Ask HN: How is GME not a pump-and-dump?

Re:Ask HN: How is GME not a pump-and-dump? by tashmahalic on Friday January 29, 2021 @12:32PM (#25959913)

If an index fund wants to maintain the same portfolio percentage of GME when GME’s stock price rises, wouldn’t the fund sell GME, rather than buy?

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Re:Ask HN: How is GME not a pump-and-dump? by reducesuffering on Friday January 29, 2021 @12:46PM (#25960096)

Isn't it actually neither buy nor sell? Most common indices (by AUM) are market-cap weighted. If a total market ETF contains 0.25% of it in GME, and GME doubles in value, it's GME it holds is now 0.50%, and that's how much it should hold now, according to market-cap weight. No buying or selling.

Of course there's many ETF's that aren't market-cap weighted, but the majority of funds/value is.

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Re:Ask HN: How is GME not a pump-and-dump? by boatsie on Friday January 29, 2021 @01:00PM (#25960261)

That’s right, I misspoke. It could possibly require other funds that were tracking, say, the top 1000 stocks by market cap to buy, not ones tracking the regular index.

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Re:Ask HN: How is GME not a pump-and-dump? by kozd on Friday January 29, 2021 @12:46PM (#25960097)

Not if it's a cap-weighted index fund.

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