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Gamestonks!

The_biscuits_532

Eternally Confused Feline
I have heard a lot about this from famaly, does anyone know were all the money the funds lost went?
FB_IMG_1611871729261.jpg

Share brokers, from what I've gathered.

I'm by no means an expert. This is the best summary I could find, feel free to correct anything.
 

Miles Marsalis

The Last DJ.
Full disclosure, I had invested in Gamestop last year when there was buzz about them being bought out and I sold all my shares yesterday. Some of the clients of the firm I work at banks too, which could bias me.

That disclosure out of the way, I think while shorting can be a destructive practice to the economy, it's important note a few key things here, like every industry needs capital which the financial industry provides, market stability and predictability benefits both big and small investors alike, not everyone who uses financial services is extremely wealthy, a lot of benign entities like charities rely on market investments to meet expenses, and that systemic stock will affect everyone.

So while there is something to applaud here, it need to be noted that when these Reddit users decide to sell, and the incentive for them is increasing every moment, where will that leave the companies they are propping up?
 

ben909

vaporeon with Axolotl gill array as neck fin
Full disclosure, I had invested in Gamestop last year when there was buzz about them being bought out and I sold all my shares yesterday. Some of the clients of the firm I work at banks too, which could bias me.

That disclosure out of the way, I think while shorting can be a destructive practice to the economy, it's important note a few key things here, like every industry needs capital which the financial industry provides, market stability and predictability benefits both big and small investors alike, not everyone who uses financial services is extremely wealthy, a lot of benign entities like charities rely on market investments to meet expenses, and that systemic stock will affect everyone.

So while there is something to applaud here, it need to be noted that when these Reddit users decide to sell, and the incentive for them is increasing every moment, where will that leave the companies they are propping up?

gamestop was likely doomed in my view already
 

Miles Marsalis

The Last DJ.
gamestop was likely doomed in my view already
They have options, but they would to adopt a drastically different business model.

But with this drama, we now have amateur investors and institutional investors who are losing money they didn't to.
 

ben909

vaporeon with Axolotl gill array as neck fin
They have options, but they would to adopt a drastically different business model.

But with this drama, we now have amateur investors and institutional investors who are losing money they didn't to.

it wound be interesting if they could, that is why i was wondering where the money went to after it was lost
 

Miles Marsalis

The Last DJ.
it wound be interesting if they could, that is why i was wondering where the money went to after it was lost
Part of the decline Gamestop is experiencing in due to TDAmeritrade and Robin Hood triggering circuit breaker restriction on new buying from investors buying under a certain volume or who are unaccredited. There are also investors who sold after the news fanfare, like I did.
 

Firuthi Dragovic

Gamer Dragon, former speedrunner
....I will admit, when I first saw this whole thing unfold (because my workplace has its TV tuned to stock market commentators all day), my first question was "Wait a minute, how did Gamestop even survive its pandemic drama?"

Two things ultimately get me about this whole drama:

1. Who's dumb enough to be pulling the whole "naked shorting" thing? You don't sell what doesn't exist - you're just ASKING to get screwed over.

2. What's even the legitimate use of shorting a stock again? I was under the impression you kept stocks for long hauls instead of basically treating companies like a casino.

Of all the rebellious stuff in the last few years, THIS is the one where I flatly admit I want to bust out the popcorn.
 

KimberVaile

Officially elected and actual ruler of FAF

Ramjet

Seizing the memes of production
Holy shit, I want that video so badly to be real. Look at that porky little dude go!

Same!

To know these are the type of people (no suprise to me) getting bet agaisnt, and this being the reaction would make this soooooo much fucking sweeter.
 

FaroraSF

Active Member
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?

Basically how it works:

Shorting is when you borrow stock from someone else and sell it with the expectation that you will buy it back later and return it. You do this with stock you expect to fall in price, if the price does fall by the time you need to buy the stock back then you gain money since you pocket the difference...however if the price of the stock rises then you are buying back the stock for higher than you sold it for so you lose money. Also you can't just hold off on buying the stock forever because you pay interest on the borrowed stocks.

Usually shorting stock is done with stocks that are "overvalued", such as a stock that is currently worth $100 but in reality is worth more like $50 and the expectation is that eventually it will fall back to $50, but it's also entirely possible to do this with stock that isn't overvalued and might even be undervalued. One of the side effects of shorting stocks is that it causes stock to plummet in a sort of positive feedback loop.

So we have these hedge funds who saw that Gamestop hasn't been doing so well (also AMC and some others but the main focus is on Gamestop), they got a new boss and were in the process of restructuring but then 2020 happened and well you know how much 2020 hit retail... so in a bid to make more money these hedge funds started drastically shorting the stock which crashed value well below what it was actually worth. These companies did it so much that they actually borrowed 140% of the stock, meaning they borrowed more stock than actually existed (this should be illegal, it might actually be, but you know how rich people are).

Enter reddit. Filled with sweaty apes that grew up going to Gamestop and watched these same hedge funds profit off its fall like they did with the 2008 recession while their family and friends lost jobs and houses, they noticed that the hedge funds bought 140% of the stock and they also noticed that the day where these companies would have to buy back the stock they sold was close at hand.

So they hatched a plan where they would all buy as much stock as they could to raise the price and instead of selling it hold onto it (this is what the diamond hands symbols you see everywhere mean), as less and less shares are available for purchase the price rises. Suddenly these hedge funds that borrowed and sold millions of shares for $5 a piece are sweating as the price keeps rising (currently over $300).

As time goes on there will be less and less shares available and the price will just get higher and higher, eventually the hedge funds have to buy or pay loads of interest, and when they do the price is going to skyrocket as demand far surpasses the amount of shares available (because all the reddit apes holding instead of selling). The hedge funds will lose billions and possibly go bankrupt.

Some people holding onto these shares will probably eventually sell and make a lot of money, but most of the people holding are doing it out of pure spite and plan to never sell, they see their shares as a trophy and a big middle finger to the wall street elite. The wall street elite are terrified because suddenly the common man/woman/whatever are playing the same games they are and they are no longer in control. This whole thing has also exposed a lot of inequality when it comes to the stock market such as various trading apps blocking the ability to buy stocks while still allowing people to sell them (pretty sure this is illegal).

Expect chaos and expect politicians to act.
 

Firuthi Dragovic

Gamer Dragon, former speedrunner
.....aaaand rumor's going around that the Redditors are targeting precious metals next.

I understand me saying this might be a BIT too late to get in on it, so this is mainly a warning for those who already HAVE money in precious metals.
 

ben909

vaporeon with Axolotl gill array as neck fin
.....aaaand rumor's going around that the Redditors are targeting precious metals next.

I understand me saying this might be a BIT too late to get in on it, so this is mainly a warning for those who already HAVE money in precious metals.

how can they lower a value with this method, they rased a value by buying to make it constantly to hurt those that shorted it, but i am not sure if that works the other way
 

Jackpot Raccuki

Aka the hot single in your area. (Not Single)
You see, what these investors don’t realise is that gamers are used to dropping $40 on something and never using it again.
.....aaaand rumor's going around that the Redditors are targeting precious metals next.

I understand me saying this might be a BIT too late to get in on it, so this is mainly a warning for those who already HAVE money in precious metals.
Panik
 

Saokymo

Art Cookie
.....aaaand rumor's going around that the Redditors are targeting precious metals next.

I understand me saying this might be a BIT too late to get in on it, so this is mainly a warning for those who already HAVE money in precious metals.
This could just as easily be a rumor started by bigger financial players trying to capitalize on the situation & using Reddit as a convenient scapegoat. Until I see WSB rallying their diamond hands behind it I’d take any rumors with a healthy dose of salt & skepticism.
 
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