everybody on ilx complains about reddit

it’s very good

Only normal things are happening

a problem for whom and what else is new. I like when people have opinions about things they say don't understand.

https://pbs.twimg.com/media/EsyNlfmXMAQg7UT?format=jpg&name=small

a problem for a bunch of people jumping on and losing their life savings? I’m just talking shut as one does on these here msg boards. I’ll leave it to the pros I guess

didn't the "fuckery" start with people who were shorting it in the first place? like, over 100% of the shares had puts against them, possibly due to algorithmic trading or something.

full disclosure: i do not know much about the stonk market. my genius lies in other domains.

Transformer neural net has opinions:

To date, the GME play has been pretty simple: buy and hold and wait for the squeeze, whether that comes in the form of outright purchase, rollover of the puts, or deep in the money bull call spread (in our case, that’s just about all it has come in the form of). In practice, that is very rarely a good idea, because from a size perspective, these massively large stocks are not liquid and can take a very long time to move in the market. This, on top of the fact that these stocks have been bid up far higher than the value of the assets they hold, should serve as a pretty big warning for anyone thinking

man this is getting insane

alwayshasbeen.jpeg

life come at you fast

Robinhood might get delisted from the app stores 😹😹😹 https://t.co/fYASjESpVL

— Danny Page (@DannyPage) January 28, 2021

qanon energy had to go somewhere, didn’t expect it would be, uh, [reads 10000 articles about what is going on] this good and or bad thing

via ranjan roy and matt levine;

First, when the tourists leave, Gamestop's stock will come crashing down. Gamestop is a real company. It has over 53,000 employees. There's a reason you have not heard from anyone at Gamestop. This must be terrifying.

One important thing to remember is that while you and I and Reddit and Elon Musk can all treat GameStop’s stock as an absurd gambling token, a toy adrift on market sentiment far from any economists tell them something about how they should invest and what their hurdle rate for new projects should be? (Lol no.) Should they keep doing the stock buyback that they still have authorized? (Lol no.)

When that stock starts absolutely tanking - what happens? Does it stop exactly at some reasonable enterprise valuation? That's not how momentum works. In trading, everyone loved the adage "don't try to catch a falling knife" but while everyone enjoyed the lulz on the way up (other than Melvin Capital), it will be (gamestop CEO) Bell's job to catch the knife on the way down to try to keep as many of these people still employed as possible. Whatever happens, it will dangerous and ugly. Real employees could lose their real jobs thanks to the lulz.

yes this is called the stock market

amazing to see all these industry professionals blaming the basic function of the system on some message board posters

my take is that this particular adventure is ill considered not just because it is being done with no thought to the consequences for the company in question and the people who have (mostly shitty and ill paying) jobs there but because it exposes the easily manipulated underpinnings of an utterly broken system at a moment when the economy is on the precipice.

OTOH this is exactly how I feel about the stock exchange all day every day so the hullaballoo mostly coming from people who are afraid their specialized market knowledge is going to turn into buggywhip making is pretty rich.

above and beyond that i would argue that investing in the stock market is more or less an inherently immoral act as it directly funds institutional racism and classism and sexism and general injustice but whee stonks wheeeeee

via ranjan roy and matt levine;

First, when the tourists leave, Gamestop's stock will come crashing down. Gamestop is a real company. It has over 53,000 employees. There's a reason you have not heard from anyone at Gamestop. This must be terrifying.
One important thing to remember is that while you and I and Reddit and Elon Musk can all treat GameStop’s stock as an absurd gambling token, a toy adrift on market sentiment far from any economists tell them something about how they should invest and what their hurdle rate for new projects should be? (Lol no.) Should they keep doing the stock buyback that they still have authorized? (Lol no.)
When that stock starts absolutely tanking - what happens? Does it stop exactly at some reasonable enterprise valuation? That's not how momentum works. In trading, everyone loved the adage "don't try to catch a falling knife" but while everyone enjoyed the lulz on the way up (other than Melvin Capital), it will be (gamestop CEO) Bell's job to catch the knife on the way down to try to keep as many of these people still employed as possible. Whatever happens, it will dangerous and ugly. Real employees could lose their real jobs thanks to the lulz.
― the serious avant-garde universalist right now (forksclovetofu), Thursday, January 28, 2021 10:20 AM (six minutes ago) bookmarkflaglink

Not following this at all -- his argument is that the mass exodus from the obviously overvalued stock is going to lead it to be undervalued and then somehow that will mean the CEO has to fire a bunch of people?

xp this has been old guy yells at the cloud i'll be back on Tuesday to discuss tiktok

weird to see all the concern about this but not Tesla becoming worth more than Ford overnight (despite selling 1% as many cars) and turning Elon Musk into the world's richest man

i know next to nothing about wall street; is it possible to buy gamestop stock through *any* channels right now, or are purchases blocked across the board?

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

I don't get why Gamestop would have to fire people either, I assume the officers are not saying "oooh we're worth billions now, time to hire 20,000 people"

I know this GameStop stuff is funny, but you have to remember this is hurting real people who own multiple boats

— Kevin Farzad (@KevinFarzad) January 27, 2021

I mean, isn't it quite possible that this is both a kinda hilarious "fuck over the hedge fund assholes" thing but also something that will have unintended consequences for some "little guys"?

Maybe I'm completely off base here, and I'm happy to be corrected, but isn't it an entirely reasonable possibility that when GameStop stock starts to plummet again, as is inevitable, it will keep going past where it "started"? And, if so, isn't one of the first moves companies like this make when the bottom line looks bad is to lay off employees? It just feels like an unintended consequence of this might be the "little guys" at these companies ending up without a job (as shitty paying as they may be) in the middle of a pandemic. And I'm just going to go out on a limb and guess that the vast majority of redditors that jumped on this and made a few bucks aren't going to share those with the suddenly out of work GameStop clerks. But maybe I'm predicting a consequence that has little likelihood of playing out.

Cilizza convinced me to jump in with a little bit https://www.cnn.com/2021/01/27/politics/gamestop-stock-surge-trumpism/index.html?

Who's holding? How do you plan to get out?

lol

https://www.reddit.com/r/wallstreetbets/comments/l6x130/class_action_against_robinhood_allowing_people_to/

Jon: no, that's my point exactly. Seems likely to me that Gamestonk is gonna ultimately crater and investors are gonna run in the longterm for fear of volatility, leading to contraction and layoffs up and down the line.

I mean tl;dr version of my previous post is that I feel like modern capitalism is v v v v good at making sure any real financial consequences are
sloughed off to the poor. I mean, these dudes may lose their funds, but they are also pretty good at diversifying and making sure they have other assets. It's not like any of these shorters are going to wind up sleeping in their cars next week.

xpost - glad I'm not the only one forks.

gonna have to go through the archives of everyones favorite financial explainer matt levine and see how often he worried about how the actions of the titans he usually covers affect the livelihoods of ordinary people

lol, I'm not saying the shorters are any better and believe me, I'm not defending any traders or hedge fund dudes in the least. Fuck them.

I'm saying that these hedge fund guys are going to be, sadly, just fine. They may have to slink back home for a few months and regroup, but I can almost guarantee not a single one of them will suffer any of the same pains a laid off minimum wage worker has felt during the pandemic.

The point is that there is no real point beyond showing up the pros -- proving to them that they aren't as smart as they think they are and that they don't have the ability to control everything.

Which, again, has its roots in Trumpism. The entire notion of Trump's candidacy and presidency was to stick it to the elites.

"No real point".... apart from making money?

Oh yeah, I forgot, everything is about Trump.

it's time to mount up. the brokerage app busters are coming pic.twitter.com/KscN1pFe66

— pawn with a kings mentality 😤🚬 (@MostCrucified) January 28, 2021

Yo this is a fucking CRIME what @RobinhoodApp is doing DO NOT SELL!!! HOLD THE LINE... WTF 🤬

— Ja Rule (@jarule) January 28, 2021

loool

what a freak show

Forks:

Those are reasonable questions to ask, although much moreso for you than for anyone who professes to be a public commentator on the subject, because they reflect a funadmental misunderstanding of how stocks and publicly traded companies work.

Generally speaking, a company's ability to pay its employees is not tied to its stock price -- a company pays its employees with the actual money that flows into the company from revenues, debt, equity raises and other sources. The stock price is just what people are paying on an exchange for shares of the company, it's not money flowing into and out of the company.

The only way the stock price could impact money flowing into the company is if the company needs to or plans to do an offering to raise capital. A lower stock price would mean it's harder to raise capital.

That said, even assuming Game Stop needed to do that, the theory that gamestop's stock price will somehow just go down and stay down way past its fundamental value for the long term because of the selloff after the bubble is unlikely to be correct, just as it's unlikely that the stock will stay up where it is now. Markets do in fact tend to correct themselves.

xxp

spoken like a man who's always on time

I am woefully ignorant of this whole world but in trying to understand this thing I came across and found this article useful:

https://www.vice.com/en/article/pkdvgy/send-this-to-anyone-who-wants-to-know-wtf-is-up-with-gamestop-stock

It doesn't really get into the potential downsides for anyone other than the obv deserving fat cats. But my admittedly tenuous take on it all is that whatever those downsides might be, they were likely to exist anyway, and the main change from what's happening is that the pool of those who are benefiting has been ever so slightly democratized

yeah, i'm aware that stocks represent investment in the company and not their day to day accounting. I'm also aware that gamestop is operating with a dying business model of brick and mortar sales for a consumer good that is predominantly acquired electronically and that amazon is eating their lunch with day-of delivery. Resale appears to be the only thing gamestop has going for it and next gen systems tend to wreck the resale market for the first year or two. that's why it was getting shorted in the first place!

to your point, gamestop is almost certainly going to need to raise capital to consolidate if it's gonna survive and restructure, which means further slashing of retail locations... which was gonna likely happen anyway but may need to be sped up in response to a market that has no trust in investing in a company that's become an international joke. obviously the stock is drastically overvalued at the moment by an exponential factor and the course correction is absolutely gonna happen. it's the confluence of those things that are gonna pull the rug out from under them.

maybe i'm wrong, perhaps the stock won't crater and even if it does it won't have reverberations to the day-to-day operations before end of year. i don't know that i'd bet on that.

It seems to me this whole thing is a glorified pump and dump of epic proportions. The notion that no one beyond those hedge funds are going to get hurt are very fairy tale-y.

yup

https://i.imgur.com/bKHlKlI.jpg

to your point, gamestop is almost certainly going to need to raise capital to consolidate if it's gonna survive and restructure, which means further slashing of retail locations...

again i think they have already been through the large part of this, they have been closely low performing locations for a long time.

their business isn't really bad right now, (this is approximate) but retail sales were only down 4.3 or something for 2020 which is pretty great considering and online sales were up 30 something points

plus at the beginning of a new console cycle the stock always used to go up before wall street decided retail was dead, but these are usually good years for GameStop

GameStop was in a better position than most large retail because private equity wasn't saddling them with debt and gutting them to start with IIRC.

your take was the one i was most interested in matt as you spent a lotta time around that company

am i wrong i thinking that new consoles throttle resale and that the paucity of the actual systems means less money to retailers than you might think? And do they have a meaningful foothold in the digital market? it seems to me like sony/microsoft/nintendo/steam's direct-to-consumer pipeline would make that an impossible marketplace to crack.

something i didn't know is that two of the hedge fund managers getting toasted right now are co-owners of the Charlotte Hornets, so MJ may have a problem on his hands because of gamestop for the first time since barkley shut up and jam

xpost

yeah that's the other maddening thing about it - is they essentially stripped these companies down to the copper wire in the walls and then use that narrative against other retail companies

down 63% today, holy shit

forks -- https://arstechnica.com/gaming/2020/10/microsoft-will-give-gamestop-a-share-of-xboxs-digital-revenues/

my ex-gf sold her .27 share when it got down to $225 but it executed at $2600