Hedge fund tries to short Gamestop, now gets short squeezed by R/wallstreetbets

[compucomp]

https://mobile.twitter.com/AOC/status/1354830697459032066

It will be hilarious when AOC (and Ted Lieu, who posted a similar Tweet) when they realize that WallStreetBets was once moderated by Martin Shkreli the Pharma Bro, fully embodies his attitudes, and has substantial overlap with MAGA (which has already been noted by several media outlets). Defending r/WSB brigading/market manipulation is not the hill they want to be dying on.

I doubt they care. Whatever their partisan preferences prior to this debacle, the ideology of the bear-raiding hedge fund that was targeted is worse and - more importantly - it has brought about far more actual harm. It's the power dynamics that matter here and I don't think I'm alone on the left in seeing an attempt at popular organisation being suppressed by greedy oligarchs.

Then they should push the SEC and the exchanges for restrictions on short selling, not cheering blatant collusion and market manipulation. If this maneuver were tried by a group of institutional investors, or god forbid a group of bulge bracket banks which if unrestricted would have the capacity to drive any stock to 0 or infinity at will, the SEC would shut them down immediately. Brokers are clearly taking provisional actions to calm down the situation in advance of new regulations against this sort of brigading, which will likely be coming from the SEC.

You can't even say this is the "noble little guys" against "Big Bad Wall Street" when the set of "noble little guys" is full of disreputable characters.

[lfromnj]

https://mobile.twitter.com/AOC/status/1354830697459032066

It will be hilarious when AOC (and Ted Lieu, who posted a similar Tweet) when they realize that WallStreetBets was once moderated by Martin Shkreli the Pharma Bro, fully embodies his attitudes, and has substantial overlap with MAGA (which has already been noted by several media outlets). Defending r/WSB brigading/market manipulation is not the hill they want to be dying on.

I doubt they care. Whatever their partisan preferences prior to this debacle, the ideology of the bear-raiding hedge fund that was targeted is worse and - more importantly - it has brought about far more actual harm. It's the power dynamics that matter here and I don't think I'm alone on the left in seeing an attempt at popular organisation being suppressed by greedy oligarchs.

Then they should push the SEC and the exchanges for restrictions on short selling, not cheering blatant collusion and market manipulation. If this maneuver were tried by a group of institutional investors, or god forbid a group of bulge bracket banks which if unrestricted would have the capacity to drive any stock to 0 or infinity at will, the SEC would shut them down immediately. Brokers are clearly taking provisional actions to calm down the situation in advance of new regulations against this sort of brigading, which will likely be coming from the SEC.

A provisional action to calm everything down would be to freeze the stock, not just block one aspect of it.

Also said hedge funds were literally driving Gamestop to 0 by literally shorting almost every share there was. I don't  find anything wrong with a short as its part of market flow but it literally does carry the risk of infinite loss.

[compucomp]

https://mobile.twitter.com/AOC/status/1354830697459032066

It will be hilarious when AOC (and Ted Lieu, who posted a similar Tweet) when they realize that WallStreetBets was once moderated by Martin Shkreli the Pharma Bro, fully embodies his attitudes, and has substantial overlap with MAGA (which has already been noted by several media outlets). Defending r/WSB brigading/market manipulation is not the hill they want to be dying on.

I doubt they care. Whatever their partisan preferences prior to this debacle, the ideology of the bear-raiding hedge fund that was targeted is worse and - more importantly - it has brought about far more actual harm. It's the power dynamics that matter here and I don't think I'm alone on the left in seeing an attempt at popular organisation being suppressed by greedy oligarchs.

Then they should push the SEC and the exchanges for restrictions on short selling, not cheering blatant collusion and market manipulation. If this maneuver were tried by a group of institutional investors, or god forbid a group of bulge bracket banks which if unrestricted would have the capacity to drive any stock to 0 or infinity at will, the SEC would shut them down immediately. Brokers are clearly taking provisional actions to calm down the situation in advance of new regulations against this sort of brigading, which will likely be coming from the SEC.

A provisional action to calm everything down would be to freeze the stock, not just block one aspect of it.

What, so the people who joined in the frenzy, not all of which were brigading particularly towards the end, have to hold and watch as their holdings tank? At least this way it lets the "noble little guy" of your imagination take their profit. The exchange has already halted trading of these stocks several times in the last week.

[Alcibiades]

The whole point of short-selling is that it is extremely risky. Yet these hedge funds expect to be able to do it with impunity! They should have been better-prepared for this sort of eventuality, and the response from some quarters of Wall Street is the kind of thing which encourages irresponsible financial practices by essentially saying investors shouldn’t have to live with the consequences of their actions.

[Rules for me, but not for thee]

The ironically-named Robinhood app, by stopping purchasing but not selling of GME, BB, AMC, etc. have united the country in opposition to this rigging of the system by rich hedge funds.  Case in point:

https://twitter.com/tedcruz/status/1354833603943931905?s=20

[Rules for me, but not for thee]

Just more proof that capitalism doesn't work.

Capitalism works better than communism, maroon.  Problem is in both systems, we end up with the elites taking all the power and the wealth.  It happens a lot faster in communism, however.  

We need rules and regulations that apply to everyone to protect the idea of a free market, otherwise it's no longer free as we see happening here.  That's what libertarians don't really get (or care about?) either; someone will rig the system to their advantage if you let them.

[VAR]

https://twitter.com/AOC/status/1354848253729234944

[Sprouts Farmers Market ✘]

What a drama queen, clearly has no actual interest in anything that isn't posturing.

[GP270watch]

AOC was right to post what she did about Cruz. He's such a phony.

[compucomp]

The more I think about this, the more I find the r/WSB maneuver to be similar to Trumpism and MAGA. They find a "big bad establishment" enemy, "Wall Street" in this case, find loopholes in the rules to execute deplorable behavior attacking said enemy (collusion and market manipulation in this case), and then justify their deplorable behavior by saying they were going after the "right" target, the hated establishment, while attacking the establishment further for "being unfair" when it tries to repair the damage.

The substantial overlap between WSB and MAGA has already been established by several media outlets. To all the people on this thread cheering WSB on, how do you feel to be essentially cheering MAGA? Has it ever occurred to you that the profits from this maneuver may ultimately be funneled into MAGA?

[Octowakandi]

The more I think about this, the more I find the r/WSB maneuver to be similar to Trumpism and MAGA. They find a "big bad establishment" enemy, "Wall Street" in this case, find loopholes in the rules to execute deplorable behavior attacking said enemy (collusion and market manipulation in this case), and then justify their deplorable behavior by saying they were going after the "right" target, the hated establishment, while attacking the establishment further for "being unfair" when it tries to repair the damage.

The substantial overlap between WSB and MAGA has already been established by several media outlets. To all the people on this thread cheering WSB on, how do you feel to be essentially cheering MAGA? Has it ever occurred to you that the profits from this maneuver may ultimately be funneled into MAGA?

How does that boot taste by the way?

[Rules for me, but not for thee]

Someone loves their Brian Stelter-flavored Flavor-Aid. Imagine not thinking the system is rigged against you, unless you are in the 1%.

[TiltsAreUnderrated]

https://mobile.twitter.com/AOC/status/1354830697459032066

It will be hilarious when AOC (and Ted Lieu, who posted a similar Tweet) when they realize that WallStreetBets was once moderated by Martin Shkreli the Pharma Bro, fully embodies his attitudes, and has substantial overlap with MAGA (which has already been noted by several media outlets). Defending r/WSB brigading/market manipulation is not the hill they want to be dying on.

I doubt they care. Whatever their partisan preferences prior to this debacle, the ideology of the bear-raiding hedge fund that was targeted is worse and - more importantly - it has brought about far more actual harm. It's the power dynamics that matter here and I don't think I'm alone on the left in seeing an attempt at popular organisation being suppressed by greedy oligarchs.

Then they should push the SEC and the exchanges for restrictions on short selling, not cheering blatant collusion and market manipulation. If this maneuver were tried by a group of institutional investors, or god forbid a group of bulge bracket banks which if unrestricted would have the capacity to drive any stock to 0 or infinity at will, the SEC would shut them down immediately.

This reads like the "They should go and vote," argument about protesting police brutality in places which have seen brutal policing remain intact regardless of electoral politics. Democracy isn't just voting, and if federal regulators refuse to act proportionately on obvious Wall Street abuse for a sustained period, nonviolent resistance should commence (the short squeeze could have indirectly acted as a restriction on short selling and much bigger market manipulation than the retail investors were capable of).

It's definitely wrong in a vacuum but no worse than the illegal bear raids which probably brought Melvin Capitol to this point. These have not been acted against by the SEC, and nor have crimes far worse in magnitude.

Brokers are clearly taking provisional actions to calm down the situation in advance of new regulations against this sort of brigading, which will likely be coming from the SEC.

They are still allowing stocks to be sold. This is a giveaway to the shorters.

You can't even say this is the "noble little guys" against "Big Bad Wall Street" when the set of "noble little guys" is full of disreputable characters.

Their character matters less than the power disparity (with Big Bad Wall Street still on the other end). That's the point about fighting for the little guy: if we assume a hierarchy is unjust, where he is in said hierarchy matters much more than who he is.

[lfromnj]

No one is saying these retail investors are heroes or anything. Some of them are rich but a lot of them are just ordinary Americans investing their stimulus checks into something where they saw a chance and a major screw up by a big player. Rather than the market rewarding at least the earlier group of these people for seeing a good chance the market decides to mess the whole game up so the original big guy will win in the end.

[GP270watch]

AOC was right to post what she did about Cruz. He's such a phony.

He cynically demagogued Trump's stupid stolen election narrative, but AOC writes as if he personally hired the best sniper east of the Mississippi. Bringing accountability to the people rigging the financial system is more important than scoring social media points on Ted Cruz.

 Cruz is such a joke and trying to rebrand himself as a populist is laughable. His dishonesty caused real violence to happen. His wife was also a private wealth manager at Goldman Sachs! He's about as insider and Wallstreet establishment as it gets.


Why Ted Cruz is wowing some of Wall Street's money-men

 Before Trump won the GOP nomination almost exclusively off the strength of his performance with Republican voters, Cruz was backed by a lot of big money Wall Street financiers and was actively courting their support. He is a despicable opportunist and a fraud.

[Dereich]

The more I think about this, the more I find the r/WSB maneuver to be similar to Trumpism and MAGA. They find a "big bad establishment" enemy, "Wall Street" in this case, find loopholes in the rules to execute deplorable behavior attacking said enemy (collusion and market manipulation in this case), and then justify their deplorable behavior by saying they were going after the "right" target, the hated establishment, while attacking the establishment further for "being unfair" when it tries to repair the damage.

The substantial overlap between WSB and MAGA has already been established by several media outlets. To all the people on this thread cheering WSB on, how do you feel to be essentially cheering MAGA? Has it ever occurred to you that the profits from this maneuver may ultimately be funneled into MAGA?

I suppose you also think that Atlas users are fools for supporting other causes involving disreputable people, like abolishing the death penalty (helps murders and rapists) and supporting free speech (helps radicals and fascists)?

[compucomp]

No one is saying these retail investors are heroes or anything. Some of them are rich but a lot of them are just ordinary Americans investing their stimulus checks into something where they saw a chance and a major screw up by a big player. Rather than the market rewarding at least the earlier group of these people for seeing a good chance the market decides to mess the whole game up so the original big guy will win in the end.

1. These "ordinary Americans" are free to close their positions and collect their 1000% profit.

2. Melvin Capital and Citron Research have closed out their shorts at massive losses. To say the "big guy" will win is untrue.

3. The behavior of AMC/GME stocks the last few days is totally unnatural and unhealthy. It was caused by collusion among market actors. These are prohibited behaviors, if institutional market participants colluded like this the SEC would shut them down immediately. The fact that retail investors were able to collude using Reddit as a forum is a loophole and I'm sure the SEC is studying this situation now. New regulations (on retail brokers probably, maybe additional scrutiny on forums like r/WSB) will be coming to address this behavior.

Basically the WSB logic is very similar to the MAGA logic on the morning of Jan. 6, "We're going to have an armed protest and storm the Capitol, we're on the right side since we're overturning the stolen election, nothing's going to happen to us since the police are undermanned and on our side, what could go wrong?"

[Sestak]

2. Melvin Capital and Citron Research have closed out their shorts at massive losses. To say the "big guy" will win is untrue.

There is no hard evidence that this has actually happened. They've said they have, but this sort of stuff isn't public and trade volume seems to indicate that this has not, in fact, actually happened; if so, it would mean that Melvin claimed they had closed their shorts in a desparate attempt to get the squeeze to stop.

[GALeftist]

I don't understand why we're talking about regulating Reddit when these hedge funds shorted well over 100% of $GME lol. This short squeeze would not happen on just some generic stock, these people got too greedy and made a mistake and are refusing to eat the loss.

[lfromnj]

No one is saying these retail investors are heroes or anything. Some of them are rich but a lot of them are just ordinary Americans investing their stimulus checks into something where they saw a chance and a major screw up by a big player. Rather than the market rewarding at least the earlier group of these people for seeing a good chance the market decides to mess the whole game up so the original big guy will win in the end.

1. These "ordinary Americans" are free to close their positions and collect their 1000% profit.

2. Melvin Capital and Citron Research have closed out their shorts at massive losses. To say the "big guy" will win is untrue.

3. The behavior of AMC/GME stocks the last few days is totally unnatural and unhealthy. It was caused by collusion among market actors. These are prohibited behaviors, if institutional market participants colluded like this the SEC would shut them down immediately. The fact that retail investors were able to collude using Reddit as a forum is a loophole and I'm sure the SEC is studying this situation now. New regulations (on retail brokers probably, maybe additional scrutiny on forums like r/WSB) will be coming to address this behavior.

Basically the WSB logic is very similar to the MAGA logic on the morning of Jan. 6, "We're going to have an armed protest and storm the Capitol, we're on the right side since we're overturning the stolen election, nothing's going to happen to us since the police are undermanned and on our side, what could go wrong?"

I don't know about AMC, but its more "unnatural/unhealthy" that Gamestop's stock was being shorted to such a high amount. The recent movement is partially in reaction to the unnatural actions hedge funds like Melvin made

I personally don't believe the shorting of Gamestop's stock should be illegal but there should be some natural financial punishment to what they did if Gamestop wasn't actually going to be doing that badly. However if the market isn't even allowed to punish this idiot hedgefund then everything is effectively risk-free.

[GP270watch]

Cruz is such a joke and trying to rebrand himself as a populist is laughable. His dishonesty caused real violence to happen. His wife was also a private wealth manager at Goldman Sachs! He's about as insider and Wallstreet establishment as it gets.

That is more to the point, and nothing that I would argue against, but it doesn't mean that he wouldn't vote the right way if he saw a percentage in it. It's also totally removed from AOC's hysterics.

 You are aware that the DOJ charged Garret Miller of Texas for posting online death threats against AOC the day of the Capitol riot, including one tweet that simply read, "Assassinate AOC."

[compucomp]

I don't understand why we're talking about regulating Reddit when these hedge funds shorted well over 100% of $GME lol. This short squeeze would not happen on just some generic stock, these people got too greedy and made a mistake and are refusing to eat the loss.

If you think excessive shorting of stock is unhealthy for the market then you should lobby the SEC to enact regulations against it. The solution is not to blow up the market completely. The relevant funds have already eaten the loss. This logic is like MAGA saying that their storming of the Capitol is justified in retaliation against BLM and Antifa torching police stations last summer.

On the subject of regulating Reddit, if the manipulation were coordinated by say 20 institutional traders over Bloomberg Chat, the chat log would quickly be uncovered and these traders would be facing dismissal from their firms and being barred from the industry, and their firms would have to pay back the ill-gotten gains plus additional penalties. The fact that retail investors coordinated were able to coordinate over Reddit is clearly a loophole that needs to be addressed.  

[lfromnj]

I don't understand why we're talking about regulating Reddit when these hedge funds shorted well over 100% of $GME lol. This short squeeze would not happen on just some generic stock, these people got too greedy and made a mistake and are refusing to eat the loss.

If you think excessive shorting of stock is unhealthy for the market then you should lobby the SEC to enact regulations against it. The solution is not to blow up the market completely. The relevant funds have already eaten the loss. This logic is like MAGA saying that their storming of the Capitol is justified in retaliation against BLM and Antifa torching police stations last summer.

On the subject of regulating Reddit, if the manipulation were coordinated by say 20 institutional traders over Bloomberg Chat, the chat log would quickly be uncovered and these traders would be facing dismissal from their firms and being barred from the industry, and their firms would have to pay back the ill-gotten gains plus additional penalties. The fact that retail investors coordinated were able to coordinate over Reddit is clearly a loophole that needs to be addressed.  

Just because something's unhealthy doesn't mean there isn't a natural cure. Said cure is punishing the shorting when it actually did go too far. However if the market isn't allowed to do that, then yes I say as a Libertarian the R word. There should be some basic regulations to prevent brokerages from being allowed to freeze one aspect of trading stocks even if its risky.



Also anyone trying to compare this movement to "Trumpism" is clearly just appealing to the left's hatred of it and "racism" and trying to show how screwing over a hedgefund is racist.

[Sestak]

Some tweets etc. going around claiming that Robinhood has now started automatically selling and closing users' GME positions without authorization. Abominable if it's true.

[Dereich]

No one is saying these retail investors are heroes or anything. Some of them are rich but a lot of them are just ordinary Americans investing their stimulus checks into something where they saw a chance and a major screw up by a big player. Rather than the market rewarding at least the earlier group of these people for seeing a good chance the market decides to mess the whole game up so the original big guy will win in the end.

1. These "ordinary Americans" are free to close their positions and collect their 1000% profit.

2. Melvin Capital and Citron Research have closed out their shorts at massive losses. To say the "big guy" will win is untrue.

3. The behavior of AMC/GME stocks the last few days is totally unnatural and unhealthy. It was caused by collusion among market actors. These are prohibited behaviors, if institutional market participants colluded like this the SEC would shut them down immediately. The fact that retail investors were able to collude using Reddit as a forum is a loophole and I'm sure the SEC is studying this situation now. New regulations (on retail brokers probably, maybe additional scrutiny on forums like r/WSB) will be coming to address this behavior.

Basically the WSB logic is very similar to the MAGA logic on the morning of Jan. 6, "We're going to have an armed protest and storm the Capitol, we're on the right side since we're overturning the stolen election, nothing's going to happen to us since the police are undermanned and on our side, what could go wrong?"

I'd like you to elaborate a bit on this "collusion." From what I can see, there's no kind of formal agreement or strategy among investors to act. Certainly there are a lot of people on Reddit and Twitter saying that they're buying the stocks and intend to do so to punish the short sellers, but its hard to see how that could be collusion under any definition. If a bunch of people decide to buy based on the stories they hear about others buying/bad hedge fund behavior how is that any different than investors buying when they hear that a company had a good quarter or selling when they hear about a corporate scandal?