Nameless Voice on 30/1/2021 at 13:35
First, hedge funds have destroyed countless lives by playing with numbers, and will continue to do so. Taking them down, for whatever reason, is in the public good.
Second, a major reason for people to do this is to make money, not lose it. The billions that the hedge funds are losing are being redistributed to all the little people who bought the stocks, once they sell the stocks at the end of February.
The main risk seems to be that governments step in and interfere to save their billionaire buddies at the expense of the many - which is sadly a common occurrence in most corrupt governments.
lowenz on 30/1/2021 at 13:36
Quote Posted by Gryzemuis
The hedgefunds made a few mistakes. They sold more call-options than there are stock. They went naked. But what triggered this is the fact that the amount of outstanding call-options is public. I don't know if this happened in this case, but hedgefunds do something extra when they go short. They announce it to the world. They mention it in interviews on TV. They make sure that everyone hears: "Wallstreet thinks GameStop will go broke soon". That causes people to be careful investing in GameStop. And that drives the price down. And that helps guaranteeing that the hedgefund doesn't need to own and sell the stock for those options. That's pure market-manipulation. And it happens all the time. But the big guys get away with it every time. But not this time.
Yes, it's a market distortion with an integrated damage-control system, but I can't see why hedgefunds managers can't retaliate over the "wannabes" (in several ways).
And I don't think the hedgefunds are - in
reality - separated from others funds.....just because the law.
The law can't create money when money get lost/burned 'cause of shady business practices.
Gryzemuis on 30/1/2021 at 13:36
Quote Posted by demagogue
But you know, the app doing this tried to contain the bleeding by preventing people from loss trading and that just made them even more enraged at "the system".
If people aren't allowed to take others down without harming themselves, you can see how preventing self-harm is a problem.
And you can't win against a religious worldview like that.
That's not what happened here.
The hedgefunds need to own shares soon. To cover their position. It is in their best interests if everybody else is selling, and they (the hedgefunds) are the only ones buying. Everybody understand thats. What Robin Hood did had nothing to do with protecting their small investors. They did it 100% only to help the big guys. That's not a religious worldview from the redditors. They understand what RH did. They might be retards and autists. But they are not stupid.
You seem to think that the redditors do this only to fuck the hedgefunds, even though they lose all their money themselves. It's not. The redditors can make money from this. What the small guys are doing, manipulating the market, is exactly what the hedgefunds have been doing for decades. But now the hedgefunds fall victim to their own game. And suddenly these "let the market decide everything"-whimps start crying "dear government, please put in regulations to protect us. and if we go belly up, because of our greedy and stupid strategies, please bail us out".
lowenz on 30/1/2021 at 13:45
Quote Posted by Gryzemuis
But now the hedgefunds fall victim to their own game. And suddenly these "let the market decide everything"-whimps start crying "dear government, please put in regulations to protect us. and if we go belly up, because of our greedy and stupid strategies, please bail us out".
What about "
You all little fuckers want to play the big game with us? Dear governement, remove ALL the protections for the little savers and let's play all together".
It's just "law", and not the physics type written in nature language :p
Gryzemuis on 30/1/2021 at 13:49
Supposedly it is illegal to lie about your position in the market. You're not obliged to tell the world how many shares and options you have. But if you open your mouth, you can't lie.
The hedgefunds would like everything to return to normal, stockprice of GME goes down again, etc. They want this thing to be over with. So what they did Thursday and Friday is: they let CNBC repeatedly tell their audience "Melvin Capital has bought enough shares now to cover their position". If that is true, the whole short-squeeze is over. Melvin isn't required to buy more stock.
But is that true? Journalists asked Melvin directly: "is it true that you have covered your position now"? Melvin doesn't answer. They can't answer themselves, because if they are lying, they get into trouble. So they let others lie for them. But it's too obvious. Nobody believes them.
I should have thought about this earlier: (
https://en.wikipedia.org/wiki/GameStop_short_squeeze) of course there is a wiki-page explaining all this.
lowenz on 30/1/2021 at 13:59
Is it illegal? Oh, just buy a new law (buying some parliamentary representation) or directly some judges or if you can't just buy the minimum sentence thanks to high level lawyers :p
I don't think these people really care about legality. It's just a decoration for them, a make-up.
Gryzemuis on 30/1/2021 at 14:07
Quote Posted by demagogue
They (hedgefunds) really don't care.
(
https://en.wikipedia.org/wiki/GameStop_short_squeeze#Impact_on_hedge_funds)
"On January 26, 2021, it was reported that short sellers lost a total of $6 billion due to the squeeze".
Six billion? Someone will care.
Quote:
If they cared about games, I think the healthier model is supporting alternative funding sources for innovative games and outlets.
This is not about GME, or gaming, of course.
But short-selling is a shitty business.
Also because the big players don't just do financial transactions. They do more. They try to manipulate the market to bring the stockprice further down. As I wrote above: just announcing that a big player is going short, will hurt the stockprice. That hurts that company. And it hurts everyone who had already invested in that company. Officially it's illegal. But it happens.
What's it like for a company who's stock goes down? Not good.
You can't attract new capital as easily. You can't reward your executives (and other employees) with stock-options. Lots of companies have "stock-buy plans" for their employees. You can buy 10% of your monthly salary worth of stock. And you get a 10% or so discount. If the stockprice sinks, it has an impact on moral. It's harder to attract new employees. You business-partners might trust you less. Or might require more financial safe-guards when doing transactions. You are more vulnerable to hostile takeovers. There are lots of reason why a high or an increasing stock-price helps companies. When hedgefunds go short, and try to drive stockprice down, it really impacts the company.
Edit: Mods, can we change the title of this thread? Into "Hedgefunds and criminal behaviour"? :) Or more precise: "Gamestop Short Squeeze" or something.
SubJeff on 30/1/2021 at 14:39
Nah, leave the title. You know what it's about.
The name Robinhood is looking to be the irony that will be them in the ass. Who would trust them in the future? Not me.
Nameless Voice on 30/1/2021 at 15:06
The title implies that GameStop are engaging in criminal behaviour, or at the very least implies that the Redditors are - neither of which are true. So it's a pretty terrible title.
SubJeff on 30/1/2021 at 17:55
It's deliberately ambiguous but yeah if you can't cope with that change it I guess.