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GameStop Stock keeps going up no end in sight

ChadD said:
If these things end the shorting on the big obvious fails... good.
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Chimpee said:
I am laughing my ass off short seller getting killed.
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I see many comments of the sorts, can I ask people what is bad on people shorting "obvious" fails (I doubt they are as obvious has they make it sound or all those people would be doing the same). It sound pretty much always high risk, finite gain with infinite lost possible.

Is there any study that show that the habit of shorting company has a net negative impact on market efficiency ?

https://www.capmktsreg.org/wp-content/uploads/2018/09/CCMR-Statement-on-Short-Selling.pdf
Stocks in the top 10% of shorting activity by volume incorporate new fundamental information into current stock prices at double the speed of stocks in the bottom 10% of shorting activity

What is the reason people have for wanting short seller to disappear ?
 
LukeTbk said:
I see many comments of the sorts, can I ask people what is bad on people shorting "obvious" fails (I doubt they are as obvious has they make it sound or all those people would be doing the same). It sound pretty much always high risk, finite gain with infinite lost possible.

Is there any study that show that the habit of shorting company has a net negative impact on market efficiency ?

https://www.capmktsreg.org/wp-content/uploads/2018/09/CCMR-Statement-on-Short-Selling.pdf
Stocks in the top 10% of shorting activity by volume incorporate new fundamental information into current stock prices at double the speed of stocks in the bottom 10% of shorting activity

What is the reason people have for wanting short seller to disappear ?
Click to expand...

Not an expert, but from what I understand some of these large hedge companies do not just short predictively, they communicate with other hedge companies, short the stock, and all start aggressively announcing that the company they just shorted is going downhill. Anybody watching any sort of stock news will see "experts" talking about how the company stock is overvalued, and then everyone else sells off the stock, which causes the value to fall.

Basically, the complaint is that they aren't predicting, they are causing the stock to fall. Again, from what I understand.
 
kirbyrj said:
The Gamestop business model is dead. It was killed off by the console makers, etc. with the push to digital purchases. As soon as you have an all digital console, Gamestop will be bankrupt.
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I think the plan is to make a digital selling platform. Like Green Man Gaming and Steam/Epic for PC. Suppose the digital store can work if competitive, but I am doubting that. For any type of client again, doubt it. No one wants to install a client unless there is a game that forces people to (Half Life 2/Battlefield 3/Fortnite).

Selling PC hardware is already a thing, or was. I saw over priced GPUs there years ago. 4 or so years back they had EVGA cards. Doubt it will do well. All the B&M computer stores went out of business, including Frys, for a reason.
 
serpretetsky said:
Not an expert, but from what I understand some of these large hedge companies do not just short predictively, they communicate with other hedge companies, short the stock, and all start aggressively announcing that the company they just shorted is going downhill. Anybody watching any sort of stock news will see "experts" talking about how the company stock is overvalued, and then everyone else sells off the stock, which causes the value to fall.

Basically, the complaint is that they aren't predicting, they are causing the stock to fall. Again, from what I understand.
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It's muddy, as directly influencing it is against the law, but you can sure put out a whole pile of info saying "here's WHY I shorted" and have people believe you. Same thing that Reddit did to boost it - "here's why I think it's undervalued!" and boom, up she goes.
 
LukeTbk said:
I see many comments of the sorts, can I ask people what is bad on people shorting "obvious" fails (I doubt they are as obvious has they make it sound or all those people would be doing the same). It sound pretty much always high risk, finite gain with infinite lost possible.

Is there any study that show that the habit of shorting company has a net negative impact on market efficiency ?

https://www.capmktsreg.org/wp-content/uploads/2018/09/CCMR-Statement-on-Short-Selling.pdf
Stocks in the top 10% of shorting activity by volume incorporate new fundamental information into current stock prices at double the speed of stocks in the bottom 10% of shorting activity

What is the reason people have for wanting short seller to disappear ?
Click to expand...
Short sellers on the scale we have today purposely TANK companies that could be saved. Now we can debate gamestop being savable or not... that isn't the main question, they are just the current example. Short selling a bit here and there isn't a problem. However when billions of dollars get bet against a company, its over. The idea of getting new investors or doing much of anything goes out the window. Then the leadership cash in themselves. There is a reason most big companies that go under the last 20 years end up paying their CEOs and other leaders 10s of millions on their way out the door to manage the corpse. I mean why not it becomes clear early that the ship is going down, and the massive WS hedge funds come and sit a few billion tons of money on top of the whole thing to ensure it sinks as fast as possible. The problem is the massive amounts of resources they can use to tank a struggling company. Profiting off the losses of 10s of thousands of jobs.... by ensuring they happen faster. Ya screw those folks.
 
BinarySynapse said:
You’re selling something you don’t own and have no stake in with the hopes of buying it back later at a lower cost so you can return it to the real owner while making a buck in the process. Not only do you KNOW someone has to lose for you to gain, but you’re HOPING and even actively working to make sure they do.
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I understand the concept.

The broker from which I own my stock is approched by someone that tell him, for a small fee give me a stock and I guarantee I will give it back to you in a maximum of 15 days.

They sell it right away and bet on the ability to significantly be able to rebuy it at a lower price to give it back.

It seem people add the morality of hoping a stock go down has a bigger deal than it is, actively working to make sure they do sound illegal and that part for sure would be bad.

In the example cited too, it seem to be short made betting on fundamentals not needing market manipulation.

serpretetsky said:
Not an expert, but from what I understand some of these large hedge companies do not just short predictively, they communicate with other hedge companies, short the stock, and all start aggressively announcing that the company they just shorted is going downhill.
Click to expand...
That sound illegal, like for pushing stock up they just bought with the intention to resell after an uptick no ?

lopoetve said:
but you can sure put out a whole pile of info saying "here's WHY I shorted"
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For small influenceable title or oil, gold, index, giant company ?
 
ChadD said:
Short sellers on the scale we have today purposely TANK companies that could be saved. Now we can debate gamestop being savable or not... that isn't the main question, they are just the current example. Short selling a bit here and there isn't a problem. However when billions of dollars get bet against a company, its over. The idea of getting new investors or doing much of anything goes out the window. Then the leadership cash in themselves. There is a reason most big companies that go under the last 20 years end up paying their CEOs and other leaders 10s of millions on their way out the door to manage the corpse. I mean why not it becomes clear early that the ship is going down, and the massive WS hedge funds come and sit a few billion tons of money on top of the whole thing to ensure it sinks as fast as possible. The problem is the massive amounts of resources they can use to tank a struggling company. Profiting off the losses of 10s of thousands of jobs.... by ensuring they happen faster. Ya screw those folks.
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Much like many PE firms. Which needs to be regulated, IMHO, because it's bullshit tactics.
 
Damn, I was hoping the company would be long dead by now.
 
ChadD said:
Short sellers on the scale we have today purposely TANK companies that could be saved.
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Reading about it, yes it seem they can sell so much stock that it would influence the price without even having to make the convince people about it stuff.

But short sellers is a good way to have hound around trying to find market flaw, and flash out the Enron of the world and other fraudster.

If a company price is actually following is fundamental, it must be hard to be attacked by short sellers, GameStop seem a good example of a company that should close and is "stealing" opportunity from the market by continuing to attract capital and trying to squeeze out what is left.

I think with European markets having often no shorts selling laws, comparison could be made to look if they are a significant net good or bad, or if the hates is in good part driven by the morality of betting on something going down.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2710371
In both the subprime crisis and the eurozone crisis, regulators imposed bans on short sales, aimed mainly at preventing stock price turbulence from destabilizing financial institutions. Contrary to the regulators’ intentions, financial institutions whose stocks were banned experienced greater increases in the probability of default and volatility than unbanned ones, and these increases were larger for more vulnerable financial institutions.
 
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Artificial inflation, Etsy stock did this too when Elon Musk tweeted about them. Don't fall for it.
 
I got in at $39 thinking it was just some BS but there is some solid DD on the short float and all that.
 
Kalessian said:
Does anyone remember Impulse? It was the digital storefront gamestop bought and ruined.
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One of many Gamestop ruined.

Babbage's, Software Ect., Funco Land...

They are the EA of the brick and mortar store.
 
BinarySynapse said:
You’re selling something you don’t own and have no stake in with the hopes of buying it back later at a lower cost so you can return it to the real owner while making a buck in the process. Not only do you KNOW someone has to lose for you to gain, but you’re HOPING and even actively working to make sure they do.
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To top it off, I think they found out 130% of the stock was shorted (unsure how you short more than exist).

So, these folks that have to buy back what they owe are not paying their original price, the have top pay $347 per share now. If I am right (or his is not my area of expertise) that puts those short sellers in a deep hole.
 
Hakaba said:
To top it off, I think they found out 130% of the stock was shorted (unsure how you short more than exist).

So, these folks that have to buy back what they owe are not paying their original price, the have top pay $347 per share now. If I am right (or his is not my area of expertise) that puts those short sellers in a deep hole.
Click to expand...

Let's say you have a share and lend it to me, and I sell it. Whoever buys that share can also lend it to me, and I can sell it too. Now there was one share, and I've sold it short twice. If the price goes down, great for me. If the price goes up, bad for me. If everyone sees the price going up and says, yay, great time to buy, really bad for me, because buying the first share to return is going to increase the price of the second share to return.

If there's like three different people who each think the company is doomed and short 40% of the shares, there's your 120% shorted. Of course, the first person to close their short position will take a big loss at the time, and probably relieve the pressure for the rest of the shorts; selling at the bottom and buying at the top doesn't work out so well.
 
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toast0 said:
Let's say you have a share and lend it to me, and I sell it. Whoever buys that share can also lend it to me, and I can sell it too. Now there was one share, and I've sold it short twice. If the price goes down, great for me. If the price goes up, bad for me. If everyone sees the price going up and says, yay, great time to buy, really bad for me, because buying the first share to return is going to increase the price of the second share to return.

If there's like three different people who each thing the company is doomed and short 40% of the shares, there's your 120% shorted. Of course, the first person to close their short position will take a big loss at the time, and probably relieve the pressure for the rest of the shorts; selling at the bottom and buying at the top doesn't work out so well.
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Margin calls. If the losses on the sheet get bad enough, the "lender" may call in the shares, and you have to pay it back NOW. Which drives the price higher, triggers more calls, and so on. (IIRC).

edit: House call is what it's called.
 
lopoetve said:
Nope, they ate it. 5+Billion it cost them - the funds already took the loss on the balance sheets.
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I’m sure they’ve already found a way to write the losses off on their Taxes so they come out even in the end?
 
"Everyone thinks this will be worth more Real Soon Now" is the basis of many things which have no physical value other than that exact fact.

If you buy into that game, understand the risk that you're buying Hopes Dreams n Wishes, not something with actual value.
 
Lakados said:
I’m sure they’ve already found a way to write the losses off on their Taxes so they come out even in the end?
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Oh they wrote it off for sure, but not even. It’ll just counter some of the capital gains they’d have otherwise.
 
Lakados said:
I’m sure they’ve already found a way to write the losses off on their Taxes so they come out even in the end?
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Outside a 100% tax rate situation or some other exceptional distortion, you usually always have a net lost on a taxes write off.
 
How could a Hedge Fund lose if they bought 1 million shares of GameStop, shorted 1 million shares of GameStop over and over again if it drops (maybe recover for another round or continue to drop) but if it went up they already have the 1 million shares to pay it back. No loss other than having to use the original 1 million shares if needed? Not sure if any Hedge Fund does this maneuver or if even legal.
 
noko said:
How could a Hedge Fund lose if they bought 1 million shares of GameStop, shorted 1 million shares of GameStop over and over again if it drops (maybe recover for another round or continue to drop) but if it went up they already have the 1 million shares to pay it back. No loss other than having to use the original 1 million shares if needed? Not sure if any Hedge Fund does this maneuver or if even legal.
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It is, and some do - or at least hold some portion of the shares in reserve as a hedge (or short to cover as a hedge the shares the hold). But if you hold equal amounts, well, any move is offset - you've got nothing in real value. You have to be bear or bull at least slightly for it to make sense.
 
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Armenius said:
This is how people were able to make out like bandits after the 2008 recession. They were trying to do it again with 2020. Never let a good crisis go to waste, indeed.
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I'm hoping the housing market takes a dump like in 2008. With rates the way they are right now & the economy fixing to fall off a cliff, its looking good! (y)
 
Normally I'm against any sort of market manipulation but this is just manipulating the manipulators so I'm okay with it. I see it as less of a turd in the punch bowl and more of another turd in the turd bowl.

I am curious to see how regulators handle this situation.
Master_shake_ said:
https://old.reddit.com/r/wallstreetbets/comments/l5x0fc/gme_endgame/

new reddit is garbage.
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Indeed, that's why I use the Old Reddit Redirect plugin that changes any reddit link to link to old.reddit. I consider that and RES essential for reddit use.
Krenum said:
One of many Gamestop ruined.

Babbage's, Software Ect., Funco Land...

They are the EA of the brick and mortar store.
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Don't forget Egghead.
 
lopoetve said:
It is, and some do - or at least hold some portion of the shares in reserve as a hedge (or short to cover as a hedge the shares the hold). But if you hold equal amounts, well, any move is offset - you've got nothing in real value. You have to be bear or bull at least slightly for it to make sense.
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Looking at Hedge Funds in general and their holdings, 10 billion is a drop in the bucket.
https://hedgefollow.com/largest-hedge-funds.php

Story now is not making much sense. Shorting Gamestop would bring such small noodles to their game, piecemeal, it makes almost no sense. Regular folks shorting Gamestop seems to be a part of it and seems more likely but I don't know. Maybe some of the smaller Hedge Funds wasted time with this or came up with this scheme to bloat it up so they can sell:
https://hedgefollow.com/stocks/GME

Links looks like older more recent data but gives general drift of investments each Hedge Fund does. Wacky stocks going ballistic for no sound bases will cause a ripple effect, people selling good stocks for bad, people sense of using profits, growth and other indicators start to go out of the window and may just decide it is too risky to invest in current climate. For example, AMD had a fantastic 4th qtr, maybe one of their bests, expected growth is huge yet dropped like a rock today. A number of investors indicated it should be around $120 -> it goes the other way -> confidence looks rather low for no apparent reason. Have to see what tomorrow brings.
 
noko said:
Looking at Hedge Funds in general and their holdings, 10 billion is a drop in the bucket.
https://hedgefollow.com/largest-hedge-funds.php

Story now is not making much sense. Shorting Gamestop would bring such small noodles to their game, piecemeal, it makes almost no sense. Regular folks shorting Gamestop seems to be a part of it and seems more likely but I don't know. Maybe some of the smaller Hedge Funds wasted time with this or came up with this scheme to bloat it up so they can sell:
https://hedgefollow.com/stocks/GME

Links looks like older more recent data but gives general drift of investments each Hedge Fund does. Wacky stocks going ballistic for no sound bases will cause a ripple effect, people selling good stocks for bad, people sense of using profits, growth and other indicators start to go out of the window and may just decide it is too risky to invest in current climate. For example, AMD had a fantastic 4th qtr, maybe one of their bests, expected growth is huge yet dropped like a rock today. A number of investors indicated it should be around $120 -> it goes the other way -> confidence looks rather low for no apparent reason. Have to see what tomorrow brings.
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There were a set of vocal funds that were short on it too much - combined with the overall market being short on GME, well, reddit got pissed off. And Legion has a lot of buying power. Combined by the death spiral that happens when you see shorts having to buy to cover... well, good times are had by all but the hedge fund guys.
 
DukenukemX said:
Not illegal. Unless you're rich then you just made up a law that says it's illegal.
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I'm not so sure. Then again, I'm not a lawyer. From my primitive understanding, what's been happening does sound like collusion and market manipulation.

But even if it was 100% illegal, the problem arises at how do you prove it's illegal without also implicating Wall Street doing the exact same thing for years? That's where I think the issue comes in. Manage to hold the peons accountable while letting the elite get off scot free.

It's about first, stop the bleeding. The fact that WSB is now a horribly racist and derogatory sub being banned from discord, to try to limit it's power and influence. As Johnny Lawrence from Cobra Kai stated, you need to flip the script. And don't be surprised if it gets other fallback, including on reddit. Second, you need to prevent the poor people from being able to do this in the future. Third, you take revenge on those who accomplished this.
 
:(

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