GME Stocks and Reddit

[just]

I don’t follow investing or stocks at all but I’m fascinated watching what’s going down with Game Stop over the last few days.

www.bloomberg.com/news/articles/2021-01-25/gamestop-melt-up-leaves-wall-street-price-analysis-in-shambles

I popped into WallStreetBets on Reddit and it’s crazy in there, where it’s clear some users (or external players, I guess) seems to be orchestrating this financial mob in a way, almost like an MLM (my only real frame of reference).

All of it’s a whole new world, and I need the eventual explanation piece from Slate or someone to help make sense of it.

Anyone know more?

[pandorica]

My H has been watching it and invested a little money for fun (like $20). All he said about Wallstreet Bets is that it's a "bad bad place" and said your description sounds accurate 😂

He's been talking about it for days and I still don't understand what's going on.

[sent]

I've seen this discussed also on an investment board I follow. I don't get it either, but I should spend some of my mindless reading time looking around at Wallstreet Bets.

[jlt19]

It looks like a large scale "pump and dump". It's usually a term used for penny stocks or shell companies. Someone will buy a ton of stock at like .0001 per share, and then somehow "pump" it up in investing sites and then when people start to buy because they see the advertising and "look, so many shares have been bought, something BIG must be coming", then the original owners will "dump" it for a huge profit.

These are all on the OTC, so there's no halting or news stories on them, so it doesn't get sent out to the masses. But I bet someone orchestrated this and once it started popping up on "legit" investing sites and news stations, others bought in so they didn't miss the boat.

But hot damn, can you imagine if you were one of the lucky ones to have bought a few hundred shares at $2.57 back in April?

[jlt19]

Wow, looks like they've done it to quite a few different stocks today and over the last week. I'm actually impressed/terrified with the power they hold over the stock market. And maybe a tiny bit envious.

[picaflora]

H has also been following, and I've seen the threads show up on /all quite a bit.

H apparently signed up for a RobinHood trading account today... I'm not thrilled, but told him he could play around with a small amount.

What annoys me, is so many jobs get tied to the "stock price" for a public company. I used to work for a large retailer in the corporate office, and you could almost predict layoffs to the day based on stock falls (and we'd staff up when the stock prices were good). Hopefully the C-suite at GME has noticed the issues thanks to whatever is going on in Wall Street Bets, and don't bank any major changes on that stock price.

[heat40]

if I understand this whole short thing correctly, this is just delaying the inevitable. the stock will tank, and those who are left holding shares/stock that was inflated, will have incurred massive losses.

[maddiepaddy]

My husband was telling me about this. There’s an element to it where I guess it had been shorted by a lot of people which led to the shorts needing to be covered and further driving up the price? Idk - but that’s what I gathered from H.

I have been saying for a long time that it doesn’t make sense that people are allowed to short the market. Doesn’t seem right that you can essentially ‘bet’ in stocks.

[PinkSquirrel]

Jan 25, 2021 17:20:40 GMT -5 maddiepaddy said:

My husband was telling me about this. There’s an element to it where I guess it had been shorted by a lot of people which led to the shorts needing to be covered and further driving up the price? Idk - but that’s what I gathered from H.

I have been saying for a long time that it doesn’t make sense that people are allowed to short the market. Doesn’t seem right that you can essentially ‘bet’ in stocks.

That's also my understanding, but also, the shorts had exceeded 100% of the outstanding shares, so there were a ton of them.   I think that may have made them kind of easy pickings for a short squeeze when WSB decided to run it up.     

[just]

So fair warning WallStreetBets is even side-eyed within Reddit. It's quarantined which means it doesn't show up in general searches on Reddit, and none of their posts make it to the front page. It's tag line is "if 4chan found bloomberg terminal" They're racist, trolly, the r-word is a badge of pride over there.

r/investing is a much more reasonable place to find out about it.

[just]

Jan 25, 2021 16:32:09 GMT -5 heat40 said:

if I understand this whole short thing correctly, this is just delaying the inevitable. the stock will tank, and those who are left holding shares/stock that was inflated, will have incurred massive losses.

You're right but watching the narrative over there, they're pumping people to hold as long as possible to inflate, and then I presume the instigators get out right before and everything drops. The rallying cry over there was hold to 1000. They didn't get close to that today and I think the buzz is over, but even still, unless they got in early last week or before, many people are going to lose money.

[rubysoh0]

I really need Bobby axelrod to break the down for me LOL

[jlt19]

Jan 25, 2021 19:17:39 GMT -5 just said:

Jan 25, 2021 16:32:09 GMT -5 heat40 said:

if I understand this whole short thing correctly, this is just delaying the inevitable. the stock will tank, and those who are left holding shares/stock that was inflated, will have incurred massive losses.

You're right but watching the narrative over there, they're pumping people to hold as long as possible to inflate, and then I presume the instigators get out right before and everything drops. The rallying cry over there was hold to 1000. They didn't get close to that today and I think the buzz is over, but even still, unless they got in early last week or before, many people are going to lose money.

Looks like the options calls aren't due until Friday's close. So it'll be really volatile the rest of the week. But you are 100% in that the "inner crowd" there will sell FAR before they say a word about it on there. They are probably laughing at everyone on there excited that they "got in" for under $150 while telling them it'll hit $1k next week. Classic tactic of a P&D, but it's fascinating to watch at these prices. 

[sent]

I spent some time reading Wall Street beats last night. My impression was that it is a bunch of youths relishing that they are beating the olds at their own game through the power of free information on the Internet. Definitely some problematic language but it’s very interesting. The next stock they keep talking about is blackberry.

[ellipses84]

Jan 25, 2021 15:45:29 GMT -5 picaflora said:

What annoys me, is so many jobs get tied to the "stock price" for a public company. I used to work for a large retailer in the corporate office, and you could almost predict layoffs to the day based on stock falls (and we'd staff up when the stock prices were good). Hopefully the C-suite at GME has noticed the issues thanks to whatever is going on in Wall Street Bets, and don't bank any major changes on that stock price.

I don’t have any comments about GME, but I totally agree with this! My old job put me in a lot of internal conversations with major US employers and some of them have knee jerk reactions to changes in the stock market. It was really short sighted from my viewpoint (like trying to time the stock market) because they would invest a ton of money and time into planning for programs/facilities and people and then just cancel/ layoff. It also takes money for start/stop and recruitment, and makes employee morale very low.

[al dente]

Jan 25, 2021 19:09:52 GMT -5 just said:

So fair warning WallStreetBets is even side-eyed within Reddit. It's quarantined which means it doesn't show up in general searches on Reddit, and none of their posts make it to the front page. It's tag line is "if 4chan found bloomberg terminal" They're racist, trolly, the r-word is a badge of pride over there.

r/investing is a much more reasonable place to find out about it.

Almost the whole front page of reddit today is wallstreetbets. It's annoying ha

[dollhouse]

Please do not invest in GME without being ok to have it go down to 0. Some people will make money but the majority of retail investors will get burned and lose big money. I’m worried this current FOMO sentiment will be the catalyst to the next stock market crash.

[jlt19]

Jan 27, 2021 1:55:19 GMT -5 dollhouse said:

Please do not invest in GME without being ok to have it go down to 0. Some people will make money but the majority of retail investors will get burned and lose big money. I’m worried this current FOMO sentiment will be the catalyst to the next stock market crash.

Oh, it'll most definitely drop and it's initial price when I started following it of $60-$80 was too much for me to "play" with, but it is fun to watch. I am a bit bummed I didn't play with some AMC since it's up 4x when I started looking at it.

And I do agree it may negatively affect the market as a whole. But not necessarily b/c of what they're doing, but what the hedge funds and "big money" are going to do to cut their losses and ensure this doesn't happen again. While WSB is full of a bunch of misogynistic assholes, they found a way to exploit the market makers for the games they play to manipulate the markets and I say good on them.

However, it may be because DH watches too many "That Chapter" YouTube crime videos before bed, but I do worry about the guy that orchestrated this and stands to make millions. While he's being hailed a hero on WSB, I'm thinking there are some pretty powerful people not so happy with him right now. 

[heat40]

I wonder if the guy who started all this bought any options. I don’t feel bad for him. While it seems like they’re going against the big enemy, what he’s really doing is manipulating the market, having all these retail investors hype shit up for them to be left holding the bag, while he takes off with millions. He doesn’t care about them really. He’s just like the “bad guys”.

[carmenere]

I vaguely remember learning about all this stuff in business school but I remember none of it.

[aurora]

I haven't followed this at all, but it does seem like a good reminder not to trust social media hype on stock purchases!

Are there any laws at play, assuming the people in this game aren't affiliated with the actual companies?

[sent]

Jan 27, 2021 9:14:48 GMT -5 aurora said:

Are there any laws at play, assuming the people in this game aren't affiliated with the actual companies?

Not a lawyer. It has been very interesting to watch this. Those of us who log into our brokerage accounts and buy stocks for ourselves are called "retail." I never knew that. My understanding is that this is an enormous game of telephone made faster by the internet. I buy a few shares and tell my friend to buy a few shares etc. and suddenly everyone is buying shares. 

My other group I follow about investments has people trying their hand at day trading with the WSB stocks in between their day job. I'm tempted to try it too just for fun, gambling and all, on the days I WFH. I just can't move money into the brokerage fast enough. 

[mbcdefg]

The latest nostalgia stock to jump on the Reddit rally is BB Liquidating Inc., the final remnant of bankrupt video-rental company Blockbuster.

The penny stock surged 774% Tuesday to just under 5 cents a share, the highest since 2012, on volume that was nearly 30 times above the three-month average, showing that even the most retrograde of old-technology stocks isn’t immune to the ebullience of retail investors and day traders.

www.bloomberg.com/news/articles/2021-01-27/bankrupt-blockbuster-remnant-joins-reddit-inspired-retail-rally

[jlt19]

This is really big now and apparently the WH is looking into it.

Again, these guys are scum, but they make a good point. This is no different than the minimum wage discussion where people will protest and march against others making $15/hour, but couldn't care less that CEO's are making billions.

So, these hedge funds made a massive bet that GameStop was going to go bankrupt and shorted the shit out of it, some regular guy noticed, shared it with Reddit and now there's some kind of issue? The 1% is just pissed they're getting beat at their own game. GME is at $345 right now. So, someone's holding.

And I'm not going to lie, I bought in at some of the others they've talked about and have made a few grand just today. Now, I'm smart enough to know to take profits on the way up, so at minimum I'll break even, but if any of these others want to run like GME, I'm ready for it.

[heat40]

so, all these people are holding shares at some crazy value right? great. but that's not cash in their pocket until they sell. Gamestop is not expected to outperform, or make any sort of profit that will increase its value from business alone. that's why it was shorted. so who is going to buy these shares at this crazy high price? if there are no buyers, no one who is left holding will get paid. regardless of how many shares they bought.

[sent]

Jan 27, 2021 15:55:48 GMT -5 heat40 said:

so, all these people are holding shares at some crazy value right? great. but that's not cash in their pocket until they sell. Gamestop is not expected to outperform, or make any sort of profit that will increase its value from business alone. that's why it was shorted. so who is going to buy these shares at this crazy high price? if there are no buyers, no one who is left holding will get paid. regardless of how many shares they bought.

I have to say though, I'm team retail/regular folks to see a hedge fund go down. Like what value did the hedge fund contribute to our economy by making these bets or how did that benefit society as a whole? For some of these regular people who are wining this lottery, it's profound money for them. 

[atexan]

I just threw in $20. Why not? Can't go to Vegas right now anyway.

[sent]

Jan 27, 2021 17:11:08 GMT -5 turbo said:

Jan 27, 2021 16:52:48 GMT -5 sent said:

I have to say though, I'm team retail/regular folks to see a hedge fund go down. Like what value did the hedge fund contribute to our economy by making these bets or how did that benefit society as a whole? For some of these regular people who are wining this lottery, it's profound money for them. 

I’m not by any means team hedge fund, but they’re usually playing with other people’s money, aren’t they? So they could be making this gamble with rich people’s money, or they could be making it with pension money for whatever state / university / large corporation invested their pension funds with them.

Even if it’s pension money, it highlights that should we be trusting our retirements to the whim of the stock markets? It is literally gambling.

[heat40]

Jan 27, 2021 16:52:48 GMT -5 sent said:

Jan 27, 2021 15:55:48 GMT -5 heat40 said:

so, all these people are holding shares at some crazy value right? great. but that's not cash in their pocket until they sell. Gamestop is not expected to outperform, or make any sort of profit that will increase its value from business alone. that's why it was shorted. so who is going to buy these shares at this crazy high price? if there are no buyers, no one who is left holding will get paid. regardless of how many shares they bought.

I have to say though, I'm team retail/regular folks to see a hedge fund go down. Like what value did the hedge fund contribute to our economy by making these bets or how did that benefit society as a whole? For some of these regular people who are wining this lottery, it's profound money for them. 

Yea I have no sympathy for the shorters. I don't like how they bet on a company to fail. But I have a feeling that the person who started all this, secured his own bag before riling everyone up to buy in (which was needed for them to make money). They can say they were trying to make a point and stick it to the big guy, but they also took advantage of a whole lot of people for their own financial benefit. They've become the monster they set out to fight. 

[sent]

Jan 27, 2021 17:23:10 GMT -5 heat40 said:

Jan 27, 2021 16:52:48 GMT -5 sent said:

I have to say though, I'm team retail/regular folks to see a hedge fund go down. Like what value did the hedge fund contribute to our economy by making these bets or how did that benefit society as a whole? For some of these regular people who are wining this lottery, it's profound money for them. 

Yea I have no sympathy for the shorters. I don't like how they bet on a company to fail. But I have a feeling that the person who started all this, secured his own bag before riling everyone up to buy in (which was needed for them to make money). They can say they were trying to make a point and stick it to the big guy, but they also took advantage of a whole lot of people for their own financial benefit. They've become the monster they set out to fight. 

Yes, I’m still murky about the origins of the whole thing. If I stay up later tonight, I will try reading up on it. I don’t think I can wait until the documentary comes out LOL.