Economy

BigRedBuster said:
OK....can someone give me the reader's digest version of what's going on with GameStop...etc.?

Edit:  I listened to the above interview and from what I gathered from Chamath, I agree with him.  If I'm understanding things correctly, people on Reddit created a momentum for everyone to go out and buy Gamestock which drove up the price.  Am I correct?

If so, people managing large hedge funds can go f#&% themselves.  That sort of thing has been happening behind the scenes with them for a very long time and they have gotten amazingly rich from it, while retail investors don't have the same information.  Now, the tables are turned?  Sorry Wall Street.....boo hoo.

If Im wrong on what's going on, please correct me.

Thanks,
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The billionaires are upset that normal people are making money. Pretty much. 

 
deedsker said:
People are nostalgic for Gamestop. Some people invest/tell other on investing subreddit about investing into Gamestop. Gamestop goes up a little bit. People find out Hedge Fund is highly investing in Gamestop tanking (short selling the stock). Internet takes over and all kinds of people start investing in Gamestop to get said Hedge Fund to lose money. No real central players causing major issues to a particular investment company and people are concerned what is next.

TLDR; real world Occupy Wall Street movement, but using financial institutions. 
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Not just highly shorted but almost 140% of the available shares for GameStop were shorted(not by the solo firm) is insane and can lead to the same domino effect that '08 did. If people decide to flood the share the shorts have to buy shares to cover their positions, well stock goes up when they do that. When stock goes up more people jump in and more shorts get squeezed and they have to buy more share to cover their short price goes up more and on and on and on.

If there is enough cash willing to hold it can end hedge funds with outsized positions. Sounds like the goal is hold till Friday, but I am not near the lunatic that these wallstreetbets guys are.

 
Omaha-Husker said:
Not just highly shorted but almost 140% of the available shares for GameStop were shorted(not by the solo firm) is insane and can lead to the same domino effect that '08 did. If people decide to flood the share the shorts have to buy shares to cover their positions, well stock goes up when they do that. When stock goes up more people jump in and more shorts get squeezed and they have to buy more share to cover their short price goes up more and on and on and on.

If there is enough cash willing to hold it can end hedge funds with outsized positions. Sounds like the goal is hold till Friday, but I am not near the lunatic that these wallstreetbets guys are.
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Sorry, I was referencing only Melvin Capital as they seem to have been the first target. You are correct on the bigger picture of the Gamestop stock as a whole and where this progressed to at the end of my summary.

 


Its a big club and you aint in it. But im sure we will still have people sucking off the billionaires on this board and giving BS “they worked hard for their money” takes. When the tides are turned in favor of the little guy, they all f#&%ing cry like the scum they are. But by all means, keep kissing their butt. 

 
The smartest play at this point is a 3 or 6 month put option.  This is Tilray all over again and the valuation will regress to the mean eventually. 

 
deedsker said:
Sorry, I was referencing only Melvin Capital as they seem to have been the first target. You are correct on the bigger picture of the Gamestop stock as a whole and where this progressed to at the end of my summary.
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All good I was just meaning to tack on not correct. Apparently Melvin had done negative press on GameStop, every short does, it just so happened they poked the bear on a company that people in their 20s and 30s grew up with! Its kind of the same reason AMC is next, these are brands people remember and its funny to knee cap a hedge fund with a company that sell video games. That is a genuine part of this.

If there was some obscure logistics firm being shorted like this it wouldn't have had this response.

 
Omaha-Husker said:
All good I was just meaning to tack on not correct. Apparently Melvin had done negative press on GameStop, every short does, it just so happened they poked the bear on a company that people in their 20s and 30s grew up with! Its kind of the same reason AMC is next, these are brands people remember and its funny to knee cap a hedge fund with a company that sell video games. That is a genuine part of this.

If there was some obscure logistics firm being shorted like this it wouldn't have had this response.
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The best part is that there are so many people aware now and the bear is out to defend her cubs. This should be an interesting ride.

 
Frott Scost said:
Its a big club and you aint in it. But im sure we will still have people sucking off the billionaires on this board and giving BS “they worked hard for their money” takes. When the tides are turned in favor of the little guy, they all f#&%ing cry like the scum they are. But by all means, keep kissing their butt. 
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They do work hard at what they do.  That doesn't give them the right to be the only people who can create momentum on a stock and make money off of it.

 
BigRedBuster said:
They do work hard at what they do.  That doesn't give them the right to be the only people who can create momentum on a stock and make money off of it.
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Except when they do illegal things, crash the market and get a huge bailout to continue doing illegal things. I wish “working hard” was as easy for us normal people. 


 
My big big big worry is now that this is everywhere a bunch of people need to know how to get out of their positions. Some people are putting in money today and need to have limits in place to catch their investment before this thing flies back down b/c its going to be a wild ride.

 




I agree with this. I'm having a hard time figuring out why NASDAQ needs to change any rule in response to this. The Redditors are just doing another version of what hedge fund managers have been doing for decades. 

If it's not a private club, then everyone gets to play. 

 
BigRedBuster said:
That's true with lots of professions.
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Yes, because other professions have the ability to ruin millions of lives like these crooks did in 2008 when the housing markets crashed due to their illegal activity. Give me a break. 
 

Not only do they ruin millions of lives, many of the people still trying to get back on their feet today. But they get bailouts...and bonuses!

 
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Could this be a modern day Boston Tea Party? - I think it could be, however my cynicism, regarding the current structure of society makes me feel as though the elite will succeed in limiting this type of engagement by regular people. The founding fathers had the pleasure of the controlling entity being thousands of miles away, with no real ability to maintain "law and order," now there are unlimited measures that can be taken by the forces that rule our government and own our politicians in order to remove any iota of power from the people. 

 
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