https://www.ft.com/content/56e8b33a-d9b6-4f74-998b-327ef54c4d5a

https://www.pcgamer.com/uk/reddit-messes-with-investors-by-driving-gamestop-stock-price-to-record-heights/

From what I gather, essentially a Reddit trolling/weaponised trading effort has wiped out billions that a hedge fund put into shorting Gamestop.

I think this puts some of STW’s inter forum trolling to shame.

“The WallStreetBets subreddit (largely daytraders) decided to mess with them and make some quick money,” industry analyst and consultant Michael Futter told me. He also clarified that the subreddit’s actions had nothing to do with propping up an ailing company out of some bizarre sense of nostalgia, or with videogames in general. “They aren’t interested in GameStop as a company. It could quite literally have been ANY company.”

This entertains me a lot more than it should.

Been following, and very interesting, but also shows just how fragile the capital markets are in today’s age of social media. While as a gamer I’m super pleased with the (current) outcome of this activity, imagine if the Redditors had decided to focus their ire on another company, through short selling.

Agreed. As the FT points out, trading and the stock market has become much more democratised. I’m unsure if that’s a good thing at this point, I suspect that we haven’t seen the last of this type of event and the questions this throws up will end up being an integral part of the social media battleground that will play out in the 2020’s.

Saw this after it was mentioned on a couple of other threads, has it actually got to the stage though where it’s properly hurt any of the short-sellers, or do they have the resources to ride it out? If the stock’s overvalued it’s going to drop at some point right?

Looks like it

https://markets.businessinsider.com/news/stocks/gamestop-short-sellers-squeezed-losses-reddit-traders-army-cohen-palihapitiya-2021-1-1030006226

imagine if the Redditors had decided to focus their ire on another company, through short selling

Whilst I don’t fully understand share trading wouldn’t manipulating the share price through shorts be more difficult/impossible? You could do it by spreading damaging misinformation about a company (I wonder if Rudy shorted Dominion…) but surely it’s harder to force a share price down through trading (unless you already hold a significant volume of them) than it is up.

Looks like it

https://markets.businessinsider.com/news/stocks/gamestop-short-sellers-squeezed-losses-reddit-traders-army-cohen-palihapitiya-2021-1-1030006226

it’s not clear (to me!) though whether that represents an ACTUAL loss or just potential (if they were to return the borrowed shares right now, rather than ride it out in the hope their position will recover). Like if you were to say, I’ve made/lost £££ on these shares because they’ve gone up or down, but you haven’t ACTUALLY realised the profit or loss until you cash out, and if you hang in the situation could change?

Good work either way though, seems to have shaken things up!

Other (bigger) thread here >

Anyone watching the Gamestop/Reddit fandango?

As the FT points out, trading and the stock market has become much more democratised. I’m unsure if that’s a good thing at this point, I suspect that we haven’t seen the last of this type of event and the questions this throws up will end up being an integral part of the social media battleground that will play out in the 2020’s.

Given the massive amounts of money available, I would imagine that some hedge fund managers are already exploiting social media massively to drive stocks in the way that suits them (Bots, shills etc). You can see that in action on r/WSB today – so many fake accounts / new accounts talking about selling.

It’s just that now it’s happening in reverse, with the hedge funds on the ropes. It feels like a big moment but I just can’t escape the sinking feeling that the house always wins. I will be watching with keen interest.

One thing that I do think is that this may be a once-in-a-lifetime event. Either the WSB retards* will win and hedge funds will have to be much more cautious about shorts in future, knowing that a co-ordinated / democratised approach could wipe them out. Or, the house wins as usual and no-one on WSB / other social media outlets has the same belief they do right now.

NYSE opens in 5 minutes: https://www.marketwatch.com/investing/stock/gme

* their self-applied moniker

Ahhh damn, can we merge the threads mods?

Because I like the idea of discussing the social ramifications/bigger picture of this – not just the narrower focus of the other thread.

but surely it’s harder to force a share price down through trading (unless you already hold a significant volume of them) than it is up.

You can also do it by sharing accurate information. There is at least one hedge fund which tries just that. Researches companies trying to find out really damaging information such as full out fraud and, if they do, then short them and release the info.

You can also do it by sharing accurate information. There is at least one hedge fund which tries just that. Researches companies trying to find out really damaging information such as full out fraud and, if they do, then short them and release the info.

Yep, see NMC Health and Muddy Waters…

https://www.ft.com/content/4dbbe048-a426-4551-9c4f-3968235adcdb

It’s just amazing that a very small number of people can make millions overnight for absolutely no good reason while some people can toil all their lives to scrape by 🙁 .   Is this where people start whispering a storm is coming and disappear off to the dark recesses of the web.  It is amazing though because in some ways it is fake but actually it is real money in the end if they can work out how to cash it out which the going is good

There’s a big ‘Robin Hood’ narrative going on – redistribution of wealth from wealthy hedge fund guys to the ‘little man’. Except that the little guys are still upper middle class guys with loads of spare cash to risk playing the stocks. The ‘hero’ player in all this (u/DeepFuckingValue who’s made $20M out of $50k) already had a net worth of >1M apparently. So it’s hardly Robin Hood IMO but it’s definitely many Davids vs a few Goliaths.

Very interesting to see how it all pans out.

My suspicion is that today’s buying was largely due to the publicity and people wanting in on the train, rather than traders worried about their shorts. So if there is a short squeeze, it hasn’t happened yet.