Gamestop

John Galt

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Ok, so if I'm a hedge fund - or anyone - who shorted these things, I just hang on until the inevitable drop (assuming that's feasible). Or are some of these guys (hopefully not S2 ) overleveraged?

Sorry, these are probably things I can look up, but it's not my area, so I thought I would cut to the chase here. I have barely read anything about this and should....but is there any reason to believe it won't ultimately drop and whoever played the last bet will lose his ass and all the shorters will be just fine?
The speculators who shorted are losing their a$$es as the price rises. Their only recourse is to buy it back to cover their positions, which drives the price even higher. Too many people need to buy, and the float is relatively small, which leads to ridiculous prices.
 

GoodasGold

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Im now out of precious metals and into precious drugs.
 

MplsGopher

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but is there any reason to believe it won't ultimately drop and whoever played the last bet will lose his ass and all the shorters will be just fine?
Makes sense to me.

Once there is any even appearance that the crash has started, people will run for their lives and anyone who is holding the stock won't be able to give it away.
 

LesBolstad

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Ok, so if I'm a hedge fund - or anyone - who shorted these things, I just hang on until the inevitable drop (assuming that's feasible). Or are some of these guys (hopefully not S2 ) overleveraged?

Sorry, these are probably things I can look up, but it's not my area, so I thought I would cut to the chase here. I have barely read anything about this and should....but is there any reason to believe it won't ultimately drop and whoever played the last bet will lose his ass and all the shorters will be just fine?
Most hedge funds have portfolio requirements that force them to sell; they also have margin calls where they cannot just hang on. They are losing billions on these trades and have no other option. In a sense, it's revenge for the little guy/retail investor who got screwed in the 2008 market collapse where wall street got bailed out while retail got crushed.
 

MplsGopher

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So the question I have yet to see answered is: why did these hedge funds short a stock like Gamestop, in the first place? Was it actually overvalued, to start out with?
 

BarnBurner

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Most hedge funds have portfolio requirements that force them to sell; they also have margin calls where they cannot just hang on. They are losing billions on these trades and have no other option. In a sense, it's revenge for the little guy/retail investor who got screwed in the 2008 market collapse where wall street got bailed out while retail got crushed.
Nailed it.

Just watched the CEO of Social Capital battle with the host on Fast Money. Very interesting back and forth.....
 

Section2

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There's clearly an inefficiency that's been identified and now exploited.
Yes. The Fed floods the market with cheap money, all looking for yield, leads to giant malinvestment, and spectacular losses. Hugely over leveraged markets. Things seem fine and then some small thing becomes the straw the breaks the back. This could be it? Volatility is usually the enemy.
thats my take.
idiotic hedge funds having ridiculously risky short positions with very little upside should go out of business. But the systemic nature of these funds mean they wont bear the burden alone.
 

stocker08

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Good. Andrew Left got smoked on this deal too.
 

Wally

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idiotic hedge funds having ridiculously risky short positions with very little upside should go out of business. But the systemic nature of these funds mean they wont bear the burden alone.
We can thank Republicons for deregulating the market when it all crashes down...
 

MNGopher23

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Bailout hedge funds?
Yea thats stupid.
Very stupid. Do not bail out the hedge funds. They need to manage their risk better. The stock market is how the 1% has manipulated their gains and wealth. The number of blatant lies and manipulation from the media this morning should be investigated by the SEC, but we all know that won't happen.
 

Section2

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Ok, so if I'm a hedge fund - or anyone - who shorted these things, I just hang on until the inevitable drop (assuming that's feasible). Or are some of these guys (hopefully not S2 ) overleveraged?

Sorry, these are probably things I can look up, but it's not my area, so I thought I would cut to the chase here. I have barely read anything about this and should....but is there any reason to believe it won't ultimately drop and whoever played the last bet will lose his ass and all the shorters will be just fine?
Hedge funds borrow money from Wall Street banks to leverage their portfolio. As paper losses mount, banks issue a margin call, and force funds to liquidate. Also, by shorting you are borrowing shares from the banks that own it. And they charge interest on the arrangement. Crowded positions get expensive to borrow, rates go up. So the big players cant ride it out. They get forced out. Once the shorts liquidate, reality will kick in at some point and the longs will try to take profits, and it will collapse. Where is that point? Im sure the Wall Street banks know.
 

fan of Ray Williams

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Looks like Wall Street Bets discord got banned from Reddit. (Think it just happened.)
 

Section2

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We can thank Republicons for deregulating the market when it all crashes down...
LMAO!!! Its regulated, highly. The only more highly regulated market is healthcare. Not surprisingly, they are our two most broken industries.
 

LesBolstad

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NBC NEWS: Short-sellers lost $14.3 billion today alone on GameStop stock, according to S3 Partners.
Total losses on all the Reddit impacted stocks may approach 50 billion!

What sucks is this will impact the rest of the market (I'm guessing down bigtime next few days) and it will cost the average Joe investor.
 

Wally

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I think its awesome, little guys target heavily shorted stocks, pile in and just f the hedge funds hard.
 

Spoofin

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I think its awesome, little guys target heavily shorted stocks, pile in and just f the hedge funds hard.
Id mention how many little guys here will also be hurt, but you would probably call me a nazi then. Wally standing tall against the evil hedge funds!
 

Wally

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Id mention how many little guys here will also be hurt, but you would probably call me a nazi then. Wally standing tall against the evil hedge funds!
Don't gamble with money you don't plan on losing....
I am not doing anything but being amused, guess even that triggers you.不
 

TurfGopher

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This is a fascinating mid week story. I invest in relatively safe, long term stuff(mutual funds, index, oil companies, ATT) so this is all kind of a different world to me. My brother has been making a killing with all the "hot stocks" this last year and I considered jumping in, but I'm kind of a pussy with money so I figure I will just steer clear. Mo' Money Mo' problems! Bernie Madoff, The Big Short, and the crash in 2008 (right when I was graduating college) scared me away from stock market get rich quick dreams I ever had.
 
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