At 7:00 it was trading at 468.89 they closed it down and now it’s at 126.01. They colluded to fuck over a bunch of people out of their retirements. I made $1700 and I’d give it all just to be on the ride, and see were it went in a free, fair and open market.
Everybody on all platforms gets fucked, they changed the entire momentum.
The people who lost their retirement cash were probably the ones invested in the short - the hedge fund managers and their clients were the ones who had a lot more to lose by getting routed in the short. And by virtue of that fact, they’re able to make a hell of a lot more noise than internet trading trolls.
Don’t get me wrong - I don’t doubt that Redditors made money. But these digital platforms are reacting to what they perceive as an existential consumer relations crisis in real time. It will be interesting to see what kind of internet mob backlash awaits the fury of disgruntled day traders. You know it’s coming, and I’m guessing that FanDuel, I mean, Robinhood knows its coming, too.
Meanwhile, hold my seat while I grab a coke and some popcorn.
I think people need to distinguish between the following two scenarios:
- The stock is currently selling for $X. I believe, based on my analysis of the company fundamentals, micro and macro economic environment etc. etc, that it’s really worth $Y. I believe my assessment will eventually become more apparent to people who lack my perception and vision, and at that point it will trade for $Y. So I’m going to buy/sell it now, so as to take advantage of that future move.
- The stock is currently selling for $X. I may or may not agree that it’s worth $X, or may not have any idea at all about what it’s worth. But I think that if I (and my buddies) buy/sell enough shares, my trading itself will influence the price, so I (we) go out and buy/sell a lot of shares in order to push the price in the desired direction, at which point we cash out our profits.
The latter is what’s thought of as market manipulation. (I’m not up on exactly what the relevant laws are in this regard, though.) The former is perfectly legitimate trading, regardless of whether the trader is long or short.
As noted above, the Reddit traders are not “winning” other than to the extent that a temporary “WE STUCK IT TO THEM!!!” counts as winning. Long term, most of those Reddit people are going to be killed.
Or possibly not even such long term. As I type this, the stock is trading at $143, still way overpriced, but down 58% for the day.
They already are. Anyone not smart enough to sell it off on day one was asking for trouble.
There have been wars between longs and shorts on message boards since the 1990’s, complete with everybody frantically telling one another to enter high-price sell orders so their shares can’t be shorted.
The only different thing is the virality and scale of this one, but I don’t really see it playing out differently. Some of the shorts will probably pay more margin interest than they anticipated, but I expect they’ll win in the end.
Short-selling comes in for a lot of unjustified hatred. Security pricing is an important way for society to drive capital toward productive enterprises. We can’t have that unless we have both buyers and sellers. Short-sellers are just a different kind of seller. Nothing ignominious or wrong about it.
It’s easy to sound smart when they can shut trading down for certain groups of people on a whim.
Yup. That’s the thing- they figured they could sell short and based on Gamespot’s recent performance, that wasn’t a totally unreasonable thing to do- it’s reasonable to have expected their stock price to decline or stay steady. They’re weak enough corporately that a significant rise in stock price was extremely unlikely, absent some sort of shenanigans like this.
That said, like @asahi says, nobody’s making them ride that bull. They know it’s risky, and just because something happens that makes that risk actual, doesn’t mean that anything wrong or illegal has been done.
What about #3. Backroom dealing to pressure your friends to fuck over poor people. Is that manipulation?
The fact that it’s “backroom” seems irrelevant. What counts are the details of exactly what your friends are going to do to “fuck over poor people”.
Even if they don’t know it’s risky, they’re making dangerous assumptions which they should never make with money that gets taken out of a checking or savings account and put into something else.
The way I look at it, they were either donating money to a cause (sticking it to the hedge fund man) or gambling – there are probably thousands of people making bad decisions with money in this country every minute.
Just maybe a tad Darwinian is all.
Oh, I wasn’t worried about the Redditors. I was pointing out that the people screaming the loudest are the hedge fund people who stand to lose a ton of money when their short selling is unsuccessful.
The Redditors can’t possibly expect to actually make money on the deal; I think it’s very much a situation of donating money to the cause of sticking it to the hedge fund man.
Lol. The enemy of my enemy is my 
Right. And if they rode the price up and ride it back down–well, that’s not losing money.
I’ve been mulling about this for this morning. I have questions.
For the RobinHood app. I’m under the impression that they were preventing their users from buying GameStop et al. I believe selling was still allowed. Is this correct? If so, while I think it is a bad move to limit your customers, It was sort of a nice thing to keep people from doing something really really stupid. And those already in could sell. Obviously, if the stock went up, that would be a different thing, but if it is going down, is preventing your customers from buying it really that terrible? Or is the reasoning that because the app prevented buying, the price went down? (I think RobinHood will get skewered simply from the optics)
Is there any doubt that Wall Street is going to make a killing on this inflated price? While for now some hedge funds may have lost money, but surely they are shorting again at these crazy highs. So lose a billion on Tuesday and gain two billion on Friday seems like a good deal.
I’m absolutely okay with Hedge Funds losing money like this, but my concern points back to the reddit people and how they are decentralized. In a Hedge Fund all those people lose or gain money together. This reddit thing is making some reddit people very rich, and some reddit people are going to lose a lot of money. While I have no sympathy to the Hedge Funds, reddit isn’t some single entity that will ‘win’ or ‘lose’. Within reddit there are winners and losers and the winners are absolutely exploiting the losers.
I can’t help thinking someone is going to make a killing shorting Gamespot stock now that it’s highly and artificially inflated, but it probably won’t be the Redditors, and won’t be the original hedge fund short sellers.
Not RobinHood’s job, and I’d bet at least a couple GameStop shares that they didn’t do it to help their retail customers.
The squeeze only works if you never give them an out. The price dropped to $126 and everyone who was caught with an over leveraged short position was able to bail. They had them by the nuts.
The big$$ couldn’t afford for it to go over $500 a share and they couldn’t afford to wait for Friday when they might have had to start buying. So on Thursday with a price of $496 they shut it down. People talk about how the Redditors were certain to lose it all. Over 100% of tradable stock was shorted. If you keep the pressure on long enough and you own a physical stock. Someone will need to buy it from you to close out their short position. When they buy it, it drives the price up higher. More shorts then need to buy to cover, and the price goes up. What the Redditors were doing was working. It worked so well that the big $$$ had to go to these drastic lengths to “save poor people from themselves”.
Your link is broken.
There is some rationality of not linking to posts in the Trolls-R-Us thread. But this is just lazy. Link to Twitter.