News for hackers. Stuff that matters.

A comment on The Battle of GameStop. Parent comment

Re:The Battle of GameStop by PartiallyTyped on Tuesday January 26, 2021 @05:11AM (#25914178)
Melvin Capital lost Billions last week alone. They needed to get bailed. You have been sold the narrative by the same people who screwed you in 2008. The bubble is the consequence of Hedge Funds getting greedy and repeatedly screwing a "dead company", by overshorting the shares.

Don't take my word for it, take Louis Rossmann's, somebody known to stand for the little guy.

https://www.youtube.com/watch?v=4EUbJcGoYQ4

[ Parent | on HN ]
Re:The Battle of GameStop by dimator on Tuesday January 26, 2021 @12:47PM (#25918894)
That video was a great explanation, thank you
[ Parent | on HN ]
Re:The Battle of GameStop by rusk on Wednesday January 27, 2021 @08:08AM (#25927745)
Surely if it's obviously a bubble they can bet on that bubble bursting and come through the other side on top? Is it just a matter of rules around capitalisation? Surely it would be good business for them to go get that capitalisation?
[ Parent | on HN ]
Re:The Battle of GameStop by blackrock on Tuesday January 26, 2021 @06:20AM (#25914564)
I wonder if there is a systemic risk behind this.

Kind of like, if one domino falls, then the rest will tumble.

[ Parent | on HN ]
Re:The Battle of GameStop by pas on Tuesday January 26, 2021 @10:09AM (#25916557)
https://www.youtube.com/watch?v=lMUtU0tOmNE (The Pyramid Scheme that Collapsed a Nation)
[ Parent | on HN ]
Re:The Battle of GameStop by PartiallyTyped on Tuesday January 26, 2021 @06:47AM (#25914730)
This is partially what happened in 2008. Hedgefunds overshorted the housing market and then everything went down.
[ Parent | on HN ]
Re:The Battle of GameStop by intotheabyss on Tuesday January 26, 2021 @09:07AM (#25915863)
Didn't hedgefunds "overlong" the housing market? They were borrowing on margin using housing debt as collateral, but the collateral turned out to be junk, so they got margin called when that collateral tanked (the CDOs), and banks with insufficient liquidity to cover the losses either collapsed or got bailed out.

Essentially the housing market bubble was people going long using worthless collateral.

[ Parent | on HN ]
Re:The Battle of GameStop by PartiallyTyped on Tuesday January 26, 2021 @09:24AM (#25916040)
My understanding is that while the market crashed, certain people capitalised on the bubble breaking and kept shorting until it was ran to the ground.
[ Parent | on HN ]