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CookiePuss
Cake from Outer Space!
Member since 5/05 14007 total posts
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An offshoot of Politics...The Big Squeeze..
Does anyone watch the stock market? There is some very interesting stuff going around with REddit and Game Stop and Bed, Bath and Beyond. Reddit users in a forum started buying up heavily shorted stocks which shot up the price of the stock and caused some big loses for the hedge funds that shorted.
Not much as far as regulation goes because it's just chatter but is it market manipulation? I am very interested to see where this leads especially with a Demo gov't which leads itself more readily to federal oversight of such things.
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Posted 1/26/21 2:43 PM  |
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GoldenRod
10 years on LIF!
Member since 11/06 26792 total posts
Name:
Shawn
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Re: An offshoot of Politics...The Big Squeeze..
I've heard of the story, but haven't dug into it too much.
https://www.cnet.com/news/reddit-and-elon-musks-gamestop-stock-surge-its-a-ponzi-scheme/
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Over the past week, the finance world watched in shock as GameStop stock rose to unthinkable levels. On Tuesday evening, it hovered around $224 per share, up more than 6,000% -- that's not a typo -- from historic lows of around $3.30 per share in the summer of 2019. Even Elon Musk tweeted about it, pointing his 43 million followers to a link of the Reddit community investing in GameStop.
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But when the memes stop and the excitement goes away, GameStop will go back to being that struggling video game retailer at a time when gaming is increasingly moving toward streaming and the idea of stepping into a physical store is still a nerve-wracking prospect during a pandemic. At that point, stock analysts say, whoever's left holding shares will see their value evaporate.
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I don't see how any of this could be illegal, but it could cost a lot of people a lot of money when the stock crashes. But, that could happen with almost any stock that is artificially inflated.
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| Posted 1/26/21 2:52 PM |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14007 total posts
Name:
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Re: An offshoot of Politics...The Big Squeeze..
It's more that it's the hedge funds that got hurt...not the oddlot investor.
The oddlot went out and looked to see what was heavily shorted and then started talking about buying. If the oddlot investor starts buying up the stock and moving the price - it then can force those holding the shorts to cover.
I find it interesting as in who got hurt.
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| Posted 1/26/21 3:06 PM |
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GoldenRod
10 years on LIF!
Member since 11/06 26792 total posts
Name:
Shawn
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Re: An offshoot of Politics...The Big Squeeze..
The people shorting the stock are currently getting hurt, but it could be casual investors who see it skyrocketing, and want to get in on this "investment". Then, when the artificial bubble bursts, they are holding $10 stocks that they bought for $300.
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| Posted 1/26/21 3:11 PM |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14007 total posts
Name:
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Re: An offshoot of Politics...The Big Squeeze..
The hedge funds had the stock shorted...reddit started talking about it and a buying frenzy started. So, as the stock is climbing...the hedge funds are now concerned because they are short on their positions so to cover it - they now have to buy this inflated stock price to cover the short. But you are right- they needs to be an exit strategy for those that are buying.
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| Posted 1/26/21 3:28 PM |
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GoldenRod
10 years on LIF!
Member since 11/06 26792 total posts
Name:
Shawn
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Re: An offshoot of Politics...The Big Squeeze..
The people that are shorting are "out" roughly $3 billion dollars this year. I guess a big part of the loss for investors who are shorting, is when they have to return the stocks. If they can ride out the bubble, they won't be too bad off. The people who buy at the peak, right as it collapses, those are the ones potentially in big trouble.
It's crazy how a bunch of random people on the Internet can make a stock's value change that drastically.
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| Posted 1/26/21 3:39 PM |
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MarathonKnitter
HAPPY
Member since 2/07 17374 total posts
Name:
EMBRACING CHANGE
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Re: An offshoot of Politics...The Big Squeeze..
Posted by GoldenRod
It's crazy how a bunch of random people on the Internet can make a stock's value change that drastically.
this.
i guess it goes to show that the "little guy" has more power than they thought. imagine if all us "little guys" organized and put our power together for good.
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| Posted 1/26/21 4:29 PM |
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Jenhos
Maeve
Member since 6/05 3273 total posts
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Re: An offshoot of Politics...The Big Squeeze..
It isn't illegal but could have very big impacts to some. I am watching this one closely.
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| Posted 1/26/21 6:36 PM |
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GoldenRod
10 years on LIF!
Member since 11/06 26792 total posts
Name:
Shawn
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Re: An offshoot of Politics...The Big Squeeze..
Posted by Jenhos
It isn't illegal but could have very big impacts to some. I am watching this one closely.
That's what we've been saying. I'm watching AMC and BlackBerry more than GameStop. GameStop is a one-off experiment. If the same thing happens with AMC, BlackBerry, and others, then potentially any company's stock could be affected.
And right now, AMC does seem to be following in GameStop's shadow.
It's going to hinge on whether or not GS's CEO change, and other factors make it viable again and can justify an increase in stock prices, and if AMC can recover from the pandemic.
If they price just shoots up artificially, then crashes quickly, that's going to cause a lot of problems....
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| Posted 1/26/21 7:27 PM |
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LSP2005
Bunny kisses are so cute!
Member since 5/05 19453 total posts
Name:
L
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Re: An offshoot of Politics...The Big Squeeze..
I am watching it. I found it interesting that all the major consumer side investor companies were locking people out of their accounts today. I have been following this since Friday. I did not invest in it though.
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| Posted 1/26/21 7:47 PM |
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BFNY516
LIF Adult
Member since 7/20 1187 total posts
Name:
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An offshoot of Politics...The Big Squeeze..
I think it's crazy how people are going after the Redditors but it's cool when the big boys do it. Anyone who is in that Reddit group knows that they were doing this a few weeks ago (and successfully) with another stock, too.
Sorry not sorry for beating them at their own game?
Message edited 1/27/2021 5:21:41 PM.
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| Posted 1/27/21 5:21 PM |
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BFNY516
LIF Adult
Member since 7/20 1187 total posts
Name:
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An offshoot of Politics...The Big Squeeze..
Someone posted "I know this GameStop stuff is crazy but remember that this hurting real people who have multiple boats."
I saw threads where people were able to make money to pay for a medical bill, or give money to their mother. One person was able to give money to their sister to pay for treatment. One person was faced with a huge vet bill for their beloved dog and was able to proceed with the surgery.
Some people in the group are donating money to help the homeless in their community.
edited for spelling
Message edited 1/27/2021 5:25:48 PM.
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| Posted 1/27/21 5:22 PM |
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GoldenRod
10 years on LIF!
Member since 11/06 26792 total posts
Name:
Shawn
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Re: An offshoot of Politics...The Big Squeeze..
Posted by BFNY516
Someone posted "I know this GameStop stuff is crazy but remember that this hurting real people who have multiple boats."
I saw threads where people were able to make money to pay for a medical bill, or give money to their mother. One person was able to give money to their sister to pay for treatment. One person was faced with a huge vet bill for their beloved dog and was able to proceed with the surgery.
Some people in the group are donating money to help the homeless in their community.
edited for spelling
That happens with all bubbles. In the Stock Market, people will make money, for any number of reasons. The big concern is when the bubble bursts and the price goes from $300 back down to under $10, and people lose a lot of money.
It's basically legal gambling. People will make a lot of money until they don't.
When stocks are artificially manipulated, it causes more problems, because the company itself isn't justifying the price, so when it drops, it will drop fast and far....
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| Posted 1/27/21 5:36 PM |
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seaside
LIF Adult
Member since 6/08 3101 total posts
Name:
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Re: An offshoot of Politics...The Big Squeeze..
Posted by GoldenRod
Posted by BFNY516
Someone posted "I know this GameStop stuff is crazy but remember that this hurting real people who have multiple boats."
I saw threads where people were able to make money to pay for a medical bill, or give money to their mother. One person was able to give money to their sister to pay for treatment. One person was faced with a huge vet bill for their beloved dog and was able to proceed with the surgery.
Some people in the group are donating money to help the homeless in their community.
edited for spelling
That happens with all bubbles. In the Stock Market, people will make money, for any number of reasons. The big concern is when the bubble bursts and the price goes from $300 back down to under $10, and people lose a lot of money.
It's basically legal gambling. People will make a lot of money until they don't.
When stocks are artificially manipulated, it causes more problems, because the company itself isn't justifying the price, so when it drops, it will drop fast and far....
A very smart colleague of mine just said a lot of what you have been saying. I have learned a lot following this and listening to you all. You relly have to know what you are doing when you invest. It seems you could just unknowinglybe playng a big, high-stakes game of chicken.
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| Posted 1/27/21 5:44 PM |
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BFNY516
LIF Adult
Member since 7/20 1187 total posts
Name:
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Re: An offshoot of Politics...The Big Squeeze..
Posted by seaside
Posted by GoldenRod
Posted by BFNY516
Someone posted "I know this GameStop stuff is crazy but remember that this hurting real people who have multiple boats."
I saw threads where people were able to make money to pay for a medical bill, or give money to their mother. One person was able to give money to their sister to pay for treatment. One person was faced with a huge vet bill for their beloved dog and was able to proceed with the surgery.
Some people in the group are donating money to help the homeless in their community.
edited for spelling
That happens with all bubbles. In the Stock Market, people will make money, for any number of reasons. The big concern is when the bubble bursts and the price goes from $300 back down to under $10, and people lose a lot of money.
It's basically legal gambling. People will make a lot of money until they don't.
When stocks are artificially manipulated, it causes more problems, because the company itself isn't justifying the price, so when it drops, it will drop fast and far....
A very smart colleague of mine just said a lot of what you have been saying. I have learned a lot following this and listening to you all. You relly have to know what you are doing when you invest. It seems you could just unknowinglybe playng a big, high-stakes game of chicken.
And then you have disruptors who are also wise & scare Wall Street.
When you see what some entities are doing, like Robinhood, it's not right.
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| Posted 1/27/21 5:49 PM |
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GoldenRod
10 years on LIF!
Member since 11/06 26792 total posts
Name:
Shawn
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Re: An offshoot of Politics...The Big Squeeze..
Posted by BFNY516
Posted by seaside
Posted by GoldenRod
Posted by BFNY516
Someone posted "I know this GameStop stuff is crazy but remember that this hurting real people who have multiple boats."
I saw threads where people were able to make money to pay for a medical bill, or give money to their mother. One person was able to give money to their sister to pay for treatment. One person was faced with a huge vet bill for their beloved dog and was able to proceed with the surgery.
Some people in the group are donating money to help the homeless in their community.
edited for spelling
That happens with all bubbles. In the Stock Market, people will make money, for any number of reasons. The big concern is when the bubble bursts and the price goes from $300 back down to under $10, and people lose a lot of money.
It's basically legal gambling. People will make a lot of money until they don't.
When stocks are artificially manipulated, it causes more problems, because the company itself isn't justifying the price, so when it drops, it will drop fast and far....
A very smart colleague of mine just said a lot of what you have been saying. I have learned a lot following this and listening to you all. You relly have to know what you are doing when you invest. It seems you could just unknowinglybe playng a big, high-stakes game of chicken.
And then you have disruptors who are also wise & scare Wall Street.
When you see what some entities are doing, like Robinhood, it's not right.
Robinhood has been doing shady stuff for years. I don't know how they can just stop their clients from buying particular stocks.
TD Ameritrade is doing the same thing.
I'm pretty sure I know *why* they are doing it... to protect hedgefunds... but I don't know how and why they are able to do that.
IMO, "It's too volatile" is not a reason to stop the purchase of stocks. Sure, but warnings up to alert clients that the stock has gone from about $10 to $450 to $100 to $200 all within a few days, but if people want to gamble, let them.
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| Posted 1/27/21 6:01 PM |
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BFNY516
LIF Adult
Member since 7/20 1187 total posts
Name:
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Re: An offshoot of Politics...The Big Squeeze..
Posted by GoldenRod
Posted by BFNY516
Posted by seaside
Posted by GoldenRod
Posted by BFNY516
Someone posted "I know this GameStop stuff is crazy but remember that this hurting real people who have multiple boats."
I saw threads where people were able to make money to pay for a medical bill, or give money to their mother. One person was able to give money to their sister to pay for treatment. One person was faced with a huge vet bill for their beloved dog and was able to proceed with the surgery.
Some people in the group are donating money to help the homeless in their community.
edited for spelling
That happens with all bubbles. In the Stock Market, people will make money, for any number of reasons. The big concern is when the bubble bursts and the price goes from $300 back down to under $10, and people lose a lot of money.
It's basically legal gambling. People will make a lot of money until they don't.
When stocks are artificially manipulated, it causes more problems, because the company itself isn't justifying the price, so when it drops, it will drop fast and far....
A very smart colleague of mine just said a lot of what you have been saying. I have learned a lot following this and listening to you all. You relly have to know what you are doing when you invest. It seems you could just unknowinglybe playng a big, high-stakes game of chicken.
And then you have disruptors who are also wise & scare Wall Street.
When you see what some entities are doing, like Robinhood, it's not right.
Robinhood has been doing shady stuff for years. I don't know how they can just stop their clients from buying particular stocks.
TD Ameritrade is doing the same thing.
I'm pretty sure I know *why* they are doing it... to protect hedgefunds... but I don't know how and why they are able to do that.
IMO, "It's too volatile" is not a reason to stop the purchase of stocks. Sure, but warnings up to alert clients that the stock has gone from about $10 to $450 to $100 to $200 all within a few days, but if people want to gamble, let them.
What bothers me too is that RH is backed by big $. They are all in cahoots. They don’t want the little guys in their big game and try to stop it. I hope they are toast after this. My brokerage account didn’t play games thankfully.
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| Posted 1/27/21 6:11 PM |
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CookiePuss
Cake from Outer Space!
Member since 5/05 14007 total posts
Name:
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Re: An offshoot of Politics...The Big Squeeze..
The only reason I can think that RH and TD are halting trading on their platforms is a liquidity scare. If there is a lot of margin calls and short covering - the hedge funds have to sell in to the market which can cause tremendous downward pressure and could cause capitulation in the markets sending them in a spiral.
I think with GME - they are all playing chicken. If the initial investors are still in - they are going to loss. It only makes sense when the shorts are outstanding.
I am not sure I would say this is market manipulation. The short report is out there. They read it and saw that the hedge funds shorted a 140% of the outstanding GME stock. The Hedge funds got played at their own game.
I don't think that RH or TD should restrict the trading. There are stops gaps in the market already. They don't do this to the big players.
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| Posted 1/27/21 6:37 PM |
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