How dare they! Unruly serfs launched a massive bull raid on shorted stock today, and value skyrocketed as Hedgefund millionaire socialists scrambled to cover their positions. KABOOM. Gamestop, GME, went from a trifling 17 bucks a share to $292 at the sound of the bell today.
So what? So a lot, because elite billionaires gambled a lot of money on rubbish companies like GME going down in value. Borrow those shares at their stupidly low price, sell them, knowing in your fiscal genius that they'll decline in value, buy them back, return them to the lender and pocket the difference.
There it is, going short, and how very awesome, let's make money out of failing businesses. Iniquitous, eh? All hail our asset-stripping overlords. But not so fast.
What if people piled into GME and stocks like it, and drove the price up? You know, like Blackberry, Blockbuster, microcaps and on. Then all of a sudden the genius shorters have to make good on their deal and buy those shares back at massive loss. Welcome to margin calls and utter disaster.
No wonder the /rwallstreetbets Discord server was taken down this evening. But lo and behold, the portal's up again and it looks like the djinn's outta the bottle. Let's see what tomorrow brings.
That in mind, here at the Compound we have a simple and hopefully compelling message to retail investors. Hold the Line.
LSP
Way, way back the initial Microsoft stock was floated on the Spokane, WA stock exchange. The broker was one Ralph Sites. His son, Tom Sites, was our company's bean counter (one of the few bean counters I ever respected). Buy in was $10,000. Tom convinced some of us to put in enough chips to come up with the $10,000. All of us got rich, right? NO! Microsoft went years without paying a dividend. The best use of the stock was collateral. After 2 years I bailed, at a modest profit, and bought land. Also during that time Iceland bonds were paying 13% annual interest. Gee, Iceland declared bankruptcy. Glad I didn't get on that train.
ReplyDeleteThat was my last flirtation with the stock market. I like tangibles like land, cars/trucks and railcars.
Caution on land. Montgomery, Al. Get off the interstate and drive Hwy 2 into downtown. You will pass miles of closed shopping malls.
Well, you don't need to be able borrow the stock to short it. Called naked shorting. They can short back to the stone age. In GME's case the short interest was 140% of the outstanding shares (50 mil shares). I hope some politicians were in that group of shorts.
ReplyDeleteWell, the buyers better beware too. People posting comments such as "I won't sell below 1,000 !" or I have my Ferrari on Order ! are very likely pumpers and dumpers selling the shares they got at 100 to newbie geniuses for 350/share asover yesterday sometime. It's a game of musical chairs and at some point the music stops and there are no buyers to relieve you of those shares you picked up at 350 and you are no a bagholders as they were called during the dotcom bust.
(Never been to reddit myself)
Gonna be a lot of kids trying to commit suicide by jumping out their basement windows when that happens.
Well shorts are important to the market, as a stock falls, shorts take their profit by buying the shares they sold earlier creating at least a temporary backstop to falling stocks and markets. Else, the things could go to zero without them.
Yep they play hardball on wall street. I only trade ETF'S associated to the S&P500 adn Russel2000. Individuaal stocks are too dangerous for me. Elon Musk come out with some idiotic statement and you're down 50 bucks a share... Bunch of kids (and pros) target Gamestop and your out 2.75 billion in a day or two. I heard other hedgies 'gave' the fund that really got his hard 2.75 billion to help them out. howz dat work?
Well-Seasoned Fool's go 'round with MS stock in the VERY early days of that company, reminded me of MY very short-lived time as a MS investor, but happily I did make a few dollars (no killing - NOT by a long-shot!), and remember, with a smile, when I lived in Seattle and actually attended a stockholder's annual meeting in a downtown hotel. I enjoyed a cup of coffee and a sweet roll, but that's all I remember of that brief foray with MS stock.
ReplyDeleteWSF, you know the saying, "They ain't making any more land." That in mind, churches and families have a weird tendency to sell their land, which they mostly don't get back. Those that hold the line over the years sometimes, maybe often, do very well.
ReplyDeleteSaying that, I'm just an observer living in a Church Compound! Still, no luggage racks on the back of a hearse :)
Kid, it's a wild and crazy ride, and I'm only a spectator. Saying that, it'd be neat to have put a little bit into the EPIC bull ride, just for kix and to be part of history.
ReplyDeleteSo. Melvin gets several billion from Capital(?) yesterday and stays afloat. Retail brokerages SHUT DOWN this afternoon viz. target stonks. Rumors of liquidity crisis at Robinhood and phone calls all 'round. Targeted shorts take a clubbing and presumably Hedge Fund positions are covered.
Robinhood set to open trading tomorrow under pressure from class action suit and lawmakers (AOC/CRUZ!?!) themselves. How many of their colleagues are caught up in the market rig and stand to lose millions? Good question.
Point being, the raid's not over and fair play to the serfs for whacking our elite overlords with their stimmy checks, heh. But as you say, those in it to make actual cash might want to think hard before risking their life savings.
Let's see how it plays out tomorrow. I predict the r/wallstreetbets etc crowd will move on to heavy metal, like SLV. Hmmm. Like a roving hedge fund destroyer. I like the idea of that.
Kid, it's a wild and crazy ride, and I'm only a spectator. Saying that, it'd be neat to have put a little bit into the EPIC bull ride, just for kix and to be part of history.
ReplyDeleteSo. Melvin gets several billion from Capital(?) yesterday and stays afloat. Retail brokerages SHUT DOWN this afternoon viz. target stonks. Rumors of liquidity crisis at Robinhood and phone calls all 'round. Targeted shorts take a clubbing and presumably Hedge Fund positions are covered.
Robinhood set to open trading tomorrow under pressure from class action suit and lawmakers (AOC/CRUZ!?!) themselves. How many of their colleagues are caught up in the market rig and stand to lose millions? Good question.
Point being, the raid's not over and fair play to the serfs for whacking our elite overlords with their stimmy checks, heh. But as you say, those in it to make actual cash might want to think hard before risking their life savings.
Let's see how it plays out tomorrow. I predict the r/wallstreetbets etc crowd will move on to heavy metal, like SLV. Hmmm. Like a roving hedge fund destroyer. I like the idea of that.
jdb, if I'd been a smart parson I'd have invested in APL when it was nothing, mask making businesses and assorted get rich fairly quick schemes. But I didn't, oh well. My family, on my mother's side, did make some investments back in the day.
ReplyDeleteFor one, they figured Denton would become a rail hub instead of Dallas. They also went long in burros. Yes, burros. These, it was felt, would be the wave of the future. Well, that may very well be the case but we haven't gone long enough.
Where's my burro ranch on the Red River, dammit!
LSP, GME Closed at 193, after house bid currently 311.
ReplyDeleteIt would have been fun to throw some lottery money at it, same with the bogus maryjane penny stocks back when but you gotta get in early. Specially with wall street licking its wounds and trading restrictions all round.
Some serious money was made there for those in the know early.
Kid, billions lost, millions made? Again, let's see what tomorrow brings, what a rodeo.
ReplyDeleteKid -- just in -- GME soars 75% after hour. Infinite squeeze?
ReplyDeleteYep, close at 193, current after hours bid is 311. Flip a coin, spin a wheel, and place your bets. :)
ReplyDeleteOh, already said that..
ReplyDeleteIt will be a short again at some point, but not for me. :)
ReplyDeleteThe ancient monkey rises from its fearsome den, and devil take the hindmost :)
ReplyDeleteAnd hey, STICK IT TO THE MAN.
ReplyDelete