> But the point is that NONE of this information or analysis was secret, conducted in back rooms, or even hard to find.

There seems to be a massive misunderstanding that somehow because these discussions happened publicly on reddit everything is fine and dandy. It seems people are conflating insider trading (which has nothing to do with the $GME short squeeze unless you’re wearing a tinfoil hat) and market manipulation. I would be surprised if the SEC went after redditors (this time, at least) but there is no “we did it openly and conspicuously” safe harbor or defense when it comes to charges of market manipulation or securities fraud.

There’s a reason market commentary comes with a whole bunch of disclaimers in the footnotes with language like “not intended as investment advice” and “references to specific securities and issuers are not intended to be, and should not be interpreted as, recommendations to purchase or sell securities”.

If it's 2 million people with $250 willing to make a bet, it's manipulation, but if a rich hedge fund manager like Soros has the money upfront to do something like short the pound and induce a Black Wednesday event [1] all by himself, that's fine and not manipulation at all? Just taking this as a random example. Any fund with enough money can move a market. This is their basic modus operandi.

[1]: https://en.wikipedia.org/wiki/Black_Wednesday

I feel like many (maybe most?) people believe that type of event should not be considered fine either.

To me, none of it is fine. I hope that this event is eye opening enough that some protections are put in place that effect everyone, including hedge funds, that prevent this type of manipulation.

There's no way of preventing things like this as long as capital markets exist and wealth distributions are the way they are. Its simple supply and demand.

What do you propose should be done about it? Should we prevent markets from "a lot" (whatever that would mean) in a single time period?

Stop letting hedge fund managers group up together and have "idea dinners" where they plan their next strategic shorts behind closed door. Oh that's right you can't stop rich people from having dinners and talking about manipulating the market. The only thing imposing restrictions and laws in a free market now is solely to fuck over the retail investors while letting the elists continue controlling the market. I'm sure it's been thought about during the 1918 crash and the 2008 crash. Everyone is making it seem like the stock markets only experienced crippling manipulation only during 2000s. The game is set in stone and any government intervention prevents it from ever being a "free market" ideologically.

You can make a stronger claim than that.

2 million people with $250, loosely coordinated vs. 2 hundred people with $2,500,000 pooled together with a full time manager.

None of it is fine, but it's not like we're going to charge billionaires or hedge funds with market manipulation (see: 2008, etc).

It's rich that coordinated behavior is manipulation but investing in a targeted managed fund isn't.

Or that "I'm buying to squeeze the shorts" is manipulation and "I'm buying because the shorts are overextended" isn't.

> I'm buying to squeeze the shorts

You are buying in specifically to manipulate the price of availability of an asset in the market.

> I'm buying because the shorts are overextended

You're buying in based on some perception of the market, but not attempting your action of "buying in" to have a direct impact.

Ya, they can be very similar, but as with a lot of legal aspects, intent matters (but is still hard to prove).

Regarding investing in a targeted managed fund, I think it's different because the rules are sort of different. A fund has to have an exit strategy that is a net positive for the whole fund. A fund can't make a profit for half of it's investors, and a lose for the other half of it's investors, on the same position. If there is no exit strategy, the position/play/trade/whatever doesn't make sense.

The current WSB exit strategy seems to be "hope to make it out before everyone else loses money".

Yes, I likely wouldn't have constructed the compact example if I didn't understand the basics of the issue.

I suppose my point is that someone with intent can use careful language to avoid creating any evidence of intent (and lawyers will cheer them on) and then someone without much in the way intent will say something sloppy that implies intent (and lawyers will punish them severely).

Ya, you're not wrong.

And the unwritten/unknown rules of how to do skirt around the law aren't going to be changed by this situation. We still (in my opinion, unfortunately) have a legal system that is way to heavy on "word of the law" vs "intent of the law".

We saw some of this a couple weeks ago. True intent is hard to prove through words, and context is super important.

For what it's worth, I seriously doubt that someone on reddit who made an market-manipulation-incriminating statement and made a couple hundred bucks will face punishment. I suspect that when all of this is looked at at the end, the "gains" will be rather bi/tri-modal. A ton of people losing money, a bunch making a little bit (relatively), and then a small handful who make absolute bank. The group on the right are the ones who will have to be careful/worried.

>> I'm buying to squeeze the shorts

> You are buying in specifically to manipulate the price of availability of an asset in the market.

Naive question: isn’t shorting market manipulation as well or only if it is coordinated among many people?

There is a difference between "market manipulation" and "illegal market manipulation.

Any action that can impact the price of something can be called "market manipulation". Apple releasing their quarterly earnings affects the price, but is clearly not illegal.

When people short a stock, it is typically because they believe that the current price is not representative of what the business fundamentals and environment dictate it should be. Ie, they expect it to go down in the long run. While yes, the act of "shorting" can lower the price, that is not the main goal of the action, and it doesn't actually cause them an immediate profit (if they wanted to exit their position, they'd have to buy it all right back up, and the price would rebound as they do).

> Ya, they can be very similar, but as with a lot of legal aspects, intent matters (but is still hard to prove).

It is so hard to prove that it becomes practically impossible in most cases, which leads to legislation that can choose when to strike and when not, leading to further concentration of unassailable power in regulating entities.

If they were an incorporated bank, made the same realization, and executed a buyout it would be perfectly legal.

It’s hardly the buyers’ fault that sellers shorted over 100% of the float.

If it’s anyone’s fault, it’s the hedge funds who tried to hammer GME into dust.

Then it seems that "market manipulation" is so broad a term that many activities, essential to the daily operations of hedge funds, qualify for it.

This would be fine by me: to just make whole sectors of these financial markets illegal, close some large exchanges and companies, in an effort to somehow limit their parasitism on the the real economy.

This is the problem with popular conspiracy theories. If a lot of people believe that a shadowy group is regularly breaking the law then that emboldens them to break the law.

That law is being constantly broken is a conspiracy theory? Really now? A crime has not happened unless there is a court decision for it, else it's a conspiracy theory? You realize how weak this logic is?

Who exactly am I conspiring with?

Is a "short squeeze" by definition market manipulation? In an illegal way?

I don't think it is generally considered such? Unless it involves putting out fraudulent/false information.

Porsche execs were investigated/tried in Germany for lying about their financial situation in order to trigger a short squeeze on Volkswagon (i believe none were convicted) -- the potential crime was the fraudulently misleading communications, not the short squeeze itself.

Because this seems just like any other short squeeze, the difference is mainly that it was planned in public instead of secretly in private. And that makes it less likely to cross the line into some kind of illegality, not more, right?

"Market manipulation" itself is not necessarily illegal, if you just mean doing things that will effect the market in a way to bring profit to yourself. It's what tons of big traders do all the time, right? It's illegal when it involves fraud, lying, secret collusion, insider trading, dereliction of fiduciary responsibility, etc. Any kind of 'short squeeze' could certainly be considered "market manipulation" in the plain English meaning of those words, but that doesn't mean it's illegal.

This investopedia article [1] on 'short squeeze' says "Contrarian investors may buy stocks with heavy short interest in order to exploit the potential for a short squeeze" -- it does not suggest there is anything illegal about that. Is that not exactly what wsb did, no more no less? they collectively decided to buy shares to exploit the potential for a short squeeze.

Investors do this all the time, the unusual thing here is that it was planned completely in public, and that it involved such a large number of small retail traders (in addition to a few pretty big traders... and quite likely other non-wsb-affiliated big traders we don't even know about who saw what wsb was doing and decided to go along for the ride, or who saw the short squeeze potential themselves independently).

Most traders don't put their "market manipulation" in public because a) they don't think it could work if they did, and b) they know they cross grey areas of legality all the time, so don't want their business to be out in the open like that.

But in this case... what law was violated?

[1] https://www.investopedia.com/terms/s/shortsqueeze.asp

It's illegal if you're not rich...

In 2013 Bill Ackman had a huge short position on Herbalife. Carl Icahn in front of millions of viewers on CNBC promoted a short squeeze.

"During the epic verbal battle between Icahn and Ackman that was televised on CNBC in January, Icahn predicted that Ackman’s Herbalife investment could produce the “mother of all short squeezes.” Shortly after that incident, it became clear that Icahn had taken a big position in Herbalife’s stock. He has since expanded that position, bought 16.5% of the outstanding shares and gotten two representatives on Herbalife’s board. "

https://www.forbes.com/sites/nathanvardi/2013/07/22/carl-ica...

^ This.

If the Biden SEC comes after Redditors while the Obama SEC let this and many other things pass, whatever chaos they imagine won't begin to describe it. It's one of the few things AOC, Warren, Cruz, and many others (claim to) agree on.

You’re absolutely right. A short squeeze in and of itself is absolutely not market manipulation. Sometimes it just happens. But creating a short squeeze can be market manipulation.

> "Market manipulation" itself is not necessarily illegal, if you just mean doing things that will effect the market in a way to bring profit to yourself.

I’m not quite sure what you mean by this. Market manipulation is a concerted (and sometimes coordinated) effort to artificially influence the supply or demand of a security. Market manipulation often relies on false information but false information is not at all a required element of market manipulation.

Where things get interesting (and fuzzy) here that I’m not quite sure where the line is between a group working together to influence the market and just... the market. I suppose its theoretically possible for everyone in the market to coordinate against one or a few players. To my knowledge there’s never been a situation with such a large coordinated effort.

That said, there are definitely a handful of individuals on WSB who got the ball rolling and have profited heavily. I definitely think the SEC could make the case they've violated the Exchange Act and potentially the '33 Act depending on what % of $GME the group controlled.

> Where things get interesting

And when a lawyer says "interesting," they mean "expensive."

> Where things get interesting (and fuzzy) here that I’m not quite sure where the line is between a group working together to influence the market and just... the market.

I think it's also noteworthy here that the short interest was at least initially over 100%. That's a powder keg; you don't "create" a short squeeze in that environment so much as just wait for any random spark to cause one.

If it comes down to the SEC prosecuting individual members of WSB (where they can't prove misrepresentation), I think there will also be substantial first amendment arguments at play. One recent rallying call of the bubble has been to buy and hold GME stock as a protest against hedge funds / the stock market as a whole, and on the face of things that's political protest. The SEC isn't in the business of investigating other politically motivated stock boycotts, so a politically-motivated stock purchase should also be treated with kid gloves.

> That said, there are definitely a handful of individuals on WSB who got the ball rolling and have profited heavily.

From what I can tell, RoaringKitty/DFV is less likely to be a target of a market manipulation charge because their arguments were made well over a year ago and were ultimately ones of value; the profit did not depend on causing a short squeeze, and DFV in fact took profit from a large portion of their initial stake by the end of 2020 (before the squeeze).

The linked post is more direct in "these purchases will cause a short squeeze," so it could more credibly be called manipulation. But again, the powder keg makes the analysis weirder.

I actually agree about RoaringKitty/DeepFuckingValue. From what I've seen none of his posts or comments were at all encouraging or even insinuating that others should follow his lead. His YouTube channel even has a disclaimer video. In an ideal world he'd include that disclaimer at the beginning and end of every video but the fact that he has one at all at least demonstrates he's thought about the potential market implications and taken steps to make sure his followers don't take his commentary the wrong way. I'm actually a bit curious if DFV will be hired as a PM by a hedge fund when the dust settles. I don't think GME is the first time his thesis has paid off.

But the people saying things like "buy GME and call your broker to instruct them not to lend your shares" or encouraging people to go "all in" and the comments specifically encouraging others to buy GME to screw $hedgeFund have left a pretty clear paper trail of their intent to induce others to purchase and manipulate the market.

> bit curious if DFV will be hired as a PM by a hedge fund when the dust settles

I kind of doubt this. Lightning rarely stricks twice, and unless he has a history of these sorts of moves who knows if he'll have a pick like this again.

Also, the money would have to be reallly good considering he's by-far set for life after this.

My biggest concern for him at this point is that he'll get dragged in to investigations regarding this. I agree with you that he specifically doesn't seem to have done anything wrong. I don't think he even ever said "You should do this", or insinuated that others should; it was just a "This is what I'm doing and here are my reasons why".

I hope the next couple years of his life aren't an absolute shit-show dealing with fallout of being the most "high profile" name (so far).

From the investopedia article:

"Contrarian investors may buy stocks with heavy short interest in order to exploit the potential for a short squeeze"

Are you suggesting that is illegal?

And are you suggesting something diferrent than that happened here? If so, what made it different?

My understanding is:

> exploit the potential for a short squeeze

Not illegal.

> Take action with the explicit intent to cause a short squeeze

Yes illegal.

Context matters though as to which side a given situation might come down on.

The weird thing here is that buying the shares themselves to exploit the potential for the short squeeze, in itself makes a short squeeze more likely, no?

But yeah, it's possible if you have that intent in your mind, somehow it makes it illegal, the laws don't always make sense and I'm not an expert here.

I am pretty confident that large traders do this all the time though, have the intent to cause a short squeeze. But I wouldn't be shocked if there's something illegal that traders do all the time anyway (without advertising it on the internet!).

For rich people it is often just fat fingers. At that much money, you can't help but step on someone's toes.

For millions of manic amateurs, it's mania and collusion. The planning of it is evidence.

So become rich, before you break laws, seems to be the moral hazard here.

Would it be fair to say that people who just read these posts and bought the stock (or calls) are completely in the clear?

Would things get fuzzier if just one person bought $100K worth, which the post claims would be sufficient to trigger a squeeze?

(Just asking theoretically, I'm not a participant :)

I’m sorry but you have written several blowhard comments along these lines and it’s just wrong. There is no such thing as “creating” a short squeeze. There is just a buying strategy based on hard work of appraising the fundamentals and speculating correctly, and you are perfectly free to tell others you plan to do that and coordinate with them.

Calling anything the retail / WSB investor crowd did in this scenario “manipulation” is ridiculous and insulting. “Coordinating” by explaining a strategy and inviting others to participate is not “manipulation.”

Well I'm a securities lawyers soooo I kind of know a thing or two about this stuff. I stand by everything I've said. If that makes a stranger on the internet think I'm a "blowhard", so be it. Apologies if reality hurts your feelings. Nothing I've said is wrong. Many things you've said are, though.

Oh, and you might want to google Phil Falcone.

If true, I’m quite shocked just based on the bald-faced, zeroth order flagrant incorrectness of things you wrote in other comments about it.

I worked as a fund manager at an asset management firm for a few years, often sitting daily with our general counsel on many issues. Nothing you have said about this, including the totally off the wall comparison with Phil Falcone, causes me to believe your take is trustworthy here. I’m not a lawyer, but just because you allegedly are one doesn’t mean I’m going to take your opinion on this at face value.

Prepare to be quite shocked, bud. I'm still waiting for you to point out what exactly I've said that's wrong. Since your comments are full of angry rhetoric and lacking in substance it seems that you strongly dislike what I've said which is actually very different from what I've said being "flagrantly incorrect". Classic mixup.

> often sitting daily with our general counsel on many issues

I think you think this somehow bolsters your (again, completely emotional) argument? On the contrary, this is a pretty good indicator you don't understand federal securities laws. And I must say, I concur with your former GC's assessment.

> “I'm still waiting for you to point out what exactly I've said that's wrong.”

I don’t know why you’re waiting on that. It’s absolutely not my job to go item by item through the comments and chronicle it for you, that’s on you if you care (or don’t, I don’t care, and I won’t be baited further). I just felt somebody needed to mention that they don’t take what you’re saying as accurate or trustworthy.

If you are making a claim that everything someone is saying is wrong, you should will be willing to state what you think they are actually wrong about, and why.

No one is asking you to "go line by line", but right now you're just yelling "YOU'RE WRONG I'M RIGHT" without even specifying what you're talking about.

No, one does not have to respond to “citation-needed” requests for bolstering arguments. Others are perfectly free to discredit me for that, ignore what I am saying, that is fine, but nobody is “required” and nobody “should” engage with that in every case.

In this particular case I think the arguments have been repeated many times across all the different GME threads. My goal is not to repeat them here, only to register dissent, which is a perfectly valid goal for me to have.

> buying strategy based on hard work of appraising the fundamentals and speculating correctly

I'm sorry are you trying to make an argument that GME right now is based on evaluating the fundamentals?!?

> “Coordinating” by explaining a strategy and inviting others to participate is not “manipulation.”

Frankly, you're kind of right, if the premises of those strategies are valid, and are not "If we manipulate the value high enough", then it is not illegal market manipulation.

If the premise of your strategy is "manipulating the price of availability", then yes, it is. If the strategy is just blatantly factually wrong or fraudulent, then yes, it is.

> “ I'm sorry are you trying to make an argument that GME right now is based on evaluating the fundamentals?!?”

I’m saying the author of the article (the reddit post) approached valuing it based on fundamentals. That is the whole point of a short equity squeeze - a stock’s valuation is predicted by many (wrong folks) to fall, institutional money takes a large short position, but a few smart speculators see a valuation-based reason why the price will actually (truly, not artificially) go up, thus squeezing the short sellers. The strategy kicks in only at that point, when buying and holding (based on speculating more intelligently about the true valuation) leads to further gains because of the short sellers’ situation. The reddit author even says explicitly - this is not a pump and dump, the stock will stay high.

Sharing a smart analysis and offering others the chance to execute the same strategy is not manipulation. It’s just a smart strategy. This guy and others who saw the opportunity early, realized GME was both fundamentally undervalued and also had super high short interest, just out-smarted professional traders and they are mad, so resorting to backchannel politics to drum up claims of “manipulation.”

> The reddit author even says explicitly - this is not a pump and dump, the stock will stay high.

Oh well I mean if the reddit author said it....

If you're arguing that it will stay high, you're saying that based on the fundamentals of the company GameStop should be a $20B company. Which is bonkers.

Ugh. I’m pretty sure if someone wrote a huge essay giving compelling reasons why they were basing the strategy on fundamentals, bolstered with various details about the board changes and track record, the current stock performance, franchise cash flow, etc., then the least crackpot explanation here is that they actually meant it and that was in fact their strategy.

Your sarcastic “.. if the reddit author said it” totally misses the point. The point is not whether the reddit author is right only the reddit author is actually describing their honest strategy based on fundamentals.

Given the specificity of the strategy and the fact that it actually did turn out to be right it would seem like an extreme claim requiring extreme evidence to disagree or to presume some ulterior secret market manipulation motive.

Separately, I for one am not sure you are right to say $20B market cap of GameStop is crazy. I think it will drop yes, but not nearly as far as most people think. The change of board management for GME is quite a big signal of the large-scale ecommerce revamp they plan to execute, and that strategy was executed by the new board member previously at Chewy, so there is actual track record to believe this.

The valuation is high right now, sure, but I sincerely think it’s not crazy high. That’s why a lot of the WSBers and redditors are still refusing to sell. The plan absolutely was not a pump and dump, it was more like jumping on an airplane before it takes off - at least in their minds. Time will tell.

Plus, only big hedge funds and billionaires can manipulate the market without going to jail (see: 2008... or pretty much everything else), individual investors can.

Doesn't "securities fraud" require false information or at least misrepresenting information? The data cited in this (and many other posts) are often publicly verifiable but people didn't know where to look until then.

It definitely looks like "market manipulation" but I think that's where the "public" aspect will play a part.

The defense will make the case of "why this group of little guys and not the hedge funds" against the SEC selectively prosecuting Redditors while giving hedge funds a pass.. in 2009-2010 under Obama and again under Biden.

I'll take the odds on WSB.

Market manipulation is defined as intentionally causing an artificial or misleading price in a security.

This definitely qualifies, because the stated intention is to move the price of the shares, not to acquire a position for any other reasonable purpose.

I work at a trading firm, if I outlined a plan to do anything like this I would (rightly) be fired instantly. If I actually did it I would go to jail.

The law shouldn't be applied differently for redditors, but probably it will be.

What's your opinion of Ackman going on CNBC in March and announcing that the world was ending, right AFTER he set up a giant hedge to short a bunch of industries. There are articles from March 2020 you can find.

Regarding last week, what about the blocking of a number of symbols from being bought (but not sold) on retail platforms while the folks on the short side could unwind their positions? These were stocks with high short interest. How did Robinhood and IB and TD get the list, from analyzing Reddit in ML?

Anytime a money manager goes on TV they it’s pretty safe to assume they’re talking there book. Markets are the one place we’re talking can make it happen. And even though you should assume this, CNBC and Ackman perform the legal dance of warning that he may have long or short positions in any or all things discussed etc.

As to Robinhood, IB and TD, the Bloomberg reporting that DTCC (clearinghouse for trades) was demanding more collateral for the high volatility names and the retail brokers were facing a heard time coming up with it is pretty compelling. Unless someone can point to something other than innuendo, I’m probably gonna believe that.

Nope, the stated intention was to buy the shares before GME valuation rose from all the other factors listed. At many points the writer mentions it’s not a pump and dump, the stock’s fundamentals and management changes indicate it is undervalued, and the short interest creates a mechanical condition that will push it up to the “true” higher value - the writer mentions an intention to buy and hold, it will go up and stay high.

The redditors have absolutely broken no laws, in fact there is not the slightest whiff of any reason to even suggest they might have. It’s just anger from wealth classes for having been embarrassed.

There is a concerted effort to misrepresent the short positions in GSE now. Not to mention tons of misinformation claiming that GameStop is actually a successful and valuable business. I'm not sure about the law but lies + financial interest often equals crime.

*GME

You're right. There was a concerted effort in the last week claiming that the hedge funds had closed their short positions. Turns out, a few had so GME went from 140% shorted way down to 130% shorted when historically, 25% is considered "high".

I hope someone looks into the hedge funds and the talking heads who spread this misinformation.

Where are you getting those % values? And on what basis do you make the suggestion that Melvin still has a short?

1. The numbers are cited in almost every analysis of the situation this week. They've also been cited on WSB for months. Don't be lazy.

2. I didn't say any specific firm. I only know the aggregate numbers and the specifics on a couple and they're not one of them.

1) Yes, I specifically pointed out that these numbers are being circulated everywhere. They are baseless and intentionally misleading. It might even amount to a crime. It matters that you can't vouch for these numbers despite repeating them yourself.

2) You intentionally used language that casts doubt on the only well-sourced statement, that Melvin got rid of their short position. If you're going to be so skeptical then I want to know why. If you think that CNBC is colluding with hedgefunds and intentionally publishing misinformation then I want to know why you are suggesting that.

How about this?

https://financhill.com/most-heavily-shorted-stocks-today

250% of floating shares.

Wow! That cite has a lot of numbers! They even explain what a short is! It's like one-stop shopping for misinfo on how to devastate your finances.

More numbers

https://www.nasdaq.com/articles/are-these-the-best-heavily-s...

121% short.

More sources follow along then to shortsight and ortex for more numbers. https://isthesqueezesquoze.com/

> Not to mention tons of misinformation claiming that GameStop is actually a successful and valuable business.

I'm an outsider to both the investing world and this whole WSB thing, but just from following the story I've gotten the opposite impression. The general sense I get from the WSB community is more like "GME is a garbage stock, you should buy it and some of these other worthless stocks too!" Might still be a crime, but it's not really misleading IMO.

You're going to have to explain to me how this post is any different from Cramer banging his buy button about a specific stock on CNBC. It can't be that the difference is that people actually did it... So what is the difference?

Doesn't this miss the fact that you couldn't _actually_ buy 50M shares at $5-10? The price would be bid up as sellers refuse to sell their shares at such low prices, and that is exactly what we've seen.

Yup, interesting... I coincidentally wrote an article yesterday calling GME the Black Swan of Wall Street

https://anupamchugh.medium.com/gamestop-is-the-black-swan-of...

No more information asymmetry, something that only crypto had so far.

There’s nothing new about this.

This strategy has been used for penny stocks for decades.

It’s just with the scale and reach of social media these days combined with the ability for things to get viral, makes it possible to target larger stocks.

Yep, it's really great that markets can create speculation that are not tied at all to the fundamentals of a security. That doesn't create bubbles, volatility, or open the door for endless shenanigans at all.

Sorry to be a bit snarky, but fad-based bubbles are not what markets need. They don't need social justice either. If you want to trade stocks, do some research and invest wisely for the long term. I am personally weary of 24/7 outrage.

Who are you to arbiter who gets to trade stock and on what terms? Isn't this play literally about fundamentals? The stock was undervalued and overshorted so Redditors saw an opportunity to crowd source a short squeeze. WallStreetBets is full of jokes and memes, sure, but there's also consistently top voted posts explaining the logic and due diligence behind GME. There's nothing untoward happening here except the insane outrage and hypocrisy of Wall St CNBC types.

I'm not American so I don't know what CNBC's coverage is like, but I'm not seeing any outrage or hypocrisy from the Financial Times, the Economist or the various Business sections of Irish media outlets. Maybe I'm missing something.

The worst I've seen is maybe a paternalistic attitude of "some inexperienced day traders are now at risk of being taken for greater fools," which I find hard to disagree with, to be honest. Or else they're slightly sniffily pointing out that short selling is not inherently immoral, and that many Wall Street firms are actually delighted with the windfall in fees from all this extra market activity.

I am just sick of all the outrage, frankly.

Now, not only is the stock market all f'd up, we gotta listen to one inane story after another about a market riot.

Not only that, you gotta now worrying if your investments will suddenly and inexplicably become the target of some online mob's ire and get spiked for absolutely no reason. And don't be fooled. These things will absolutely be gamed by botnets, astroturfing, and smear campaigns until kingdom come.

It's just another landmine that makes the whole background of life suck even more.

But yeah, let's get them CNBC types! Burn it down!

You're all over the place. GME is a black swan aberration borne out of current market conditions BECAUSE of hedge funds and institutional players. Retail investors involved in short squeezes like GME are not going to cause a crash.

In fact, I would argue the GME episode has made life suck a lot less for plenty of people - some made money but a lot of people have just had fun laughing, making memes, and putting some money in because, well, what else are you gonna do? The stock market is not F'd up because of retail investors. What should we do - just sit on our hands and hope the free Ford stock Robin Hood gave us goes up? Why not have fun and dream a little and learn about the market in the process?

Lol it’s not the people on Reddit’s fault for exploiting an opportunity. Maybe your anger should be directed at the hedge funds who were shorted 140% OF AVAILABLE FLOAT. Wanna know where the instability is coming from? The hedge funds don’t want to pay up and lose money. Redirect your anger towards the proper people.

> Yep, it's really great that markets can create speculation that are not tied at all to the fundamentals of a security. That doesn't create bubbles, volatility, or open the door for endless shenanigans at all.

Speculation is a huge part of the market, and "sophisticated investors" take part in it all the time. Tell me why certain popular tech stocks are trading at P/E ratios of more than 1000, or pulling in negative income year after year. Be sure to justify your answer using "fundamentals".

Do you think that I think that that is a good thing? Speculation is good for a lucky few and very bad for lots of people when it goes off the rails. Which is the whole point of having governing bodies regulate the market.

Are you proposing that we rein in speculation in a wider sense? Then please, sign me up! But let's not do this with mobs and all the screaming, please.

I don't think it's that simple. Of course the Gamestop situation is a unique one, but speculation is the entire point of the stock market. You can justify (and lower) the risk you take by examining fundamentals, or by investing in "safe" funds, but you are always speculating that the price will eventually go up and not down.

An example: One could argue that TSLA's current price is almost entirely speculation divorced from current fundamentals. Are you sure it will be "good for a lucky few and very bad for lots of people when it goes off the rails"? It's possible, but what should we do about that? Restrict people's ability to trade TSLA?

In the case of Gamestop, I agree with you, it will be bad for lots of people who get in late. I think more people should be informed about risk before entering the stock market, but I don't know if I agree with you that we need more government regulation in the market to do this. What would that look like?

But that’s fine and why I don’t buy GME or Tesla! It’s just not the type of investing for me.

It would be hard to see how anyone was hurts by GME speculation or organized buying. (Assuming nobody gets government bailouts.)

>It would be hard to see how anyone was hurts by GME speculation or organized buying.

That's because the they still in the pump part of the pump and dump scheme.

People buy Tesla because they think its worth even more. Everyone who has thought about it for more than a second understands GME is not worth 22 Billion dollars.

So the people who are buying now are going to collectively lose a ton of money when it inevitably crashes back down to 8 bucks a share.

The people knowing engaging in the short squeeze are taking that risk, so that is on them. But I feel sorry for people who foolishly chase the gains or the wifes/husbands of fools who are buying in now.

The whole ideas is that the hedge funds are these "bag holders." And to a huge degree they were, which is hilarious. But a huge amount of the bag holding is going to be done by retail investors.

> The whole ideas is that the hedge funds are these "bag holders." And to a huge degree they were. But a huge amount of the bag holding is going to be done by retail investors.

Yup, people are buying into a misconception here that because of high short interest there must be more to squeeze and the shorts will be the bag holders, while completely ignoring that the further this goes from the actual value of GME the more attractive it is to short, so who is short may change, but short interest won't go down much. The mob for some reason sees the short interest not going down as "they'll have to buy it at a higher price!" Once the smart longs start taking their profits the whole idea will fall apart, some shorts are going to make much more than people who bought early in the run and held thinking it would keep running up.

> Assuming nobody gets government bailouts

This is a lot of the problem. Certain people are too big to fail, they can keep the profits, but they don't suffer. How many people who had barely heard of the stock market lost their homes after 2008? How many speculators lost their homes?

How many people who have barely heard of the stock market have made massive gains over the last 10 years? How many speculators?

The government borrowed trillions, that all ended up in the pocket of people with shares, not in the hands of people who struggle to make rent.

> Yep, it's really great that markets can create speculation that are not tied at all to the fundamentals of a security.

To take the other side of the argument, the linked post is not about a value "not tied to the fundamentals of a security." In particular, it claims:

>> For reference: if $GME was trading at the same P/S multiple as $CHWY, the share price would be $420.

Now, this argument is wildly speculative to me, but it is in fact an argument about the long-term proper value of the company based on a fundamental.

The most recent hype train of "hold diamond hands to the moon rocket" is indeed disconnected from the value, but note that the current stock price is still within a small multiple of the above-quoted long-term level.

> If you want to trade stocks, do some research and invest wisely for the long term.

That's undoubtedly the safest advice, but this does not make short-term investment illegitimate. Stocks reach long-term value as a series of short-term movements, after all.

> They don't need social justice either

Taxpayers have been pumping cash to share owners for the last decade. If a frickin pandemic can't cause shareowners to stop increasing their net worth, what will?

Because while non-shareholders are working on treadmill living and majorly suffering, there's something seriously wrong. Either fix the market and the wealth disparity, or some people will just say "ah fuck it" and watch the world burn.