Reddit retail traders cause hedge funds to lose $5 bn

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Reddit retail traders cause hedge funds to lose $5 bn

Postby everything on Wed Jan 27, 2021 7:14 am

https://markets.businessinsider.com/new ... 1030006226

TL;DR: hedge funds were short selling GameStop (because digital downloads spells the end), but Reddit users caused the 1%ers to lose a lot of money. Won't last, but it's kind of hilarious. The Internet is still undefeated.
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby oragami_itto on Thu Jan 28, 2021 9:57 am

C'mon, put your retirement in the stock market, they said. It'll be safe, they said.
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby meeks on Thu Jan 28, 2021 10:26 am

yea - and now they've stopped trading on it to protect the 1%-ers - where were these protections when the 1%-ers drove it down to $3 a share? (or something around there)
Last edited by meeks on Thu Jan 28, 2021 10:27 am, edited 1 time in total.
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby Steve James on Thu Jan 28, 2021 12:36 pm

The problem is still that Gamestop stores weren't making money because they lost customers to online gaming, especially during the pandemic. The hedge funds bet on the stock continuing to lose money due to lack of sales. For them, when the stock falls, they have a way of making a profit. But, small investors began to buy the stock, so it went up --a lot. The more shares bought, the more the stock was worth. Oops, that meant those who be on it going down lost --a whole lot. Unfortunately, the stock price doesn't represent the value of Gamestop. And, the only way the small investors can keep their profits is to sell them while they're high. Take the money and run like hell.:)


https://www.youtube.com/watch?v=m-b3opvdYL4
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby oragami_itto on Thu Jan 28, 2021 3:12 pm

My wife wound up just making $500 off of this with an initial investment in Robin Hood in total of $17.
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby everything on Thu Jan 28, 2021 7:17 pm

It's good to just take these relatively small profits from these weird anomalies. "Trading"/gambling, not investing.

Like when I made $25 at the slots from $5 in quarters.

Presumably the short selling "hedge funds" made a smart decision (where the heck is GameStop really going?), but some investment firm's CEO was saying on CNBC something like it shouldn't be allowed to have 140% of the available stock being shorted (you can't really "borrow" more than exists). One of the underlying problems of the "rigged"/house always wins system. Then the government ("we the people") will help them out, but won't help the retail investor.
Last edited by everything on Thu Jan 28, 2021 7:18 pm, edited 1 time in total.
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby Steve James on Thu Jan 28, 2021 8:53 pm

If you want to screw the short sellers, use the profits at Gamestop.
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby everything on Thu Jan 28, 2021 8:57 pm

lol.

as a consumer / casual gamer, it's just super convenient to buy a game via download.

I miss going into Tower Records for the slightly overwhelming feeling. I still like Barnes & Noble. I really liked ThinkGEEK, but it seems like GameStop didn't really realize the e-commerce / brand potential, and kind of just destroyed some value.
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby Steve James on Fri Jan 29, 2021 6:16 am

Streaming and on-line purchasing destroyed retail entertainment stores before the pandemic hit. Yep, going to Tower Records or Virgin Megastore was an experience. Remember putting on headphones to preview cds :). They were also meeting places. It was a good experience, but there was no other choice.

Anyway, the game will change because the internet makes more information transparent and available almost instantly. Yeah, there's the "gamification" aspect, making it possible to play on a phone any time of day or night --and make money doing it. Is it more exciting than Fortnite or an online casino? (I dunno, never played either :)).

More people in the market is a good thing, though. Imagine if small investors got together to gain controlling interest in an oil company and could sell gas to stockholders at cost. :)
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby everything on Fri Jan 29, 2021 9:50 am

There's a new type of corporation proposed called LTE (long term enterprise) based on two assumptions:
1. most of the actual market is long term retirement investors
2. the "high value" knowledge workers in this kind of enterprise are creating the long term value

so ownership is restricted to those two groups (who have a long view, not a quarterly view), unlike with public corporations where management incentives are "aligned" with the shareholders' interest (so everything is "gamed" to be optimized for the short term stock improvement).

I don't know the legal and financial structure of the LTE and how feasible the idea is, but as a person in groups 1 and 2, I rather like the concept. I'm not really a trader, but I don't mind the idea of doing some very limited trading, but that's way down the list.
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby yeniseri on Tue Feb 02, 2021 3:10 pm

Reddit users did not cause hedge funds to lose the money. Reddit users did not have a capital base (financial reserves of various kinds!) to go long term and hedge fund people pannicked at the audacity of the little guy trying to follow and benefit from the market. Reddit retailers will never have that clout nor the backing of the 2-5% but now they may be taken a little more seriously from the big guys. If we really want to know, it was the hedge fund stalwarts with their university credentials who bankrupt Puerto Rico with their financial schemes and backing of their masters.

Puerto Rico's debt and Robinhood theft
https://www.thenation.com/article/archi ... bt-crisis/

Part 2 Aurelius Capital vs Puerto Rico
https://www.nytimes.com/2019/11/26/maga ... -rico.html
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby Trick on Tue Feb 02, 2021 8:44 pm

There will be some stormy waters up till 2030 with its new great reset implemented, Klaus and his WEF staff has plans for us all then, we will be free and there will be nothing to worry about-
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby everything on Tue Feb 02, 2021 9:50 pm

Some of the hedge funds already tried to factor in the retail short squeeze probability.

Retail can’t win the same trading game to the same degree.

It’s like saying my mom and pop shop competes with Amazon.

But individuals can make money.
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Re: Reddit retail traders cause hedge funds to lose $5 bn

Postby Steve James on Wed Feb 03, 2021 8:54 am

GameStop stock today down to $57 per share, down from almost 400$ last week.

Sell or Hold? Hope no one bought 100 shares at $400.

https://omaha.com/business/investment/p ... 0c140.html
Last edited by Steve James on Thu Feb 04, 2021 6:50 pm, edited 2 times in total.
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