| It'll definitely be interesting to see whether the subreddit can hold until the end of Friday, because as I understand it a number of funds will go to the wall unless the bubble bursts! |
Gamestop stock shenanigans • Page 2
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Rogueywon 12,387 posts
Seen 8 hours ago
Registered 16 years agoYour-Mother wrote:
Not sure about this. I've worked with pension fund investors for years. They are far, far more likely to take out long positions, particularly in areas like infrastructure and regulated utilities. Shorting is inherantly risky - there's no such thing as a "safe" short as even an "obviously" declining business can have a short-term uptick in its stock price (e.g. from announcing restructuring, job cuts or if people think an acquisition is on the cards).
The big problem here is that by doing this the Reddit lulz brigade aren’t really sticking it to the man, who won’t really lose much ultimately, but the knock on effect will be on pension funds (which make up the majority of these hedge funds, that traditionally go for low risk options, like, say, shorting an outdated retailer clinging desperately on to life) that'll hurt regular people.
Obviously not a hard and fast rule, but shorting tends to be much more the preserve of the for-profit investor with a higher risk appetite than the average pension fund. -
alt-cmd-esc 713 posts
Seen 3 days ago
Registered 7 years agoVery interesting all this. Not sure I understand any of it, mind -
TheSaint 20,950 posts
Seen 4 days ago
Registered 16 years agoKind of hard not to root for the Reddit folks over the scummy funds making money from the misery of the pandemic. -
Rodney 5,029 posts
Seen 6 hours ago
Registered 15 years agofontgeeksogood wrote:
I was going to say basically this, but as much as traders are a bunch of cunts, too much volatility in the markets isn’t great because after all it’s peoples savings they are all playing with.
Again, this is just what happens every day on Wall Street, it's just because outsiders are doing it that it is getting attention, it's costing hedge fund managers a lot of coke money.
I love it, pulling back the curtain of a broken, fucked up chase the lady card trick.
AMC have said this has basically saved them -
Nazo 1,951 posts
Seen 9 hours ago
Registered 12 years agoSurely someone with enough case to make 20M out of this is 'the man' rather than someone sticking it to him? -
Rodney 5,029 posts
Seen 6 hours ago
Registered 15 years agoAlso I can see this leading to me getting hit with even more spammy ads for trading apps.
Edited by Rodney at 08:20:15 28-01-2021 -
Rodney 5,029 posts
Seen 6 hours ago
Registered 15 years agoBy the way, sort of related, but I recently switched my pension fund to ethical investment options - which I know is a bit of a brag.
But it means none of my money will go into the arms trade or fossil fuel projects - and the returns aren’t much lower. I suspect in the long run I’ll do alright because there is already a lot of divestment from fossil fuel projects any way; and selecting ethical investments is one way we can individually exercise a bit of market power. -
fontgeeksogood 12,913 posts
Seen 5 months ago
Registered 3 years agoRodney wrote:
I don't understand this take.
fontgeeksogood wrote:
I was going to say basically this, but as much as traders are a bunch of cunts, too much volatility in the markets isn’t great because after all it’s peoples savings they are all playing with.
Again, this is just what happens every day on Wall Street, it's just because outsiders are doing it that it is getting attention, it's costing hedge fund managers a lot of coke money.
I love it, pulling back the curtain of a broken, fucked up chase the lady card trick.
AMC have said this has basically saved them
THIS HAPPENS ALL THE TIME. This is just more public and different people doing it.
Shorting kills companies, and people's livelihoods. This will no doubt have some impacts on savings - but like Roguey says, really unlikely anyone's retirement funds are in a shorting HF - but this has the potential to rectify a toxic part of the market.
The establishment talk about the bubble bursting, referencing the Redditors and I guess hoping that they will be scared back out / dissuade new investment, but I rather think they are nervously looking at the much larger bubble which they have their greedy little fingers and toes in -
Rogueywon 12,387 posts
Seen 8 hours ago
Registered 16 years agoInstinctively, I suspect this will end up being a flash in a pan The redditors will probably end up breaking a couple of funds that barely anybody had heard of before this kicked off. A couple of people who got in early and sold at the right time will make quite a bit of money. Most of the other redditors will lose money, but hopefully none of them were daft enough to invest more than they could afford on this.
I'm sure there'll be attempts to replicate this on other stocks over the next few weeks, but the individuals who lost out first time around are less likely to participate. I suspect this stunt will prove hard to replicate. Funds and advisors will get a lot cagier about speaking in public about their short positions for a while. In a few months time, it'll be mostly forgotten.
Gamestop will continue to judder onwards and downwards for a while yet, but unless it can find a way to reinvigorate its business model, its days are probably numbered. -
Trowel 24,512 posts
Seen 1 day ago
Registered 18 years agofontgeeksogood wrote:
What makes it technically illegal?
I read a BBC article which used language like 'blame' for the act of, effectively, negating the technically illegal, definitely immoral shorting.
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fontgeeksogood 12,913 posts
Seen 5 months ago
Registered 3 years agoIf you are short selling, you are not allowed to be loaned the shorting stock. But the SEC don't enforce that -
RunningMan 3,098 posts
Seen 3 days ago
Registered 15 years agoHaving had stocks decimated by shorts in the past, I am happy to see a number of these hedge funds go under. Main issue with shorting a stock is that the shorter can just lie and spread misinformation about a stock to scare long investors. Just go on yahoo finance comments boards to see this in action. -
Rogueywon 12,387 posts
Seen 8 hours ago
Registered 16 years agoShort-selling can have a useful wider value. The people who routinely engage in it do not tend to be the nicest, but their role can, at times, be useful enough to justify their existence.
In simple terms, they can function as a canary in a coal mine, albeit a particularly twatty canary. By and large, companies want to make themselves attractive to investors. There are laws around how they are allowed to do this, but they will always want to put on the most attractive face possible to the markets. Big, institutional investors like pensions funds need to try to discern the genuinely attractive companies from the bullshitters - if they can't, they risk losing their investors' money.
The whole business of short-sellers lies in trying to work out why companies might fail and in trying to pick holes in the show of strength that they put on for investors. Short-sellers like Jim Chanos were sounding warning bells about Enron for some time before the whole edifice came crashing down - unfortunately, not many people listened to them. A clever long-term investor will generally be keeping a close eye on what short-sellers are doing.
Doesn't mean they don't do some pretty awful things and when they deliberately spread misinformation they should be prosecuted, but they're not quite as parasitic as sometimes presented.
Edited by Rogueywon at 08:54:20 28-01-2021 -
fontgeeksogood 12,913 posts
Seen 5 months ago
Registered 3 years agoI for one am grateful to the guy who broke into my house and took some of my stuff, he was a canary to alert me to the serious security concerns of my kitchen window -
nickthegun 87,711 posts
Seen 8 hours ago
Registered 16 years agoGl3n wrote:
this is arguably the most interesting part. 'dark forces' have starting creating new accounts to try and get people to sell.
It'll definitely be interesting to see whether the subreddit can hold until the end of Friday, because as I understand it a number of funds will go to the wall unless the bubble bursts! -
askew 24,121 posts
Seen 5 days ago
Registered 16 years agoI see they turned to some UK stocks, like Cineworld (days after the shareholders approved the deal to give the owners massive compensation package if the shares went back to pre-pandemic levels) and Pearson, which increased in value more than the previous CEO had been able to in seven years… -
Decks 31,013 posts
Seen 9 hours ago
Registered 6 years agoMy understanding is they need to buy shares in orange juice pretty soon. -
Rogueywon 12,387 posts
Seen 8 hours ago
Registered 16 years agofontgeeksogood wrote:
Except in this case, unless the shorter was deliberately spreading misinformation, it wasn't your house and your stuff anyway. You just thought it was.
I for one am grateful to the guy who broke into my house and took some of my stuff, he was a canary to alert me to the serious security concerns of my kitchen window
The Enron collapse is a great example of a situation where institutional investors should have been paying a lot more attention to short-sellers, a couple of whom were actually jumping up and down shouting "this company stinks" having spotted the problems far earlier than regulatory authorities. -
Armoured_Bear 31,233 posts
Seen 2 days ago
Registered 10 years agoHmm, looks as if they're going to try similar today,on a heavily shorted stock (XSPA) that I have shares in. May be interesting if it does actually happen...
I see talk of silver metal being a possible upcoming target. -
nudistpete 1,273 posts
Seen 11 hours ago
Registered 4 years agoRodney wrote:
A system that allows morally reprehensible practices like shorting will sometimes become volatile. If the powers that be wanted less volatility, they could have it with a few bits of legislation - they choose not to because big hedge fund managers really need that luxury yacht they got by causing massive depressions in the value of what would have been otherwise viable businesses.
I was going to say basically this, but as much as traders are a bunch of cunts, too much volatility in the markets isn’t great because after all it’s peoples savings they are all playing with. -
Rogueywon 12,387 posts
Seen 8 hours ago
Registered 16 years ago@askew Really? Cineworld?
I guess the thing to remember here is that none of this is actually making much difference to the long-term viability of these companies. If Gamestop's struggling because games buyers are moving towards digital purchases and they can't compete with Amazon on delivery, that's still as true now as it was last week. If Cineworld are struggling because of the pandemic and because the market might be moving towards simultaneous streaming releases... that'll still be true even if redditors pump its stock price.
This is pure casino stuff. Entertaining to watch, but unlikely to change much at all. Ironically, pick your timing right (which is the hard part) and there could be huge profit to be made by shorting Gamestop over the next few weeks. -
fontgeeksogood 12,913 posts
Seen 5 months ago
Registered 3 years agoYet AMC have said that it has raised $1bn and means they don't have to file / seek emergency investment.
I'm being fanciful, but I think this actually has potential to save a few companies which would be a loss if they didn't survive the pandemic. I can get behind that even if it means a few yachts get unsold -
sport 17,064 posts
Seen 20 hours ago
Registered 16 years agoRogueywon wrote:
Like in that movie about the 08 crisis, The Big something... sell-off? shenanigan?
fontgeeksogood wrote:
Except in this case, unless the shorter was deliberately spreading misinformation, it wasn't your house and your stuff anyway. You just thought it was.
I for one am grateful to the guy who broke into my house and took some of my stuff, he was a canary to alert me to the serious security concerns of my kitchen window
The Enron collapse is a great example of a situation where institutional investors should have been paying a lot more attention to short-sellers, a couple of whom were actually jumping up and down shouting "this company stinks" having spotted the problems far earlier than regulatory authorities. -
askew 24,121 posts
Seen 5 days ago
Registered 16 years agoRogueywon wrote:
Sorry! I'm wrong. The cinema chain was AMC. Another European stock seeing the same activity was CD Projekt
@askew Really? Cineworld?
Edited by askew at 09:18:45 28-01-2021 -
sport 17,064 posts
Seen 20 hours ago
Registered 16 years agoaskew wrote:
Relic malfunction
Rogueywon wrote:
Sorry! I'm wrong. The cinema chain was AMC. Another European stock seeing the same activity was CD Projekt
@askew Really? Cineworld? -
Rogueywon 12,387 posts
Seen 8 hours ago
Registered 16 years ago@askew CD Projekt I can kinda see the case for. Their stock's taken a hammering over the last few weeks. That might be a rational reaction - they're a 1-game-at-a-time developer (albeit with some other activities) who just took a big reputational hit that they might not recover from. But you could also make an arguable case that the markets have over-reacted and they're now under-valued. Wouldn't like to bet money either way myself, though! -
fontgeeksogood 12,913 posts
Seen 5 months ago
Registered 3 years agosport wrote:
God bless Christian Bale for canary-ing the world from a worldwide recession via his selfless acts
Rogueywon wrote:
Like in that movie about the 08 crisis, The Big something... sell-off? shenanigan?
fontgeeksogood wrote:
Except in this case, unless the shorter was deliberately spreading misinformation, it wasn't your house and your stuff anyway. You just thought it was.
I for one am grateful to the guy who broke into my house and took some of my stuff, he was a canary to alert me to the serious security concerns of my kitchen window
The Enron collapse is a great example of a situation where institutional investors should have been paying a lot more attention to short-sellers, a couple of whom were actually jumping up and down shouting "this company stinks" having spotted the problems far earlier than regulatory authorities. -
hedben2013 2,261 posts
Seen 18 hours ago
Registered 9 years agoReading up on this stuff does make me wonder if I'd enjoy a bit of amateur trading. I had fun with matched betting for a couple of years but ultimately got bored as the deals ran out and the effort to profit ratio worsened.
Anyway interesting stuff, looking forward to a long-form article dissecting what happened. Something to watch from afar while knowing you'd never have the time to do it yourself- like Eve Online for moneypushers -
Its also worth bearing in mind that these retards are also one of the reasons Elon Musk is now worth more than Jeff Bezos.
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