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Talking stocks, trading, and investing in general

brokencycle

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I haven't been following the story, but did a bunch of people on reddit just eviscerate a hedge fund or two?
GME still has a short float of 140% though, so yea, someone is going to have to buy the stocks at 1000. But retail investors won't. Melvin has already taken a 3bn hit and has been forced to liquidate other positions to fund their GME shorts.

Maybe if greedy hedge funds would stop selling stocks that doesn't exist people would like them more.
The short interest was like 140% of the float. Doesn't matter how shitty the company is, that's reckless.



What does it matter?
I never said retail investors would have to buy back the short float. But if a retail buyer buys at $950 thinking the stock is going to the moon and all those retail investors and other traders who bought at $200 on the way to the moon, the stock is going to quickly collapse back down, and those guys buying at the top will take a huge loss (I obviously don't think many institutional investors will be buying at $900+). That's the case with any stock, if you buy at the peak, you can wind up losing a lot.

Shorting more than the outstanding shares is reckless for whom? There's no magic rule that you can't short sell more than the existing shares. If the company goes belly up, the short sellers can buy back for free. Short selling is an amazing and important tool for the efficacy of financial markets. They provide a valuable signal. If more people are short selling than are willing to buy, that's probably a pretty good indication that there is no market confidence in that business.

Edit:
As to why it matters is only academic, but the media is pushing a narrative that retail investors via social media are buying up and pushing the stock higher. I don't believe it. I want the facts. I suspect some institutional investors are the actual ones buying it up and making a huge profit. I don't care if institutional investors are the ones making money, but I just don't buy the narrative.
 

javyn

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Shorting more than the outstanding shares is reckless for whom?
I'd say the hedge fund that lost its ass and had to get bailed out.

Short selling is an amazing and important tool for the efficacy of financial markets. They provide a valuable signal. If more people are short selling than are willing to buy, that's probably a pretty good indication that there is no market confidence in that business.
These aren't buy and hold investors, these are traders. They don't care about Gamestop's business any more than Wall Street generally cares about the Main Street economy.

I'll try to find some empathy for the short sellers.
 

otc

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How much room do these massive shorts have to negotiate here?

I imagine there are a lot of bankers out there that would be willing to say "yeah, this is messed up, not based on any fundamentals, and I believe that you'll be able to repurchase those shares soon at a reasonable cost...so I will let you keep holding the position" rather than lose one of their biggest clients to bankruptcy/fund collapse?

I mean, maybe the WSB ploy for everyone to call their broker and insist that their GME shares not be made available for loans will work out and the shorts will have no wiggle room, but it seems pretty clear that there's no underlying asset that can support this valuation and that the bubble must pop soon.
 

jbarwick

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My blue collar buddy talked me into the gamble....I am in for $100 for the fun of it.
 

javyn

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efta

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.

Shorting more than the outstanding shares is reckless for whom? There's no magic rule that you can't short sell more than the existing shares. If the company goes belly up, the short sellers can buy back for free. Short selling is an amazing and important tool for the efficacy of financial markets. They provide a valuable signal. If more people are short selling than are willing to buy, that's probably a pretty good indication that there is no market confidence in that business.

Edit:
As to why it matters is only academic, but the media is pushing a narrative that retail investors via social media are buying up and pushing the stock higher. I don't believe it. I want the facts. I suspect some institutional investors are the actual ones buying it up and making a huge profit. I don't care if institutional investors are the ones making money, but I just don't buy the narrative.
Well I agree the law isn't very magical but its still rules.
 

brokencycle

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I'd say the hedge fund that lost its ass and had to get bailed out.



These aren't buy and hold investors, these are traders. They don't care about Gamestop's business any more than Wall Street generally cares about the Main Street economy.

I'll try to find some empathy for the short sellers.
The bolded is confusing bad outcomes with bad decision making. If I gave you a chance to take the following bet:

Pick the Powerball numbers, if you don't match everything (i.e. don't hit the jackpot) you win $6. If you do match everything, you owe me $300. You would probably take that deal.

It doesn't matter if traders care about the underlying business or not. They're trading stock based on if they think the value of the company will go up or down based on the information they have.

This bullshit populist "wall st doesn't care about main street" you spout is some weird MAGA/occupy Wall St hybrid.
 

brokencycle

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Well I agree the law isn't very magical but its still rules.
As far as I'm aware, there is no law that prevents that. I'm not an expert, so I'm happy to be proven wrong.
 

javyn

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The bolded is confusing bad outcomes with bad decision making. If I gave you a chance to take the following bet:

Pick the Powerball numbers, if you don't match everything (i.e. don't hit the jackpot) you win $6. If you do match everything, you owe me $300. You would probably take that deal.
I don't even know what you are going on about here.

It doesn't matter if traders care about the underlying business or not. They're trading stock based on if they think the value of the company share price will go up or down based on the information they have.
FTFY

This bullshit populist "wall st doesn't care about main street" you spout is some weird MAGA/occupy Wall St hybrid.
ROFL okay. The growing divergence between Wall St. and Main St. is well documented. But hey, you do you bro.
 

Omega Male

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Meanwhile the broader market is taking a dump. But who cares about non-stonks?
 

javyn

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Just exited AMC. 20% ROI, not bad. That's a week's pay right there for me.

edit: Glad I sold, this one's tanking after hours already hehe
 
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jbarwick

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Meanwhile the broader market is taking a dump. But who cares about non-stonks?
Don't you know the hedge funds are selling to cover their shorts....gotta get the money from the winners to pay for the losers.
 

nootje

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Damn that's fucking stupid. Shorting a company losing money in a dying industry isn't reckless.

Also, I will continue to say prove that retail investors are buying millions of shares.
They aren’t. But they are buying calls, which have to be secured by 100 stocks per contract. And having a lot of people doing that can engender these numbers.

Even though I’m not in the market anymore, I love this story.
Could get funny, those shares only get released once the calls dates are up I think. If there aren’t enough to cover the shorts, which is what I think is happening, well fuck.

disclaimer, At one point in my life I was a day trader. Could be that my knowledge is a little rusty.
 

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