Gamestop?

[NYEXPAT]

So how often is this filing disclosed? I heard the guy debating Scott Warner (?) on CNBC say transparency of short positions would level the playing field. I admit to not knowing much about these things but I believe they have a tendency to spill over and hurt everybody.

It is filed quarterly, I believe u/DFV first discovered it in the Sept filing.

 

[NYEXPAT]

My point was that it was from publicly available information, not that they are "gamers" and that is why they selected GME.

Yes, you are correct, and as Chamath pointed out in the CNBC interview WSB has some really sharp guys on it.

 

[NYEXPAT]

Right but it won't be someone on Robinhood, will it ....

RH just opened limited trading on these stocks due to public backlash. It is rumoured that Citadel re shorted the stock this morning, before the call telling RH to prevent new buyers from coming in. Citadel buys RH orderflow so they can front run the clients.

 

[Markola]

Years ago people used to buy front end load funds with an upfront 8.5% fee. Terrible investment, yet they agreed to it. Same thing with Hedge Funds, some people like to pay for sub par, but they agreed to it so who is to argue about it.

Exactly. Despite the hype, there’s nothing special about hedge funds. They are really just actively managed mutual funds with all the risks, quintuple the fees and none of the style boxes.

 

[jazz4cash]

You are saying two opposite things together. First you say shorting is bad, then you say it is good because they can sell shares at higher prices. High short interest is always good because those shares will need to be bought back.

It sounded that way to me also.

Can’t recall the last time there was so much angst in a single thread on this forum. Not me, I’m too confused.

 

[Montecfo]

Robinhood apparently is under some financial strain. According to reports they have drawn down several hundred million dollars on their credit lines recently but apparently they also drew an entire $200m on their credit lines last March.

https://finance.yahoo.com/news/robinhood-said-draw-credit-lines-214509076.html

 

[RVplusDog]

RH just opened limited trading on these stocks due to public backlash. It is rumoured that Citadel re shorted the stock this morning, before the call telling RH to prevent new buyers from coming in. Citadel buys RH orderflow so they can front run the clients.

This. This is the kicker. RH encouraged & in some cases forced sales of these stocks (ones on margin) at a lower price, locking out the retail buyers who were willing to pay more.

Rumor has it that Citadel also owns majority of RH.

The whole narrative of protecting the consumer from themselves doesn’t play well. Unhealthy people shouldn’t have Big Macs?

There was some brokerage manager/CEO on CNBC saying that the Redditors are doing it wrong - buying stock the wrong way, for the wrong reasons. Is it a free market or not? If I want to pay $1000 for a stock because their logo is teal, why should that be stopped?

 

[NW-Bound]

Earlier, I tested a buy order on GME with Merrill Edge and Schwab. Merrill Edge said "no", but Schwab was OK with it.

On another stock, I forgot if it was BBBY or KOSS, Merrill Edge said an authorization code was required. I did not go through the steps of getting the "authorization code", so did not know what it entailed.

 

[SecondCor521]

There's a desperate hedge fund waiting to cover a position?

Except, as far as I know, a short seller, especially a hedge fund, isn't necessarily desperate.

I am unaware of any time pressure to cover a short position. There can be price pressure, and you have to pay the dividend. But GME's dividend is about 38 cents per quarter - not really a big deal if you're shorting a $20 or even $200 stock that's "probably" worth $15.

And as for @Montecfo's comment, I'd be really surprised if RH's account agreement did not have a well written and enforceable arbitration clause. The lawsuits will either get thrown out or moved to arbitration - IMHO.

 

[Letj]

I guess the free market is only a good thing when it benefits the rich. When the low income people make a few bucks at the expense of the rich then there's a problem? The other way around is fine though?

This!!!

 

[easysurfer]

^^^

All the more reason why I choose to be a passive investor.

Let the others fight it out .

 

[NW-Bound]

It's not what we thought.

The curb on buying meme stocks was caused by some technicalities in the brokers being able to clear the trades with their clearinghouse.

Speculation that Robinhood was limiting the trading ability of those users at the behest of, pick your poison, Citadel, the US government, hedge funds, Janet Yellen, or others, ran rampant.

But none of it was true – at least according to Robinhood's telling. In its post, Robinhood wrote that (emphasis TechCrunch):

[a]mid this week’s extraordinary circumstances in the market, we made a tough decision today to temporarily limit buying for certain securities. As a brokerage firm, we have many financial requirements, including SEC net capital obligations and clearinghouse deposits. Some of these requirements fluctuate based on volatility in the markets and can be substantial in the current environment. These requirements exist to protect investors and the markets and we take our responsibilities to comply with them seriously, including through the measures we have taken today.

That reads like Robinhood ran low on capital and had to make some hard decisions, quickly. The securities its users wanted to trade likely generated the highest capital obligations given how volatile they proved and how long it takes for trades to settle, so Robinhood had to shut off some trades to stay on the right side of its capital needs. (Not great, not terrible?)

Reporting from Bloomberg indicates that Robinhood "tapped at least several hundred million dollars" from credit lines today makes sense in this context. As does the unicorn's decision to allow for some trading of the afore-limited securities in the near future ("starting tomorrow, we plan to allow limited buys of these securities," the company wrote); now reloaded with more capital, Robinhood can afford to let its users get back, somewhat, to business.

Other brokers who disallowed buy orders also mentioned the same financial problems.

Most will allow normal trading tomorrow. People can sell the farm, and buy all they want.

See: https://finance.yahoo.com/news/somewhat-boring-reason-appears-robinhood-225309083.html

 

[NW-Bound]

Some people are smart: when offered a jackpot, they took it.

GameStop disclosed in a filing with regulators on Thursday that MUST Asset Management, a large shareholder in the company, has sold its entire stake in the company.

The South Korean asset manager’s sale comes after the stock surged 788% through Wednesday, powered higher by swarms of individual investors targeting the videogame retailer’s heavily-shorted shares.

 

[NW-Bound]

Redditors are buying anything that gets mentioned in a post. It appears that the narrative of a short squeeze is not needed anymore. Mention online any penny stock run by a mom-and-pop operation, and a BUY, BUY, BUY mania develops.

We no longer have just a tulip mania, but a daisy mania, a dandelion mania, a ragweed mania, any flower mania. BUY, BUY, BUY.

Source: Bloomberg

An obscure company that employs five people and appears to produce negligible amounts of oil and natural gas from some wells in Appalachia became the latest Reddit-fueled day-trading craze, soaring nearly 1,000% to become a $128 million company in a matter of hours.

New Concept Energy Inc. got a mention by retail traders on the WallStreetBets forum on Reddit on a day when brokerages including Robinhood Markets clamped down on trading in shares such as GameStop Corp. after some of the wildest stock swings the markets have seen in recent years.

For a company that produces a mere 70 barrels of oil equivalent a day and has a board whose average age is 74, that was still enough to send its shares up by a whopping 959% to $25, the highest since 2000.

 

[NW-Bound]

Here's another 3rd-party shareholder who was smart in dumping all its shares of a stock being pumped on reddit. The stock was Macerich, a mall owner. The smart shareholder is Ontario Teachers’ Pension Plan.

While Redditors buy, buy, buy, the pension plan sells, sells, sells.

Source: Bloomberg

The largest shareholder in high-end mall owner Macerich Co. sold its entire holding for nearly $500 million when the stock soared after being touted on Reddit.

Ontario Teachers’ Pension Plan sold 24.56 million shares on Wednesday at an average price of $20.25 a share, according to details in an amended 13D. The Canadian fund had owned 16.4% of the company, according to data complied by Bloomberg.

Macerich, based in Santa Monica, California, has been struggling for years and was battered by a pandemic that forced malls to shut down and pushed consumers toward e-commerce. The stock lost 84% of its value over a three-year period ending Dec. 31, 2020.

 

[Montecfo]

Some people are smart: when offered a jackpot, they took it.

As predicted. LT holders acting rationally, pressuring the kids.

 

[alaska55]

You are saying two opposite things together. First you say shorting is bad, then you say it is good because they can sell shares at higher prices. High short interest is always good because those shares will need to be bought back.

For someone that touted his securities employment you sure have problems with understanding what you read. When a company is shorted at 140% of its float they can't do sh*t. When the price ran up the shorts had to cover plus the high market cap allowed them to sell shares and raise capital. Which they couldn't do when shorted at 140%.

 

[jim584672]

For someone that touted his securities employment you sure have problems with understanding what you read. When a company is shorted at 140% of its float they can't do sh*t. When the price ran up the shorts had to cover plus the high market cap allowed them to sell shares and raise capital. Which they couldn't do when shorted at 140%.

Having high short interest doesn't prevent a company from issuing shares or selling debt, they certainly CAN do s$%^. The person was saying two contradictory things.

 

[jazz4cash]

It's not what we thought.

Not me. We still really don’t know what’s going on but that won’t stop some from making assumptions, acting on them, or being outraged.

 

[JoeWras]

Redditors are buying anything that gets mentioned in a post.

It's fun to see your buy, along with your fellow army buddies' buys, causing a move in the market.

Until it isn't.

 

[ls99]

Did not know what gamestop was, is, or going to be. Maybe Vanguad does. That is whay they get the big bucks.

 

[Music Lover]

The wrong people are winning and that can't be allowed to continue.

 

[Winemaker]

As I mentioned in an earlier post, my Tanger Outlet stock was purchased low, and was one of the most heavily shorted stocks at 55%. When they announced the return of the dividend, and the ex dividend day was 1/28/21, the squeeze was on! Otherwise, the borrower of the shares has to have the $ to pay the dividend. I doubled my $ on 1/27/21 when I sold.


The borrowers of Gamestock shares used to "in the short", have to even their cash amount, when the true owners of the Gamestop stock were to sell. And apparently, no one was selling until recently when it was in the $300s. A Redditor who posted a November $53,000 position the other day, is now at$43,000,000.

 

[Markola]

The wrong people are winning and that can't be allowed to continue.

Likely true, as Wall Street and their lobbyists are skilled at privatizing wins and socializing losses. Still, if the free marketeer hedge fund titans start wailing for government protection, I hope Congress ties it to the end of the Carried Interest Loophole and other curbs on abuses and preferential treatments.

 

[NYEXPAT]

Likely true, as Wall Street and their lobbyists are skilled at privatizing wins and socializing losses. Still, if the free marketeer hedge fund titans start wailing for government protection, I hope Congress ties it to the end of the Carried Interest Loophole and other curbs on abuses and preferential treatments.

And agrees to to pay $10,000.00 per share to us retail folk, to avoid another LTCM disaster!