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

[Santander]

Institutional investors are led and staffed by professionals who have ethical and fiduciary responsibilities to individuals, retirees, governments, unions, etc. They need regulation to prevent them from certain activities. If there were any professionals involved, they should be disciplined, but we're mostly talking about anonymous/semi-anonymous randoms talking on the Internet.

[Torie]

So brokerage firms shut down purchases when big hedge funds out of "avarice" are losing their shirts to bail them out. Robin Hood in reverse.

The Torie man has never bought a stock. He is so clueless that he buys mostly Vanguard Index funds and puts them on ignore. One he has held for 50 years now. I was looking for such funds even before they existed. God I am old!

[Sestak]

https://twitter.com/sensanders/status/1354930238061481987?s=21

[Santander]

So brokerage firms shut down purchases when big hedge funds out of "avarice" are losing their shirts to bail them out. Robin Hood in reverse.

The Torie man has never bought a stock. He is so clueless that he buys mostly Vanguard Index funds and puts them on ignore. One he has held for 50 years now. I was looking for such funds even before they existed. God I am old!

Jack Bogle was one of the greatest visionaries of the 20th century.

[Torie]

So brokerage firms shut down purchases when big hedge funds out of "avarice" are losing their shirts to bail them out. Robin Hood in reverse.

The Torie man has never bought a stock. He is so clueless that he buys mostly Vanguard Index funds and puts them on ignore. One he has held for 50 years now. I was looking for such funds even before they existed. God I am old!

Jack Bogle was one of the greatest visionaries of the 20th century.

The Torie man decades later actually had dinner with Bogle. I showed him a letter I had written him in 1979, and his response back. The whole Vanguard saga was an accident of history, when Wellington fired him in 1976. He lashed back, and essentially stripped Wellington of its control of the its mutual funds as its "advisor." The rest is history, and Vanguard is still the only true mutual fund company out there, and now by far the largest in the world. He is one man who made this planet a hell of a lot better than it was, beyond per adventure. RIP St Jack. You are one of my greatest heroes, right up there with my Dad. I can give one no higher compliment.

[Rules for me, but not for thee]

The far left leading the charge against this nonsense for once.  If /r/WSBs is committing a crime, so have the hedge funds for decades.

[H.E. VOLODYMYR ZELENKSYY]

The far left leading the charge against this nonsense for once.  If /r/WSBs is committing a crime, so have the hedge funds for decades.

“For once”? Are you under the impression that the far left has been pro-Wall Street up until now?

[Rules for me, but not for thee]

snip

The far left leading the charge against this nonsense for once.  If /r/WSBs is committing a crime, so have the hedge funds for decades.

“For once”? Are you under the impression that the far left has been pro-Wall Street up until now?

Not that so much but since the Occupy movements (which were mostly grassroots), not much traction ever was made on this. Obama bailed out Wall St, so did Trump with little push back.

[Absentee Voting Ghost of Ruin]

<previous posts cut for size>

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.

I am concerned that this may end up being an example of a deeply destructive pattern and practice in the United States where regulators avoid confronting major players, because doing so is difficult, yet still come down hard on market participants who lack the clout to push back.

For example, this story from back in 2018: SEC, strapped for funds, can't police financial markets.  This whole affair is outside my expertise, so I may very well be wrong. But the optics of it for the finance-government complex are French Revolution levels of terrible.

[walleye26]

Let’s be real here: before this week, nobody ever manipulated the market? Do I have that right?

[Secretary of State Liberal Hack]

This whole thing is a nice expose on the hollowness and stupidity of modern american populism which transcends the party divide. You have politician ranging from Ted Cruz to Alexandria Ocasio-Cortez arguing that this is fight between the little guy angry at wall street which is using it's institionla power to complain about them but are loosing. This narrative of Golliath vs Davis has little factual accuracy but a lot of emotional power so it's get people angry.

The actual thing going on is a classic bubble(the idea that only short-sellers will be left holding the bag is ridiculous) with early investors like the the redditors that promoted it and Blackrock capital gaining billions of dollars out this rush of stupidity. The populist left and right seem to have united in seeing this transfer of wealth between the two hedge funds aidded by a pump and dumb esque promotion campagin as a populist revolt and decrying all the experts as being in the pocket of wall street

https://twitter.com/steveniweiss/status/1354827133852528647

[Born to Slay. Forced to Work.]

This whole thing is a nice expose on the hollowness and stupidity of modern american populism which transcends the party divide. You have politician ranging from Ted Cruz to Alexandria Ocasio-Cortez arguing that this is fight between the little guy angry at wall street which is using it's institionla power to complain about them but are loosing. This narrative of Golliath vs Davis has little factual accuracy but a lot of emotional power so it's get people angry.

The actual thing going on is a classic bubble(the idea that only short-sellers will be left holding the bag is ridiculous) with early investors like the the redditors that promoted it and Blackrock capital gaining billions of dollars out this rush of stupidity. The populist left and right seem to have united in seeing this transfer of wealth between the two hedge funds aidded by a pump and dumb esque promotion campagin as a populist revolt and decrying all the experts as being in the pocket of wall street

https://twitter.com/steveniweiss/status/1354827133852528647

I mean there are hedge funds loosing billions of dollars, possibly facing criminal charges and bankruptcy

[Secretary of State Liberal Hack]

This whole thing is a nice expose on the hollowness and stupidity of modern american populism which transcends the party divide. You have politician ranging from Ted Cruz to Alexandria Ocasio-Cortez arguing that this is fight between the little guy angry at wall street which is using it's institionla power to complain about them but are loosing. This narrative of Golliath vs Davis has little factual accuracy but a lot of emotional power so it's get people angry.

The actual thing going on is a classic bubble(the idea that only short-sellers will be left holding the bag is ridiculous) with early investors like the the redditors that promoted it and Blackrock capital gaining billions of dollars out this rush of stupidity. The populist left and right seem to have united in seeing this transfer of wealth between the two hedge funds aidded by a pump and dumb esque promotion campagin as a populist revolt and decrying all the experts as being in the pocket of wall street

https://twitter.com/steveniweiss/status/1354827133852528647

I mean there are hedge funds loosing billions of dollars, possibly facing criminal charges and bankruptcy

The main people getting rich from this are other hedge funds.

[PSOL]

snip

The far left leading the charge against this nonsense for once.  If /r/WSBs is committing a crime, so have the hedge funds for decades.

“For once”? Are you under the impression that the far left has been pro-Wall Street up until now?

Not that so much but since the Occupy movements (which were mostly grassroots), not much traction ever was made on this. Obama bailed out Wall St, so did Trump with little push back.

Occupy Wall Street was ran and participated by very, very different people than the Democratic Party establishment. They did and continue to rail against Wall Street, just that they are wholly ignored by the media.

[SInNYC]

What is sad about all this is that the reddit people can actually cause an economic collapse if done on a bigger scale. But the lesson to be learned isnt that we need rules against them. The whole system is easily manipulated by those with money.

The stock market has nothing to do with the economy and little to do with a company's performance. But it is taken as axiomatic that trading of 28th derivatives is essential to a modern economy.

[SevenEleven]

This whole thing is a nice expose on the hollowness and stupidity of modern american populism which transcends the party divide. You have politician ranging from Ted Cruz to Alexandria Ocasio-Cortez arguing that this is fight between the little guy angry at wall street which is using it's institionla power to complain about them but are loosing. This narrative of Golliath vs Davis has little factual accuracy but a lot of emotional power so it's get people angry.

The actual thing going on is a classic bubble(the idea that only short-sellers will be left holding the bag is ridiculous) with early investors like the the redditors that promoted it and Blackrock capital gaining billions of dollars out this rush of stupidity. The populist left and right seem to have united in seeing this transfer of wealth between the two hedge funds aidded by a pump and dumb esque promotion campagin as a populist revolt and decrying all the experts as being in the pocket of wall street

Populists aren't exactly known for their critical thinking skills.

[Fmr. Gov. NickG]

So what is GameStop going to do with all this extra new capital?

[SevenEleven]

So what is GameStop going to do with all this extra new capital?

Stiff their employees even harder and close some more stores, probably.

[MaxQue]

So what is GameStop going to do with all this extra new capital?

Nothing, because capital isn't real.

[KaiserDave]

This is market manipulation, but Wall Street has gotten away with market manipulation forever. So...


In any case this just makes the case for a well managed regulatory apparatus that isn't in the pocket of Wall Street. But this isn't something we've just needed now.

[KaiserDave]

What we may see is a few of the Redditors get punished, and while they may have broken the law, it's obscene that Wall Street faced no punishment for what happened in 2008, or their rampant criminality in general.

Thankfully we have Sherrod as Banking Chair now, who will actually try to hold them accountable for their culture of deception.

[Hindsight was 2020]

So Dave Portnoy of Barstool Sports sent his troll army after Steve Cohen and harassed his family 😡

[True Federalist (진정한 연방 주의자)]

So what is GameStop going to do with all this extra new capital?

What extra capital?  They didn't issue any new shares.  Conceivably they could do a stock offering to take advantage of their stock being overvalued, but by the time they could likely do that, the stock price will likely have returned to normal.

[Fudotei]

So what is GameStop going to do with all this extra new capital?

What extra capital?  They didn't issue any new shares.  Conceivably they could do a stock offering to take advantage of their stock being overvalued, but by the time they could likely do that, the stock price will likely have returned to normal.

There were a couple major shareholders of GME who had their stuff balloon. Not directly related to the first comment - these people should sell and keep liquid $750m, right? Guy who had 13.9% had that.

https://www.marketwatch.com/story/gamestop-shareholder-sells-off-stake-valued-at-over-1-billion-11611855951

Go figure...

[Yoda]

So Dave Portnoy of Barstool Sports sent his troll army after Steve Cohen and harassed his family 😡

Uggghhh. r/awfuleverything