I'm not sure if this is supposed to be posted here but I'm not sure this would be welcome in c/wallstreetbets (lmao) either. It's just sad and dispiriting. Not really gonna say more about this because it's been pretty draining tbh.
Also, before someone says "well I don't think it's WRONG to talk about this, and I don't think it's praxis, and y'know I had to pay rent and spent some money on this and I just like laughing at Melvin eating shit and...." cool, I'm not talking about you, you know which people I am talking about.
Idk where people are taking 70B in the hole from, a couple firms lost around 5B or so, and Melvin Capital (the biggest loser) closed their position afaik now.
This has been framed very badly. It's not just a one sided loss for capital in general. This was triggered by WSB but lots of Wall St firms jumped in to get some of the action, and the ghouls that own the most GameStop stock (the top stock owner I believe owns something like 13% of all stock) gained hundreds of millions each. And all that money isn't just coming from Melvin and other hedge funds. That's not the only reason the price is getting inflated. The OTHER reason is that people are buying stock en masse to get in on the action, and a lot of them will get fucked over when this collapses, to the benefit of both the people at WSB who will pull out at a more opportune time, and the other hedge fund ghouls that are in on the thing.
In the long run, I don't see this as a blow to capitalism at all. If anything, it's gonna make more people invested at the stock market. The stock market making people rich isn't particularly good at radicalizing people, even if they get a bit angry at an app or whatever for not letting them get richer.
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The market cap of Gamestop is 25B? I'm not 100% sure how everything works but I don't understand how this number is realistic. Is it based on a prediction that it will still surge much higher? Because it's definitely not happened yet.
"As an example, take a situation involving four investors. Annie owns shares of GameStop, and Annie and her broker have an agreement that allows the broker to lend Annie's shares to short-sellers. It lends them to Bob, who subsequently sells those borrowed shares short in hopes that GameStop's share price will fall.
An investor named Chris ends up buying those borrowed shares from Bob. However, Chris has no way of knowing that those shares have been borrowed from Annie. To Chris, they're just like any other shares.
More importantly, if Chris has the same kind of agreement, then Chris's broker can lend out those shares to yet another investor. Diane, another GameStop bear, can borrow those shares and sell them short.
In this example, the same shares end up getting borrowed and sold twice. The short interest volume these transactions add to the total is twice the number of shares actually involved. You can therefore see that if this happened throughout the market, total short interest would eventually exceed the number of shares outstanding and approach 200%"
Yes that is nuts. And yes capitalism is a big meme.
If they literally had to buy every stock in the market twice, it still wouldn't be worth close 70 billion. Someone posted the link to the article they thought was showing they were losing 70 billion, and it was about loss at short positions this year in general, not just due to the GameStop squeeze. https://www.reuters.com/article/us-retail-trading-shortbets-idUSKBN29X1SW
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I brought up market cap because the market cap is the combined value of all outstanding shares of that company. Someone posted the link to the 70 billion number and it turns out that it comes from an article in Reuters that talks about the combined losses on shorting positions for every firm in the US, which was misread to be about GameStop. The same article put the losses of GameStop short sellers at around 1 billion at that time.
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Yes, I was just responding to someone who said they were losing 70 billion because of GME. It seemed a very weird claim to me, which is why I brought it up.
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As far as i know on the story they stopped buying up the stock, but they owe the difference per stock and i dont have numbers on the estimated purchase amount.
But it’s an introduction of a market force they cant immediately predict or control, least until they embed their own types to wsb
More importantly we as leftists dont have the luxury of picking the most agreeable moments to act.
They're probably already doing that to an extent. But it's not just Melvin. I wouldn't be surprised if at least part of this was aided by some other hedge fund. Firms do that kind of shit to each other. Shkreli did it too in 2015.
Act and do what though? There is little one can do here. Like, I guess someone can do some astroturfing in WSB to see if they can hook up a couple of people? That's about the scope of this. George Floyd was a real opportunity and very important. Healthcare is a potent issue. Corona is a potent issue. Rising unemployment is a potent issue. The stimulus checks are a very potent issue. This is just... Something redditors look at and laugh for a while.
Naked manipulation of the stock market, the only thing that was bailed out during the pandemic by the US government? The arbiters of The Mighty Line coming together and saying all the things they’ve been doing all along is illegal when we do it?
Open demonstration of the uselessness of the stock market? This is more than bankrupting a couple investment firms, this is a fresh crack on the mask of self importance the finance industry placed on itself. People are buying up prices. Nothing is created by these actions, potentially only destroyed,
We dont know the extent to which we’ll get results, or even small traction. But an attempt must be made here. If the left isnt out there making a case for itself, them who is? The people are swirling, blithering masses with no direction outside their next step. People here have been saying theyre demonstrating some degree of class consciousness, so if they feel they can make some influence, or do we let 5 million people together go to waste?
Not every one of them is the slur throwing frat bro, that’s the character of the subreddit, there could be many lurkers there who just want to skim the advice, or people rubbernecking at the spectacle. Hell we might even convince some of their usual traffic.
But this is a war of sorts, we dont have the luxury not to fight.
This has been abundantly clear for a long time. A lot more than that is required.
This is big news in reddit but most normal people I talked to about this had no idea what I was talking about. It's not even getting that much exposure. And, I mean, it happened in 2015 and no one seems to remember it, not sure people outside reddit will remember this in a month.
Make your attempt. There might be a few people who are somehow pushed to the right direction. But probably not any more than any other day. Gambling is a hell of a drug, it can easily turn against class consciousness, ESPECIALLY if you win. We're supposed to always be trying to talk to people. The main issue here is how massively people are overestimating this as an opportunity, and even worse, the promotion of stock trading by some, not even just as a way to make money but worse, a revolutionary activity, which is at best a diversion. They point to a deeper problem with their approach to politics.
Also posting isn't praxis. It produces few results. People here are biased towards it because we're all extremely online and many people here were radicalised by posting, but it's very limited in scope. Do it on the side, do it if there is nothing else you can do at that moment, but it's not a substitute.
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It’s ill advised to assume people really know the uselessness of the stock market, many people cant fathom how it works are likely just lean into “it does”. Wall Street wrapped itself in a safety blanket of self-importance, so even if people understand they do nothing, it doesnt really affect them.
As for it’s new outreach, i suppose it depends on where you get your news. I didnt seek any of this out, infact i would probably only know about it from reddit chatter or my brother who invests on Robinhood if it wasnt posted here at all.
But we’re not telling people to step into a boxing ring during the fight, just to talk to as many people as possible when they make for the exit, because lots of eyes are on this. Especially if wsb fails to bankrupt a firm.
Well chances are this isn't gonna change things. Like, it literally took a massive shit in 2008 which cost millions of people their jobs, but they still didn't figure it out, chances are they won't figure it out now either.
Exactly. It's big news on reddit. Extremely online people know about it. The rest? Eh.
We cant convince everyone, but the effort’s gotta be made to convince someone
As for the news, for all we know it’s probably left out of the news because:
On that second point they could be afraid that people would see it’s the hot new stock and buy and hold, which is the last thing any firm wants. These people will probably be hurt the most when the stock tanks, but they dont bother to think about that.
I agree. This should be the default. I disagree with the overestimation of this as an opportunity, and especially the people pretending stonks are praxis.
What are your sources for this info? I was under the impression that this isn't over yet.
It's not completely over (and it's not just Melvin that shorted the stocks) but it seems like it peaked a while ago and now it is fluctuating at a lower price before it collapses. Not 100% sure because who the fuck knows what the stock does but at this point it seems like it is at least partly artificially supported by WSB holding and convincing more people to get in on this, and not so much because of the shorts.
Well yeah that's pretty clear to /r/wsb. That's why they're holding onto the stocks until the ghouls have to buy huge amounts of stock.
That's not what I mean. I meant that the price isn't that high so much because the short sellers need to buy all that stock, but because randos are still buying in. Shorting interest is still high but I'm not sure if what is happening is "sustainable".
The way in which this whole scheme was supposed to be different from a more ordinary stock market bubble resembling a ponzi scheme is that this was supported by short sellers who really needed to buy all that stock at any cost. So it was supposed to be a free for all funded by Melvin. Now I think it is gradually moving away from that and getting closer to a more typical kind of bubble.
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Well yeah that's where the gamble is. /r/wsb seems to be pretty enthusiastic about holding out until the ghouls have to buy.
https://www.reuters.com/article/us-retail-trading-shortbets-idUSKBN29X1SW
This is about the total losses on short positions in the US this year, not just GameStop. Look what it says about GameStop:
The entire market cap of GameStop is like $25B.