Discussion Game Stop Stock Short Squeeze

[zzyzxroad]

But the only way they can profit is if the stock is mispriced. Isn’t it valuable to correctly price stocks?

Well my point is who is using this tool and profiting off of it. Are shorts really mostly serving the purpose you propose? As someone who is ignorant on the topic I appreciate your insight.

Are these really doing anything other than providing a bulletproof tool for the rich to get richer?

 

[fskimospy]

Well my point is who is using this tool and profiting off of it. Are shorts really mostly serving the purpose you propose? As someone who is ignorant on the topic I appreciate your insight.

Are these really doing anything other than providing a bulletproof tool for the rich to get richer?

I’m certainly no expert but from my understanding they are widely considered to improve pricing and liquidity.

Maybe they are abused and some additional regulation is in order but just as a basic idea I think if you can bet a stock will go up it makes sense to be able to bet it will go down.

 

[zzyzxroad]

I’m certainly no expert but from my understanding they are widely considered to improve pricing and liquidity.

Maybe they are abused and some additional regulation is in order but just as a basic idea I think if you can bet a stock will go up it makes sense to be able to bet it will go down.

In general the market seems to be increasingly manipulated and is almost a scam to allow the people at the top to profit. Seem to me like more regulation in general is in order. Main street unfortunately has been duped into thinking the market = the economy. Just look at 401Ks and how people have been conned into thinking they are a viable retirement vehicle for most.

 

[cytg111]

What are you saying that's there's an incestuous releationship between the hosts and the CEOs they have on, and have their little chats, throwing softballs?

I dont know, maybe I caught the bug, cause conspiracy be like... maybe the earth IS flat?

 

[Pipeline 1010]

I've been wondering how Gamestop itself benefits from any of this. It is nice to have a high stock price, but after all the short positions are closed, the stock will plummet again and align more closely with underlying business fundamentals. A temporary boost in stock price does little to fundamentally help Gamestop. So how does Gamestop leverage this? They are in need of cash. The hedge funds are in need of that GME stock.

So what would stop Gamestop from issuing stock right now and selling it to the hedge funds at a discount? Enough stock to cover all of the short positions, and at a low enough price that the cost wouldn't bankrupt the hedge funds. This could infuse Gamestop with enough cash to stay afloat for years and transition their business to online (like they have been proposing). Would that even be legal?

It would be a win-win for Gamestop and the hedgies. The other scenario, of letting the hedge funds die and the stock price return to normal is a lose-lose.

Can anyone smarter than me about the stock market explain if this would work and why or why not? Please tell me this can't happen.

 

[bshole]

I’ve never understood why we would want to do that. I mean when people buy stocks (broadly speaking) they are doing so because they believe they are undervalued. Why prohibit them from acting when they think they are overvalued?

Because when billionaires lose billions (as is the case in this instance), the taxpayers will be asked to bail them out. I would not be surprised to see the next stimulus package include a few billion for the hedge funds that were affected by this. I also would not be surprised to see a few of the reddit gang criminally prosecuted (for terrorism or some other such nonsense) and their gains forcefully taken from them. Can't have the proles taking money from the owner class, that is not how the system is set up to work. Remember that Wall Street OWNS both the Republicans and the Democrats. They write the laws, not the politicians. As they say, the house always wins... and nobody should expect anything different on this occasion.

Hell Google has already signaled that it will do it's part. All of the enraged Robin Hood users flooded their app with negative reviews because the app ceased allowing them to buy the stock (and some allege that it outright sold their stock against their will) and Google kindly memory holed all of them.

 

[Wreckem]

I've been wondering how Gamestop itself benefits from any of this. It is nice to have a high stock price, but after all the short positions are closed, the stock will plummet again and align more closely with underlying business fundamentals. A temporary boost in stock price does little to fundamentally help Gamestop. So how does Gamestop leverage this? They are in need of cash. The hedge funds are in need of that GME stock.

So what would stop Gamestop from issuing stock right now and selling it to the hedge funds at a discount? Enough stock to cover all of the short positions, and at a low enough price that the cost wouldn't bankrupt the hedge funds. This could infuse Gamestop with enough cash to stay afloat for years and transition their business to online (like they have been proposing). Would that even be legal?

It would be a win-win for Gamestop and the hedgies. The other scenario, of letting the hedge funds die and the stock price return to normal is a lose-lose.

Can anyone smarter than me about the stock market explain if this would work and why or why not? Please tell me this can't happen.

That’s what AMC is doing. They diluted last week and are possibly going to do it again at $13/share next week.

 

[Pipeline 1010]

That’s what AMC is doing. They diluted last week and are possibly going to do it again at $13/share next week.

Well....shit.

 

[sdifox]

That’s what AMC is doing. They diluted last week and are possibly going to do it again at $13/share next week.

Not exactly. Someone had convertibles, which lets them convert to stock.

 

[MrSquished]

I’m certainly no expert but from my understanding they are widely considered to improve pricing and liquidity.

Maybe they are abused and some additional regulation is in order but just as a basic idea I think if you can bet a stock will go up it makes sense to be able to bet it will go down.

I think using the word bet to describe investing in the stock market is perfect. It should be regulated more but also disconnected from being any significant measuring stick of the economy, since it is essentially a casino for a minority of folks.

 

[Wreckem]

Again I said they diluted. Silver Lake converted it’s debt for the 44million share then sold all of its shares. It has been reported that AMC may sell shares at $13 soon. They have been pressured to repeatedly since the fall.

 

[Tweak155]

Potentially scary stuff if you read through its entirety (linked site & linked sites links) (TLDR at end):

https://www.reddit.com/r/wallstreetbets/comments/l97ykd

TLDR: The theory is that everyone buying into $GME is exposing that more shares are publicly available than should be mathematically possible based on the number of shares issued by $GME themselves. This would expose long-known but failed to be proven (due to capabilities to hide the numbers by HF's, MM's and the like) corruption as to the level of counterfeit shares being created on a regular basis across the entire market. While not yet conclusive, the numbers do appear very compelling.

 

[WelshBloke]

Can someone please come and put me out of my misery? Pretty please?

This is just insane.

So how's it going?

 

[MomentsofSanity]

So how's it going?

Honestly? It’s frustrating as hell. Everyone is talking about the institutional investors and those making some money on the retail side. What no one is talking about is how many people have jumped into this mess and lost everything before shorting and uncovered options were blocked by brokers to protect themselves and their clients.

We get to see that side too. The people who saw the news hyping it up and had no real understanding on what was going on and how much they were at risk. They see all these articles about how much money so and so made and just dive in thinking that will be them. It reminds me of the pot stock craziness about three years ago this time of year. We spent months just being ears for people who lost everything. We are literally having to send the police out on welfare checks for people who have blown up their margin accounts.

Not everyone in this business is greedy. Some of us want to help people and try to educate them on how things really work. Help them understand what they are doing and the risks it poses. Unfortunstely, like everything else, YouTube and Facebook win out.

 

[s0me0nesmind1]

It's nice to see written admittance from Elizabeth Warren that she is completely stupid and dumb as a box of rocks.

https://twitter.com/x/status/1355187260514250754

 

[repoman0]

It's nice to see written admittance from Elizabeth Warren that she is completely stupid and dumb as a box of rocks.

https://twitter.com/x/status/1355187260514250754

What exactly is wrong with what she wrote? Did you read the whole thing or just blow your load at the chance to attack a woman as usual?

 

[Zorba]

It's nice to see written admittance from Elizabeth Warren that she is completely stupid and dumb as a box of rocks.

https://twitter.com/x/status/1355187260514250754

Show us on the doll where the smart woman touched you. Or is the lack of being touch the issue? Not enough hugs from mommy?

 

[WelshBloke]

Honestly? It’s frustrating as hell. Everyone is talking about the institutional investors and those making some money on the retail side. What no one is talking about is how many people have jumped into this mess and lost everything before shorting and uncovered options were blocked by brokers to protect themselves and their clients.

You'd have had to try really hard to lose a lot of money as a retail trader in this at the moment. It's $325 at the moment and hasn't been much above that for any significant time.

 

[cytg111]

So a sane bet would be to short gme now?

 

[sdifox]

So a sane bet would be to short gme now?

lol no... the aim is to squeeze the shorters. Don't join them cuz you will be burnt.

 

[cytg111]

lol no... the aim is to squeeze the shorters. Don't join them cuz you will be burnt.

Mmmmmmm....

 

[sdifox]

You'd have had to try really hard to lose a lot of money as a retail trader in this at the moment. It's $325 at the moment and hasn't been much above that for any significant time.

AFAIK MomentofSanity works on exchange floor in commodities.

 

[MomentsofSanity]

You'd have had to try really hard to lose a lot of money as a retail trader in this at the moment. It's $325 at the moment and hasn't been much above that for any significant time.

That would be mostly accurate now based on GME being moved to non-marginable by everyone and all leverage plays being removed. The things to consider is that that wasn’t always the case, it’s had price swings equalling $340 a share over two days and GME isn’t the only stock right now this is happening with. It’s just the one most outlets talk about. There has been and remain lots of ways to lose money on this right now.

AFAIK MomentofSanity works on exchange floor in commodities.

im a dealing representative so not on one of the exchange floors. We are the ones placing the orders for pretty much everything for our clients and sending them to the market makers. The only things we don‘t trade in is futures (commodities) and forex any longer. Not a lot of Canadian brokers do. I haven’t touched those markets in over three years now sadly.

 

[Jaskalas]

lol no... the aim is to squeeze the shorters. Don't join them cuz you will be burnt.

How much longer could they possibly be squeezed?
GME will fall like a rock at some point.

 

[uclaLabrat]

So if the hypothesis of the counterfeit shares is true, how do the shorts get out? Can the retail holders truly get dumped? Don't they short sellers need more shares to cover than actually exist in that scenario?