And what about all the people who watch MSNBC and CNBC and Cramer, do they need to stop pushing stops as good or bad too? They tell lots of people "who don't care about hedge funds or any of that, but just got the impression from the news that hey this stock is going way up and that must mean it is a way to make a quick buck" too.
None of this could have happened if they weren't shorting GME at 143%+ of float. They were greedy, this is the consequence. In 2006-2008, they ALL were greedy and so the government had to bail them out. No lessons were learned. If the SEC wants to do something, remove these instruments that allow infinite leverage and collapses.
They were greedy, they over leveraged their positions, and when the market called them out on it exactly like it’s supposed to, they just turned the market off. Im almost surprised someone hasn’t been arrested for that move yet.
We let big players partake in risky things like shorting GME above 100% float because we don't care if they lose. It's the same reason we allow them to invest in companies like Theranos. They know the risks they were getting into and will still be fine without a extra 0 in their bank account. Regular followers of WSB are aware of the risks as well, so I'm fine with them attempting a short squeeze. The problem is that they're encouraging regular people to join their crusade against hedge funds who are most likely going to time the market incorrectly. What's worse is that most of the world, including politicians are cheering them on.
Except hedgefunds only trade money from accredited investors, i.e. people who can afford to lose a lot of money. They also typically aren't swayed by TikTok videos and short explainers of how shorts work designed to hype up GSE. The point is that Robinhood investors are being exploited.
I disagreed with the statement about WSB users knowing what they're doing. Upon closer reading I think our larger points are the same. All over the internet I'm seeing sleazy promotions for GameStop stock targeted at young people who are inexperienced with trading. Anyone left holding GameStop stock when this ends will lose a lot, i.e. most of WSB.
Then you haven't been paying attention to WSB. WSB knows full well they will lose everything. We call it Loss Porn and it gets us going. When you see 5,6,7 figures in losses you get desensitised to it. It's a casino, yes we sometimes make money, we call that the first time, you know, the first one is free.
Besides the jokes and the memes, Chamath went on CNBC and argued that WSB provided very good due diligence in some instances. Yes a lot of it is utter garbage, no doubt, but when there are specialists there able to call each other out, you get to see good analysis.
What a lot of you are missing is that this isn't happening within your little WSB playground anymore. It's just a regular stock frenzy now, it's not even really all that relevant anymore how it started.
Haven't been paying attention... It must not be in the news, right? This is more of a niche interest, not getting any attention. Hard to pay attention to. You really have to be focused on WSB subreddit to know what's going on, right? It's really a few key people understand it. Anyways, yeah, GameStop is a great company with a great stock and some evil hedgefund is going to lose billions for trying to manipulate the price!
And that is a straw-man, I never claimed any of what you are accusing. You have nothing to say, so you twist the words. Quite sad actually to see this in Hackernews of all places.
I claimed that if you have your information about WSB from anyone but yourself, you have most likely been duped in some way or another and that is evident by how you talked about WSB, full of ignorance.
> Anyways, yeah, GameStop is a great company with a great stock and some evil hedgefund is going to lose billions for trying to manipulate the price!
Nobody said GME is a great company. What are the odds the proletariat on reddit throwing money into the fire pit in an attempt to hurt the rich is attempting to con you, and what are the odds somebody who stands to lose billions and already lost is?
No one who has been in WSB for a while wants the publicity, believe me. No one who has been around views this as some noble moral crusade. But WSB went from <1M subs in 2019 to 2M by end of 2020, to 6M now. We didn’t magically orchestrate it, they flocked to WSB after every media outlet in the world mentioned it for a week+ straight since Gamestop happened. Its an open forum and we don’t decide who joins, or when, or what they post. When 4M new people show up in a sub of 2M in a week, its Theseus’ ship twice over at warp speed.
Yep, this is my point, not that it's necessarily WSB's fault that a bunch of regular people are jumping on a bandwagon and going to get screwed, just that it is happening and is bad. I think it is more the fault of mainstream news editors and Elon Musk than of WSB regulars.
You're mushing together two separate issues. Shorting GME at 100+ is not in itself a problem. (There's an argument that it dilutes the stock, makes it harder for the underlying company to turn around, because market sentiment is already against them, see investment reflexivity theory, etc.)
There's a problem with bailing out big companies again and again. While not bailing out small investors (directly).
Every stock trading app/site/service requires submitting tons of "risk declaration" forms. (Sure, all of it is next next finish. It's the EULA/TOS all again, but with money.) And that's the problem.
I haven’t watched Cramer regularly in a long time, but unless he changed, this isn’t what he does.
He has an entertainment component, but fundamentally encourages people to educate themselves and manage a portfolio of stocks who choose to do so.
The mob bullshit we’re seeing now is just the new normal - brigades of internet idiots, motivated by profit or ignorance to run around like a drunken monkey. It’s no different than the political drama we’ve seen fomented by irresponsible social media like Twitter, Facebook, Reddit, etc.
CNBC / Cramer type stuff is pretty bad too IMO, but way less mainstream than network news talking about how a single stock is a rocket ship and making all these regular joes (just like you!) oodles of cash.
Greed is really only a problem when your actions ultimately hurt someone else.
In general, shorting stocks is a beneficial action because it helps prevent shares from becoming overvalued.
So, yea, the fact that GME had 143% of its shares shorted is a function of greed. But, no, greed in this case was not a problem so long as GME's share price was fairly valued.
None of this could have happened if they weren't shorting GME at 143%+ of float. They were greedy, this is the consequence. In 2006-2008, they ALL were greedy and so the government had to bail them out. No lessons were learned. If the SEC wants to do something, remove these instruments that allow infinite leverage and collapses.