Pretty certain the politicians in Washington D.C. won’t do anything for GME shorts. If they have/had enough clout, they would have gone to the exchanges. But it’s too late now, big money as in billions is on both sides. I doubt the Robinhooders manage billions in GME so they are along for the ride at this point.
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gotta keep in mind that some of these hedge funds are tied to companies that provide 401Ks and retirement schemes or corporations that employ many people… so yeah, the hedge funds will send the media after the politicians/feds if they don’t get their bailout and use the media to make a scandal out of it saying that the politicians/feds are allowing hackers to steal billions from people’s retirement funds or that these companies have to do mass layoffs and make the average naive public who don’t understand what happened or that no real hacking occurred angry, and make many politician’s constituents will be very angry and force their hand and bailout.
Will be like 2008 again (car industry and banks)… government bail out of these multibillion dollar corporations that made bad investments when these companies send the media after the feds under the guise of mass layoffs, people’s retirement funds liquidated, etc. to pressure them into it due to the average moronic american public…
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The federal government is not going to bail out the GME shorts. Short sellers are not loved by anyone. lol
Of course, if enough Robinhooders lost money, then if anything crooked happened the politicians and regulators might take notice.
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lol flag patrol out and about this morning.
There’s an alphabet thread you should be tending to.
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OP’s message was hidden like 15 minutes after he posted it.
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Real life viscious market PvP is happening along with some “creative use of game mechanics”
(nobody with any sense should go anywhere near that stock right now; it’s a trap, a bubble and a giant irrational game of chicken all rolled into one and every single new person stepping in at this stage of the “game” will almost certainly lose everything they put in)
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It’ll be a good year for some accountants and tax preparers this filing season and, if GME is any indication, next filing season too. Day trader tax returns aren’t necessarily cheap so they better make money. lol
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This is what class warfare looks like in 2021.
AMC
TO THE MOON
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Me and a friend are looking at TVs and see one for $1000.
Friend gives me $1000 and I promise to get him the TV in a couple weeks.
I’m expecting the TV to go on sale for $900 so that I can pocket the difference.
Instead of it going on sale, other people buy the TV and raise the price to $1200.
I still have my friends $1000 and he wants his TV now.
I now have to buy the TV for $1200 and lose $200 of my own money.
The people who bought out the TVs first (Reddit) make a bunch of money.
Me the (Big Stock Company’s) lose money.
So what happened is that Reddit found out there was a BUNCH of open-ended promises to buy GameStop stock. So they bought the stocks which raised the price and now the big company’s are forced to fulfil their promise to buy and have to pay the higher price.
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you sort of understand it. I’ll give you both a laymans explanation.
First to understand a short sell you must think of a piece of stock as a physical item(this helps me at least).
If I see a stock of a company that is selling at $10 a share and for whatever reasons I think it is going to go down in price I will “short” the stock.
I tell my broker. My broker loans me a share - think a physical item. This “share” is something the broker has on inventory. Brokers keep stocks lying around in their warehouse for this and other reasons. So the broker gives me the share and I sell it to someone else for $10.
So where does that leave us:
The buyer has the “share”.
I have $10 straight cash homie.
My broker is has a space on their shelf in the warehouse for a share that I owe them back
Now the question is how do I get the broker a share back? They dont want just any share. They want a specific share that represents ownership of that specific company, the same one they loaned me of course. How do I get shares? Well I buy them. I have $10 to spend on buying a share of that company back and giving the broker their share back.
If my hunch pays off and the stock price for that company goes down in a few weeks and is now $5. Great. that $10 I have, I can use $5 of it to buy a share and give the broker what I owe them - a share of that company. Profit - I made $5 bucks.
Gamestop - The deal with game stop is this. They are a bad company. Not all their fault, its their brick and mortar and console based business model. It is what it is.
So giant Hedge Funds are shorting them. Add the words million and billion to the numbers I gave and you will understand what we’re talking about. They took out huge short positions betting gamestop would go lower and planned on selling when it did.
The little guys dont like hedge funds for lots of reasons I wont get into. So they decided to band together. So for example a hedge fund may have bought gamestop at $10 a share 2 months ago and spend 5 million on it. Little guy says screw you and pumps the share price to over $300 now. The hedge fund spent 5 million on shares. The brokers want their shares back. The hedge fund would have to spend about 150 million to buy enough shares to give back to their broker. They only have 5 million. They lost a lot of money replacing those shares.
If a broker sees a stock going up like that they often call in shares. They want to be assured the short seller can afford to pay back the shares. Your broker might not even let you borrow the shares to short a good stock like apple, why would they. And if you’re wrong you cant just sit on them. If you are wrong about a stock whoever loaned you the share might not be convinced you can pay back if it gets worse and worse and worse, and so they will call in the stock, forcing you to repay it even if its gone up. They want to make sure they get their share back.
The brokers make money in this whole processes usually by charging you a commission fee. They are the ones loaning you the share(or finding someone who will) they do the actual trades etc. so whether you make money or not, you are paying them a minimum commission. Thats their angle.
A Wow Example: Wow does not provide anything like this but the closest using your example could be this.
Prices of armor kits are 20 gold on the ah but you think that price is going down. I ask my guild, hey I want to borrow an armor kit from the guild bank and I will replace the armor kit later. They say sure just make sure you replace it in a week. You sell the armor kit for 20 gold on the ah. A week later they are selling for 10g. You buy an armor kit for 10gold and put it back in the guild bank. You profit 10 gold. The guild gets nothing unlike brokers irl but its the closest scenario.
the other outcome is a week later the price of kits is 30 gold. You have to replace the kit so you buy it and put it in the guild bank. You lost 10 gold on this deal.
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Aaaaaand it’s gone
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Yeah I see it tanking… down 15% already.
I mean it’s still early but various brokers already started putting limitations on it (and just read Robinhood also just restricted trading for many stocks now), and it was up to 490 in after hours I believe. The one thing about investing is it can be stressful and nerve wracking, especially when it comes to this kind of craziness.
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I wouldn’t touch it with a 10 foot polearm.
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I’m expecting below $200 by Feb 1st (but too chicken to short it).
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A big hedge fund over-sold short shares and some people realized they could cash in by fleecing the hedge fund when they tried to cover the short sales. Sell short means you sold options the shares before you had them with the plan of buying them back cheaper when you had to cover the sale. This hedge fund for some reason sold 138% of the available shares and so it didn’t take that many people buying shares to screw them over.
People are saying this could be the end of hedge funds as we know them.
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Remember that the investment banks were leveraged as much as 30-to-1 back in the mid-2000s. Leverage is the only reason for a hedge fund’s existence. Otherwise, they might as well run a mutual fund. As long as the Federal Reserve provides cheap and easy money, there will be hedge funds.
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But hedge funds “as we know them” will probably not exist anymore due to these short-crashers. They won’t be able to make huge 100% plays on a single company because the crashers could target it. They will be more cautious and rational in their targets.
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Dunno, I’d just go with simpler:
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Some big shot investors decided gamestop was doomed, so they bet that it would lose value (a “short sell”)
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A group decided to punish them and then bought a ton of gamestop stock, driving the price up
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The short sellers got smoked and lost a lot of money because they “bet wrong”
But, in the end, this little trick doesn’t actually mean the big shots were wrong and gamestop isn’t doomed (they likely are), they just got a taste of the risk they chose to take and how small investors can punish you if you overextend.
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Very true.
Bloomberg article on hedge funds taking losses:
“Hedge-Fund Titans Lose Billions to Reddit Traders Running Amok”
‘https://finance.yahoo.com/news/cohen-sundheim-lose-billions-reddit-022818276.html’
The Vandals have taken Rome.
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