Gamestop

[Kidlicious]

https://www.google.com/amp/s/www.foo...ver-100-heres/

Motley Fool says that in some cases due to multiple people borrowing a stock to short it can occur but in my mind any time the amount of stock being borrowed is over 100% of the total stocks available then someone is obviously naked short selling. I am open to hearing more though.

The media is in on it Oerdin. They do this all the time. It's business as usual. Corruption is everywhere now.

[-Jrabbit]

Dude, nothing has changed. People are greedy, and enforcement has always been particularly lax on white collar/Wall Street abuses.
Corruption has been everywhere for many, many moons.

[Kidlicious]

You're blind to at least half of the things that happen.

[pchang]

While you see all sorts of things that never happened.

[Egbert]

A sumarry.
1. Wall Street ***** short sold 140% of the shares in Gamestop.
2, Other ***** noticed and bought up up actual shares.
3. Wall Street ***** could only buy shares at very high prices to cover their positions because the other ***** sat on the shares to make prices skyrocket.
4. Wall Street ***** lost billions while other ***** made billions in a great victory for poor *****.
5. Everyone laughing at Wall Street
6. ***** in charge now changing rules to protect Wall Street ***** from themselves.

[BlackCat]

6. ***** in charge now changing rules to protect rich Wall Street ***** against actions from poor *****.

FTFY

[Egbert]

I have pressed the "like" button for this poast.

[BeBMan]

I have most of my games from Steam anyway

[Dinner]

A sumarry.
1. Wall Street ***** short sold 140% of the shares in Gamestop.
2, Other ***** noticed and bought up up actual shares.
3. Wall Street ***** could only buy shares at very high prices to cover their positions because the other ***** sat on the shares to make prices skyrocket.
4. Wall Street ***** lost billions while other ***** made billions in a great victory for poor *****.
5. Everyone laughing at Wall Street
6. ***** in charge now changing rules to protect Wall Street ***** from themselves.

Yeah, pretty much though I would add unethical trading platforms such as Robin Hood and TD Ameritrade Immediately blocked theor members from buying any of the stocks in question likely because of a conflict in interests. I.E. those companies were themselves shorting those stocks and they themselves faced massive financial loses so they decided to, possibly illegally and definitely unethically, block their customers from buying more shares as they personally would lose money. That is some bull**** and such conflicts of interest should be outlawed.

You will notice at every turn here it is the rich and powerful trying to abuse the poor common man. All while the rich and powerful lie and whine about how the evil little guy cost them money.

[Kidlicious]

I guarantee Robin Hood and TD Ameritrade got pressured. The only question is who all did it.

[Kidlicious]

Just leaving this here in case anyone wants to read it.

"Product.


The Wallstreetbets subreddit are furious after Robinhood stopped allowing trading on GameStop. Here’s how the “commission free” investing app makes money.
EO
By Edward Ongweso Jr
January 28, 2021, 2:26pm

MIKE EGERTON - PA IMAGES / CONTRIBUTOR

As GameStop and other stocks targeted by day traders in the r/WallStreetBets subreddit begin to climb, popular fee-free trading platform Robinhood is outright preventing users from buying and only allowing sales to close out positions. The company has been widely criticized for the trading restrictions and is now the subject of a class action lawsuit.

ADVERTISEMENT

Given that Robinhood is playing a central role in retail investors pumping dark horse stocks, it’s worth examining once again how it makes money: namely, by selling users’ trades to other large firms before they’re actually executed. Those firms make money by effectively seeing what the retail investors on Robinhood are going to do before they actually do it, and acting accordingly. Those firms are basically buying information that then informs their own trades.

For the past few years, Robinhood has spent a great deal of energy marketing itself as born out of the Occupy Wall Street movement and champions a mission to “democratize finance for all.” The reality, however, is that this rhetoric distracts from the fact that it's actually helping preserve the status quo—namely by turning its customers (but more so their orders) into products.

The secret to Robinhood's success (and profitability) is simple: payment for order flow. To ensure trades are commission free, trades are sold to "market makers'' or large firms such as Citadel—Citadel Securities is Robinhood’s largest customer, and affiliate Citadel LLC tried to bail out Melvin Capital after its Gamestop shorts cost it billions. Market makers execute those trades (sometimes at an inferior rate) and can use their privileged position to place themselves in the middle and make a profit. Crucially, in this arrangement, more trades and more volatility mean there’s more for firms like Citadel to work with. Here is the Financial Times explaining how it works:

Citadel Securities pays tens of millions of dollars for this order flow but makes money by automatically taking the other side of the order, then returning to the market to flip the trade. It pockets the difference between the price to buy and sell, known as the spread.

Easy access to the market against the backdrop of wild swings in prices have led to higher trading volumes for stocks and options this year—increasing the raw material Citadel Securities uses to turn a profit. At the same time, the rise in volatility has forced spreads wider, increasing the potential income for market makers.

Market makers like Citadel are supposed to be honest dealers that seek the best price for orders, whether they internalize the order themselves or send it to market. Unfortunately, Citadel has not always done this. In 2017, the SEC fined Citadel $22 million because its algorithms were screwing the retail investors whose order flows it was purchasing.

“One strategy, known as FastFill, immediately internalized an order at a price that was not the best price for the order that Citadel Securities observed,” the SEC noted. “The other strategy, known as SmartProvide, routed an order to the market that was not priced to obtain immediately the best price that Citadel Securities observed.”

Do you work at Robinhood, another trading platform, or an investment firm investing in GameStop? We'd love to hear from you. Using a non-work phone or computer, you can contact Edward Ongweso Jr. securely on Signal at (202) 642 8240, or email edward.ongweso@vice.com

Payment for order flow wasn’t invented by Robinhood (that honor belongs to Bernie Madoff), but the company's technique differs from others who use it in the industry in that it charges a percentage of the order spread. In 2020, payment of order flow has made the company a killing: for the first quarter, it accounted for $90 million in revenue for the company (70 percent), by the second it doubled to $180 million.

Payment for order flow is a wonderful system that makes a lot of money for everyone involved, except the consumer.

In December, Robinhood was fined $65 million by the Securities and Exchange Commission for "misleading statements and omissions in customer communications" about its revenue, but specifically around its payment of order flow process. The SEC found that customers were led to believe they were getting the best possible price for their orders, but were actually collectively "deprived" of $34.1 million because Robinhood chose to give their orders to firms that would give the company higher revenues rather than the best prices for customers.

"If the service is free, you are the product. Robinhood users thought the service was accountable to them, but actually it exists to serve giant Wall Street institutions like Citadel and other market makers,” J.E. Karla, editor of the business newsletter Contention, told Motherboard. “They will suicide bomb their own business models to protect the real powers from the consequences of their internal contradictions. When a system approaches a terminal crisis, its institutions will break their own rules to suppress elements that threaten the system’s continued viability. That’s what’s happening here. This specific episode may be over in a week or two, but it's a symptom of something very ominous."

While the GameStop stock saga has so far largely been seen as a case of the “the little guy” (as far as day traders with money can be considered “the little guy”) getting back at big financial players, the reality is more complicated. The financial system has many moving parts, and the day traders on Robinhood who imagine themselves as literal Robinhoods are really just grist for a larger mill. It’s worth noting here that whatever profits a few day traders end up realizing on GameStop, the huge firms that own the majority of GameStop stock will likely come out on top.

Robinhood may bill itself as an app for the little guy, but its platform, perhaps more than any other, is a great reminder that the stock market is a casino—which means you cannot forget that the house always wins. "

[Kidlicious]

https://www.vice.com/en/article/qjpnz5/robinhoods-customers-are-hedge-funds-like-citadel-its-users-are-the-product

[Elok]

I don't understand the stock market but I gather this means some useless rich people got punched in the dick and nobody likeable got hurt so I tentatively approve.

[Egbert]

Yeah, pretty much though I would add unethical trading platforms such as Robin Hood and TD Ameritrade Immediately blocked theor members from buying any of the stocks in question likely because of a conflict in interests. I.E. those companies were themselves shorting those stocks and they themselves faced massive financial loses so they decided to, possibly illegally and definitely unethically, block their customers from buying more shares as they personally would lose money. That is some bull**** and such conflicts of interest should be outlawed.

You will notice at every turn here it is the rich and powerful trying to abuse the poor common man. All while the rich and powerful lie and whine about how the evil little guy cost them money.

The really scary thing is the thought that highly paid managers of huge hedge funds short sold 140% of the stock in a company. They could not possibly have had any strategy to deal with somebody noticing and swooping in to buy enough shares to squeeze them. Somebody did notice and did swoop in so it is clear sufficient information to do that was publicy available.

This raises three questions:
- why was it not some other highly paid hedge fund manager swooping in rather than amateurs
- do these "professionals" really have no risk management strategies given that short selling has the risk of unlimited losses and "stop losses" do not always work
- should I be terrified that retirement funds (including mine) are managed by "professionals" <<< this is the question that actually concerns me

[Egbert]

I don't understand the stock market but I gather this means some useless rich people got punched in the dick and nobody likeable got hurt so I tentatively approve.

Watching a hedge fund get destroyed is good entertainment for the masses. The best blood sport since the Roman Colloseum was shut down.

It has also been good that some tads in the ghetto made enough money to pay off their student debt or otherwise get a better life from buying shares and making a profit.

This will end badly for many small people. There will be people buying Gamestop shares at peak prices and losing a lot of money.

There will be ignorant investors making a lot of money this tax year by what could be be described as luck and then losing money nest tax year, That mean they get a big tax bill for this year but lost all their gains in the following year thus getting nowhere or going backwards.

[Kidlicious]

"10-year-old San Antonio boy cashes in on GameStop stocks

A vehicle passes in front of a GameStop store in Vernon Hills, Ill., Thursday, Jan. 28, 2021. The online trading platform Robinhood is moving to restrict trading in GameStop and other stocks that have soared recently due to rabid buying ...
By - Associated Press - Friday, January 29, 2021

SAN ANTONIO (AP) — A 10-year-old San Antonio boy made a killing by selling GameStop stock he was gifted more than a year ago.

Jaydyn Carr’s mother, Nina, spent $60 for 10 shares of the video game chain’s stock in December of 2019 that she gave him for Kwanzaa to reflect Ujamaa, one of the festival’s seven principles that focuses on cooperative economics.

With GameStop‘s share price skyrocketing this week behind a speculative frenzy driven by a Reddit chat group, Jaydyn sold the shares Wednesday for a little less than $3,200, the San Antonio Express-News reported.

---

---

“My phone was going off, because I have GameStop on my watch list,” Nina said of watching the share price surge. “I was trying to explain to him that this was unusual. I asked him ‘Do you want to stay or sell?’”

The mother-son investing duo said $2,200 of the funds would go to Jaydyn’s savings account and that they’d put the other $1,000 toward future investing.

[Kidlicious]

Class-action suit against Robinhood now

[Thoth]

I'm thinking that the real beneficiaries of this bubble are the institutional investors who were long on GameStop and have been quietly s******ing into their sleeves all week as they unload their shares at 5-10 times their value. A little over $21 billion has been transferred from the pockets of gullible Redditors and into the coffers of the people they think they're screwing.

This whole "triumph of the little guy" narrative is largely false. But I do have to commend the folks who orchestrated this. They have trolled the **** out of not only some hedge funds but a hell of a lot of "ordinary people" as well. 10/10

[Kidlicious]

The people that started this are redditors and did due diligence. Of course it only worked because other people bought in. Some people will lose but a lot of people got rich.

[Thoth]

The people that started this are redditors and did due diligence

.

The small group of sophisticated investors who started this on reddit have made mad coin. The hordes who have been flocking to r/WallStreetBets and signing up for RobinHood accounts have no clue what they are doing.

Of course it only worked because other people bought in. Some people will lose but a lot of people got rich.

If it only works because people continue to buy in.....it's a Ponzi scheme and a fraud.

The folks who got rich from this are the smallish group of savvy and skilled investors who started this on reddit and the institutional investors who held long positions in GameStop. The noobs who are inflating this bubble are marks who have been duped by a very appealing false narrative of "the triumph of the little guy over the evil hedge funds and everyone is going to get rich". They're suckers whose ignorance is being used and exploited.