GameStop/Reddit vs. Big Financial

[phylodog]

Shorting will get you rekt.

Deservedly so.

 

[Twangbanger]

So a question to the group, since I only know enough about this stuff to be dangerous to myself:

In theory, any "contract" can be renegotiated by the consent of both parties. What is to prevent the parties from negotiating with each other, to modify either the interest rate or duration of time the Gordon Gekkos have to return the stocks? It seems to me they could even do it secretly, and we wouldn't necessarily even know it happened.

Corporations renegotiate loan repayment terms all the time, because both parties to the agreement have an interest in the other party not getting blown out of the water. It just seems like the Wall Street Killers might have a similar shared interest.

Can you really trust the original owner of the stock not to tell the Gordon Gekkos, "Hey, we both hate these Redditors, so tell you what...I'll give you an extra month to return the stock, because I'm assured of your eventual success in waiting these people out...and I'll simply raise your service fee, oh, 50%?"

The original owner of the stock gets to make even more money, the borrower avoids totally taking a bath, possibly breaking even or better on this one position...and they both revel in breaking their d*cks off in the Reddit People?

 

[2ndamendlover1]

I just heard about this. Im not very knowledgable with stocks. Maybe someone can explain it to me a little better. Isn't there a big risk that some people on reddit who just became a millionaires see that money and sell off the stock they own, causing the little guys who just jumped on the train to be stuck holding nothing?

This is how the little guy gets back at the billionaires!! Im loving this short squeeze

 

[Twangbanger]

I just heard about this. Im not very knowledgable with stocks. Maybe someone can explain it to me a little better. Isn't there a big risk that some people on reddit who just became a millionaires see that money and sell off the stock they own, causing the little guys who just jumped on the train to be stuck holding nothing?

That's what is very likely to happen. I admire what these people are doing and it would put a thrill in my knickers to see them succeed. But they are putting their bodies in front of the train, and chances are they will get slaughtered. Time is not on their side, and they are assuming the "Big Dogs" can't hold out indefinitely. But I wouldn't put it past their creditors to "adjust" the terms or interest of their stock-loan to help them wait this out.

It reminds me of when I bought Delphi stock off the pink sheets back in (2006?) after they filed bankruptcy. It was like shooting fish in a barrel, on paper. That company had kazillions worth of cash flow and active and future supply contracts with a captive customer who was unlikely to take their business elsewhere. I picked it up at 57 cents and rode it up, anticipating the bankruptcy judge would act how they always do, and tear up the union contract as part of the proceedings. Because that's what usually happens; they give management and the union a deadline to work out their issues, and if they can't, the union contract is tossed and starts over at zero. In this particular stock, getting the union out of the way would create room for that stock to go up many multiples in reorganization.

The deadline came, and...the judge extended the deadline. Then extended it, again. Aaand a-gain. My first of many lessons that judges can do almost anything. I had to wait significantly longer than I wanted to get my gain out of that one. Didn't change the outcome, but boy, did it make me sweat in the mean time.

How many times have we anticipated a .Gov shutdown forcing budget cuts...only to see them be allowed to extend their credit limit indefinitely, until the "swamp" reaches agreement on an answer which makes them all happy?

Lesson: never assume "time" or a deadline will force another party to act in your favor precisely to a schedule. It can happen; but there are also a lot of ways for it not to happen. All deadlines are almost always negotiable. And you don't find out what those "creative" work-arounds are, until somebody's balls are in the cracker and the favors start getting called in.

I love this story. But these people are not going to allow a bunch of Reddit dorks to pee in their wheaties.

 

[ditcherman]

That's what is very likely to happen. I admire what these people are doing and it would put a thrill in my knickers to see them succeed. But they are putting their bodies in front of the train, and chances are they will get slaughtered. Time is not on their side, and they are assuming the "Big Dogs" can't hold out indefinitely. But I wouldn't put it past their creditors to "adjust" the terms or interest of their stock-loan to help them wait this out.

It reminds me of when I bought Delphi stock off the pink sheets back in (2006?) after they filed bankruptcy. It was like shooting fish in a barrel, on paper. That company had kazillions worth of cash flow and active and future supply contracts with a captive customer who was unlikely to take their business elsewhere. I picked it up at 57 cents and rode it up, anticipating the bankruptcy judge would act how they always do, and tear up the union contract as part of the proceedings. Because that's what usually happens; they give management and the union a deadline to work out their issues, and if they can't, the union contract is tossed and starts over at zero. In this particular stock, getting the union out of the way would create room for that stock to go up many multiples in reorganization.

The deadline came, and...the judge extended the deadline. Then extended it, again. Aaand a-gain. My first of many lessons that judges can do almost anything. I had to wait significantly longer than I wanted to get my gain out of that one. Didn't change the outcome, but boy, did it make me sweat in the mean time.

How many times have we anticipated a .Gov shutdown forcing budget cuts...only to see them be allowed to extend their credit limit indefinitely, until the "swamp" reaches agreement on an answer which makes them all happy?

Lesson: never assume "time" or a deadline will force another party to act in your favor precisely to a schedule. It can happen; but there are also a lot of ways for it not to happen. All deadlines are almost always negotiable. And you don't find out what those "creative" work-arounds are, until somebody's balls are in the cracker and the favors start getting called in.

I love this story. But these people are not going to allow a bunch of Reddit dorks to pee in their wheaties.

A sure thing, kind of like buying at the money soybean calls right before harvest...

Also, I wouldn’t bet against the little guy at this point. The People, United, is what makes this country great, and maybe we’re about to show up and be.

 

[erasure]

Uh so, well, uh...

When short sellers identify a case of fraud or similar, they borrow and sell the stock, hoping to buy it back at a lower price later. Again, there is nothing evil about this. To the contrary, it’s a way of keeping prices honest. A market without short sellers is like a political system without investigative journalists.

 

[ditcherman]

Uh so, well, uh...

I see what they did there.
Tried to equate the big money and themselves as the hero’s.
Journalism. Pffffft.
We don’t need either one, actually. Just honest people.

 

[Twangbanger]

Uh so, well, uh...

Funny, I don't recall hearing anything from WaPo about "keeping the market honest" in 2008, when The Street made bad bets and were bawling and beating the drum for bailouts.

Economic Libertarianism for Thee...Socialism for Me.

 

[CampingJosh]

Journalism. Pffffft.

It's not journalism, and it's not pretending to be. The headline starts with "Opinion."

 

[thompal]

Uh so, well, uh...

Wow. Just...wow. That's like saying that kidnappers provide a valuable service to society by preventing the parents from being bad parents.

 

[jsx1043]

I’m just holding out waiting on my big gains...

 

[hANNAbONE]

looks like the next big run is now Silver...

 

[rooster]

I exited my positions on Friday. Modest gains, still can’t afford to buy ammo. That said I’ve been pouring over the charts and I’m now convinced that most of the shorts have exited.

anyway back to playing SPY calls 45dte

 

[ditcherman]

It's not journalism, and it's not pretending to be. The headline starts with "Opinion."

“A market without short sellers is like a political system without investigative journalists” is why I did my Bill the Cat imitation.
They really think they’re something, and they are defending their pals.

 

[printcraft]

I heard frozen concentrated orange juice is going to skyrocket.

 

[ziggy]

GME is down over $125.00 today (2-2-21). So, people who went long on GME early and got out early made out like bandits. Where it goes from here is anyone's guess. I think the Reddit guys are still trying to encourage buyers to buy because of the still huge short positions in the stock.
Who will make out? Maybe some of those Reddit guys just want to unload their long positions. Most of the people who are short still probably think this company is in a decline that will end with the stock at or near zero. It is hard for me to see how GME survives without a new/different business model.

 

[BroodXI]

yea, i had to cut my losses on GME. It was painful watching it bleed, I was up 7k at one point from spare change.

 

[gregkl]

GME is down over $125.00 today (2-2-21). So, people who went long on GME early and got out early made out like bandits. Where it goes from here is anyone's guess. I think the Reddit guys are still trying to encourage buyers to buy because of the still huge short positions in the stock.
Who will make out? Maybe some of those Reddit guys just want to unload their long positions. Most of the people who are short still probably think this company is in a decline that will end with the stock at or near zero. It is hard for me to see how GME survives without a new/different business model.

If one didn't get out early when they were still making huge gains, it's on them. My father in law always said; "don't get greedy". A lot of investors in GME could/should have made 9 fold on their investment. Holding out for $1000 share prices will get you what you got.

Just my opinion, but not caring about the money and just wanting to take down the "big guy" is kinda foolish. Be in it to make money. Some of these Reddit investors could have secured their retirement in one week.

 

[smokingman]

NYSE restricts shorting in GME(along with 48 other stocks). 2/2/2020

NYSE Report Center

www.nyse.com

 

[ditcherman]

NYSE restricts shorting in GME(along with 48 other stocks). 2/2/2020

NYSE Report Center

www.nyse.com

Wasn't a real direct link to article and didn't take time to search, but is this saying that the overseers of the big players have restricted how they play? No more short selling? Permanently?