starting with Gamestop and now AMC theaters
If I had any Gamestop stock I’d be happy to get rid of it now that it’s selling for so high.
Seems they’ve succeeded. It will be a lesson for short sellers.
Welcome to the day and age of anyone with a computer and some money in their accounts can trade, and the age in which people can literally drive a stock up or down. I don’t see how anyone can legally stop what they are doing, and I don’t think the SEC necessarily should punish or regulate the traders themselves. But perhaps the exchanges can be encouraged to have policies whereby they temporarily stop ‘unusual’ activity or activity that seems to be driven by mob behavior, but even that is a sticky wicket, I suppose.
And I have no problem with them learning that lesson. These hedge fund managers are cocky enough to ride the ups; they can ride the downs, too.
I’d hope the SEC doesn’t work to protect Wall Street from its own greed. I’m pretty pro-capitalist but I find it disgusting when the government steps in to pick winners. Especially when it picks billionaires to be the winners.
It is another data point in the power of the democratization of the press. I don’t day trade and hindsight is definitely 20/20 but a jump like Gamestop’s is tantalizing if one is in possession of a time machine.
I have also been watching that and wondering if or when it will collapse or if anyone will actually make any money. There are many, many threads on Reddit about this and they all seem to believe that they are going to just make a killing. Like they have found a secret that no one has thought of before.
By artificially driving up the demand for the stock are they actually going to end up driving the real value of the stock down? They have enough people working together to create a difference in the market that has nothing to do with the actual investment value of the companies involved. If I were a real, non-Reddit, major investor would I ride it out or would I cash in?
Very interesting to follow, but I am not sure it is legal, probably is for now. Viral Investing could be a new thing that could be used to raise a company up short term, and then just as easily destroy it.
I have mixed feelings, but I’m not gonna lie: GME is tantalizing - or at least it was 12-24 hours ago. I smell a rout coming on, but at least some people made some cash.
A part of me has no problem with it: the market generally functions as it always has but people jerking off to a few hot stocks is nothing new. It’s always happened, always will happen. That’s pretty much how the whole day trading craze got started and it’s been around since at least the 90s, if not longer. People will lose their shirts on the way down, but again, it’s always been that way. Nobody’s making them ride that bull.
On the other hand, there’s the matter of scale. It seems larger, more democratized now. Democracy is generally a good thing…most of the time.
Seems to me that one could make pretty much guaranteed money by buying put options 2 or 3 months out, once the hullabaloo dies down and the fundamentals of the company catches back up.
Not sure how much the sky-high implied volatility being priced into the options will affect the risk/reward ratio of this strategy though.
If I had Gamestop shares I’d sell them and make a profit. I think the folks doing the most howling about the temerity of the lowly masses are those who have unlimited exposure because of short-selling.
I bought 10 shares @ 95$ average. It been a fun ride. Bankrupt a hedge fund that shorts 140% of the stock down to 2$. I’m in.
(This is all reddit BS. I don’t really know what I’m doing but I can afford 1000$.)
Fascinating story which I am still trying to get my head around. My first thought: isn’t this an illegal pump-and-dump scheme? A long piece by the estimable Matt Levine addresses this and his answer seems to be: it’s complicated. Will be interesting to watch if the SEC does anything.
Rather similar to the age when stock-market betting shops were common all over the USA (using the telegraph system to communicate with head office market makers and traders), and a person could drive the (much smaller market for a) stock up or down.
Stock market betting was criminalized, and stock market manipulation was criminalized, precisely because it was common.
I can’t find any sources that say it’s currently illegal to bet on the stock market or other financial information.
I bet 
you also can’t find any betting shops that offer that service.
Looks like the SEC is actually reading that Reddit thread, and it’s causing the predictable freak out, lol.
They’re upset that the SEC is reading what appears to be a public thread?
I like to look at “conversations” on the Yahoo finance stock boards, as it’s the quickest way of finding out why a stock of mine is gaining or losing value abruptly.
Geez, those boards are full of people trying to talk down or talk up the stock with the hope of influencing its price. When I first started reading them, I’d get nervous, thinking this was real information. But I soon found out it was all bullshit and that the longs and the shorts were in a perpetual warfare of insults.
So Reddit is doing this too? I shouldn’t be surprised.
They seem to be more upset the SEC would ever think anything they’re doing is wrong, while engaging in a ton of tu quoque and whataboutism.
They genuinely seem to think they’re not doing anything wrong.
I think there is virtually no doubt that the stock price will collapse in the near term and that most of the people who buy into this mania will be crushed. (By way of scale, BOA just raised their target price to $10, and the stock closed today at $348.) I suspect that many or most of the buyers know this but are assuming they can get out before that happens (ala the “Greater Fool Theory”). But obviously, a large number of them won’t, and will pay dearly for their hubris.
People in this thread who are chortling about big hedge funds losing money should consider that other big hedge funds have been rushing in to short the stock (short interest has been rising even as the price increases), and they are the ones who will ultimately make a killing, while most of the small time Reddit investors will be killed themselves.
I would think about shorting it myself, but as the old saying goes, “the market can stay irrational for longer than you can stay solvent”. The price was insane yesterday too, but had I shorted it then I would be down enormously, with the price having increased 135% today. And in a short situation, you can get margin calls and can’t wait it out.
But I’m thinking of buying put options. (Potential problem is that the long term value of these options is probably determined based on more sophisticated investors than the Reddit people, and they are probably priced accordingly.)