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Gamestonks!

TrishaCat

TrishaCat

The Cat in the FAF
If this is too political I understand, but If figured since this is more of a stock market news thing maybe it'd be okay.

So some crazy stuff started late last week. A bunch of redditors on /r/wallstreetbets noticed that some hedgefunds are making money by shortselling and naked shorting various companies with low stock prices, namely Gamestop (but also AMC, Nokia, Etsy, and Blackberry). To explain this in laymens terms, shortselling is when you borrow stock, sell it while the stock value is high, and then buy it back when the value is low to give back for a profit. Gamestop in particular was suffering this very hard, enough to the point where there was more stock being sold than actually existed (called naked shorting, its very illegal). Many people see shorting as essentially kicking someone when they're down, profiting off of a company's failures. Many hedgefunds run by wealthy people at wall street do this. So, a bunch of redditors on /r/wallstreetbets all decided to collaborate together to buy stocks in these companies. This caused the stock value to rise to insane degrees, to where it was continuing to rise until this morning, when RobinHood, the stock trading app, decided to stop supporting these companies and took away the ability to buy stock in them, only sell.
And now the latest news seems to be that /r/wallstreetbets is encouraging everyone to not sell their stock and all the while they wish to do a class action lawsuit against RobinHood for manipulating the market.

TL;DR: reddit bought stock in gamestop, this made rich people who made money off of the low stock value angry as it can bankrupt them, robinhood tried to stop this, reddit wants to take it to court

Some sources/newspieces on the subject:
www.nbcnews.com

Opinion | Why it matters that Reddit users beat Wall Street by betting on GameStop's stock

Wall Street giants are calling foul after having been beaten at their own game by a bunch of guys on the internet. It's hard not to cheer.
www.nbcnews.com www.nbcnews.com

https://www.reddit.com/r/wallstreetbets/comments/l6x130/_/gl37tau
 
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TrishaCat

TrishaCat

The Cat in the FAF
Why this is important: random small time investors are looked down upon by Wall Street bigwigs, and this kind of event is disrupting the normal way of things in the stock market, which could result in new laws and regulations regarding this. This sort of thing on this scale has, to my awareness, never happened before. Its essentially the little people, the average joes, have a powerful effect on the stock market in such a way that could bankrupt many rich people.
For example, when this first started happening, the short seller Melvin Capital had to be bailed out by a couple billionaires as they were losing massive amounts of money from the redditors doing this. Its directly affecting billionaires in a massive way.
markets.businessinsider.com

GameStop short-seller down 30% this year gets $2.8 billion bailout from the firms of billionaire investors Steve Cohen and Ken Griffin

Billionaire investor Steve Cohen. Steve Marcus/Reuters Steve Cohen's Point72 and Ken Griffin's Citadel are investing $2.75 billion in Melvin Ca...
markets.businessinsider.com markets.businessinsider.com
 
Attaman

Attaman

"I say we forget this business and run."
On which note, a heads up to people that tomorrow (when we're going to see the last flurry of official Stock Market activity before the weekend) is bound to be... interesting. Probably not horrifyingly / world shattering-ly so, but if one has the time they're probably going to want to keep an eye / ear out for it.

Also, we have a few stock investors on this forum so it'll probably be fun hearing their takes on this.

Saokymo said:
I’ve always believed that the stock market was a rigged game,
Click to expand...
I'd argue less that it's "rigged" so much as "plays by rules that are utterly distinct and separated from the general economy to such a degree that familiarity with one is literally worthless for interacting with the other".
 
Ramjet

Ramjet

Seizing the memes of production
What did they think was gonna happen shorting over 100% of the entire gamestop float?! LMAO

Your apsolutly right that this is a game changing moment, no longer can the large hedge funds be the only market movers now.Trading apps like Robinhood have given the average Joe a large hammer, I can't imagine the nails on Wallstreet are happy about it either.
They can do a flip for all I care, we didn't forget about 08.....

T. Short term position trader
 
Saokymo

Saokymo

Art Cookie
Ramjet said:
Trading apps like Robinhood have given the average Joe a large hammer, I can't imagine the nails on Wallstreet are happy about it either.
Click to expand...
Except that Robinhood has now halted purchases of GME & other “meme stocks,” but allowing users to sell them to try and drive the prices down again. Even I can see that’s a blatant attempt at market manipulation to try and save the hedgefunds & investment companies at the center of this mess.
 
Ramjet

Ramjet

Seizing the memes of production
Saokymo said:
Except that Robinhood has now halted purchases of GME & other “meme stocks,” but allowing users to sell them to try and drive the prices down again. Even I can see that’s a blatant attempt at market manipulation to try and save the hedgefunds & investment companies at the center of this mess.
Click to expand...

Yup, and not only them either...

1611764424881.jpg
 
Frank Gulotta

Frank Gulotta

Send us your floppy
MrSpookyBoots said:
I think it's hilarious. Wall Street is watching this carefully. Restrictions in place only serve to confirm that the "free market" only exists when the big boys play.

It doesn't when the common folk play the same games that they do. How convenient.
Click to expand...
Better read the corporate press to know everything about why it's all okay or doesn't matter in the end!
 
Yakamaru

Yakamaru

Darn tootin'
Saokymo said:
I’m old-poor, another stock market crash can’t knock me down much further than I already am.

But the schadenfreude of watching hedgefunds & predatory investors get a taste of their own medicine will sustain me forever!
Click to expand...
Predators come in all forms. Predatory practices like these are scummy and needs to be smacked down in the best way possible: Through the markets, using them against them.
 
KimberVaile

KimberVaile

Officially elected and actual ruler of FAF
Won't somebody think of the rich valley girls? They'll have to travel publicly instead of on private jets, and rage wipe with silver toiler paper instead of gold, the horror! The world just so cruel and unfair ;_;
 
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ben909

ben909

vaporeon with Axolotl gill array as neck fin
I have heard a lot about this from famaly, does anyone know were all the money the funds lost went?

did someone(or group) get it, does gamestop now have a second chance, was it just “destroyed” from not being physical money?
 
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