Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
GME and hedge funds
- Thread starter dukebound85
- Start date
- Sort by reaction score
I've seen a few headlines recently but as far as I can tell, this is not an investable situation.
GME's fundamentals are horrible and all of the recent share price activity has zero basis on the company's actual performance or its long-term prospects. Remember that the phrase "bankruptcy filing" had been floated for this bricks-and-mortar retailer a year ago.
At this point it looks like GME is more like a ultra short-term collectible rather than an investment. A few hedge funds might be able to basically day trade this but it's not a credible investment for Joe Consumer who is spending most of the day doing his/her job rather than following intra-minute share price graphs and technical indicators.
One important criteria I have for my investments is the ability to sleep. I don't want to fret about something and wake up at 3am.
GME's current behavior fails this basic litmus test.
People here always talk about how much money they made on Iinvestment X but won't utter a word on how they got clobbered on Investment Y.
This isn't investor specific. Psychologists refer to this as BIRG (Basking In Reflected Glory) and CORF (Casting Off Reflected Failure). Sports fans do this. When your team wins fans say "We won." If the team loses the fans say "They lost."
GME's fundamentals are horrible and all of the recent share price activity has zero basis on the company's actual performance or its long-term prospects. Remember that the phrase "bankruptcy filing" had been floated for this bricks-and-mortar retailer a year ago.
At this point it looks like GME is more like a ultra short-term collectible rather than an investment. A few hedge funds might be able to basically day trade this but it's not a credible investment for Joe Consumer who is spending most of the day doing his/her job rather than following intra-minute share price graphs and technical indicators.
One important criteria I have for my investments is the ability to sleep. I don't want to fret about something and wake up at 3am.
GME's current behavior fails this basic litmus test.
People here always talk about how much money they made on Iinvestment X but won't utter a word on how they got clobbered on Investment Y.
This isn't investor specific. Psychologists refer to this as BIRG (Basking In Reflected Glory) and CORF (Casting Off Reflected Failure). Sports fans do this. When your team wins fans say "We won." If the team loses the fans say "They lost."
Last edited:
It was a dramatic short squeeze. Hedge funds were caught with their pants down with their shorts around their feet. They were probably naked too ... which is illegal. There were more shares short than the market cap of the company. If it was a naked squeeze, people should be going to jail. You are right though ... the move had nothing to do with the fundamentals of the company. I would expect a dramatic correction in price to continue.
I do not understand how the SEC allows this to happen. It's damaging to the capital markets to allow such blatant manipulation. In the end the shorts are getting justice but it's not good for the markets generally and the fallout will be harmful to some retail investors who are now piling in. I hope GME management is smart and does a shelf offering if possible to at least benefit from all this as well.
You know articles published on the internet, social media, and television by "credible sources" are low key doing the same thing (setting people up on the other side of funds' real intended trades), albeit on a smaller scale.
I'm only following it to the extent that it appears on daily Most Active or Winners/Losers market reports. My view about this–and most other "short this" fads that gamblers on Reddit/Twitter/Instagram/Robinhood push–is that if you're using the stock market as a replacement for Draft Kings or going to Vegas or A.C., then go have your fun. Just remember that unlike sports books, slots, or table games, shorting has infinite downside. Your potential losses are not limited to whatever your initial stake is.
And for options, individuals aren't going to beat the professional traders. They have information, capital, strategies, trade execution, and, most critically, EDGE, that you don't.
Yeah, it's a bummer. But if you, as a retail investor, want to make money over the long run, letting virtual balloon drops and confetti explosions dictate your trades ain't gonna get you to where you want to go.
People are purposely increasing the price to gain from short sellers. Word on the cyberspace has it that the community at https://www.reddit.com/r/wallstreetbets/ purposely made this and they are taking claim of it. Others say it happened by natural market trading behaviour but the members of WallStreetBets are proclaiming it was them in an act of superiority.
Now it has the problem of manipulating the market which is a crime, then again, I have trouble believing some members on a website having enough money to influence the stock of a $1B company...thats a BILLION dollars. I could see how this will happen if HSBC, JPMorgan, and Bank of America were on it but not nickname93011 could.
article cover the topic: https://www.nasdaq.com/articles/wallstreetbets:-the-big-short-squeeze-2021-01-26
Now it has the problem of manipulating the market which is a crime, then again, I have trouble believing some members on a website having enough money to influence the stock of a $1B company...thats a BILLION dollars. I could see how this will happen if HSBC, JPMorgan, and Bank of America were on it but not nickname93011 could.
article cover the topic: https://www.nasdaq.com/articles/wallstreetbets:-the-big-short-squeeze-2021-01-26
I have absolutely no knowledge of the stock market at all
but it appears that a bunch of poor people put they money together and started sticking it to some of the Wall Street cronies and are getting rich in the process (By all means please correct me if I’m way wrong... keep it 8th grade so I can understand)
They're also saying AMC stock is the next play... they’re sitting at 4.97 a share at the moment.... I’m thinking about blowing $1,000 out of my savings to buy 200 or so shares.... YOLO 🤷🏾♂️
but it appears that a bunch of poor people put they money together and started sticking it to some of the Wall Street cronies and are getting rich in the process (By all means please correct me if I’m way wrong... keep it 8th grade so I can understand)
They're also saying AMC stock is the next play... they’re sitting at 4.97 a share at the moment.... I’m thinking about blowing $1,000 out of my savings to buy 200 or so shares.... YOLO 🤷🏾♂️
LOL. AMC is at 17.9 premarket. This is exposing the issue of how institutions play by different rules because the SEC does not enforce the law. If retail were to short without available shares the brokerages would not allow them to do it.
Big risk, you'd have to go in with the attitude that you might be throwing a thousand bucks away.
GME's short squeeze is exceptional because there are more shares shorted than there are available. Right now GME stands at:
| Short % of Shares Outstanding (Dec 31, 2020) 4 | 102.08% |
By contrast AMC is nowhere in the vicinity at 18% short of shares outstanding.
Just a funny bit of investment trivia.
YOLO isn't just a pop culture acronym. It's the actual trading symbol for a cannabis ETF:
AdvisorShares Pure Cannabis ETF (YOLO) Stock Price, News, Quote & History - Yahoo Finance
Find the latest AdvisorShares Pure Cannabis ETF (YOLO) stock quote, history, news and other vital information to help you with your stock trading and investing.
finance.yahoo.com
Someone had a good sense of humor when they applied for the symbol name...
The GME situation is crazy town.
In all the madness I managed to make a whopping $20 on GME lmao. This was small ball stuff, trading between 1 and 5 shares. I’ve got some other stocks that WSB has been pushing so we’ll see what happens. I’m typically invested in weed stocks in my “play money” account so I’m used to serious volatility, but this is something else entirely. Good for the little guy getting one over on Wall Street for once.
In situations like what you're in right now, when do you decide to sell? I mean if I'm looking at a +226% increase, I would be pulling the trigger to liquidate everything.
Then again, some post on WSB had some guy make his 3MM into 22MM so who am I to judge.
My play account is only worth a little over $9k at the moment. Your account must either be worth a substantial sum or you went balls to the wall YOLO haha (and not the ticker).
I'm probably going to wait and see what happens on Friday. I imagine I'll sell before EOD Friday. With the SEC stepping in now and the WH press secretary saying that their administration is looking into what's going on, I can't imagine it'll last much longer. Remember, playing the markets to make money is something acceptable for giant hedge funds that are worth billions, not us plebs. They get bail-outs, we'll get regulation.
Honestly I just got extremely lucky. I was just messing around and bought a single share of Tesla stock in Feb 2019 for ~311. That exploded and I sold it for ~4k on Friday and dumped it all into GME and now it's worth $30k+
Nice, I've been grinding out gains with weed stocks the last couple years. Started with a $7400 investment, which might sound like not much gain here considering the account is only worth just north of $9k, but I've periodically taken out gains from the account to pay off debt like student loans.
At least at the moment anyway, they're scrutinizing why GME was allowed to be shorted so heavily in the first place, rather than pointing the finger at unusually savvy retail. At the end of the day, this was Wall Street's doing. They set it up and retail knocked it down.
Of course the presently being discussed band-aid of halting the stock for 30 days is only likely to hurt the retail investors regulators are saying they're worried about. Not to mention other stocks are currently undergoing similar volatility, so folks would likely just pile on into another.
Last edited:
Its a 21st century pump-and-dump, whether that was the intention or not.
Happy for those that got in at the right time and made the $$$.
Sad for those that are going to lose a lot because they chose to ride the hype train and buy something they don't really understand at the worst possible time.
Happy for those that got in at the right time and made the $$$.
Sad for those that are going to lose a lot because they chose to ride the hype train and buy something they don't really understand at the worst possible time.
this whole time meanwhile, nothing but greed was preventing these hedge funds from closing out positions when it hit 30, 40, 50, 60, 70, and so on and now here we are >300 and they cry FOUL
Discord bans them and now the subreddit is private. Gee, what a coincidence..
Caused a brief crash in GME, but it seems to be recovering, at least for now.
No way that a stock market could sustain these foolish levels.
Too much detachment from real economy.
Irrational Exuberance by Robert J. Shiller is always a good lecture.
