Current Events > Hedge funds lost 2.8 billion dollars today apparently

(+) Yeah! (+)

Dammit I wish my trailing stops didn't trigger in the low 60s. Tomorrow should be better for us. I might fuck around and buy another stock solo just for laughs.

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GME and AMC bby

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Shorting is scummy as hell anyway.

Questionmarktarius posted...

Shorting is scummy as hell anyway.

lol how so
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g980 posted...

lol how so

as a terrible analogy, it's like buying fire insurance for the house next door.

how long till we bail them out with our tax dollars

hodl

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Bankrupt them all

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Questionmarktarius posted...

as a terrible analogy, it's like buying fire insurance for the house next door.

want to try for a good analogy maybe
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littlebro07 posted...

Bankrupt them all

This. Not just the companies, but the people who do it as well. They know the work they do has ramifications for the working class. They don't care.

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They have infinite money, theyll be ok. Gambling is fun when you have deep pockets and keep doubling down till you inevitably hit

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g980 posted...

want to try for a good analogy maybe

if you've got any ideas, go for it.

Tag

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g980 posted...

want to try for a good analogy maybe

How about no analogy at all. You borrow shares in a company to sell them, then go into Bloomberg or WSJ or some other publication and talk about how the company is failing, this drives down investor confidence and makes them sell off the stock lowering the price. Then you close your short position for a small profit at the expense of thousands of jobs.

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those poor hedges need trimming

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DTCC insurance is something crazy like $66 trillion

Idk why people are tagging lol I just thought it was a fun bit of info.

I'm definitely going in on the next squeeze wsb brings up though.

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Makeveli_lives posted...

I'm definitely going in on the next squeeze wsb brings up though.

Some people will always be left holding the bag.

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Pepys Monster posted...

Some people will always be left holding the bag.

I'm not yoloing shit lol

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Tyranthraxus posted...

How about no analogy at all. You borrow shares in a company to sell them, then go into Bloomberg or WSJ or some other publication and talk about how the company is failing, this drives down investor confidence and makes them sell off the stock lowering the price. Then you close your short position for a small profit at the expense of thousands of jobs.

1) why is expressing a negative sentiment wrong? Is it worse than publishing positive sentiment? Is it wrong for investment companies to publish any sentiment?

2) share price dropping doesnt cost anyone their jobs.
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Questionmarktarius posted...

if you've got any ideas, go for it.

Short selling provides more information to the market, allowing prices to better reflect market expectations.

In fact, i would say the downward pressure from short positions is even more valuable than upward pressure from long positions given that the infinite downside risk necessitates a higher degree of conviction.
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And before anyone gets in a tizzy about "shilling" i will say that any bozo still shorting meme stocks deserves to lose their shirt
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g980 posted...

1) why is expressing a negative sentiment wrong? Is it worse than publishing positive sentiment? Is it wrong for investment companies to publish any sentiment?

2) share price dropping doesnt cost anyone their jobs.

1) the sentiment expressed are literally just lies determined to artificially manipulate share prices for the benefit of the shorters to the detriment of the holders. Sentiments expressed should be the truth. When Ryan Cohen expressed he felt GME was undervalued due to all current consoles continuing to support physical media as well as profitable online sales, he did so with a position of facts. Shorters who said "they're closing stores" deliberately misled customers and GameStop's actual profits to destroy investor confidence.

2) it does when the company goes out of business because they can't attract any venture capital investors or get bought up by a competitor only to get shut down.

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gunplagirl posted...

This. Not just the companies, but the people who do it as well. They know the work they do has ramifications for the working class. They don't care.

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Tyranthraxus posted...

1) the sentiment expressed are literally just lies determined to artificially manipulate share prices for the benefit of the shorters to the detriment of the holders. Sentiments expressed should be the truth. When Ryan Cohen expressed he felt GME was undervalued due to all current consoles continuing to support physical media as well as profitable online sales, he did so with a position of facts. Shorters who said "they're closing stores" deliberately misled customers and GameStop's actual profits to destroy investor confidence.

2) it does when the company goes out of business because they can't attract any venture capital investors or get bought up by a competitor only to get shut down.

1) first, that is hyperspecific and not remotely fundamental to short selling. Second, everyone was bearish on GME. It was already tanking. There is no reason to believe they were lying about believing GME failing because it was failing. Just because you are bullish doesnt mean they are insincere.

2) a. Investing in a public company is not what venture capital does
b. Any public company that is dependent on raising capital through new public offerings to finance existing operations is already fucked. That is not common practice at all.
c. If theres an acquisition that would drive the price back up and is definitely not the intended outcome of short sellers. But this edge case is the closest thing to a plausible reason i guess
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Id be really curious to read the misleading article you mentioned tho
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g980 posted...

1) first, that is hyperspecific and not remotely fundamental to short selling. Second, everyone was bearish on GME. It was already tanking. There is no reason to believe they were lying about believing GME failing because it was failing. Just because you are bullish doesnt mean they are insincere.

That's not hyper specific at all. Everyone was bearish on GME because of exactly that.

See the following:
https://seekingalpha.com/instablog/11442671-gerald-klein/3096735-anatomy-of-a-short-attack

https://www.youtube.com/watch?v=W90V_DyPJTs


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How is going long different than shorting? People come out and make hyped up promises in hopes to make their shareholders a little bit more money. Sometimes it's all a lie and people lose their jobs as well.

If we can bet on a company going up, we can bet on a company going down.

Yes, there are sometimes people who take this to the extreme and say shit they shouldn't. But overall just betting against a company isn't a problem.

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WrkHrdPlayHrdr posted...

How is going long different than shorting?

This question is thoroughly answered by the above two links

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We don't need to bullshit about stupid mintuae for fuckwits itt.

Fuck hedge funds, fuck them all.

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Its ok they get bailouts

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Tyranthraxus posted...

That's not hyper specific at all. Everyone was bearish on GME because of exactly that.

See the following:
https://seekingalpha.com/instablog/11442671-gerald-klein/3096735-anatomy-of-a-short-attack

https://www.youtube.com/watch?v=W90V_DyPJTs

Its hyper specific to GME

Any thoughts on point #2? Your claim that it costs job was a big one.
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Tyranthraxus posted...

This question is thoroughly answered by the above two links

I don't literally mean HOW. And I read the first link but i'm not watching a video right now.

I'm saying how is coming out and talking shit to drive down the price of a stock worse than coming out and talking shit to raise the price of a stock? Both are done. Why are we mad about the lies that could bring it down but not the lies that could raise it up?

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g980 posted...

Its hyper specific to GME

Any thoughts on point #2? Your claim that it costs job was a big one.

I mean that's just general economics. I don't know why I have to explain how rapidly vanishing equity is bad for a company and it makes it more difficult to get new investments. The goal of short sellers is to drive companies bankrupt because if they do they don't have to return the shares. A bankrupt company has 0 employees.

And again it's not hyper specific to GME. The video I linked is from 2006. But they've been doing it for far longer. It's applicable to AMC as well as other companies historically. This is business as usual for short sellers. The only thing Unusual about GME is the high short ratio. AMC also has the same shorting issue. It's just shorted less than GME. (140% vs 90% at the time of the WSB trains. Short positions have probably closed since then)

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WrkHrdPlayHrdr posted...

I don't literally mean HOW. And I read the first link but i'm not watching a video right now.

I'm saying how is coming out and talking shit to drive down the price of a stock worse than coming out and talking shit to raise the price of a stock? Both are done. Why are we mad about the lies that could bring it down but not the lies that could raise it up?

The thing about long positions is that that don't pay off for a long time. You can look at Elizabeth Holmes for what happens when you lie about long positions. I'm not sure why you think people aren't mad about it. If anything because actual arrests were made they are more mad.

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Ill always hold the belief that people that are against short selling hopped on the trend when GME exploded

Nobody who sells stocks, even on an individual level, actually thinks short selling is bad

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Tyranthraxus posted...

I mean that's just general economics. I don't know why I have to explain how rapidly vanishing equity is bad for a company and it makes it more difficult to get new investments. The goal of short sellers is to drive companies bankrupt because if they do they don't have to return the shares. A bankrupt company has 0 employees.

And again it's not hyper specific to GME. The video I linked is from 2006. But they've been doing it for far longer. It's applicable to AMC as well as other companies historically. This is business as usual for short sellers. The only thing Unusual about GME is the high short ratio. AMC also has the same shorting issue. It's just shorted less than GME. (140% vs 90% at the time of the WSB trains. Short positions have probably closed since then)

I dont think you understand the economics. Equity offerings arent used to pay existing salaries. There are other ways to raise capital too - loans, debt issuances, etc.

And your article/video arent about shorting, theyre about things some people have done around shorting. Its like saying long positions are bad because of insider trading
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Samurontai posted...

Ill always hold the belief that people that are against short selling hopped on the trend when GME exploded

Nobody who sells stocks, even on an individual level, actually thinks short selling is bad

This is definitely the case
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Samurontai posted...

Ill always hold the belief that people that are against short selling hopped on the trend when GME exploded

Nobody who sells stocks, even on an individual level, actually thinks short selling is bad

I mean, if you don't short over 100% then yeah.

WingsOfGood posted...

I mean, if you don't short over 100% then yeah.

do you even know what this means

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Sackgurl posted...

do you even know what this means

I do.
GME was shorted and still is over 100% of available existing shares.

Tyranthraxus posted...

How about no analogy at all. You borrow shares in a company to sell them, then go into Bloomberg or WSJ or some other publication and talk about how the company is failing, this drives down investor confidence and makes them sell off the stock lowering the price. Then you close your short position for a small profit at the expense of thousands of jobs.

do you think it's legal to do this without disclosing that you are short on the company you're writing about?

because if you're an investment advisor for a publicly owned company it literally is not

nearly every piece of investment advice written in the public domain today comes with a disclaimer as to whether the author has any financial position in the associated stock

when they do you can take it with a grain of salt, just like "offer applies with enrollment in triple advantage."

WingsOfGood posted...

I do.
GME was shorted and still is over 100% of available existing shares.

and what percent of existing shares are traded day to day, do you know? because that's what would make this relevant, which is to say what it means

liquidity problems for shorts are real in leveraged short environments if and only if volume is enough to force a margin call that they can't pay

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Sackgurl posted...

and what percent of existing shares are traded day to day, do you know it? because that's what would make this relevant

I am guessig you know? Care to explain?

In any case, several keypoints about GME.

1. Shorts said they were put. They advertised it and paid news to say it. It was a lie as proven when congress questioned them under oath.

2. Shorts borrowed a few billion in loans. No one knows what that money went to. However, the same day they secured the loan GMe dropped from $300+ to around $180 instantly.

3. GME price is absurdly high and yet it still goes up and down like every week.

4. Days when the whole market is down, GME is usually up. And this is paired with news of shorters losing billions of dollars.

Not financial adivce I am an amateur.

WingsOfGood posted...

I am guessig you know? Care to explain?

the daily volume can be viewed here. there are 70 million shares outstanding.

https://finance.yahoo.com/quote/GME/history/

for shorts to be squeezed, volume must be high enough, ie, enough shorts must be looking to close their positions at the same time to be willing to pay the high prices. otherwise, the 'latent demand' for the stock can simply trickle out bit by bit after the volatile 'crashes'.

the current volume is a large fraction of the whole, which is why the stock continues to have its price held where it is. low volume days tend to crash it, high volume days tend to spike it. average volume is not going to stay high forever, mean regression is certain.

margin calls are triggered when sudden upward spikes (possibly from other margin calls) force them to deposit more than they have in their accounts as collateral

take a look at feb 25. volume of 150 million shares. there are 70 million shares of this stock. that was a short squeeze day. today it's 3 million.

there's no evidence the loans taken were used to make new shorts on GME. hedge funds are obligated by law to state their holdings quarterly. a sharp drop could just as easily be longs all trying to take profits at once as shorts trying to open new negative positions.

you want me to guess at where the loan money went? margin account collateral, so that short positions held at the time could wait out the storm. interest rates are so low that the actual interest on the holding is trivial; the real risk is collateral cost becoming too excessive to maintain and forcing a short to close their position at -1000% loss on the original position.

volatility tends to spike at maxima. i certainly would not short GME right now, potential for new margin calls is too high, but i would not be opening new long positions on it either, because while it might (briefly) be higher, in the long run it will be lower--companies don't just get super-high valuations without making money.

WingsOfGood posted...

4. Days when the whole market is down, GME is usually up. And this is paired with news of shorters losing billions of dollars.

this is a big one to understand:

the rest of the market's equity performance is correlated with the underlying company's performance. individual companies are not bellweathers or hedges against the 'rest of the market', they sometimes just are decoupled and completely independent from this.

GME's equity performance currently has nothing to do with the underlying company's performance.

eventually, it will again. and that time will not come when you expect it to.

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oh, by the way.

the claim that GME "currently" is shorted over 100% isn't even true.

https://www.marketbeat.com/stocks/NYSE/GME/short-interest/

the current short volume is 11 million shares, so whoever told you that was trying to fuck you over.

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