Current Events > CNN: How bad bets on meme stocks led to a $1 billion wipeout

(+) Yeah! (+)

https://www.cnn.com/2024/05/15/investing/gamestop-short-sellers-nightcap/index.html

The only bet riskier than buying meme stocks like GameStop may be cheering for their decline. Thats the lessonWall Streets short-sellers are learning the hard way this week.

For the first four months of the year, GameStop short-sellers investors who bet on a stocks decline were sitting on $392 million in gains, up nearly 50%. But with this weeks surge, those gains have vanished and left shorts with more than $1.2 billion in paper losses, according to research from S3 Partners. Nearly $1 billion of that was wiped out Monday alone.

Wow they lost a billy just from this week. No not the regular people but the shorters.

WingsOfGood posted...

https://www.cnn.com/2024/05/15/investing/gamestop-short-sellers-nightcap/index.html

Wow they lost a billy just from this week. No not the regular people but the shorters.

You dont think retail lost money too? How many peoples $50+ calls are going to be wiped out tomorrow?

The real shenanigans will happen tomorrow.

whitelytning posted...

You dont think retail lost money too? How many peoples $50+ calls are going to be wiped out tomorrow?

The real shenanigans will happen tomorrow.

CNN reported on the 1 billion loss by shorters.

If you believe what you just said go find a CNN article about it and make a topic on it. Nothing is preventing you other than that said article may not exist.

I dont care about what CNN said. Thats why I only quoted what you said.

whitelytning posted...

I dont care about what CNN said. Thats why I only quoted what you said.

What I said was literally a summary of the article.

Stocks even allowing shorts is a stupid ass idea. How are you increasing your net worth by trading stocks and going "I bet this shit goes DOWN in value"?

Oh NO!

Anyway...

wanderingshade posted...

Stocks even allowing shorts is a stupid ass idea. How are you increasing your net worth by trading stocks and going "I bet this shit goes DOWN in value"?

Shorts serve a purpose that is more than just hoping a company goes out of business, I read a thing about how it does.. something good

but I dont remember what it was

MICHALECOLE posted...

Shorts serve a purpose that is more than just hoping a company goes out of business, I read a thing about how it does.. something good

but I dont remember what it was

Well I'm convinced
>_>

MICHALECOLE posted...

Shorts serve a purpose that is more than just hoping a company goes out of business, I read a thing about how it does.. something good

but I dont remember what it was

That's basically describes the stock market as a whole.

I dunno. Wikipedia says something about "price discovery" and shorts "correct the market" on things that are "overvalued" but that just sounds like some shit like money is magic-voodoo and we're all making it up kinda stuff.

HylianFox posted...

Well I'm convinced
>_>

It talked about the housing crash thing, like the movie the big short

but I didnt really understand much of that movie either

I am very smart

I am aware that "shorting" is a thing but I don't understand what purpose it serves beyond making rich douchebags richer

wanderingshade posted...

Stocks even allowing shorts is a stupid ass idea. How are you increasing your net worth by trading stocks and going "I bet this shit goes DOWN in value"?

You borrow stocks to sell with a promise to return them later. You then sell the borrowed stocks and buy them back when you need to return.

HylianFox posted...

I am aware that "shorting" is a thing but I don't understand what purpose it serves beyond making rich douchebags richer

Something about banning it doesn't make the market more moderate and that it "counters a bullish market" or some shit.

the funny thing about gamespot is, at least to me, I haven't been in one in ages, but I remember they are kind of just a funk pop business with a little video games on the side now. Like, people were shorting gamestop because it didn't appear to have much value. People caught wind of this and people bought a bunch of gamestop stock, inflating the value. But who actually cares about gamestop? I only ask because whatever the trading price of gme stock is, it's more divorced from the reality of the business itself than most stocks.

MICHALECOLE posted...

Shorts serve a purpose that is more than just hoping a company goes out of business, I read a thing about how it does.. something good

but I dont remember what it was

So why parrot it when it made no sense such that you cannot even explain it?

argonautweakend posted...

the funny thing about gamespot is, at least to me, I haven't been in one in ages, but I remember they are kind of just a funk pop business with a little video games on the side now. Like, people were shorting gamestop because it didn't appear to have much value. People caught wind of this and people bought a bunch of gamestop stock, inflating the value. But who actually cares about gamestop? I only ask because whatever the trading price of gme stock is, it's more divorced from the reality of the business itself than most stocks.

It's pretty much just the internet trolling shorters.

argonautweakend posted...

the funny thing about gamespot is, at least to me, I haven't been in one in ages, but I remember they are kind of just a funk pop business with a little video games on the side now. Like, people were shorting gamestop because it didn't appear to have much value. People caught wind of this and people bought a bunch of gamestop stock, inflating the value. But who actually cares about gamestop? I only ask because whatever the trading price of gme stock is, it's more divorced from the reality of the business itself than most stocks.

Truth is, I actually have been shopping at GS more frequently in the past couple years, but mostly to buy gaming kitsch and not actual games...

argonautweakend posted...

the funny thing about gamespot is, at least to me, I haven't been in one in ages, but I remember they are kind of just a funk pop business with a little video games on the side now. Like, people were shorting gamestop because it didn't appear to have much value. People caught wind of this and people bought a bunch of gamestop stock, inflating the value. But who actually cares about gamestop? I only ask because whatever the trading price of gme stock is, it's more divorced from the reality of the business itself than most stocks.

I been to gamestop because the $15 reward program gives you $5 free credit a month.

You get literally $60 value if you buy a game every month (I don't but occasionally I do).

In addition you get points that can reduce the price further and they often do firesales.

For instance they firesold Xenoblade 3 awhile back for $25 a pop.

When I go there I see people in the store. Parents come to buy Pokemon cards for their kids quite often.

Also now if a niche game is overpriced on amazon or ebay gamestop is one of the places you can usually find it because Target, Best Buy, Walmart purge their game stock quite frequently now so goooodluck.

wiki says this

Research indicates that banning short selling is ineffective and has negative effects on markets.[1][2][3][4][5] Nevertheless, short selling is subject to criticism and periodically faces hostility from society and policymakers.[6]

https://en.wikipedia.org/wiki/Short_(finance)

but WHAT are the negative effects?

doesn't say.................
hmmmmmmmmmmmmm

then I look at History

SURELY I will see GOOD reasons why shorting exists RIGHT? RIGHT?

History
The practice of short selling was likely invented in 1609 by Dutch businessman Isaac Le Maire, a sizeable shareholder of the Dutch East India Company (Vereenigde Oostindische Compagnie or VOC in Dutch).[9] Short selling can exert downward pressure on the underlying stock, driving down the price of shares of that security. This, combined with the seemingly complex and hard-to-follow tactics of the practice, has made short selling a historical target for criticism.[10] At various times in history, governments have restricted or banned short selling.
The London banking house of Neal, James, Fordyce and Down collapsed in June 1772, precipitating a major crisis that included the collapse of almost every private bank in Scotland, and a liquidity crisis in the two major banking centres of the world, London and Amsterdam. The bank had been speculating by shorting East India Company stock on a massive scale, and apparently using customer deposits to cover losses. It was perceived[citation needed] as having a magnifying effect in the violent downturn in the Dutch tulip market in the eighteenth century. In another well-referenced example, George Soros became notorious for "breaking the Bank of England" on Black Wednesday of 1992, when he sold short more than $10 billion worth of pounds sterling.
The term short was in use from at least the mid-nineteenth century. It is commonly understood that the word "short" (i.e. 'lacking') is used because the short seller is in a deficit position with his brokerage house. Jacob Little, known as The Great Bear of Wall Street, began shorting stocks in the United States in 1822.[11]
Short sellers were blamed for the Wall Street Crash of 1929.[12] Regulations governing short selling were implemented in the United States in 1929 and in 1940.[13] Political fallout from the 1929 crash led Congress to enact a law banning short sellers from selling shares during a downtick; this was known as the uptick rule and was in effect until 3 July 2007, when it was removed by the Securities and Exchange Commission (SEC Release No. 34-55970).[14] President Herbert Hoover condemned short sellers and even J. Edgar Hoover said he would investigate short sellers for their role in prolonging the Depression.[citation needed] A few years later, in 1949, Alfred Winslow Jones founded a fund (that was unregulated) that bought stocks while selling other stocks short, hence hedging some of the market risk, and the hedge fund was born.[15]
Negative news, such as litigation against a company, may also entice professional traders to sell the stock short in hope of the stock price going down.
During the dot-com bubble, shorting a start-up company could backfire since it could be taken over at a price higher than the price at which speculators shorted; short-sellers were forced to cover their positions at acquisition prices, while in many cases the firm often overpaid for the start-up

nope

lol

Its getting to the point were Gamestop hardly has that many games. Like, I did not even realize Eiyuden Chronicle: Hundred Heroes was a thing so I tried to buy it for the PS4, but since I did not reserve it, not only did it not have any copies, none of the other stores in the area had it either so I gave up and just bought the online one....it is looking grave.

For all the hell Gamestop gets it would just be places like Target and Wallmart left if it folded and that would suck.

wanderingshade posted...

I dunno. Wikipedia says something about "price discovery" and shorts "correct the market" on things that are "overvalued" but that just sounds like some shit like money is magic-voodoo and we're all making it up kinda stuff.

We literally are is why. None of this shit has a real value, not even our labor. It's worth whatever price tag can move whatever we're talking about around.

If people stopped spending and determined everything was worth wild West era prices, that's what it would be. Granted that is ridiculously unrealistic.

Necronmon posted...

Its getting to the point were Gamestop hardly has that many games. Like, I did not even realize Eiyuden Chronicle: Hundred Heroes was a thing so I tried to buy it for the PS4, but since I did not reserve it, not only did it not have any copies, none of the other stores in the area had it either so I gave up and just bought the online one....it is looking grave.

For all the hell Gamestop gets it would just be places like Target and Wallmart left if it folded and that would suck.

There is no PS4 version....

and the PS5 version is literally in stock

https://www.gamestop.com/video-games/products/eiyuden-chronicle-hundred-heroes---playstation-5/402139.html

Try looking up your local store I bet they might have a copy today unless you live in the middle of nowhere

No there was a PS4 version I had the option to download the PS4 and PS 5 versions when I bought it and the two versions have there own trophy lists.

R_Jackal posted...

We literally are is why. None of this shit has a real value, not even our labor. It's worth whatever price tag can move whatever we're talking about around.

If people stopped spending and determined everything was worth wild West era prices, that's what it would be. Granted that is ridiculously unrealistic.

b-b-but stock fundamentals

how can you say this? my digital certificate that doesn't even let me control the direction of a company even when they hold a vote (they can just reject the majority vote if they want) doesn't have actual value?!?

Necronmon posted...

No there was a PS4 version I had the option to download the PS4 and PS 5 versions when I bought it.

It doesn't exist

https://www.reddit.com/r/EiyudenChronicle/comments/17ushos/i_think_that_the_physical_release_for_the_ps4/

seems ps4 is only digital

Fair enough, but I asked for the PS5 version when I think about it.

Necronmon posted...

Fair enough, but I asked for the PS5 version when I think about it.

Was it release day? Gamestop isn't allowed to sell to people who didn't pre-order. They do this to try and get you to pre-order next and also to make sure employees don't mess up and sell out of the product before the people who pre-ordered get it.

WingsOfGood posted...

seems ps4 is only digital

That's the other thing, plenty of games don't even have a physical release anymore

HylianFox posted...

That's the other thing, plenty of games don't even have a physical release anymore

another reason I go to gamestop is half the games that come out I don't even know they existed but I see them on the shelf

tons of weeb games go under the radar

Necronmon posted...

Its getting to the point were Gamestop hardly has that many games. Like, I did not even realize Eiyuden Chronicle: Hundred Heroes was a thing so I tried to buy it for the PS4, but since I did not reserve it, not only did it not have any copies, none of the other stores in the area had it either so I gave up and just bought the online one....it is looking grave.

Well, as much as a lot of dudes like to talk shit about those that pre-order games that is pretty much the entire point of pre-ordering......so you let the store know you want a copy of this smaller niche game and thus they order a extra 1 just for you. Don't ever expect to waltz in any store, even one that sells a lot of games like gamestop and expect to find loose copies for the smaller name games like eiyuden chronicles, mega man battlenetwork collection (this is why amazon tends to suck even more than brick and mortar stores for the past few years.....even if you pre-order games from them, with these smaller games they a lot of times don't even ship these shits out until days, or in mega man battle network's case like 2 weeks later for a lot of it's buyers), your standard falcom/NIS game, etc. in this day and age.

Digital sales is the majority now in a lot of places so brick and mortar stores is only going to order enough copies for their pre-orders and maybe like, 1 or 2 loose copies if you are lucky for those games like one piece pirate warriors 4. (My brother busted his ass something serious to find a physical for this one on release for the switch).

*Of course you rarely have to worry about a lack of copies for your standard ubisoft release, sports game, whatever is the latest AAA flavor of the month etc.*

I already know I wanted a disc for both shin megami tensei 5 vengeance and that other game atlus is putting out, so I put my orders in. Both of those aren't going to have loose copies anywhere in-store down my way for sure.

WingsOfGood posted...

another reason I go to gamestop is half the games that come out I don't even know they existed but I see them on the shelf

tons of weeb games go under the radar

Pretty much the main reason I bought this game here since I seen it on the upcoming releases and gamestop is the only single store in my area that is stocking a game like this. Glad I did though since this game was pretty cool:
https://gamefaqs.gamespot.com/a/forum/1/180394bd.jpg

I get that, that's why I reserve things such as Armored Core 6 or Soul Hackers 2 before they vanished. What I'm talking about is that I did not preorder Chronicles because I did not even know what it was...it was not till I looked at the message boards here and saw that the game was a spiritual successor to Suikoden that I realized it was a game I wanted.

Its harder to even be aware of lesser known games if they vanish before you even have a chance to buy them and all.

Mad-Dogg posted...

Pretty much the main reason I bought this game here since I seen it on the upcoming releases and gamestop is the only single store in my area that is stocking a game like this. Glad I did though since this game was pretty cool:
https://gamefaqs.gamespot.com/a/forum/1/180394bd.jpg

Interesting, I will look it up. And if it looks good I will use my amazing $5 off to get it at gamestop!!! and point reward coupon!!!

Necronmon posted...

I get that, that's why I reserve things such as Armored Core 6 or Soul Hackers 2 before they vanished. What I'm talking about is that I did not preorder Chronicles because I did not even know what it was...it was not till I looked at the message boards here and saw that the game was a spiritual successor to Suikoden that I realized it was a game I wanted.

Its harder to even be aware of lesser known games if they vanish before you even have a chance to buy them and all.

But does your gamestop have any copies today? I bet they do. And you can order the game off the website and ship it to store anyways.

That is if you can't find it anywhere else and don't want to use amazon.