Oh, and here’s an example of what people are posting on WSB–to insist these guys are “unsophisticated” and don’t know what they’re doing is disingenuous and reflective of the insanely common attitude that nobody can know anything about a subject UNLESS they make their living that way. I think the world markets are about to get a big education themselves–the internet is a great leveller and auto-didacts never stop learning.
And u/DeepFuckingValue talked to the Wall Street Journal. I bet it chaps their ass that this guy is fucking them with a sandpaper dildo.
Don’t forget that all these houses that people are losing are being bought up by investment groups that will raise the price of housing for everyone.
I have an employee who got her letter of approval from the bank, but she can’t find a house, because they are all pretty much already bought as soon as they go on the market.
I’m extrapolating from the EU rulebook (I work on the compliance side). You’re right, I’m not aware of an actual case, but I presume the regulators wouldn’t warn the private-equity people against kneeling on the neck of a distressed takeover target if it hadn’t been a problem previously.
No, I don’t think you were wrong. There was nothing especially noteworthy in the crypto market that happened in the last day (that I’m aware of), so this seems strictly like a “oh no, we ban our customers from all sorts of transactions all the time! it has nothing to do with our corrupt relationship with capital companies losing their ass” distraction/cover move.
I think it was Dogecoin, which was always more of a joke than anything else. I mean, all crypto is a joke, but Dogecoin started as one of those “Oh, Bitcoin’s hanging on as a thing, let’s make a new one and name it after a meme” follow-ons. Easy to go up 500% when it was exchanging at one cent per Dogecoin.
It must be tough to have lost all that in 3 days, erasing all you’ve gained since (checks notes) January 4th. The S&P 500 fell 3.7% from its high this week. So if you lost 156,000, then you started with $4.2 million. You’ll survive.
ISTM that a rational seller would have sold a long time ago. The only reason the Redditors are holding is because they know why the stock is going up. If the people holding long positions saw the price go up, even a little, a rational seller would have sold, probably to a Redditor who was buying. At this point, anyone holding is either playing chicken or aren’t paying attention to the stock because as you say, there’s a lot of risk to holding at this point. Any pre-squeeze owners wouldn’t likely take on that risk for no reason unless they also were in on the game.
This is the part I’m not following. If Melvin Capital put in $2.75B, then wouldn’t the Redditors collectively be up by $2.75B at least?
Why couldn’t the Redditors also sell short on the way down? After all, many of them hold the long position, so they have the collateral.
Aren’t the people who are selling short buyers in the sense that they have to cover their positions at some point?
You have a very dim view of Redditors. I don’t share it. We’ll see what happens because definitely the power doesn’t reside with them, but some of the most intelligent conversation I’ve seen on the internet comes from Reddit, depending on the sub, of course.
In other news, I just read this about Robinhood. Apparently, they have already been fined by the SEC previously for making misleading statements to customers.
Interesting how people are so upset about a few Redditors playing the market, but Robinhood robbing their customers of $34.1M doesn’t make anyone blink.
Jon Najarian on Investor’s Business Daily confirms my thinking that some of the people on r/wallstreetbets are super sophisticated traders. This was not a freak accident. The leaders of the group have been doing sophisticated trades for a long time. Of course, there are also a bunch of people who don’t know anything, but they’re following the leads.
What happens if those people who are seeking to destroy Melvin Capital (and the other hedge funds who are shorting GameStop) succeed? Let’s say Melvin Capital says “You got us. We were trying to short sell this stock and you drove up the price. This is too much for us to handle. We’re shutting down.”
So Melvin Capital declares it’s out of money and closes its doors.
What happens to the brokers who loaned the shares to Melvin Capital? Melvin Capital sold those shares and just said it can’t pay for the replacements. Do the brokers just eat the loss? Are they obligated to buy replacement shares?
What happens to all of the reddit investors who are holding GameStop shares? They supposedly were buying these shares in anticipation of Melvin Capital being obligated to buy them. They figured it was a sure thing to buy them because they had a guaranteed buyer. But now that buyer has gone out of business. Nobody else has an obligation to buy GameStop shares. And nobody who isn’t obligated to buy GameStop shares is going to pay $300 a share for them. Or $200. Or $100. Or $50. Or $25. Or $10.
This is also why Hank Green got involved. He has a nice simplified explainer on he and his brother’s vlogbrothers YouTube channel (where videos are usually 4 minutes long or less).
I had a chilling thought today as a result of all this: we’re seeing the blueprint for financial terrorism.
That’s why, whether you agree with WSB or not, I have a feeling the feds are about to find reasons to get involved in replacing the invisible hand with the visible hand of regulation. It’s really a national security issue.
I don’t feel this reaches that level. This is directed at a few specific hedge funds not at the financial industry as a whole. The worst case scenario is a few companies go broke. I don’t see it affecting our national economy or security.
