It has been interesting to watch the WSB narrative shift over time. It's a real-time experiment that optimizes for the best messaging to convince casual Redditors to put their money into stocks in ways that benefit earlier WSB members.
At this point, they've convinced a lot of people that buying $GME at obviously inflated prices and never selling it is somehow an altruistic move to take down all of Wall Street that might also make them so rich they can retire early. Of course, it should be obvious that no one is going to get rich by never selling the stock, but that message gets buried among the memes.
It was fun to watch at first, but now it's just sad to watch so many people pour real money into something that won't generate the outcome they've been promised.
Many of them are buying because they're being told it's a way to hurt the people who caused the 2008 financial crisis. In reality, they don't have a good idea of who's benefiting and who's losing, nor what those parties may have done to cause the financial crisis.
Given the insane volume on both sides, I think Reddit is a small fraction of the buyers. Professional traders and big firms are probably the bulk of both sides. And with the price so high, I'm sure there are plenty of retail investors trying to short it. Basically, both groups are on both sides.
But also, the subreddit is trying to weaponize anger against Wall Street for the 2008 crisis into a generalized anger against all hedge funds and investment firms, regardless of whether these firms are actually guilty of anything. Melvin Capital didn't exist until 2014, but it doesn't matter. They're automatically guilty because they're a hedge fund. People on WSB are telling stories about how their families suffered in 2008 and therefore they are never going to sell their GME stock.
WSB mods are deleting posts advising against holding GME. There is a pretty concerted effort on the subreddit to get people to buy more GME and to hold. And the people that do so are going to be the ones holding the bag when the bubble ends.
If you're cynical, you might wonder if redditors are the "mark", and some of these posters are intentionally trying to screw them out of their money. Regardless, the idea that this specifically hurts the people that caused the financial crisis is unsubstantiated.
Misunderstandings like this are part of the problem.
Anyone can take out a short position. It's only marginally more complicated than buying a stock. Plenty of retail investors are taking short positions, too.
More importantly, the idea that short interest only goes down is a mistake. Anyone, retail or institutional, can close out a short position and re-open a new short position at a higher price. Total short interest remains unchanged, even though earlier shorts have been closed out.
That was not a misunderstanding at all. sure, anyone can take a short position. But for the number of outstanding shortage there are, it has to be institutional investors and above. And sure, anyone can close out at a higher position, but that doesn't mean they didn't take a huge loss to do so. I'm not sure why you think that was in misunderstanding.
> Everyone who has been on WSB for more than a week perfectly understands that it is a gamble and you can lose it all.
On the surface, yes, but they've also been fed a lot of misinformation about how they're more likely to get rich than to lose it all. They think the odds are stacked in their favor, but that's definitely not true for the late entrants.
> Also, vast majority of WSB users (at least up to the last few days) are buying GME not to profit (according to their own words).
WSB isn't a democratic subreddit. They will downvote or remove any posts or comments that don't support the pump. They upvote any post or comment that encourages people to buy stocks they own.
It's a pump group. They gain financially by pumping the stock. They'll gladly upvote any narrative that encourages more people to pump the stock.
> And all these events obviously will leave a large mark on stock market and probably introduce some new regulations which is a good thing.
This topic keeps coming up, and I keep asking people: What regulations do you want? Or expect? Specifically, what regulations would help here?
If anything, we're going to see more regulations on retail investors after we see how vulnerable they are to falling for mass pump-and-dump schemes with the widespread availability of margin accounts.
I've been analyzing this myself. Generally, I'm not convinced.
WSB had millions of people join the subreddit in the past week (~5m). If each held an average of 5 shares, that'd be 25m shares. There are only 69.75M shares outstanding.
At that point WSB started piling on and millions of shares went into call options and / or were purchased - by retail investors OR people who frequented WSB.
Remember, hedge fund managers and what not also visit and contribute to WSB. There is absolutely no reason to assume a given institution isn't also in on this (and effectively collaborating).
Anyway, how much of it is institutional? I'm unsure, honestly doesn't matter.
By January 15 the float started being purchased and prices were rising. The short sellers started losing money and the hedge funds holding short positions likely expected things to reverse course, as a quick pump-and-dump.
That didn't happen. All the remaining float was then bought up by millions of retail investors; raising prices. Sure some of the hedge funds also sold during this point, but retail inexplicably kept buying (keeping prices high).
They also aren't going to sell for anything less than $1000+ and IT IS NOT ABOUT THE MONEY. Some may never sell:
What does this mean? The short sellers double down hoping to wait it out.
Does this work? Maybe. After robinhood forced the sell off, we're going to see peoples transferred funds hit monday and tuesday. This is a middle finger to the hedge funds to these people. We're going to see the price go up... idk ho much, I'm guessing thousands.
People will surely sell, but if retail continues to hold (or buy at $200), the short sellers are still suck spending billions on interest and will eventually pay out. Sellers have little reason to sell for anything less than $10,000 or something crazy.
Now, did the short sellers get out? I'm not sure, but given how much everyone is freaking out - I am not so sure. I know "hedge fund bros". My bet is they are still holding or doubling down and it's about to get real very fast.
It has been interesting to watch the WSB narrative shift over time. It's a real-time experiment that optimizes for the best messaging to convince casual Redditors to put their money into stocks in ways that benefit earlier WSB members.
At this point, they've convinced a lot of people that buying $GME at obviously inflated prices and never selling it is somehow an altruistic move to take down all of Wall Street that might also make them so rich they can retire early. Of course, it should be obvious that no one is going to get rich by never selling the stock, but that message gets buried among the memes.
It was fun to watch at first, but now it's just sad to watch so many people pour real money into something that won't generate the outcome they've been promised.