Gamestop
- Thread starter Bonerfarts
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For those that don’t own GME, I would hold some cash. If a squeeze happens the hedge funds are going to have to liquidate their long positions. We saw this on Wednesday. The rest of the market will plummet and you will get amazing prices on some great companies. For those that are holding, hold GME past $10,000.
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I now have uneducated hillfolk on my FB pushing dogecoin.
I said I wasn't sure. I'm reaching far back in time to my securities classes in college with some of this stuff. I don't personally partake in these investment strategies so am a bit rusty.
Haha nope. I’ve kinda come around full circle after reading up on things tonight. There is such a low supply on GME shares right now and such a high demand (historical levels for both) that this is truly a sky rocket with a lit wick, so much so that I think if it squeezes it will ultimately break the financial institutions that run the stock market. I don’t think the retail brokers shut down buy positions today because they wanted the little guys to lose, they just literally can’t afford new positions. See the link below and the last boomer video I posted. They can’t afford what’s in the books now at $300 per share, what happens if the prices go exponential? The brokers can’t pay the clearinghouses, the clearing house can’t pay market makers or the brokers back, the brokers in return can’t pay the retail investors. The hedge funds can’t pay the brokers and will need to liquidate assets. HFs liquidate assets and stock prices plummet to extreme lows. Tax payers come in to bail everyone out again. Maybe I’m being over paranoid, but if it squeezes it will be high and hard. So much so that it would be ultimately bad for everyone in the economy. Someone tell me I’m wrong.
GameStop Trading Restrictions Blamed on Wall Street’s Clearing Firm by Online Broker
A number of brokerages have limited trading in a handful of popular stocks.
www.wsj.com
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They will get bailed out by the feds. No worriesHaha nope. I’ve kinda come around full circle after reading up on things tonight. There is such a low supply on GME shares right now and such a high demand (historical levels for both) that this is truly a sky rocket with a lit wick, so much so that I think if it squeezes it will ultimately break the financial institutions that run the stock market. I don’t think the retail brokers shut down buy positions today because they wanted the little guys to lose, they just literally can’t afford new positions. See the link below and the my last boomer video I posted. They can’t afford what’s in the books now at $300 per share, what happens if the prices go exponential? The brokers can’t pay the clearinghouses, the clearing house can’t pay market makers or the brokers back, the brokers in return can’t pay the retail investors. The hedge funds can’t pay the brokers and will need to liquidate assets. HFs liquidate assets and stock prices plummet to extreme lows. Tax payers come in to bail everyone out again. Maybe I’m being over paranoid, but if it squeezes it will be high and hard. So much so that it would be ultimately bad for everyone in the economy. Someone tell me I’m wrong.
GameStop Trading Restrictions Blamed on Wall Street’s Clearing Firm by Online Broker
A number of brokerages have limited trading in a handful of popular stocks.
I agree with all you’re saying but why are hedge funds allowed to wreck companies with short positions in the first place? They knew the risk on the downside just felt it was a 1 in a billion chance they would experience the downside, welp.Haha nope. I’ve kinda come around full circle after reading up on things tonight. There is such a low supply on GME shares right now and such a high demand (historical levels for both) that this is truly a sky rocket with a lit wick, so much so that I think if it squeezes it will ultimately break the financial institutions that run the stock market. I don’t think the retail brokers shut down buy positions today because they wanted the little guys to lose, they just literally can’t afford new positions. See the link below and the my last boomer video I posted. They can’t afford what’s in the books now at $300 per share, what happens if the prices go exponential? The brokers can’t pay the clearinghouses, the clearing house can’t pay market makers or the brokers back, the brokers in return can’t pay the retail investors. The hedge funds can’t pay the brokers and will need to liquidate assets. HFs liquidate assets and stock prices plummet to extreme lows. Tax payers come in to bail everyone out again. Maybe I’m being over paranoid, but if it squeezes it will be high and hard. So much so that it would be ultimately bad for everyone in the economy. Someone tell me I’m wrong.
GameStop Trading Restrictions Blamed on Wall Street’s Clearing Firm by Online Broker
A number of brokerages have limited trading in a handful of popular stocks.
Absolutely hedge funds are absolutely at fault. I’m buying tomorrow. Let’s just see what tomorrow brings.
How does a company get 'wrecked' by their stock being shorted (assuming that generates a price decline)?
If the company is making money where does the price on the stock come into play?
Collateral for loans or something?
If tomorrow everyone thought Amazon stock was only worth $5/share, how does that affect people using their services and Amazon making money on them?
I think this guy is 100% right. Robinhood has a liquidity problem (amongst all other problems). See the proof.
I am so rooting for the Reddit guys in their battle here. The system should not be games. If these hedge funds made a bad play and got caught then they should reap what they sow.
Full disclosure, not in on on GME, not involved, just on the sidelines watching the drama.
This is a huge story.
Full disclosure, not in on on GME, not involved, just on the sidelines watching the drama.
This is a huge story.
Yep. Robinhood did what they did out of self preservation.I think this guy is 100% right. Robinhood has a liquidity problem (amongst all other problems). See the proof.
A company's stock price and market valuation matters. Companies need that for borrowing and liquidity. Run the stock to zero and the company has little to no value. Sure, your business operations might be making money but you are so handcuffed in what you can do you will be put out of business. Try going to a bank and borrowing for expansion or capital improvements to grow your business and the lender says sorry, you aren't worth a piece of crap.
Amazon and publicly trade companies rely on the funds from stock sales to operate their business. The company subsequently sell more stock to raise more capital. So it’s a major source of funding and the other source is debt through bonds. So if a hedge fund targets their stock with shorts and they are successful, who will buy bonds or issue debt at that point? So they either go bankrupt, mass layoffs, takeovers, etc. All because some hedge fund targets their stock with a short, seems fair?
I'm with you. I'm not looking at GME, I'm looking at the values that will be had when the hedge funds have to sell other stocks they hold to cover their GME, BB, ANC, etc positions.
I'm thinking value funds might have a decent year in the aftermath.
Haha nope. I’ve kinda come around full circle after reading up on things tonight. There is such a low supply on GME shares right now and such a high demand (historical levels for both) that this is truly a sky rocket with a lit wick, so much so that I think if it squeezes it will ultimately break the financial institutions that run the stock market. I don’t think the retail brokers shut down buy positions today because they wanted the little guys to lose, they just literally can’t afford new positions. See the link below and the my last boomer video I posted. They can’t afford what’s in the books now at $300 per share, what happens if the prices go exponential? The brokers can’t pay the clearinghouses, the clearing house can’t pay market makers or the brokers back, the brokers in return can’t pay the retail investors. The hedge funds can’t pay the brokers and will need to liquidate assets. HFs liquidate assets and stock prices plummet to extreme lows. Tax payers come in to bail everyone out again. Maybe I’m being over paranoid, but if it squeezes it will be high and hard. So much so that it would be ultimately bad for everyone in the economy. Someone tell me I’m wrong.
GameStop Trading Restrictions Blamed on Wall Street’s Clearing Firm by Online Broker
A number of brokerages have limited trading in a handful of popular stocks.
you are not wrong, and I am simply shocked at some of the posters I have seen in this thread recently that are not getting this. posters I consider pretty smart on this stuff. All I am saying and I am out. Roll.
naked shorts are illegal. I have no clue why you, someone I know is knowledgeable on this would say otherwise. Naked shorting is why these hedge funds are about to go bankrupt. I am shocked at the lack of conversation about why this is actually happening.
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**** these hedge funds. They deserve what’s coming to them. Lying ****ing pricks.
If you can only keep your business operating not by generating profits, but just diluting your existing shares with new issuance, aren't you already doomed before the shorts came in?
That one doesn't make sense to me.
The company's current stock price factors into deciding if they can or will generate the income to repay bonds?
Just doesn't seem fundamentally connected to the ability to repay (that's why I wondering if company held stock was collateral or something, the dwindling of which could cause loans to be called in).
Drive Microsoft's stock price down to a dollar and they're still raking in dough from customers to pay for the operating expenses.
I don't see the connection, or how the stock price would force them to lay off staff who are making money with customers.
In such a case two things happen, misperceived notional value evaporates [as it should], and the people who mismanaged assets lose title to those assets. This is critical to capitalism functioning. It is a system of profit and loss, and the loss part serves an important function of moving assets from poor stewards.
All the bailout does is let them keep title to the assets they should have lost 'fair and square'.
That's what the 2008 bailout was about.
None of the capital equipment or anything else real was blown up in 2008, just a lot of connected people were about to lose their ass(ets) after the prices corrected, and they were able to keep the assets they should have lost at the expense of everyone else in society (through the Fed buying at securities, etc.).
As you said, I've transferred positions from one broker to another numerous times. Pretty seamless process.
And continue to argue whether the can afford to send $1400 checks for COVID relief
I explained to my wife what was going on in a metaphor and I think she got it.
Let’s imagine there is a store with 100 cups of water (shares) and there are 130 people (130% short interest) in the store that need a drink. For the sake of the metaphor the glasses auto refill. They pay $1 per cup of water. As long as everyone doesn’t rush the store there is enough for everyone and the price stays the same. Now imagine someone (short’s broker) turns up the heat (stock prices rise and interest goes higher) in the room and people are getting more thirsty . It’s causing their demand for water to go up (rising prices means higher borrowing interest rates), they are willing to pay more for a cup of water ($2 or $3) Also imagine a bunch of people from Reddit and Robinhood buy 50 cups of water. They don’t sell them, they hold them(💎 🙌). Now 140 people who are thirsty have to drink from 50 cups. They need to get a drink or the broker will take their money to force them to drink. With the smaller pool of cups the prices rise to $5, $9, $14. Eventually all cups are sold and the last person will pay their entire account to buy the last cup. That’s when the holders sell their cups for a huge profit and the price drops back to normal.
This isn’t based on sales projections, consoles sold, or future earnings. It’s purely supply and demand of stock.
If someone was to short the stock today, they would force themselves to demand to buy a stock that has a limited supply. Suckers are shorting the stock based on the fundamentals and outlook of the company. Do so only after the squeeze and if short internet is less than the supply of the shares.
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I know you meant GME but I wonder how many people are buying other stocks by mistake. I looked up AMCX (AMC TV Network) and it 90% shorted. AMC the theater is only at 38%. I bought AMC and was wondering if I bought the wrong one.
I thought he was referring GME as well but his price points also line with CME and after looking at CME , it is an intriguing stock but not due to short squeeze stuff.
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