Great explanation. IMO the GameStop phenomenon is the result of the combination of democratization of trading through software (Robinhood no fee trading, doing it on your cellphone) + social media enabled mass scale online community building (around some previously fringe niche). Any area that is subject to this kind of combination of change could face similar situation where the old institutions guarding the area would face increasing challenge from grass root efforts ("retards/autistics" as in wsb's lingo).

There is a third factor: a generation of investors who have never really lost money in the market.

I don’t think it’s about that at all. If you follow the subreddit at all, you’d see that WSB investors have been losing immense amounts for a long time now.

I think the primary thing that baffles the more traditional investing establishment is how irrational WSB investors actually are.

Amazingly, it seems actually possible that WSB can remain irrational longer than some Hedge Fonds can stay solvent.

/r/wsb are not the prototypical Robinhooder who have followed on behind them.

The mean dollar through Robinhood probably comes from a WSB:er tho

So much this. I cut my teeth in commods which are still very much two way markets.

But the equity crowd hasn't seen any real volatility until March of last year and the Fed promptly stepped up to backstop the entire regime.

I have friends who own TQQQ like it's dumb not to...and they're right.

I think there have always been potential "investors" that never really lost money because they were never investors in the first place. Lots of Robinhood, r/wsb users/members are 1st time traders because Robinhood significantly lower the barrier to entry for investing, and they don't feel as alone and scary once found an online community similar to themselves.

I didn't watch all the videos, but so far as I write this post, it does not appear that shorts have covered, or started covering (at least as of this morning). It seems like the price hike is due to big buyers and gamma squeezes. There's been systematic short attacks in an attempt to drive the stock down, but they keep getting neutralized by big buyers. It's been a wild ride.

Short interest is still over 100 after today’s close. Watch for the gamma squeeze on Friday.

Melvin Capital did.[0]

[0] https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddi...

You sure about that?

https://www.reddit.com/r/stocks/comments/l64xvw/gme_dedicate...

What is stopping Melvin Capital from lying about closing their position in order to deflate the stock price so they can actually close out their short position when they are due this coming Friday?

Yeah that is basically it. If you are safe why report on it? You don't gain anything. If you are in danger then a little lie doesn't hurt because even a tiny chance of success could mean billions of dollars for you.

Couldn't they close their position and still have the short interest go up because of other investors opening new positions?

If these institutions are going on record as closing their positions, when they actually havent, aren't they committing some sort of fraud?

If you follow this in more detail you will see they have already misled the public on their positions several times. But when the choice is between your fund’s bankruptcy and an SEC fine, people do crazy things.

Also the borrow fee for shorts is insane now, like 23%.

Annualised? If so, that's peanuts.

I lost my respect for Rossman after he uploaded a video cursing out short sellers after $AGRX sunk after getting approved. Bio stocks almost always sink after PDUFAs, but he was just raging after what he thought was market manipulation.

I was disapointed in some of his videos about Coronavirus and Cuomo's executive orders. But then I remembered that he is neither a stock trader nor an epidemiologist. His channel is fundamentally an opinion show. Its a good opinion show, but still an opinion show. When he starts giving opinions on things far outside his wheelhouse he becomes a more-rational-than-average lay person.

I think he is mostly just genuine about his opinion on things and explaining why he holds those opinions. Per peer post on his intellect. Which I agree is generally a rational wat to approach things and I respect him for it.

I call them 'professional morons'--high-profile who have a lot of status and money and clout in various tech and investment fields despite being sorta dim and banal

Rossmann is hardly rich. His whole brand is fighting Apple for right-to-repair legislation as well as a bunch of pro small business stuff. What exactly is wrong with this opinion on the oppressive covid lockdowns?

I was not referring to him specifically

This is gold, it's things like this situation and then such people explaining it that teaches me more about the market than any other dry material I have ever found before.

Just SO pumped that library is being used in the real world to host videos!

I'm unable to watch any of them, only the first few seconds loads. Hopefully they can improve because this is terrible

I tried to watch the first video and it stopped after 13 seconds, insisting the video was complete. Refreshes didn't fix it.

So I just went and watched on Youtube instead. Not sure what the deal was there.

I didn't even get through 4 minutes of the first video without a huge amount of buffering. Is this on youtube?

I had some hiccups, they should have gone with PeerTube, the more peers, the merrier.