Digitalzone
Posts: 185 +109
This is great because they just did what WallStreet sharks and financial moguls do : cooperate on manipulating stock markets cause what other way you could make a money on the stock?
Reddit's GameStop traders are now driving up stock in AMC, Blackberry, and more
- Thread starter Cal Jeffrey
- Start date
duckofdeath
Posts: 448 +586
They claim it's done by analyzing business plans and knowing the global trade of commodities, services and understanding risks, product growth and intelligent insight. BS filter off: Own the fastest line to the servers.
I don't see what this prank will do to change anything. What if, this was actually instigated by a few WS people looking for easy money on the side?
Peter Farkas
Posts: 654 +530
Toju Mikie
Posts: 279 +265
Wow I'm glad I bought some Nokia shares a few months ago.
It appears that Robinhood has temporarily restricted users from purchasing Nokia, GameStop, AMC and a few other stocks. You can only sell them.
It appears that Robinhood has temporarily restricted users from purchasing Nokia, GameStop, AMC and a few other stocks. You can only sell them.
mbrowne5061
Posts: 2,167 +1,367
Hey Techspot, can we get a writer on these pieces that actually seems to understand the relationship between securities and shorts?
The tl;dr is that the Hedge funds were expecting Gamestop to fail during the pandemic. Then, it stayed stable (due to everyone staying home and playing video games) and brought in new management. The new management intended to pivot to being an online platform to sell digital copies of games (long term, probably sue MS and Sony to get their storefronts added to Xbox and Playstation). Meanwhile, the Hedge funds saw the Game Stop had enough cash reserves and capital resources to cover their market cap - meaning if they could crash the company, they could loot the coffers if they were also shareholders.
So the hedge funds shorter 140% of the GME shares on the market and began spreading "Game Stop is dying" news. The plan was the short would drive price of the shares down, making the funds money, which they would then use to buy the shares themselves after the shorts closed. Then, now that they owned enough shares, they would have voted to close and liquidate Game Stop. But r/wsb noticed the over-extension of the short options, the GME had a lot of capital, and a plan to pivot their business model into something potentially viable in the long term (still a risky bet, but not a guaranteed failure like it was heading just a year ago). So r/wsb started buying the shares hoping to box out the hedge funds, and in the process also drove the stock price up - ruining the short options as well.
Now the funds are paying interest on the difference between the security's price and their sort option's price (costing them millions a day), and will eventually be on the hook for billions if the security's price stays above the option prices. All the securities holders need to keep doing is hold the stock they already own, and maybe buy each dip as the funds try to trade their borrowed shares back and forth to drive the prices temporarily down (to try to trigger any automated sell positions).
No one actually thinks GME is worth $1,000-$5,000 a share. Everyone knows that $20-$50 is far more reasonable. But until those short options close, you can pretty much demand any price you want for GME securities because the funds are trying to buy their way out of their bad bets. Once that is over, the price will fall - and hopefully Game Stop will have found a way to capitalize on the spike to inject a little more cash into their war chest.
The tl;dr is that the Hedge funds were expecting Gamestop to fail during the pandemic. Then, it stayed stable (due to everyone staying home and playing video games) and brought in new management. The new management intended to pivot to being an online platform to sell digital copies of games (long term, probably sue MS and Sony to get their storefronts added to Xbox and Playstation). Meanwhile, the Hedge funds saw the Game Stop had enough cash reserves and capital resources to cover their market cap - meaning if they could crash the company, they could loot the coffers if they were also shareholders.
So the hedge funds shorter 140% of the GME shares on the market and began spreading "Game Stop is dying" news. The plan was the short would drive price of the shares down, making the funds money, which they would then use to buy the shares themselves after the shorts closed. Then, now that they owned enough shares, they would have voted to close and liquidate Game Stop. But r/wsb noticed the over-extension of the short options, the GME had a lot of capital, and a plan to pivot their business model into something potentially viable in the long term (still a risky bet, but not a guaranteed failure like it was heading just a year ago). So r/wsb started buying the shares hoping to box out the hedge funds, and in the process also drove the stock price up - ruining the short options as well.
Now the funds are paying interest on the difference between the security's price and their sort option's price (costing them millions a day), and will eventually be on the hook for billions if the security's price stays above the option prices. All the securities holders need to keep doing is hold the stock they already own, and maybe buy each dip as the funds try to trade their borrowed shares back and forth to drive the prices temporarily down (to try to trigger any automated sell positions).
No one actually thinks GME is worth $1,000-$5,000 a share. Everyone knows that $20-$50 is far more reasonable. But until those short options close, you can pretty much demand any price you want for GME securities because the funds are trying to buy their way out of their bad bets. Once that is over, the price will fall - and hopefully Game Stop will have found a way to capitalize on the spike to inject a little more cash into their war chest.
terzaerian
Posts: 1,517 +2,260
Do you really need it explained to you why a site that censors anything their corporate owners tell them to doesn't need to exist?
Peter Farkas
Posts: 654 +530
Reddit didnt censor anything. it was facebook deleting the group with 150K members. Google deleted 100K negative reviews of RobinHood. I don't get what your point is about Reddit. That is (mainly) where Wallstreetbets is happenning. They are the ones who didnt censor anything and where all this has begun and is going right now.
zamroni111
Posts: 448 +250
Their stock were shorted because those companies keep loosing money.
though rocketing recently, their stock price will stonk after upcoming financial reports.
though rocketing recently, their stock price will stonk after upcoming financial reports.
terzaerian
Posts: 1,517 +2,260
When I made the comment, WSB had gone "private,"; in the past, with politically motivated subreddit bans, that was always the first step towards Reddit purging a subreddit. If Reddit has backed off for now, it's doubtless that it's because they're waiting until the attention has gone down to finally pull the trigger. You're being painfully naive if you think otherwise. I'm tired of their BS.
Peter Farkas
Posts: 654 +530
WSB has over 6 million degenerates my dear friend. You are talking nonsense here. That is the only place where the community can gather.
Regarding pulling the trigger in the future, you might be right but that is pure speculation and at the moment it is only Reddit who lets this continue while other social media platforms banned it with bs reasons.
Do you research before posting batsh*t crazy nonsense like this.
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