Current price is, in part, driven by asymmetrical risk/reward - there's a small potential loss (size of one's position in GME) and subjectively high chance of having a real stock squeeze (and having a 10/100/1000x reward) assuming that original 120%+ short interest was not closed and is still held in the form of various derivatives.
The assumption hasn't been disproved so far, partly because current regulatory environment is very lax on reporting (which makes it very hard to disprove the thesis using public data) and partly due to other indicators (like retail owning over 10% of float as of last earnings report).
This assumption is disproved every day by publicly available short interest data. If you operate on the assumption that all official data is false you can make all the wild claims you want, but you're not being serious and your theory is unfalsifiable.
I will also say: you can read SEC sources about RegSHO limitations about how short interest can be manipulated and masked through "Failures to Deliver" (FTD). So this is not exactly an assumption, more of a preposition about magnitude.
This is a strawman. It is possible to believe (and there is motive and opportunity in this case) that one "official" statistic is manipulated or does not show the whole picture without being a raving conspiracy theorist who trusts no official.
Actually, it's the other way round: you can only have accurate price discovery if people can take both long (buy) and short positions (short sell). If shorting is restricted, price discovery is much less likely, since only current owners of the shares can sell them. That's like only allowing current owners of the shares to buy more of them.
The more opaque information discovery is in general, the less accurate markets are in the short term.
Acme Corp has exactly 1 share of float, owned by Alice.
Bob borrows the share from Alice and sells to Charlie.
Diana borrows the share from Charlie and sells it to Eve.
Bob and Diana are each short 1 share for a total of 2. Total short position is 200% of float.
The better indicator of sketchy activity is FTDs, which may indicate that people are selling short without a locate.
> subjectively high chance of having a real stock squeeze
Ha, that explains a lot. The only way to believe the stock will go up, is the fairy-tale short squeeze. The current valuation is extremely generous based on reality.
Uhh, what?
I guess one man's price stabilization is another man's market manipulation.
The idea that MMs would somehow use their privilege to actively sell massive amounts of non-existent shares into the market in order to manipulate the price downwards is preposterous. That is literally the opposite of their business model and such activity would certainly be flagged by regulators.
Honestly it feels like a lot of the conspiracy theories around these meme stocks are based on reading a lot into a very narrow slice of regulatory text without any real understand of the whole.
Every trade has to be marked correctly, whether it's short with a physical locate or short on a riskless principal basis. Equity swaps trade and are marked as riskless principal trades (ie. they're fully hedged positions and the short position is the market maker's aggregate short position). That information gets aggregated at client level and reported to regulators.
After Dodd Frank equity swaps and rehypo became even more heavily restricted. Swaps go through a clearing house and rehypothication was basically dead the last time I worked in the industry (though that might have changed).
I'm 99% sure that the speculation about the "elites" and their sinister role in GME's trading activity is simply caused by booking errors and/or aggregation mistakes.
If you're taking liquidity (i.e. "I want to sell right now"), you're directly applying downward price pressure to the market, by removing shares from the buy side.
If you're adding liquidity ("I'm selling, but I'm waiting for a buyer"), that's likely to have much less (if any) effect on the price.
It's literally called the "madoff rule" and the "madoff exemption" because he's the one that pushed the SEC to allow it.
Related to this theory, a lot of them believe the ease of closing short positions is facilitated by shady phantom shares and are trying to stamp that out by directly registering shares with the broker Computershare.
Disclaimer: I own GME stock.
Gamestop stock value represents a lottery ticket that they will ever make some money again. It's not worth much.
A business is at least worth it's liquidation value at any time. And $GME was trading near liquidation value. Feel free to read up on Cigar Butt Investing if interested.
Only if majority shareholders will actually liquidate. If they are set on a futile attempt to light the money on fire, you don't have that $100 you lent your cousin Johnny to start his door-to-door knife selling business anymore...
It is actually astonishing how much GME/WSB'ers have continuously gotten wrong from this saga and keep trucking along in cognitive dissonance: alleged Robinhood + Citadel collusion, not understanding DTCC collateral requirements spike, short sellers / "wall street" covering and going bankrupt anyday now... First QAnon, then most of these WSB'ers probably derided QAnon'ers imaginary conspiracy world, only to jump on board the same flavor a months later?? Internet is doing some damage.
For what it's worth, Roaring Kitty's original video streams where he analyzes GameStop's stock should still be up on YouTube and probably cross-posted on other sites. He has hours and hours of commentary on the topic so if he said anything urging collective action or pumping the stock in an illegal way, somebody should be able to find it. As far as I remember, he was just doing a fundamental business analysis of GameStop and just pointed out that the stock was drastically underpriced given the upcoming new console cycle and his opinion that the actual business of selling physical games was not yet on the way out. Should commenting on a security that you like be illegal in a free society?
As far as your commentary about the increase of "pump and dump" schemes, I think the technology is more useful than you seem to recognize and that we're in the very early stages of blockchain tech and better uses for it will be found, but that's a separate issue I'd rather not go into here.
But as far as the pumps/dumps go, I think you're more closely looking at the symptom and not the cause. What's closer to the root cause of all of these financial schemes is the mental health crisis impacting young people. Many young people are feeling hopeless about the future for many, many reasons, and feel that financially making it through extreme risk taking is the only way to have a good life. Many are just dropping out of society. You can see this being impacted in some widely popularized stats like the number of young men not having sex, suicide rates, college attendance dropping, and many more things. What's going on with the mental health of the young is much more important to the future of humanity than the fixation society is currently stuck on.
The incentives are different. The people trying to get rich quick are not likely to do hard work to make/grow a city. Hell, it's hard enough to get people to do the simple act of voting (especially in primaries) or going to municipal or school board meetings.
While it is sad that we can't get civic engagement higher I don't think you can equate these problems at all.
That's my entire point - you're not going to get engagement from the vast majority of the GameStop people if it doesn't involve a get rich quick value proposition.
Is it perhaps possible that what's been solved is not collective action in a general sense, but transparently self-interested collective action for a narrow easy-engagement rapid-payoff set of problems?
Revamping city design, or setting up a new one, doesn't meet any of those criteria. It's not easy to engage with. It doesn't pay off quickly. It's not immediately obvious why a random person would want to jump on.
So, go ahead. Lament that the teeming masses have collectively made a decision that's not the one we would like them to. It is a modern tragedy. For my own part, I think there are lessons to be learned in why one decision was collectively made and acted on and not another.
This is why it is so depressing.
Someone has solved a particular kind of collective action problem. Now we have a playbook for addressing a specific type of situation. It doesn't seem to be a general solution or readily adaptable to a general solution.
Perhaps we could be happy that we have gained a useful tool. Even if it's not quite the tool we might have wished for. Otherwise we're essentially lamenting that all the money and effort that goes into, say, consumer goods R&D (or another unworthy cause) isn't instead used for medical research (or another worthy cause).
Right. And if only we could all just band together, we could create world peace and end hunger! It's so easy you guys! Just everyone cooperate!
You honestly think starting a meme cryptocoin is equivalent to the effort required to build a new city!? How are these things even remotely related?
I mean, that does sound like a true proposition. So why is it that we can't band together?
We can escape the fatalism of Dunbar's number and in/out-groups through leadership and recursively hierarchical structures. See any large (>~200 persons) company, collective action (civil rights, wars, social movements), nations, etc.
I was asking a rhetorical question tbh.
However, the sums of money and level of commitment involved in starting a new city are radically different to that in buying a bit of GameStop or Bitcoin or whatever.
Even if you chucked in ten grand your friends might think you're crazy.
By contrast that's not even getting you half of the materials of a house. Or an apartment. Even if it's a prefab with no interior. And we haven't even started talking about making a city yet, what with all of the roads and power lines and decision makers and those juicy bits.
It's actually just a far harder problem to solve.
(Mind you, a lot of high profile VC deals look like that as well! Remember Wework?)
Collective action, or rather, any effective form of organisation is (arguably) the limiting factor on human progress. Corporation, country, tribe, union... all forms of organisation.
These are all very different, have very different strengths, weaknesses and abilities. Tribal chiefs are not very likely to be effective at the same things, in the same way as a CEO or a prime minister. Linux, GNU, WWW, Wikipedia and such are another form. Rare, relatively. But novel and productive. What these organisations produced is again, qualitatively different from what commercial entities produce. There's a medium-message dynamic between form and product.
A lot of things are clearly doable, but our forms of organisation don't produce them. We're basically limited to the things that are forms of organisation can produce. Organisational methods are a limiting factor to the same extent that resources, science and such are limiting factors.
This starts (according to YNH) at the start of history, or rather, we might define "human history" as the point at which our methods of organisation develop past biological determinants. IE, chimps operate in troops. Gorillas in harems. Geladas in a complex herd structure. Modern humans are (again, according to YNH) the homo subspecies with the ability to switch. That said, we're not that good at it.
For the most part, human cooperation of this epoch is defined by working tirelessly against each other in such a way that sometimes produces emergent benefits. Within
^In a literal sense.
Our species is very clearly lacking a crucial ingredient for our continued evolution: the ability to align our actions (and motivations, and rewards), on a societal scale. If we're still here in a hundred thousand years, I think the anthropologists of the future will look back to today as falling before some critical phase transition in the way our collective consciousness operates. Whether that's a hive mind, or some technological approach to consensus (which I'm almost loathe to say out loud given the Baby's First Computer approaches we're coming up with these days), or just us all waking up and realizing that we should be living life in service to one another, who knows. Our contemporary penchant for individualism, while producing many interesting emergent artifacts, is causing us to eat ourselves alive.
I don't think these are contradictory statements. Our society is both defined and limited by the quality of our "collective consciousness," ability to operate cooperatively and such. It's not zero, and it's not unlimited either.
Personally, I don't see this as a purely ideological or philosophical limitation. Our ideologies and philosophies tend to trail culture, IMO, not the other way around. Neither do I think that individualism vs collectivism is a defining dichotomy. Both individualism and collectivism are, likely, inevitable. Also both individualism and (especially) collectivism compete within themselves as much as they do with each other.
And yes, the ways that we cooperate are clunky, maybe immoral, and not really designed. Money is a cultural construct, for example, that creates cooperation. So is religion, tribalism, legal systems, etc. Is money a collectivist artefact? I think it's very hard to argue otherwise. Money is useless if you are alone, and requires a collective consciousness to even exist. Equality and collectivism aren't synonyms.
Just curious, do you believe there is some greater organism or what have you with the ability to integrate human consciousnesses (something like Gaia theory)?
If so, what do you believe that organism/being (or whatever it is) would feel or think about what humans are doing now, acting in the world?
Haven't seen any evidence for it.
You have confused a short-term low-effort collective action not much more different than a Tweeetstorm with some kind of long-term civilizational megaproject, and all over your very own pet issue. Come on.
Curious what you mean here, and how it relates to collective action?
But it doesn't have to be this way. People could put all this energy they're burning on crypto and apply the same principles into getting everyone to agree to some sort of better city with sustainability and low-cost-of-maintenance built in by default. That way we could have affordable housing spring up. It would take work to vet; escrows, webs-of-trust, etc. But it's totally doable in the new work from anywhere future.
People don't want affordable housing. They want affordable housing in the existing cities where they (and everyone else) want to be.
From op: > But it's totally doable in the new work from anywhere future
They're talking about creating a new city, not reusing the existing empty housing.
Even if you can work from anywhere (which ignores many industries), this only satisfies that one requirement. Some people might see the snow and cold as a deal breaker. Others might not want to move there because it's far from family. A typical theme on related posts of relocating for remote work is that they want some combination of educated population, technology culture/groups, and some sort of specific government/community resource. The list goes on.
The nature of the housing problem is that people want to live in very specific areas and then it snowballs. Remote work today should allow a considerable number of people to move out of SV, Toronto, etc. Yet most are staying. There are cheaper and better (depending on specific desires) options, yet they are not often explored. It's basically group-think. I don't see a new city solving that, since once it becomes popular, it too will suffer from demand effects.
But nobody in Canada is offering this to me because even though this is better for the world, this takes real work. Instead they want to pump crypto and stock market scams because the payoff is short term and because they're naturally cynical.
Because the ante is low. Throw a few hundred or thousand at a chance to be rich is way easier than to uproot your life to move to a fledgling city that nobody knows how it will work out, and you still have to work.
"But nobody in Canada is offering this to me because even though this is better for the world, this takes real work."
Maybe this is an opportunity for you to offer it to yourself and others. Start the movement! If you wait for others to do it, it might not happen. If not you, then who?
I have been dreaming of doing something like this lately! The issue is where would we do it? How would we get people to move there? Who will fund it?
Buses and trains have engines and motors. You probably mean designing around public transit rather than personally owned vehicles.
In general it would seem that human beings don't actually want to make the world a better place, but if you can find a way to sell it as a get rich quick scheme it might actually work.
Well... hosing a bunch of hedge funds is at least going to give you a good laugh as a return for your money, not to mention that the entire GME saga showed once again what a house of cards the financial system is and how incompetent hedge fund managers, regulatory agencies and politicians are - while NTFs are just a plain scam.
By contrast, NFTs are refreshingly honest, even if their long term value is questionable. An NFT is the direct digital equivalent of a numbered print of an artwork, signed by the artist. There is no pretension of political righteousness, and mainstream media is inundated with messaging that they are a scam. Everyone involved knows exactly what they are getting, and has been endlessly warned of every possible downside.
The sad part is that we could actually solve some real problems by coordinating collective action on, say, starting a new city that's designed around non-motorized transit within the city limits. But we don't. We get Snoop Dogg crypto instead.
It's all so depressing.