Go Back  British Expats > General > Take it Outside!
Reload this Page >

Gamestop trading

Gamestop trading

Old Jan 26th 2021, 11:52 pm
  #1  
Lost in BE Cyberspace
Thread Starter
 
Joined: Feb 2004
Posts: 13,816
anotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond repute
Default Gamestop trading

If you haven't heard of this over the last few days you should read up on it.

Briefly: about 2m people following a subreddit are trying to bankrupt some hedge funds by driving up the price of Gamestop stock when the hedge funds are short (they are betting against it).

https://www.google.com/amp/s/www.cnbc.com/amp/2021/01/26/gamestop-jumps-as-elon-musk-tweets-out-reddit-board-thats-hyping-stock.html

One guy started this about 4 months ago I think. Someone apparently turned 50k into 8m, but that was before today's gain.

I put it here because I'm sure some people will take issue with trying to bankrupt a company, but equally there are a lot of people that would be happy if that happened to a hedge fund.



anotherlimey is offline  
Old Jan 27th 2021, 4:09 pm
  #2  
Oscar nominated
 
BristolUK's Avatar
 
Joined: Jan 2008
Location: Moncton, NB, CANADA
Posts: 36,496
BristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond repute
Default Re: Gamestop trading

How GameStop found itself at the center of a groundbreaking battle between Wall Street and small investors

I started to read but it just doesn't hold my attention
BristolUK is offline  
Old Jan 27th 2021, 4:59 pm
  #3  
Listen to the Music
 
dave_j's Avatar
 
Joined: Mar 2013
Location: Fraser Valley BC
Posts: 2,726
dave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond repute
Default Re: Gamestop trading

It's a rare example of Wall Street traders being taken to the cleaners by popular mass insider collusion using similar techniques to those used by the traders themselves.
By that I mean that a large assemblage of investors are manipulating the price of Gamestop shares as an attack on predatory short selling fund managers who normally have it all their own way.
I'm in favour of this. Short selling can become self fulfilling. You sell shares you don't own in the expectation of the share price falling but the very act of selling drives the price down. It's a herd activity, where fund managers combine their activities to target an unfortunate business and one that deserves a read.
https://www.bbc.com/news/business-55817918
dave_j is offline  
Old Jan 27th 2021, 7:09 pm
  #4  
Lost in BE Cyberspace
Thread Starter
 
Joined: Feb 2004
Posts: 13,816
anotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond reputeanotherlimey has a reputation beyond repute
Default Re: Gamestop trading

Originally Posted by dave_j View Post
It's a rare example of Wall Street traders being taken to the cleaners by popular mass insider collusion using similar techniques to those used by the traders themselves.
By that I mean that a large assemblage of investors are manipulating the price of Gamestop shares as an attack on predatory short selling fund managers who normally have it all their own way.
I'm in favour of this. Short selling can become self fulfilling. You sell shares you don't own in the expectation of the share price falling but the very act of selling drives the price down. It's a herd activity, where fund managers combine their activities to target an unfortunate business and one that deserves a read.
https://www.bbc.com/news/business-55817918
Absolutely happy to see this. The guy quoted in that article who piblicly called Gamestop a "failing mall based retailer" was also heavily short on it.
anotherlimey is offline  
Old Jan 27th 2021, 9:25 pm
  #5  
Forum Regular
 
Joined: Jul 2018
Location: California
Posts: 180
vespucci has a reputation beyond reputevespucci has a reputation beyond reputevespucci has a reputation beyond reputevespucci has a reputation beyond reputevespucci has a reputation beyond reputevespucci has a reputation beyond reputevespucci has a reputation beyond reputevespucci has a reputation beyond reputevespucci has a reputation beyond reputevespucci has a reputation beyond reputevespucci has a reputation beyond repute
Default Re: Gamestop trading

Originally Posted by anotherlimey View Post
Absolutely happy to see this. The guy quoted in that article who piblicly called Gamestop a "failing mall based retailer" was also heavily short on it.
I don't know much about this, but I think in the end, whenever you have artificial prices, bubbles, etc, the small guy will get ripped off by the experienced professional who better knows how to handle it. The small guy should just buy a tracker fund.
vespucci is offline  
Old Jan 28th 2021, 3:44 am
  #6  
Magnificently Withering
 
Oakvillian's Avatar
 
Joined: Jan 2007
Location: Oakville, ON
Posts: 6,774
Oakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond repute
Default Re: Gamestop trading

I have been absolutely delighted to read about this the last couple of days. To see the hedge funds being played at their own game - and losing badly - is gleeful stuff. The lack of awareness of some of the Wall St types is staggering: to suggest that this "shouldn't be allowed" or that there should be regulations to prevent it. It was the deregulation of markets in the 1980s and subsequently that has allowed the very concept of a hedge fund to exist, mostly to the detriment of the small investor. They're the ones borrowing money on a promise of selling shares they don't yet own, and finding themselves squeezed on their short position; while the redittors are, by and large, buying and holding real actual shares with their own real actual money. If a hedge fund or two loses a few billion in the process, then good. Perhaps they shouldn't be so keen to gamble with other people's money trading financial instruments they clearly don't understand, if they can't afford to pay it back. As one wag said on a twitter thread: if they're losing money that badly in a market this buoyant, they're clearly not very good at their jobs, are they?
Oakvillian is offline  
Old Jan 28th 2021, 5:02 am
  #7  
Listen to the Music
 
dave_j's Avatar
 
Joined: Mar 2013
Location: Fraser Valley BC
Posts: 2,726
dave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond reputedave_j has a reputation beyond repute
Default Re: Gamestop trading

Originally Posted by Oakvillian View Post
I have been absolutely delighted to read about this the last couple of days. To see the hedge funds being played at their own game - and losing badly - is gleeful stuff. The lack of awareness of some of the Wall St types is staggering: to suggest that this "shouldn't be allowed" or that there should be regulations to prevent it. It was the deregulation of markets in the 1980s and subsequently that has allowed the very concept of a hedge fund to exist, mostly to the detriment of the small investor. They're the ones borrowing money on a promise of selling shares they don't yet own, and finding themselves squeezed on their short position; while the redittors are, by and large, buying and holding real actual shares with their own real actual money. If a hedge fund or two loses a few billion in the process, then good. Perhaps they shouldn't be so keen to gamble with other people's money trading financial instruments they clearly don't understand, if they can't afford to pay it back. As one wag said on a twitter thread: if they're losing money that badly in a market this buoyant, they're clearly not very good at their jobs, are they?
Yes, it warms the cockles doesn't it.
First identify your favourite short seller and his target.
Such an episode does require the organisational facilities provided by the web to enable enough small investors, each with their small investment, to be able to influence the market price of the share.
Once this has been achieved you're on a roller coaster to profit as the short seller finds itself in a quandry whether to take a loss or hang on and withstand a greater loss if the share price stubbornly refuses to fall back.
As the short seller scrambles to minimise his losses by buying shares at the new higher price to cover his position he drives the price still higher.
Beautiful isn't it. Couldn't happen to a more deserving bunch of crooks.
dave_j is offline  
Old Jan 28th 2021, 10:12 am
  #8  
WWLLCJD?
 
Scamp's Avatar
 
Joined: Feb 2011
Location: Dubai
Posts: 25,057
Scamp has a reputation beyond reputeScamp has a reputation beyond reputeScamp has a reputation beyond reputeScamp has a reputation beyond reputeScamp has a reputation beyond reputeScamp has a reputation beyond reputeScamp has a reputation beyond reputeScamp has a reputation beyond reputeScamp has a reputation beyond reputeScamp has a reputation beyond reputeScamp has a reputation beyond repute
Default Re: Gamestop trading

It's been fun to see but we know who wins in the long run.
Scamp is offline  
Old Jan 28th 2021, 2:21 pm
  #9  
BE Forum Addict
 
Joined: Apr 2010
Posts: 1,088
retzie has a reputation beyond reputeretzie has a reputation beyond reputeretzie has a reputation beyond reputeretzie has a reputation beyond reputeretzie has a reputation beyond reputeretzie has a reputation beyond reputeretzie has a reputation beyond reputeretzie has a reputation beyond reputeretzie has a reputation beyond reputeretzie has a reputation beyond reputeretzie has a reputation beyond repute
Default Re: Gamestop trading

Wait, did people think that the stock market was not being manipulated? Yeah, it's all Queensberry rules on Wall St...

The cherry on top was the phrase "for the lulz" appearing in a serious piece of journalism
https://www.theguardian.com/commenti...hink-in-action
retzie is offline  
Old Jan 28th 2021, 4:18 pm
  #10  
Fair and balanced
 
kimilseung's Avatar
 
Joined: Dec 2006
Location: WA
Posts: 15,723
kimilseung has a reputation beyond reputekimilseung has a reputation beyond reputekimilseung has a reputation beyond reputekimilseung has a reputation beyond reputekimilseung has a reputation beyond reputekimilseung has a reputation beyond reputekimilseung has a reputation beyond reputekimilseung has a reputation beyond reputekimilseung has a reputation beyond reputekimilseung has a reputation beyond reputekimilseung has a reputation beyond repute
Default Re: Gamestop trading

Originally Posted by anotherlimey View Post
If you haven't heard of this over the last few days you should read up on it.

Briefly: about 2m people following a subreddit are trying to bankrupt some hedge funds by driving up the price of Gamestop stock when the hedge funds are short (they are betting against it).

https://www.google.com/amp/s/www.cnb...ing-stock.html

One guy started this about 4 months ago I think. Someone apparently turned 50k into 8m, but that was before today's gain.

I put it here because I'm sure some people will take issue with trying to bankrupt a company, but equally there are a lot of people that would be happy if that happened to a hedge fund.
This is a much better precis of the situation than any article I have read on it.
kimilseung is offline  
Old Jan 28th 2021, 6:36 pm
  #11  
BE Forum Addict
 
philat98's Avatar
 
Joined: Nov 2011
Location: Central Italy
Posts: 1,617
philat98 has a reputation beyond reputephilat98 has a reputation beyond reputephilat98 has a reputation beyond reputephilat98 has a reputation beyond reputephilat98 has a reputation beyond reputephilat98 has a reputation beyond reputephilat98 has a reputation beyond reputephilat98 has a reputation beyond reputephilat98 has a reputation beyond reputephilat98 has a reputation beyond reputephilat98 has a reputation beyond repute
Default Re: Gamestop trading

Originally Posted by anotherlimey View Post
One guy started this about 4 months ago I think. Someone apparently turned 50k into 8m, but that was before today's gain.
If I invested I would turn 8m into 50k.
philat98 is offline  
Old Jan 28th 2021, 7:21 pm
  #12  
Magnificently Withering
 
Oakvillian's Avatar
 
Joined: Jan 2007
Location: Oakville, ON
Posts: 6,774
Oakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond reputeOakvillian has a reputation beyond repute
Default Re: Gamestop trading

I had fun at lunchtime today trying to explain this to my kids when one asked "what's all this GameStop stuff about?" The best analogy we could come up with is taking a leaf from Animal Crossing (to the uninitiated, this is a build-a-civilization type game on Nintendo Switch that includes a marketplace for trading in turnips) where daily turnip prices are quoted on the "stalk market index."

If you buy turnips at the beginning of the week and hope to sell them later in the week when the price of turnips goes up, you're behaving like a small investor. You have invested actual funds and you own actual turnips. If the price doesn't go up, you sell at a small loss, or worst case scenario is that, if you can'f find a buyer, your entire crop rots in the field at the end of the week, and you lose the money you invested in your turnips.

Imagine, though, there's a guy that lives in the hedge beside your field. What he does is to promise to sell you a crop of turnips on Friday, for $200. He doesn't actually have any turnips - he never wants to physically own any turnips, he's not a turnip farmer and that's not how his business works. What he wants to do is to hope the price drops to $150 or so between now and Friday, at which point he buys all your older brother's turnips for $150, has them delivered to you, you pay him your promised $200, and he pockets the $50 in profit. If he shouts loudly enough that turnips are only really worth $150, he might persuade your big brother to sell them at that price, by undermining your brother's confidence in his turnips and convincing him that that's all they're worth.

What's happened here though is that your little brother thinks this hedge guy is full of it, and he buys a couple of fields of turnips early in the week. Other like-minded people see what's happening on the stalk exchange, and start buying more turnips, driving the price up. By Thursday evening, a crop of turnips is worth $250. Now, the hedge guy has a problem. He doesn't own any turnips, but he's promised to sell you some. So he has to try and buy them. But they're now costing him more than the $200 he's promised to sell them for, so he's making a loss. And if there aren't enough floating around in the market for him to buy to cover his obligation to you (this shortage in the marketplace is what's known as a "squeeze"), your little brother will see what's happening and refuse to sell the hedge guy his turnips for anything less than $500. the hedge guy has to buy some, so he does. But now, see, the going price for turnips is $500 and rising, and your big brother, wise investor that he is, refuses to sell his turnips to the hedge guy for anything less than $1000. Again, the hedge guy has to buy soem to make good on his obligation to sell them to you. As the price is driven up, the hedge guy's losses end up being way, way more than the original cost of the turnips. His own efforts to manipulate the market in his favour have turned round and bitten him, because his bluff was called.

It's all form of gambling, of course. If the hedge guy wins his bet, the price goes down far enough that all the small farmers either have to sell at a loss, or don't sell at all. For the small turnip farmer, the most you are likely to lose is the money you sunk into a crop of turnips rotting in your field.That can still hurt. But for the hedge guy, it's a very dangerous form of gambling because there is absolutely no limit to the amount of money he can lose if he bets the wrong way, the price goes way up, and he still needs to deliver on his promise to sell on a given day at a given price. Nobody's suggesting that turnips are actually intrinsically worth $1000, but that is the price a speculator has to pay when they bet the wrong way on the market.

Remember that every time the hedge fund wins, the small investors and the businesses they invest in lose out. If the hedge fund loses, very few people outside the money markets have any sympathy: the numbers can look scarily large, but remember that these are the guys who make a living by betting on which businesses will fail. It's pretty macabre stuff.

That's the kind of lunchtime discussion that makes having all three kids at home during lockdown *almost* worthwhile...

Last edited by Oakvillian; Jan 28th 2021 at 7:28 pm.
Oakvillian is offline  
Old Jan 28th 2021, 7:24 pm
  #13  
Lost in BE Cyberspace
 
Jsmth321's Avatar
 
Joined: Jan 2006
Location: British Columbia
Posts: 27,272
Jsmth321 has a reputation beyond reputeJsmth321 has a reputation beyond reputeJsmth321 has a reputation beyond reputeJsmth321 has a reputation beyond reputeJsmth321 has a reputation beyond reputeJsmth321 has a reputation beyond reputeJsmth321 has a reputation beyond reputeJsmth321 has a reputation beyond reputeJsmth321 has a reputation beyond reputeJsmth321 has a reputation beyond reputeJsmth321 has a reputation beyond repute
Default Re: Gamestop trading

This whole situation is confusing my brain, I think I finally figured it out all, guess that is why I am not in the stock market....ha ha

Although if I had known about this earlier when the price was low, and had the guts to try it, I could have made a decent profit with no much upfront...ha ha but then if I was a risk taker, I would have bought lots of airline stock in 2001, specifically the airline I worked for, would have cleaned the bank...ha ha
Jsmth321 is offline  
Old Jan 28th 2021, 9:11 pm
  #14  
BE Forum Addict
 
Anian's Avatar
 
Joined: Feb 2011
Location: WA state
Posts: 2,842
Anian has a reputation beyond reputeAnian has a reputation beyond reputeAnian has a reputation beyond reputeAnian has a reputation beyond reputeAnian has a reputation beyond reputeAnian has a reputation beyond reputeAnian has a reputation beyond reputeAnian has a reputation beyond reputeAnian has a reputation beyond reputeAnian has a reputation beyond reputeAnian has a reputation beyond repute
Default Re: Gamestop trading

To put it in really simple terms, hedge fund people make bets based on thinking stock prices will drop. Smalltime investors have messed up their bets by driving up stock prices by buying them legally, so the hedge people are angry and might have to sell a yacht or two.
Anian is offline  
Old Jan 28th 2021, 10:16 pm
  #15  
Oscar nominated
 
BristolUK's Avatar
 
Joined: Jan 2008
Location: Moncton, NB, CANADA
Posts: 36,496
BristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond reputeBristolUK has a reputation beyond repute
Default Re: Gamestop trading

Originally Posted by Anian View Post
...hedge people are angry and might have to sell a yacht or two.
Reminds me of a few years ago - quite a few, it must have been - when Prince Philip had to make some sort of cost savings by giving up one of the Rolls'.
BristolUK is offline  

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information -

Copyright © 2021 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.