![]() ![]() Too big to fail arguments will be there to lean on. Neverminded the damages (jobs, financials) these hedge funds cost betting against the companies and the billions they have already been paid out. You think I am joking? I have seen mentions of this being done to right the ship and make these funds whole. These hedge funds will just get bailed out again, like during housing crisis, and by the same cronies in Washington. #Vox gamestop full#And if somebody else does it legally (follows the same rules) it is a problem? Why? Because the billionaires who drive the stock price down on short may lose money when a network of individual small investors are making moves, like they are doing here as they are betting against the hedge fund short who had bet 100% full stock value of GME? At least these reddit users bet using their own cash and that is what they will lose at the end of the day if the stock drops down. Wait so only big billion dollar funds can game the system. Or at least regulating the profitability out of the practice.Īt this point there are no clean hands in the mess. Preventing a repeat will likely require the end of short selling. Many somebodies.īubbles have happened before and they'll happen again but this one was started on purpose. Sooner or later somebody will take a bath. ![]() The problem is the bubble didn't stop with the short sellers it looks to have enticed smaller players into gambling on "the bigger fool" theory: that no matter what they paid they would find a fool to pay a higher price before the bubble bursts and there's no more shorters buying, just speculators. This was/is a classic pump and dump market manipulation.īut where classic pump and dump is by one or two manipulators fleecing the masses, this time it was a horde of small investors manipulating the stock to fleece big players. But enough prople jumped on the bandwagon that the price kept rising and by then it was time for the shorters to buy but there wasn't enough stock going around to cover their bets so they had to bid higher, raising the price even more so the second tier and third tier buyers made their profit and the bubble got bigger. ![]() As more and more people got with the program the supply went down and (supply vs demand) the price went up instead of down.ģ- The people who started the buying frenzy cashed out. The profit or loss is the difference between what they took in in the past minus what it costs to make good on the sale.ī - What actually happened this time was:ġ- The shorted stock was dropping and the make good date was approaching.Ģ- A bunch of people coordinated online for each to buy some stock removing it from the pool the short sellers could buy. They make XXX dollars.ģ- If they're right, when it comes time to pay back the stock they sold, they buy it at the then current price. GameStop itself has not yet commented on the situation.Ģ- Investors think the stock will drop to a given level by a specific date so they "borrow" stock from the future and sell it at the current price. One said that it was able to help them get through a "very rough year." Meanwhile, there have been testimonials all over WallStreetBets from people who claim to have benefited greatly from the situation. Gabe Plotkin had to raise billions in bailout money amid the squeeze and has since left his position.īrokerage houses like TD Ameritrade and Charles Schwab also announced Wednesday that they are restricting trading for GameStop, AMC (another shorted stock), and others to mitigate "risk for our company and clients." ![]() One of the hedge funds that was shorting GameStop, Melvin Capital, confirmed that it was closing out after suffering a huge loss. One redditor said it was to send a message to "market manipulators, and others agreed. It's tough to say whether this was a deliberate attack on hedge funds and other venture capital firms or if it was mostly a troll by a subreddit. Even CNBC commentator and Mad Money host Jim Cramer is weighing in, telling people not to invest in GameStop. Now we're here just over a week later, and Gamestock is the biggest story in video games. #Vox gamestop windows#Source: Windows CentralThe stock has skyrocketed over the past five days, although it's leveling out as of late Wednesday. ![]()
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