(43) Is This The Next Big Hedge Fund To Blow Up... And What Happens Next - YouTube Why the reddit radicals bid up gamestop: not profit seeking, but revolutionary politics.
Why? Again, you're building a strawman to make a point that doesn't stand up to scrutiny. The Reddit traders understand the market better than many. They identified hedge fund attacks on several companies and countered them by buying shares of these companies, triggering squeezes that led the share prices to skyrocket. You're saying the companies were worthless and the bottom feeders were just cleaning up. Those are the same guys who spent 3 years going after Tesla and other now prosperous companies. And you give 2020 as the year to prove your point? Seriously... There's now much information about the GME saga going back at least 3 years. Perhaps you will be less vitriolic after reading up on it. Revolutionary politics? And what value do hedge funds add to the economy? Why do they not have to report their short positions? Who is Citadel, this company that finances 30% of RH revenues in exchange for early knowledge of the platform's trading activity AND is the hedge funds' sugar daddy? Is that OK by you or maybe our democracy should consider more laws to further protect these activities? I sure hope these traders are able to shine the bright lights over these practices and trigger bipartisan political action to change how the market operates.
Look at GME's numbers. The company is worthless--well, worth what little you could get for its assets in a fire sale, so there is no way anyone could reasonably describe it as "oversold." It's a money loser with negative earnings and sharply falling revenue. It's book value is 5 a share, but that assumes no optimistic accounting. Further, a coordinated conspiracy to brazenly manipulate the price of a stock is not only illegal, but in this case easily provable in court. This is a blatant pump-and-dump scam of a sort that has been prosecuted before, although most manipulated penny stocks (stocks selling for under $5) do not get pumped to the absurd level of $325 a share! Prosecution of leading participants should be a no-brainer unless the conspirators get political cover from their sympathizers in the White House. I mean, if regulators can't see the unlawfulness of a conspiracy this transparent, publicized, and well documented, what can they see? At least most stock manipulators try to hide their crimes. Is there a political motive behind WallStreetBets? Listen to it's founder: Rogozinski believes he moved with intentionality, knowing exactly what he was unleashing. “I saw this coming,” he says. “What’s being accomplished now is what Occupy Wall Street tried and failed to do.... Rogozinski was raised there in Mexico, then educated in America, studying economics and electrical engineering at the University of Illinois’ Urbana-Champaign campus. After graduating in 2005, he founded a startup that offered IT support before taking a job at the Inter-American Development Bank, a major source of funding for Latin America, in Washington, D.C. Founder Of WallStreetBets Discusses Why The Group Unleashed Chaos On GameStop—And Why He’s (Really) Exiled From Reddit (forbes.com) And from: ‘This is the way’: the Reddit traders who took on Wall Street’s elite | Financial Times (ft.com) “The standard WallStreetBets user has a disdain for the rich,” he said. “If we could all be making money while also undoing a very rich person’s wealth, it’s even more empowering.” Anti-capitalism: The GameStop Revolt Exposed Capitalism (jacobinmag.com) Over the last few months millions of ordinary people, armed with the cash distributed by America’s successive COVID-19 stimulus programs, developed a plan to bankrupt hedge funds that were shorting a set of stocks Behind the GameStop stock frenzy - World Socialist Web Site (wsws.org) The main point that needs refuting is the view, often expressed by users on wallstreetbets, that by speculating on a worthless stock, and potentially forcing Wall Street firms to take losses, they are somehow making a progressive protest against the capitalist system. Short sellers: short selling keeps the market a little more honest than it otherwise would be by exposing and punishing badly run companies and sometimes criminal companies. GME was and is a perfectly legitimate short prospect, and those who seek to frustrate short sellers simply out of spite are protecting corporate incompetence and, in some cases, corruption and criminality. I think it is safe to say that, outside of hedge funds and other parties engaged in active trading, no one dislikes short selling more than the big corporate executives that so many redditors (reddit being, like other dominant internet platforms, a generally left leaning site with a habit of banning cultural conservatives) love to hate.
Prosperous??? Gimmee a break. Major short sellers don't go after healthy companies. They go after the walking dead, or at least the irrationally overpriced. You mentioned Tesla (definitely one of the walking dead). It loses money on every car it sells and only makes a profit by getting carbon offset credits (another worthless scam to subsidize giant corporations and enrich oligarchs) funded by the long suffering taxpayer. Short sellers gave up (for now) on shorting Tesla not because it is a sound company (no way!), but because, as one short seller put it, "It's hard to short a cult."
Gamestop is a dog. Why is this a difficult concept? Nobody is going to the fucking mall and buying a video game. That geeked-out shit ended a decade ago.