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

[MaxQue]

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.  

The issue is that it creates an inequity in such that huge hedge funds are the only ones able to affect the market.

The sums that one hedge fund can invest is bigger that many investors over Reddit and the fact the former is allowed to did it because they are one entity while the latter can't because they are not is not based in logic or anything.

It's based in preserving the power of established players.

[MaxQue]

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.  

Also, is a taking head on TV saying X stock is a good buy is market manipulation?
Should we ban any forums or discussions on the stock as any opinion can be interpreted as an opinion?

[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?"

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?

The discussion on WSB was "everyone buy GME and GME calls now", so people did so, drove GME shares up, causing a short squeeze.

Similarly, Trump said there would be protests on Jan. 6, yelled on Twitter repeatedly about it, then gave a speech at the White House on Jan. 6 saying everyone should go to the Capitol, and they did so. But so far we don't have evidence that Trump directly coordinated with any group about Jan. 6 events. So Trump has done nothing wrong?

[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.  

Also, is a taking head on TV saying X stock is a good buy is market manipulation?
Should we ban any forums or discussions on the stock as any opinion can be interpreted as an opinion?

It can be market manipulation, yes. That's why you have that disclosure about the analyst's holdings and conflicts of interest immediately before/after they speak, and if they are found subsequently to be trading against their public pick, they will be punished for it.

[MaxQue]

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?

The discussion on WSB was "everyone buy GME and GME calls now", so people did so, drove GME shares up, causing a short squeeze.

Similarly, Trump said there would be protests on Jan. 6, yelled on Twitter repeatedly about it, then gave a speech at the White House on Jan. 6 saying everyone should go to the Capitol, and they did so. But so far we don't have evidence that Trump directly coordinated with any group about Jan. 6 events. So Trump has done nothing wrong?

Also, isn't everybody deciding to restrict trades on those stocks collusion too?

[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'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?

The discussion on WSB was "everyone buy GME and GME calls now", so people did so, drove GME shares up, causing a short squeeze.

Similarly, Trump said there would be protests on Jan. 6, yelled on Twitter repeatedly about it, then gave a speech at the White House on Jan. 6 saying everyone should go to the Capitol, and they did so. But so far we don't have evidence that Trump directly coordinated with any group about Jan. 6 events. So Trump has done nothing wrong?

Also, isn't everybody deciding to restrict trades on those stocks collusion too?

No that's making sure investors are still allowed to put their entire life savings in penny stocks but preventing buying GME because its too "risky"
Its necessary for the SAFETY BIGOT.

[Absentee Voting Ghost of Ruin]

https://mobile.twitter.com/atl_q0/status/1354804030933884930

[anthonyjg]

Can you imagine if Occupy knew how money works

[SteveRogers]

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?

The discussion on WSB was "everyone buy GME and GME calls now", so people did so, drove GME shares up, causing a short squeeze.

Similarly, Trump said there would be protests on Jan. 6, yelled on Twitter repeatedly about it, then gave a speech at the White House on Jan. 6 saying everyone should go to the Capitol, and they did so. But so far we don't have evidence that Trump directly coordinated with any group about Jan. 6 events. So Trump has done nothing wrong?

I don’t follow your analogy. Buying stock in a publicly traded company is perfectly legal. Storming the Capitol, destroying federal property, and beating a police officer to death is illegal.

If there is a specific law that these redditors might have been breaking, then I would be interested in learning about it as this area of law is admittedly outside my area of expertise. But so far I haven’t seen anyone articulate how this was legally any different from a bunch of tv viewers taking Jim Cramer’s advice and buying a particular stock.

[lfromnj]

https://babylonbee.com/news/merriam-webster-changes-definition-of-white-supremacist-to-anyone-who-wins-at-the-stock-market-when-theyre-not-supposed-to/

SPRINGFIELD, MA—WallStreetBets has been banned from Reddit and Discord after conspiring to make money on the stock market, even though they are unworthy of such riches. Shortly after they were banned for "hateful and discriminatory content," the online dictionary Merriam-Webster quickly changed the official definition of "white supremacist" to "anyone who makes a lot of money in the stock market when they’re not supposed to."

(Satire)

[compucomp]

As I was saying, the SEC is now looking at enforcement action against the GameStop traders.

https://finance.yahoo.com/news/will-the-sec-sue-gamestop-traders-183845241.html

Traders who gobbled up GameStop (GME) stock in the Reddit-user-fueled push to squeeze short sellers could end up on the defending side of enforcement action if officials can find out who they are and show they tried to manipulate or deceive the markets.

Indeed, Fox Business Network’s Charlie Gasparino tweeted on Thursday that regulatory sources were telling him they would be looking at a market manipulation case related to GameStop trading.

However, a successful case against those who caused the spikes is no slam dunk. That’s partly because it could be hard for regulators to show that traders intentionally deceived market participants into thinking that GameStop’s fundamentals were healthier than they actually were.

[F. Joe Haydn]

We shouldn't pretend like the posters on a subreddit called "Wall Street Bets" are somehow anti-Wall Street. All they want is to be the ones making the money instead of the hedge funds; both sides are greedy stockjobbers.

It's pretty silly how everyone is acting like this is a "people vs. Wall Street" conflict. It's a small investor vs. big investor conflict that is completely divorced from the lives of average working class people. Also, let's not forget that Martin Shkreli, who literally went to prison for being so greedy, was a moderator on that subreddit, a subreddit full of entitled, immature, infantile, nasty bullies.

Can you imagine if Occupy knew how money works

Occupy Wall Street was an actual popular movement against Wall Street, while this GameStop thing sprung up from an online community of libertarian capitalists called "Wall Street Bets" who want to get rich quick. Completely different people and motives.

[Starry Eyed Jagaloon]

[MaxQue]

As I was saying, the SEC is now looking at enforcement action against the GameStop traders.

https://finance.yahoo.com/news/will-the-sec-sue-gamestop-traders-183845241.html

Traders who gobbled up GameStop (GME) stock in the Reddit-user-fueled push to squeeze short sellers could end up on the defending side of enforcement action if officials can find out who they are and show they tried to manipulate or deceive the markets.

Indeed, Fox Business Network’s Charlie Gasparino tweeted on Thursday that regulatory sources were telling him they would be looking at a market manipulation case related to GameStop trading.

However, a successful case against those who caused the spikes is no slam dunk. That’s partly because it could be hard for regulators to show that traders intentionally deceived market participants into thinking that GameStop’s fundamentals were healthier than they actually were.

And what about Robinhood and others actions to slow down trade? Aren't those market manipulation too?

[TiltsAreUnderrated]

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?"

The key difference is that the election wasn't rigged for Biden but the market was rigged for Wall Street. If the election had been rigged, marching on Washington would probably have been justified.

This is part of why there is much more value in going after the dishonest Trumpian "thought leaders" than the criminally stupid.

[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?

The discussion on WSB was "everyone buy GME and GME calls now", so people did so, drove GME shares up, causing a short squeeze.

Similarly, Trump said there would be protests on Jan. 6, yelled on Twitter repeatedly about it, then gave a speech at the White House on Jan. 6 saying everyone should go to the Capitol, and they did so. But so far we don't have evidence that Trump directly coordinated with any group about Jan. 6 events. So Trump has done nothing wrong?

How is that any different than stories you see all the time saying "this analyst says that right now you should buy X share" or Jim Cramer telling people every day on CNBC to buy one company or another? Are those collusion?

Your Trump comparison is an ultra-strained reach to try to discredit the small investors. These are (comparably) unsophisticated investors who don't have the ability to control the market themselves. There is no figurehead at the head of this telling people who will do whatever they say what to do.

[GP270watch]

 The fact that the SEC is made up of folks who eventually want to or end up working on Wallstreet means they are the cops, like all cops for the establishment. In the 2007-2009 credit crash the people who got the most scrutiny and investigations were the short-sellers who knew the housing market was being over leveraged and the financial instruments packaging up mortgages were complete garbage with dishonest ratings. They got the vast majority of audits and investigation when it should have been the investments banks, mortgage lenders, and credit rating agencies.

[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?"

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?

The discussion on WSB was "everyone buy GME and GME calls now", so people did so, drove GME shares up, causing a short squeeze.

Similarly, Trump said there would be protests on Jan. 6, yelled on Twitter repeatedly about it, then gave a speech at the White House on Jan. 6 saying everyone should go to the Capitol, and they did so. But so far we don't have evidence that Trump directly coordinated with any group about Jan. 6 events. So Trump has done nothing wrong?

How is that any different than stories you see all the time saying "this analyst says that right now you should buy X share" or Jim Cramer telling people every day on CNBC to buy one company or another? Are those collusion?

Your Trump comparison is an ultra-strained reach to try to discredit the small investors. These are (comparably) unsophisticated investors who don't have the ability to control the market themselves. There is no figurehead at the head of this telling people who will do whatever they say what to do.

Clearly the retail investors do have the ability to control the market on GME and AMC when coordinated. The short squeeze didn't "just happen", that's like saying Jan. 6 was a spontaneous event. A mob formed, riled up by the rhetoric on r/WSB, and decided to take destructive collective action. By the "incitement" standard r/WSB would be clearly guilty of whatever Facebook, Twitter, Parler, etc. were guilty of prior to Jan. 6. The SEC will find out just how much coordination there was (and probably subpoena Reddit to do so).

FINRA/SEC know that stock-picking analysts like Jim Cramer can easily be manipulating the market, so there are regulations against that.

[Sestak]

https://twitter.com/ddayen/status/1354887002525585409

[SteveRogers]

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?

The discussion on WSB was "everyone buy GME and GME calls now", so people did so, drove GME shares up, causing a short squeeze.

Similarly, Trump said there would be protests on Jan. 6, yelled on Twitter repeatedly about it, then gave a speech at the White House on Jan. 6 saying everyone should go to the Capitol, and they did so. But so far we don't have evidence that Trump directly coordinated with any group about Jan. 6 events. So Trump has done nothing wrong?

How is that any different than stories you see all the time saying "this analyst says that right now you should buy X share" or Jim Cramer telling people every day on CNBC to buy one company or another? Are those collusion?

Your Trump comparison is an ultra-strained reach to try to discredit the small investors. These are (comparably) unsophisticated investors who don't have the ability to control the market themselves. There is no figurehead at the head of this telling people who will do whatever they say what to do.

Clearly the retail investors do have the ability to control the market on GME and AMC when coordinated. The short squeeze didn't "just happen", that's like saying Jan. 6 was a spontaneous event. A mob formed, riled up by the rhetoric on r/WSB, and decided to take destructive collective action. By the "incitement" standard r/WSB would be clearly guilty of whatever Facebook, Twitter, Parler, etc. were guilty of prior to Jan. 6. The SEC will find out just how much coordination there was (and probably subpoena Reddit to do so).

FINRA/SEC know that stock-picking analysts like Jim Cramer can easily be manipulating the market, so there are regulations against that.

Again, the difference is that “incitement” had to be incitement of a crime. The January 6th mob committed a bunch of crimes. If you want to say the same standard applies, you have to point to a crime that was committed here.

[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?"

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?

The discussion on WSB was "everyone buy GME and GME calls now", so people did so, drove GME shares up, causing a short squeeze.

Similarly, Trump said there would be protests on Jan. 6, yelled on Twitter repeatedly about it, then gave a speech at the White House on Jan. 6 saying everyone should go to the Capitol, and they did so. But so far we don't have evidence that Trump directly coordinated with any group about Jan. 6 events. So Trump has done nothing wrong?

How is that any different than stories you see all the time saying "this analyst says that right now you should buy X share" or Jim Cramer telling people every day on CNBC to buy one company or another? Are those collusion?

Your Trump comparison is an ultra-strained reach to try to discredit the small investors. These are (comparably) unsophisticated investors who don't have the ability to control the market themselves. There is no figurehead at the head of this telling people who will do whatever they say what to do.

Clearly the retail investors do have the ability to control the market on GME and AMC when coordinated. The short squeeze didn't "just happen", that's like saying Jan. 6 was a spontaneous event. A mob formed, riled up by the rhetoric on r/WSB, and decided to take destructive collective action. By the "incitement" standard r/WSB would be clearly guilty of whatever Facebook, Twitter, Parler, etc. were guilty of prior to Jan. 6. The SEC will find out just how much coordination there was (and probably subpoena Reddit to do so).

FINRA/SEC know that stock-picking analysts like Jim Cramer can easily be manipulating the market, so there are regulations against that.

Again, the difference is that “incitement” had to be incitement of a crime. The January 6th mob committed a bunch of crimes. If you want to say the same standard applies, you have to point to a crime that was committed here.

Easy, securities fraud. I suspect the current rules are not strict enough to nail the traders, but I'm glad the SEC will try and I'm sure there will be new regulations in the future to guard against this kind of behavior by retail investors.

It would already be illegal if institutional traders agreed to all buy a stock at once to punish a hedge fund.

[Fight for Trump]

Easy, securities fraud. I suspect the current rules are not strict enough to nail the traders, but I'm glad the SEC will try and I'm sure there will be new regulations in the future to guard against this kind of behavior by retail investors.

It would already be illegal if institutional traders agreed to all buy a stock at once to punish a hedge fund.

... because institutional investors have different responsibilities and regulations than individual retail investors? Retail investors playing hot potato based on Internet hype is destructive, but completely different.

[ChiefFireWaterMike]

Truly a glorious few days for all.

HOLD THE LINE

[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?

The discussion on WSB was "everyone buy GME and GME calls now", so people did so, drove GME shares up, causing a short squeeze.

Similarly, Trump said there would be protests on Jan. 6, yelled on Twitter repeatedly about it, then gave a speech at the White House on Jan. 6 saying everyone should go to the Capitol, and they did so. But so far we don't have evidence that Trump directly coordinated with any group about Jan. 6 events. So Trump has done nothing wrong?

How is that any different than stories you see all the time saying "this analyst says that right now you should buy X share" or Jim Cramer telling people every day on CNBC to buy one company or another? Are those collusion?

Your Trump comparison is an ultra-strained reach to try to discredit the small investors. These are (comparably) unsophisticated investors who don't have the ability to control the market themselves. There is no figurehead at the head of this telling people who will do whatever they say what to do.

Clearly the retail investors do have the ability to control the market on GME and AMC when coordinated. The short squeeze didn't "just happen", that's like saying Jan. 6 was a spontaneous event. A mob formed, riled up by the rhetoric on r/WSB, and decided to take destructive collective action. By the "incitement" standard r/WSB would be clearly guilty of whatever Facebook, Twitter, Parler, etc. were guilty of prior to Jan. 6. The SEC will find out just how much coordination there was (and probably subpoena Reddit to do so).

FINRA/SEC know that stock-picking analysts like Jim Cramer can easily be manipulating the market, so there are regulations against that.

Again, the difference is that “incitement” had to be incitement of a crime. The January 6th mob committed a bunch of crimes. If you want to say the same standard applies, you have to point to a crime that was committed here.

Easy, securities fraud. I suspect the current rules are not strict enough to nail the traders, but I'm glad the SEC will try and I'm sure there will be new regulations in the future to guard against this kind of behavior by retail investors.

It would already be illegal if institutional traders agreed to all buy a stock at once to punish a hedge fund.

Where is the fraud? Clearly it is not a requirement of the stock market that you must trade solely on fundamentals. And punishing an investor for how they invest isn't illegal either; the whole idea of a "poison pill" is to punish an investor for their investment decisions. There is no misrepresentation at play; its not like the Redditors are pushing fake news about how GameStop is actually a trillion dollar company. There's plenty of encouragement to buy shares to other small investors, but as has already been discussed that's super-common in financial journalism already. Unless you think this Reddit mob being secretly directed by some kind of investor puppetmaster there's no fraud at work.

I have no idea what kind of rules you think the SEC will put in place here; should they make it illegal to publish which companies are being shorted? Or maybe they should ban non-journalists from talking about companies they want to do well on the market?

[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?"

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?

The discussion on WSB was "everyone buy GME and GME calls now", so people did so, drove GME shares up, causing a short squeeze.

Similarly, Trump said there would be protests on Jan. 6, yelled on Twitter repeatedly about it, then gave a speech at the White House on Jan. 6 saying everyone should go to the Capitol, and they did so. But so far we don't have evidence that Trump directly coordinated with any group about Jan. 6 events. So Trump has done nothing wrong?

How is that any different than stories you see all the time saying "this analyst says that right now you should buy X share" or Jim Cramer telling people every day on CNBC to buy one company or another? Are those collusion?

Your Trump comparison is an ultra-strained reach to try to discredit the small investors. These are (comparably) unsophisticated investors who don't have the ability to control the market themselves. There is no figurehead at the head of this telling people who will do whatever they say what to do.

Clearly the retail investors do have the ability to control the market on GME and AMC when coordinated. The short squeeze didn't "just happen", that's like saying Jan. 6 was a spontaneous event. A mob formed, riled up by the rhetoric on r/WSB, and decided to take destructive collective action. By the "incitement" standard r/WSB would be clearly guilty of whatever Facebook, Twitter, Parler, etc. were guilty of prior to Jan. 6. The SEC will find out just how much coordination there was (and probably subpoena Reddit to do so).

FINRA/SEC know that stock-picking analysts like Jim Cramer can easily be manipulating the market, so there are regulations against that.

Again, the difference is that “incitement” had to be incitement of a crime. The January 6th mob committed a bunch of crimes. If you want to say the same standard applies, you have to point to a crime that was committed here.

Easy, securities fraud. I suspect the current rules are not strict enough to nail the traders, but I'm glad the SEC will try and I'm sure there will be new regulations in the future to guard against this kind of behavior by retail investors.

It would already be illegal if institutional traders agreed to all buy a stock at once to punish a hedge fund.

Where is the fraud? Clearly it is not a requirement of the stock market that you must trade solely on fundamentals. And punishing an investor for how they invest isn't illegal either; the whole idea of a "poison pill" is to punish an investor for their investment decisions. There is no misrepresentation at play; its not like the Redditors are pushing fake news about how GameStop is actually a trillion dollar company. There's plenty of encouragement to buy shares to other small investors, but as has already been discussed that's super-common in financial journalism already. Unless you think this Reddit mob being secretly directed by some kind of investor puppetmaster there's no fraud at work.

I have no idea what kind of rules you think the SEC will put in place here; should they make it illegal to publish which companies are being shorted? Or maybe they should ban non-journalists from talking about companies they want to do well on the market?

The maneuver, if done by institutional traders, would be a clear violation of the Securities  Exchange Act of 1934 and related SEC regulations against collusive trading and market manipulation. If prosecuted in a court it would most likely be classified as a securities fraud case.

The fact that it was done by retail investors in my personal judgement probably means the law and regulations don't cover it. r/WSB found a loophole in the rules, they made money, good for them. But that doesn't make them freedom fighters or anything of the sort. I'm glad the SEC is going after them to see if they violated any rules. The SEC could stop this kind of behavior by requiring brokers to monitor and guard against this activity (which they're basically doing now) and make forums like r/WSB into monitored spaces similar to how Bloomberg chats are monitored.