS (smallest big 6 bank, so I chose it). Then create a CtA on WSB, calling for a mass short to dethrone GS based on fake information, and pump it up with bots. Retail starts shorting, Algobots might pick up on the momentum and join the trend, followed by traditional HFs joining the crowd. In the end, you'll have GS being shorted for no particular reason, but enough to cause some serious damage momentarily. Price goes down, they get deemed overlevered, and they're forced to take a bailout (highly damaging to the politicians in Congress who support it) or led to fail (which would cause shockwaves across the street). It's likely the politicians will sacrifice themselves for a cushy job post politics, but the current ruling party would lose all legitimacy in front of its voters. I imagine such a scenario would be easily plausible in Europe, where the banks are much weaker financially (save for the Swiss ones).

vga805 6y ago

Andrew Left of Citron Research today announced that Citron will no longer research and invest in shorts. They will now cover long positions. He's trying to reverse his image with WallStreetBets. I hope it is in good faith, he likely just sees an opportunity.

JohnJamesRambo 6y ago
A child could see through that.

nabla9 6y ago

Double irony. The story is not over. When the GameStop valuation jumped to ridiculous levels, it was obviously noticed by others who started shorting. The end result of this is that some in the WallStreet are making even more profits than Citron Research. This time it's on the backside of those retail investors who think "holding the stock" is protecting it's price. Citron Research was caught on surprise by WSB, these new speculators have the benefit of weighting and analyzing WSB group action. They can take account possible short squeeze risk and duration and take a long view. https://isthesqueezesquoze.com/ https://isthesqueezesquoze.com/ >GME shorts have not begun to close their positions in substantial numbers. >the situation (1/28 5 PM ET): >- short interest: 100% of float by Ortex, 123.25% of float by S3 Shortsight >- change in short share availability: +9,000 Matt Levine covers all scenarios nicely, must read as always: https://www.bloomberg.com/opinion/articles/2021-01-28/knowing-when-to-sell-gamestop-stock-at-the-top-is-impossible https://www.bloomberg.com/opinion/articles/2021-01-28/knowin...

ChrisRR 6y ago

I'm English, and I don't know what point he's trying to make about being English

adamcstephens 6y ago

Ahh I love financial reporters. Just because Left has never lost a court case doesn’t mean he isn’t doing anything illegal. There are two tiers of justice in this country, and the rich can by their way out of crime.

bloqs 6y ago

How are people missing that the original bet on this was founded around the newest generation of consoles shipping with Optical Drives? That was the entire basis on which Gamestop reapproaching retail with a new mindset and new investment led to wsb getting behind it in the first place. Source, u/DeepFuckingValues earliest comments on reddit on GME around Mark Cubans involvement

flerchin 6y ago

I keep seeing folks saying that retail will be left holding the bag. Retail folks are buying GME and holding. Worst case they're out their initial investment. GME shorts like Melvin Capital are out many multiples of their initial investment, their losses are unbounded. Retail (r/wsb) understands this, and is willing to lose their $600 or whatever to screw over the institutions.

bilbo0s 6y ago
The institutions can game all the way up though. The mistake the retail guys made in this instance was not accounting for the other institutional vultures Who had no prior interest in it, but would opportunistically pile in. It’s becoming clear that a better designed attack was necessary. Unless government steps in, this attack will enrich market makers and a lot of hedge funds, while cleaning out retails who may not have fully understood the dynamics of this attack. In my view though, that’s the market. It’s a learning process. Retailers will gain more understanding and the next attack will be better designed.

SilasX 6y ago

This feels like "damning with faint praise": "Yeah, yeah, sometimes they break the rules but they say there's no significant court case they lost." >They are very open about the fact that they or their clients may already have short positions in the stocks concerned and as I said, most of what they say is publicly available information. Clearly, they are not doing anything illegal, or even underhand. They have been sanctioned a few times by regulatory authorities and lost legal battles overseas but, as founder and Executive Editor Andrew Left has frequently pointed out, they have never lost a significant court case in America.

JW_00000 6y ago

This story is constantly being framed as "the angry mob" vs "Wall Street hedge funds". But surely other professional investors ((hedge) funds, high frequency traders, algorithmic traders) are also jumping on the bandwagon, to (1) eliminate a competitor and (2) make a profit themselves on the way. I read yesterday that (at least one platform for) algorithmic traders have been monitoring subreddits like /r/WallStreetBets since the start of 2020, to immediately buy what is mentioned favorably there before retailers bring the price up. The way I see it, is that among the professional investors, one will lose hard (Citron), while most others will profit. When the sell-off starts, they'll be able to sell first, thanks to their sub-ms connections to exchanges, algorithms that monitor media in real time (including reddit!), and employees that are constantly monitoring this whenever the markets are open (as opposed to retailers doing this in their free time). Among the retailers, a few will win big (/u/DFV), while most will lose. They'll either stubbornly "HODL" if they're in it to "get a message across", or if they're in it for profit, they'll notice the sell-off too late and act too late, probably exacerbated by RobinHood suffering outages at that point. So my prediction is that in the end one hedge fund will go down while others will profit from it... Most retailers will lose. Then what was the point?

SilasX 6y ago
So much this. I've been rolling my eyes at the "fight the power" narrative, since I assume there are other hedge funds or shadowy figures taking the other side of the bet, and stoking the short squeeze.
cannabis_sam 6y ago
> Then what was the point? I mostly agree with your analysis, and I don’t have any money invested in GME (I usually do private investments). But at the same time, I think there is incredible value in exposing how much of a lie “the free market” is...