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Stock Thread (12 Viewers)

Sideshow Bob said:
Ignoring the NOKs of the world and focusing solely on GME, they're not trading on fundamentals, no. And some of them are going to get burned, yes. But their thesis is not wrong, even if it doesn't match your investing style. There are Boomers who would look at us and think, "You paid what multiple? For companies that have NEVER been profitable? What a maroon."
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There’s a huge difference between Amazon and Tesla growing their businesses by investing and not worrying about profits early and GameStop hemorrhaging revenue to be not profitable, right?

This isn’t a new investment paradigm. It’s day trading and just a case where day traders en masse caused short squeezes. I don’t think it’s a new investment paradigm. Knowing which companies have a lot of short interest has been around a lot longer than two weeks. This is a bit more artificial and that’s why I don’t have much sympathy for either side. I see no difference between shorts releasing BS reports or trying to trigger stop loss trades to drive stocks extra low and looking at short interest and artificially causing a huge squeeze. Short squeezing has been around forever but it was usually more organic like a company exceeding numbers and people flooding to buy so they can own the stock. GameStop isn’t crushing it, there was a coordinated effort to squeeze. It worked so bully for them but don’t act like this is an investment style. It’s no different than a bear raid with BS reports.

 
Cam someone explain the rules behind shorting and when you have to buy back the stock?  If the stock goes higher, are you forced to purchase it back sooner?

 
Chaz McNulty said:
I would think a Margin Call would prevent them form being to much in the hole.  Wouldn't the client have to have a certain amount invested, and an automated margin call would occur if they exceeded their limit.  But if something gapped up an incredible amount (beyond their account limit), I am not sure how they go about recovering the money.
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Yes, but can’t you technically lose more than you have with short selling? Buying something you can only go to zero, but let’s say you buy GME shares with all your money and then you borrow half as margin to buy more (wouldn’t shock me). If GME loses more than 67% (was down 80% from the high today), you are now negative and can’t pay back to money. As a brokerage where you see so many people buying GME and you know the intrinsic value is way less than what would make your investors broke, I can see the risk. 

 
stbugs said:
No. This is crazy ####. When my two youngest sons are showing me Tik Toks about WSB type memes and asking me if Tesla is a good investment, I know this #### show is going to come crashing down.

Who was it that wanted to know when taxi drivers are giving stock tips? I think my youngest son asking about Tesla for his friend and my middle son actually knowing about AMC stock qualifies. We are there boys and girls, the nadir. Time to jump off the mountain and see who lands in the snow and who lands on the rock. Cats and dogs living together, mass hysteria.
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I’m more confused now than before I posted in here. Thanks, I guess

 
Steve Tasker said:
1) Do you have diamond hands?

2) Do you like tendies?

3) How do you feel about failing brick-and-mortar video game retailers?
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1. You mean like Colossus, no

2. I love Henrik. Shesty and Georgie not getting it done. 
 

3. could take em or leave em. 
 

on a side note, how is it going Tasker. Did you ever get your soccer certs? Hope it’s not too cold in Buffalo. 

 
cheese said:
Yep. Gonna play this game until at least Friday at 4 to stall it sounds like.  Every time anyone opens they are flooded w buys. 
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This is criminal.  

I mean they over-shorted because out of greed, and now instead of learning a lesson, they just learned they will be protected.  

 
stbugs said:
Yes, but can’t you technically lose more than you have with short selling? Buying something you can only go to zero, but let’s say you buy GME shares with all your money and then you borrow half as margin to buy more (wouldn’t shock me). If GME loses more than 67% (was down 80% from the high today), you are now negative and can’t pay back to money. As a brokerage where you see so many people buying GME and you know the intrinsic value is way less than what would make your investors broke, I can see the risk. 
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I know the institutions will enact a margin call if you short something and it goes up more than what your account can handle.  The borrowed shares are basically automatically bought back for you at the market rate and returned to the borrower.  This will prevent some from losing 10X their initial investment.

 
Chaz McNulty said:
That's where we differ.  The whole intent of driving these stocks up wasn't some pyramid scheme where they could make money of the latecomers.  The idea was to drive the stock up and force the Shorts (130%) to cover at an extremely high price.  Which then drives the stock even further up.  Everyone makes out like bandits except for the Hedge Funds which lose billion because they had to cover at 10x plus their principal.

It's a fundamentally solid ides if you can keep the masses from panicking.
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You’re making the assumption that the last holders of the stocks are the hedge funds and not other WSB folks jumping in. You have no idea who’s buying and when the float is supposedly 50M and the shorts have 70 million shares short, the buying volume of a billion means the hedge funds aren’t likely the bag holders at the end. The hedge fund shorts got killed and the guys on the bottom of the WSB Ponzi scheme get killed. The WSB folks who’ve been building up positions well before you guys jumped in are the ones who made the mad money. Look at some of the pissed off folks in this thread. Do you think they are mad because they already sold their $15 shares?

 
Chaz McNulty said:
I know the institutions will enact a margin call if you short something and it goes up more than what your account can handle.  The borrowed shares are basically automatically bought back for you at the market rate and returned to the borrower.  This will prevent some from losing 10X their initial investment.
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That makes sense and I guess they could do the same in my buy one stock and the borrow and buy more, but these stocks move in minutes so I really could see them saying we don’t want to allow that risk. Heck, they could even be trying to avoid letting their clients lose a ton, which with buying GME at $300 is a real possibility. Could see lawsuits about how could you let my son risk all his college money like that or even like that RH kid who lost a ton and killed himself. I guess I can see not wanting that risk.

 
AcerFC said:
I’m more confused now than before I posted in here. Thanks, I guess
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GameStop has been on the Blockbuster Video path for a while now. There are reasons recently to think their prospects are better than they were, but still... brick and mortar video game sales? Not great.

Because of that, lots people and large institutions were betting that their stock price would continue to decline. So those people, in the least complex explanation possible, would sell shares of GameStop rather than buying them. That's called shorting the stock. If the stock is at $10 today, I sell it for $10 and hope it will drop to a lower price, so I can rebuy it for less. If it goes from $10 to $7, I get to keep the $3 difference.

But the opposite is also true. If the stock goes up from $10 to $14, I lose the $4 difference. In this case there were actually more shares sold short than exist. So by driving the price up, the WSB people forced the shorts to buy back their shares to cover at a higher price. It becomes a cycle. The higher the price is, the more it costs to cover, the higher the price keeps going. They drove the price up knowing they could force the price even higher as institutions that were short were forced to cover their losses. 

But people with lots of money like keeping that money, so they exerted pressure on brokerage houses to suspend buying (but not selling) of the security. Which causes the price that had been artificially inflated to deflate (also artificially, even if appropriately). Now the people who were largely responsible for creating this price increase are trying to do it again, because arrogant people with money and a belief the price should be lower than it is are, well, arrogant people with money. And stubborn.

 
stbugs said:
There’s a huge difference between Amazon and Tesla growing their businesses by investing and not worrying about profits early and GameStop hemorrhaging revenue to be not profitable, right?

This isn’t a new investment paradigm. It’s day trading and just a case where day traders en masse caused short squeezes. I don’t think it’s a new investment paradigm. Knowing which companies have a lot of short interest has been around a lot longer than two weeks. This is a bit more artificial and that’s why I don’t have much sympathy for either side. I see no difference between shorts releasing BS reports or trying to trigger stop loss trades to drive stocks extra low and looking at short interest and artificially causing a huge squeeze. Short squeezing has been around forever but it was usually more organic like a company exceeding numbers and people flooding to buy so they can own the stock. GameStop isn’t crushing it, there was a coordinated effort to squeeze. It worked so bully for them but don’t act like this is an investment style. It’s no different than a bear raid with BS reports.
Click to expand...
No.  One is cheating the system and the other is using the rules to their advantage.

 
stbugs said:
This isn’t a new investment paradigm. It’s day trading and just a case where day traders en masse caused short squeezes. I don’t think it’s a new investment paradigm. Knowing which companies have a lot of short interest has been around a lot longer than two weeks. This is a bit more artificial and that’s why I don’t have much sympathy for either side. I see no difference between shorts releasing BS reports or trying to trigger stop loss trades to drive stocks extra low and looking at short interest and artificially causing a huge squeeze. Short squeezing has been around forever but it was usually more organic like a company exceeding numbers and people flooding to buy so they can own the stock. GameStop isn’t crushing it, there was a coordinated effort to squeeze. It worked so bully for them but don’t act like this is an investment style. It’s no different than a bear raid with BS reports.
Click to expand...
There isn't a difference.  That's the whole friggin' point.  Brokers don't disable the sell button on institutions when they go hunting for stop losses and create a selloff.  The SEC doesn't do #### about BS short reports from huge investors.

But when retail does half as much, the brokers shut down, SEC starts talking about regulating it all, etc.

It's either a free market or it's not.  It can't be a free market for some and not for others.  That's the whole reason people are pissed.

stbugs said:
You’re making the assumption that the last holders of the stocks are the hedge funds and not other WSB folks jumping in. You have no idea who’s buying and when the float is supposedly 50M and the shorts have 70 million shares short, the buying volume of a billion means the hedge funds aren’t likely the bag holders at the end. The hedge fund shorts got killed and the guys on the bottom of the WSB Ponzi scheme get killed. The WSB folks who’ve been building up positions well before you guys jumped in are the ones who made the mad money. Look at some of the pissed off folks in this thread. Do you think they are mad because they already sold their $15 shares?
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The funny part about all of this is that disabling the buy button and trying to kill the rally now is what guarantees retail gets stuck with the bags.

I don't think you really read Chaz's post all the way through.  The whole theory in all of this is to trigger a squeeze to make the hedge funds buy at the top.  Yeah there is still retail buying at 300, 400 that can get screwed here, but if the squeeze actually DOES happen and this thing goes to $4000 or whatever, it's not getting there from retail buying.  The only way it gets there is if hedge funds get liquidated and all of their shares get covered in a huge rush of market orders where 70 million shares have to be covered and there are only 1 million available to buy.

Will that happen?  Who knows.  But all RH quashing it does is GUARANTEE that retail gets caught holding the top, when the whole premise of the trade is to systematically force the institutions to buy the top.

 
stbugs said:
I get that. I just think it’s hysterical that this is all over buying GME at $200-400 when everyone knows it’s a crappy company not worth close to that. I’d love to see how much the Chewy guy and his buddies have sold. Will be interesting to see if that info comes out.

I guess I liken the complaining about buying a stock for an unreal reasoning to a crazy on an other board who was complaining about potentially being forced by his work to get the vaccine (he could quit) and how it was similar to years ago when African American women were sterilized.

Listen, you guys are absolutely free to bash RH and switch trading platforms but they are a business and they set their terms of service. They say whether or not you can traded off hours, options, margin, foreign stocks, OTC stocks, etc.

If they deem buying a stock that could in fact crater as too risky then honestly, it’s something they can restrict. You can’t buy OTC stocks on RH and they are ridiculously risky. Buying GME at $400 is holding your money over a fire and hoping it doesn’t burn. It’s not on the bill of rights so it’s their limit to set. You can sell so there really isn’t any harm IMHO. **** move that could lose them customers, sure, but I still don’t think a lot of people realize the risk and that they basically classified these stocks as say penny stocks. People are pissed because they think short squeezing is their right and they are missing out on free money.
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The only problem I have is that my money is tied up with that firm and I can't move it on a dime when they change the rules.  It's like me shopping for a high end sports car this weekend and finding a dealer two states away saying he has one for sale.  I drive there on Saturday with my cashiers check made out to him and he tells me he's not selling it to me because high end sports cars are silly purchases.  Not only was my time wasted, I have funds tied up in that cashiers check for several days.

 
stbugs said:
There’s a huge difference between Amazon and Tesla growing their businesses by investing and not worrying about profits early and GameStop hemorrhaging revenue to be not profitable, right?
Click to expand...
To you and me, sure. To someone who is used to using outdated metrics to value businesses? How can TSLA be worth more than Ford when they have less revenue AND lower EPS?

I wouldn't favorably compare exploiting being on the right side of supply and demand to exploiting outright lies and misinformation, no.

 
shades said:
Thinking about this further... the 1/29 date is a guess based on what options were available back when this started. No one knows for sure. 

But if it sounds like it could be unfair, how about the fact that these shorts and hedge funds can see your account trades before they happen (allowing them to swoop in and buy a stock a nanosecond before you do, and therefore sell it to you at a slightly inflated price and take a middleman cut rather than let you deal directly with the owner) and can see what your stop limits are inside your account?

For example, if you have a $100/share stock and you want to be sure that you sell if it ever dips below, say, $80, to limit your losses... you put in a stop limit order at your brokerage. Well, the shorts can see that you have that price set, and know that if they artificially drop the price to $80, they can swoop in, buy it from you, then turn around and resell it once it goes back to a "normal" price of $100, whether that's a second or a minute or a day later or whenever. 

They can see your strategy and exploit it for their profit. They literally have access to your brokerage account's open trades. I think that's more unfair than some internet nerds using publicly available knowledge to develop a guess hypothesis about what the other traders are up to.
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Yes that sounds shady. Guess that is in the fine print and how trades are free. 

 
FreeBaGeL said:
Will that happen?  Who knows.  But all RH quashing it does is GUARANTEE that retail gets caught holding the top, when the whole premise of the trade is to systematically force the institutions to buy the top.
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I agree. Not to mention the unbelievable pub this story is getting- picked up in all major news markets.

 
Sideshow Bob said:
To you and me, sure. To someone who is used to using outdated metrics to value businesses? How can TSLA be worth more than Ford when they have less revenue AND lower EPS?

I wouldn't favorably compare exploiting being on the right side of supply and demand to exploiting outright lies and misinformation, no.
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Right.  And let's not pretend that 90% of the trades we talk about in here aren't about the value of the trade more than the value of the company.  Why are we acting like this is some new thing?  The majority of us here own a $3 billion dollar biotech company that has 10 employees and the world's worst CEO who commits fraud on a monthly basis.  Again, why are we acting like this is some new thing?

And FWIW, just for the funzies of it all, Koss is actually the ticker that has run the most in this anti-short attack, even more than Gamestop, and they just reported earnings.  After their 6600% run-up during this ordeal they now trade at a 214x multiple.  That's less than BYND, TSLA, ZM, and a whole other slew of stocks that we trade here regularly.

 
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CFB Sicko said:
I really hope none of you knuckleheads are holding onto AMC still. It's upside is volume driven. RH has placed a restriction and consumer confidence is lower than ever after losing their asses off.
 

People are only going to be more desperate to sell closer to EOD and I don't think AH is going to be kind to you either.
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AMC

After Hours:

$12.09

(UP 40.09%)+$3.46  :lmao:

 
Sideshow Bob said:
GameStop has been on the Blockbuster Video path for a while now. There are reasons recently to think their prospects are better than they were, but still... brick and mortar video game sales? Not great.

Because of that, lots people and large institutions were betting that their stock price would continue to decline. So those people, in the least complex explanation possible, would sell shares of GameStop rather than buying them. That's called shorting the stock. If the stock is at $10 today, I sell it for $10 and hope it will drop to a lower price, so I can rebuy it for less. If it goes from $10 to $7, I get to keep the $3 difference.

But the opposite is also true. If the stock goes up from $10 to $14, I lose the $4 difference. In this case there were actually more shares sold short than exist. So by driving the price up, the WSB people forced the shorts to buy back their shares to cover at a higher price. It becomes a cycle. The higher the price is, the more it costs to cover, the higher the price keeps going. They drove the price up knowing they could force the price even higher as institutions that were short were forced to cover their losses. 

But people with lots of money like keeping that money, so they exerted pressure on brokerage houses to suspend buying (but not selling) of the security. Which causes the price that had been artificially inflated to deflate (also artificially, even if appropriately). Now the people who were largely responsible for creating this price increase are trying to do it again, because arrogant people with money and a belief the price should be lower than it is are, well, arrogant people with money. And stubborn.
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Thx Sac. It still doesn’t make 100% sense but I get enough. 

 
Sideshow Bob said:
To you and me, sure. To someone who is used to using outdated metrics to value businesses? How can TSLA be worth more than Ford when they have less revenue AND lower EPS?

I wouldn't favorably compare exploiting being on the right side of supply and demand to exploiting outright lies and misinformation, no.
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:goodposting:   I believe the old rule was don't buy anything with a p/e over 13 or else you're a sucker.

 
Sideshow Bob said:
To you and me, sure. To someone who is used to using outdated metrics to value businesses? How can TSLA be worth more than Ford when they have less revenue AND lower EPS?

I wouldn't favorably compare exploiting being on the right side of supply and demand to exploiting outright lies and misinformation, no.
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Eh, I’ll stop because when people are monetarily involved they get emotional like watching their favorite team lose because of a bad call. I just don’t sympathize with any manipulation. I mean if the point is to not sell so shorts continue to pay more why does buying today matter? The company’s floats are traded multiple times a day, way more than the short shares. If volume was ridiculously low, wouldn’t that be better if the point was to really squeeze shorts so they didn’t have enough shares to buy? Even today with all the halting and buy limits the volume was still greater than the float. The volume over the past week has been multiples of the shares that were outstanding.

 
shades said:
I think that's more unfair than some internet nerds using publicly available knowledge to develop a guess hypothesis about what the other traders are up to.
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I find there is nothing unfair about some internet nerds using publicly available knowledge to develop a guess hypothesis about what the other traders are up to.

 
When I started working for a company that was traded I was stunned when we struggled to hit targets every quarter and our stock continued to climb at five times the rate of the market. 
 

That opened my eyes that our results did not drive our stock price. It was all speculation. 
 

Interesting to see what changes if any will come of this. It is certainly opening more eyes to how messed up this whole system is. 

 
FreeBaGeL said:
Chamath tweeted RH ditchers should move to SoFi and as you can imagine IPOE is running on that.
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Well, at least I got something out of this.  

----

Just saw a Rush Limbaugh rant on this.  Which agrees with Cruz, AOC, and Portnoy.  Such a wide variety of folks that see this right.  And then some yahoos on the news channels who have no clue.

 
pecorino said:
A former student of mine works in cyber security and he was pimping this hard back in September. I looked into buying it and did not want to jump through the hoops. That might have been short sighted on my part.
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This seems like a really bad case of my laziness costing me some actual coin. I did not want to deal with the coinbase and making an account and adding money into it, yadda yadda yadda. Dogecoin doubled today and now I'm reading on this forum that the redditors have their eyes on it. I have regrets.

 
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