[Formerly Given To Fly]

https://www.wsj.com/livecoverage/amc-gamestop-stock-market

"The reason there seems to be an uproar this time is because the wrong people made money."

This quote is a good summary of what has taken place in a short period of time. I can't summarize the events very well because there is a lot of financial jargon involved, but people from a Reddit forum called wallstreetbets made a lot of money by buying shares of GameStop which caused several hedge-funds to lose a lot of money ($5 billion or so) because they were "shorting" shares of GameStop. There really aren't many heroes (or villains) here, but when several wallstreetbets members were able to post screen shots of their student loan debt being payed off in 1 payment because of the money they made, all I can say is good for them!

Lastly, the most important aspect of this situation is no one did anything illegal or wrong (as far as we know). I do not know how this will end; I hope it isn't horrible.

The idea that "the wrong people made money" is one that could only have been thought up because certain people believe it to be true. That seems problematic on several levels.

What are your thoughts?

 

[Rich]

Game changer. I heard about it today. When a group on the internet intentionally manipulate a stock, it's still manipulating a stock. Not that it isn't done all the time, but it's usually in secret. This was a focused attack on short sellers. Now the funny part will be how it ends because that stock has got to crash. It's up 600% on a company that's in trouble, 100% today alone. The stock will crash, who's left holding the bag when it does is like playing musical chairs. In the end, the shorts got their lunch handed to them if they were on margin, but if they're straight shorts it will all even out and they'll be the ones laughing in the end. But as an attack on the hedge funds shorting, their bonuses are going to suck this quarter :lol:

I wish I still had cash in my trading account because I would definitely short it, without margin of course!

 

[Formerly Given To Fly]

Game changer. I heard about it today. When a group on the internet intentionally manipulate a stock, it's still manipulating a stock. Not that it isn't done all the time, but it's usually in secret. This was a focused attack on short sellers. Now the funny part will be how it ends because that stock has got to crash. It's up 600% on a company that's in trouble, 100% today alone. The stock will crash, who's left holding the bag when it does is like playing musical chairs. In the end, the shorts got their lunch handed to them if they were on margin, but if they're straight shorts it will all even out and they'll be the ones laughing in the end. But as an attack on the hedge funds shorting, their bonuses are going to suck this quarter :lol:

I wish I still had cash in my trading account because I would definitely short it, without margin of course!

https://www.cnbc.com/2021/01/28/robinhood-interactive-brokers-restrict-trading-in-gamestop-s.html

It is sort of like musical chairs, except the retail traders just got handed the bag and have been told they can't sit down until the hedge-funds find a comfortable enough chair to sit in.

 

[Rich]

The trade platforms are at risk of class action suits for allowing sales and shorts of known manipulation to continue. That it's blatant manipulation is on the record, so they had to make this move.

 

[Formerly Given To Fly]

The trade platforms are at risk of class action suits for allowing sales and shorts of known manipulation to continue. That it's blatant manipulation is on the record, so they had to make this move.

Oh. That is a good reason. lain:

When this first became widespread news, I thought it was a perfect storm type of situation that rarely ever happens. The people shorting GameStop became complacent and some retail traders were able to take advantage of their complacency by buying stock. In other words, the little guys won.
Is that manipulation?

 

[diablomozart]

it's a big club and you ain't in it"-george carlin...d.m.

 

[joabim]

Game changer. I heard about it today. When a group on the internet intentionally manipulate a stock, it's still manipulating a stock. Not that it isn't done all the time, but it's usually in secret. This was a focused attack on short sellers. Now the funny part will be how it ends because that stock has got to crash. It's up 600% on a company that's in trouble, 100% today alone. The stock will crash, who's left holding the bag when it does is like playing musical chairs. In the end, the shorts got their lunch handed to them if they were on margin, but if they're straight shorts it will all even out and they'll be the ones laughing in the end. But as an attack on the hedge funds shorting, their bonuses are going to suck this quarter :lol:

I wish I still had cash in my trading account because I would definitely short it, without margin of course!

I don't agree that what WSB are doing is manipulation though, they have no insider information and they are playing by the rules. Disabling stock purchasing and only allowing closing your position because one of your majority investors has a vested interest in fulfilling the shorts is manipulation though. The stock price unsurprisngly fell yesterday as the volume of sell orders dwarfed the buy orders (as they were restricted). Of course no-one expects gamestop to be around in a year or two, but that type of "easy money" is exactly why the publicly available stock was shorted to more than 130% in the end of 2020 by these investment institutions. Allowing these hedge funds to sneak themselves out of these shorts during a time when your average joe is unable to even purchase the stock reeks of malpractice.

 

[Rich]

You don't agree that their stated goal was to band together to buy heavy and drive up the price to kill the short selling hedge funds, to make them buy to close positions, to drive the price up more, and that's not manipulation? Also collusion? It's a genius strategy but only the law will decide if it's legal or not. Although everybody can agree far worse was done by far many and have gotten away free and clear.

 

[Formerly Given To Fly]

This a pretty good summary of the GameStop Short Squeeze.

This a rather in-depth summary of the GameStop Short Squeeze.
https://en.wikipedia.org/wiki/GameStop_short_squeeze

FYI