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  1. #1
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    Some smart person explain the GME (gamestop) thing

    I'm far from stock genius, and know nothing, but damned if the news isn't in a tizzy about reddit GME stock buyers. Tell me what's happening in idiot terms.

    Thanks.

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  2. #2
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    https://youtu.be/4EUbJcGoYQ4

    Louis Rossman fixes MacBook boards but he explains it well in layman’s terms. Also explains why it’s the firms’ fault, and not the average Joe retailers.


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  3. #3
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    This explains it well too

    https://apple.news/A8lI86IAWQHGc6xo2vSl8rA

  4. #4
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    Read this: https://www.google.com/amp/s/www.aut...ueeze-of-2008/

    Basically, people are buying the stock because they believe a short squeeze is imminent. So the stock exploded/continues to rise. People on the short side can fight back (causing large volatility in price), but that has only enraged the internet and driven the price higher. At this point I think those hedge funds are about to learn the internet is undefeated and the price is going to hit 4 figures, but I could be wrong and this ends up just being a massive pyramid scheme. Either way I’m along for the ride because YOLO.

  5. #5
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    The stock was not the darlings of the big Financial investors of the likes of Wall Street Trading companies. They shorted the company stock (betting that the stock would go down more than it already was trading at and basically betting against the company's future (as low as $3 and up to a max of $20 in recent history from what I've heard.)

    The Redit subscribers and individuals felt that Gamestop had more value and wanted to "stick" it to the large investors that were betting against it by purchasing the stock and of course as more and more smaller individuals got into the stock, it continued to drive the price up. The result is those institutional investors that shorted the stock, in a sense "lost" their bet and have incurred large losses on their "short" because the stock has climbed to as high as mid $300 (high was around $370). So some smaller investors are either knowing something that big investors do not know about the future and the possible earnings of the company, or the stock is artificially trading at a higher value than the earnings and will eventually loose value and come back down to reality. Day Traders, and individual traders are making money if it rises and they get out by selling before a "correction" in the stock price (selling before the stock goes lower than what they bought into it of course)...

    The big investors look at what the company sells, whom they compete against (Amazon and on line retailers along with a bit of their product line also available at Big Box stores like Walmart, Target, and Best Buy types of places that games and gaming accessories can be also purchased. But most of the other retailers do not do used games and trade in's etc. that Gamestop does do trade in and selling of used games and gaming systems.)

  6. #6
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    FYI it hit $513 this morning.

    Also, sounds like Robinhood might have just restricted GME and other meme stocks. Maybe they’ll come back, but right now, those moves just further enrage the Reddit crowd and feed into the narrative that Wall Street just wants to shit on the little guy. This is going to be a wild ride.

  7. #7
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    Quote Originally Posted by kathleenturneroverdrive View Post
    FYI it hit $513 this morning.

    Also, sounds like Robinhood might have just restricted GME and other meme stocks. Maybe they’ll come back, but right now, those moves just further enrage the Reddit crowd and feed into the narrative that Wall Street just wants to shit on the little guy. This is going to be a wild ride.
    Yep. No more bbby, bb, nok, amc, and gme on Robinhood. Which kind sucks because I’ve made money on just about all of them this month. Power structure circling the wagons.

  8. #8
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    I think more accurate is that a firm took a very aggressive short position for more than 100% of stock with no real price ceiling. This left them exposed for a large counterparty action as they have huge stock buying requirements to fulfill their shorts (at one point 140% of existing stock), so by buying and holding a large amount, the price was guaranteed up as there were not enough shares in circulation in the market to fulfill the short obligations. This is something that happens on a semi-regular basis, but it's usually confined to the financial world. This is the first time the collective action of retail investors has had any real effect or created any major action. Basically the hedge funds were targeting retailers and companies on the downslope, then making large bets to hasten their fall by large-scale shorts (and make a pile of money in the process), which is reasonably predatory but 100% legal.
    Now, something else to understand is that it's not purely retail vs. hedge funds - many institutional and hedge investors are now taking a similar tack to retail as they see money to be made.
    Long story short - high flying hedge fund decided to play fast and loose, got caught up by a subreddit and collective action and now will get fucked over for billions of dollars for their hubris.
    a past short squeeze: https://www.autoweek.com/news/indust...ueeze-of-2008/

  9. #9
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    Hedge funds and other institutional investors that have manipulated markets and fleeced retail investors for decades short sold more than 100% of Gamestop stock; that is, they borrowed the shares and sold them, with a promise to return the shares at some later date (after a price decline). Their intent was to drive the company out of business or depress the stock price so much they could return the shares for pennies on the dollar.

    Then Gamestop became a meme stock on Reddit and people there realized that the short sellers are way over-exposed...gonna be hard to return more than 100% of the shares. So they're driving up the price because when short contracts expire, the holders are required to buy shares at the market price at that point, which will create a "short squeeze" as more short sellers need to cover their own contracts and the price is bid up.

    Hedge funds are now claiming they're being taken advantage of by retail investors who are manipulating the market, providing great joy to everyone who hates the fuckers who crashed the economy in 2008 and got bailed out.

  10. #10
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    The feel good story of January.


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  11. #11
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    Quote Originally Posted by dan_pdx View Post
    Hedge funds and other institutional investors that have manipulated markets and fleeced retail investors for decades short sold more than 100% of Gamestop stock; that is, they borrowed the shares and sold them, with a promise to return the shares at some later date (after a price decline). Their intent was to drive the company out of business or depress the stock price so much they could return the shares for pennies on the dollar.

    Then Gamestop became a meme stock on Reddit and people there realized that the short sellers are way over-exposed...gonna be hard to return more than 100% of the shares. So they're driving up the price because when short contracts expire, the holders are required to buy shares at the market price at that point, which will create a "short squeeze" as more short sellers need to cover their own contracts and the price is bid up.

    Hedge funds are now claiming they're being taken advantage of by retail investors who are manipulating the market, providing great joy to everyone who hates the fuckers who crashed the economy in 2008 and got bailed out.
    Do short contracts expire? I thought shorts never expire, problem is as the price increases you pay more and more interest, and if your broker doesn't think you're gonna be able to cover your debts they can call your ass to the carpet to pay up immediately. I see people talk about "shorts expiring" enough that I need to ask this in the TGR safe space...

  12. #12
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    Quote Originally Posted by paulster2626 View Post
    Do short contracts expire? I thought shorts never expire, problem is as the price increases you pay more and more interest, and if your broker doesn't think you're gonna be able to cover your debts they can call your ass to the carpet to pay up immediately. I see people talk about "shorts expiring" enough that I need to ask this in the TGR safe space...
    Ha! Now that you mention it, I'm not positive. You may be right that the real "expiration date" is when your broker sees you're about to be unable to cover your losses.

    Also...THIS is your safe space? I'd hate to see the other places you hang out.

  13. #13
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    Why no PSA on this? Bunch of greedy dentists around here.

  14. #14
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    I saw it pointed out last night that the greedy Hedge Funds actually represent millions of ordinary investors in the form of retirement funds and pension funds?

    Anyone care to comment on that?

    Does this represent a threat to stock market stability?
    I have been in this State for 30 years and I am willing to admit that I am part of the problem.

  15. #15
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    Quote Originally Posted by concretejungle View Post
    The feel good story of January.


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    Yeah at least one bright light to start 2021. And of course the hedge fund is trying to flip the narrative. They're fucked LOL.....wish I got in...
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  16. #16
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    Quote Originally Posted by alias_rice View Post
    Yep. No more bbby, bb, nok, amc, and gme on Robinhood. Which kind sucks because I’ve made money on just about all of them this month. Power structure circling the wagons.
    What an insane maneuver. Stabbing your most loyal customers in the back is a bold move

  17. #17
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    Robin HOod and other Brokerages have put limitations or stopped entirely the ability for its retail customers to buy stocks such as AMC and GME. This could cause the institutions to take new positions in shorts as the retail field cannot buy to provide support...... ps i dont kno what the fuk im talking about , this is not investment advice.....
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  18. #18
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    Quote Originally Posted by Bunion 2020 View Post
    I saw it pointed out last night that the greedy Hedge Funds actually represent millions of ordinary investors in the form of retirement funds and pension funds?

    Anyone care to comment on that?
    This is 100% true. Yes, funds have a lot of money from wealthy individuals and the fund managers, but college endowments, pension funds, etc are very large investors in the hedge fund space.

  19. #19
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    Quote Originally Posted by alias_rice View Post
    Yep. No more bbby, bb, nok, amc, and gme on Robinhood. Which kind sucks because I’ve made money on just about all of them this month. Power structure circling the wagons.
    sorry , ....what he said ^....ignore my post i will delete when not busy....i cant read these threads completely when im reading my wsb feeds
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  20. #20
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    Quote Originally Posted by Micol View Post
    Robin HOod and other Brokerages have put limitations or stopped entirely the ability for its retail customers to buy stocks such as AMC and GME. This could cause the institutions to take new positions in shorts as the retail field cannot buy to provide support...... ps i dont kno what the fuk im talking about , this is not investment advice.....
    yes, and I imagine I'm just one of thousands of new account holders who logged in this morning to discover they couldn't buy AMC stock on the robinhood platform. Buncha pussies.
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  21. #21
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    Quote Originally Posted by Bunion 2020 View Post
    I saw it pointed out last night that the greedy Hedge Funds actually represent millions of ordinary investors in the form of retirement funds and pension funds?

    Anyone care to comment on that?

    Does this represent a threat to stock market stability?
    As an individual you can’t just walk into Blackrock and give them a few grand.... You have to be an “accredited investor” to invest in a hedge fund. Which basically means you have bundles of money. Therefore the fund’s capital often comes from pensions, employee benefit plans, foundations, endowments, etc...


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  22. #22
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    Quote Originally Posted by schuss View Post
    I think more accurate is that a firm took a very aggressive short position for more than 100% of stock with no real price ceiling. This left them exposed for a large counterparty action as they have huge stock buying requirements to fulfill their shorts (at one point 140% of existing stock), so by buying and holding a large amount, the price was guaranteed up as there were not enough shares in circulation in the market to fulfill the short obligations. This is something that happens on a semi-regular basis, but it's usually confined to the financial world. This is the first time the collective action of retail investors has had any real effect or created any major action. Basically the hedge funds were targeting retailers and companies on the downslope, then making large bets to hasten their fall by large-scale shorts (and make a pile of money in the process), which is reasonably predatory but 100% legal.
    Now, something else to understand is that it's not purely retail vs. hedge funds - many institutional and hedge investors are now taking a similar tack to retail as they see money to be made.
    Long story short - high flying hedge fund decided to play fast and loose, got caught up by a subreddit and collective action and now will get fucked over for billions of dollars for their hubris.
    a past short squeeze: https://www.autoweek.com/news/indust...ueeze-of-2008/
    Ha! This whole story is just amazing. I know a couple douchebag hedgefund moguls up in the YC that make their fortunes doing exactly this sort of predatory nonsense. About time they get caught with their pants down as they've destroyed countless lives throughout their careers.

    I bet there's a few of them out there screaming into their phones, "Martha! Cancel the jet order! CANCEL IT NOW!!!"

    And you know there's got to be some poor junior MBA working at Gamestop HQ who's like this in their office right now, not knowing what the hell to do right now:

  23. #23
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    This whole thing makes me reminisce on the good old days of GameStop. They would buyback games for decent store credit and their used game prices were great. You could go in with a game you had finished and leave with the next game you wanted and be out of pocket only like $10... then the game industry pushed the market towards digital downloads and GameStop’s credits went to shit...

    I’d be like if the local ski shop would give you $300 store credit for those 2017 Mantra’s then sell you some 2019 Bonafides for $450...


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  24. #24
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    The new norm.

  25. #25
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    Quote Originally Posted by DLD in UT View Post
    This is 100% true. Yes, funds have a lot of money from wealthy individuals and the fund managers, but college endowments, pension funds, etc are very large investors in the hedge fund space.
    I'll feel bad when hedge fund owners/traders stop taking millions->billions in fees. They don't run charities, that's for sure.

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