News Are you riding the GME stock train?

[Nihilum]

As title says, have you hopped on the GME stock shitastrophe? Do you have a love hate relationship with your money? I'd love to hear if anyone else has gotten in on this madness. It's a thrill watching your portfolio go from +600 to -500 within three hours. If you're not in on it, what are your thoughts? This can include the ordeal with WSB and manipulation by the hedge funds.

 

[CorralDust]

I'm trying to get my head wrapped around it. I don't play the stock market other than my 401K from my job (which I just put on autopilot and never really look at - and have purposefully not looked at today).

Am I understanding things right that this is exposing some larger schemes about insider trading? It's the whole 'borrowing the stock' bits that have me scratching my head a little trying to understand.

 

[Nihilum]

I'm trying to get my head wrapped around it. I don't play the stock market other than my 401K from my job (which I just put on autopilot and never really look at - and have purposefully not looked at today).

Am I understanding things right that this is exposing some larger schemes about insider trading? It's the whole 'borrowing the stock' bits that have me scratching my head a little trying to understand.

Essentially, it's revealed that the "free market" we claim to have isn't too free. I'm no expert in anything other than weeping as I watched my portfolio drop a thousand dollars this morning, but I'll try to give a simplified rundown of what's happened so far.

1. Gamestop (GME) is thought to be going underwater. Short sellers that belong to hedge funds essentially take the gamble that the stock value is going to hit the rock bottom, so they borrow shares at a high price and immediately resell them. They will eventually need to buy these shares back in order to return them to the place they borrowed them from, but they're hoping they can buy them back at an astronomically low price to make a huge profit.
2. WSB on reddit decides to gamble against the short sellers as a meme. This essentially means that they think the stock value will go up instead of down. Through the combined effort of 5+ million people, they pump the price up enough to terribly fuck over the short sellers. The short sellers continue to double down and throw more money at GME under the belief that the value will still tank.
3. Somehow, somewhere, the short sellers manage to borrow 140% of GME's shares. GME rises from $4 to well over $150. The short sellers still need to buy back their borrowed stocks, but the price is now much higher with interest rates in the mid 30s. It's worth noting that a large hedge fund, Melvin Capital, is responsible for most of these short sellers. They lose upwards of thirteen billion dollars in three days. Also, Elon Musk tweeted "GAMESTONK!!" and triggered a hilarious price spike.
4. This gets us to today. Tomorrow is supposed to be D Day in regards to the short sellers' calls expiring (although this is debated information), where if the short sellers cannot cover their positions at a low cost, they will have to buy it at whatever is market value. This would bankrupt most of them. Overnight, GME's value rose to $500. Short ladder attacks, which are basically short sellers buying and selling small amounts to each other to artificially trigger a value drop, are concentrated heavily in the first hour the market opened today. Nonetheless, WSB continued to pump buys into the stock, until...
5. Almost every single major broker, including Robinhood, ceases all trading into GME and several other "meme stocks" until further notice. You can now only sell, and the value has gone to the shitter because there's been short attacks all day ever since. This wouldn't be a problem if not for the fact that the price will continue to go down because no retail investors (you and me!) can purchase the stock. Earlier today, it was revealed that most of these brokers are under the same clearing, Apex Holdings. This has some correlation to the guys that bailed out Melvin, but I can't recall the name rn.

And that's all there is to the story for now. I suppose the biggest thing to get out of this is that the little guys like you and I aren't supposed to make a profit off the stock market - the second our play money starts to screw over the hedge funds (billionaire investing firms), they'll put out every trick in the book to shut the whole place down. It's uncovering a lot of corruption and market manipulation. This stock alone has shown how a couple big hedge funds can get together to beat a stock into the ground, while also getting away with bankrupting a lot of folks who were doing honest trading. People were making millions up until today.

 

[AnnJam]

Not participating but I am following the story and it has been absolutely wild. I'm learning a lot too, I'm starting to get a better very basic grasp on stocks because of this and I think that is cool (on a personal improvement level cuz you can't go wrong with useful knowledge). It has been wild and I'm wondering what their next move is going to be with all the holds on certain stocks. I don't think this is over by along shot and things are going to get more volatile for a bit.

Honestly on a entertainment level I am just singing that these mother fuckers are getting a taste of their own game. Like fuck bottle those rich man tears and pass em down the line!

CorralDust This guy also gives a very basic layman's explanation to the situation too.

 

[Sele]

No, but it is interesting to watch