back to article What happens when the internet realizes the stock market is basically a casino? They go shopping at the Mall

So it seems 2021 is going to be the year that internet culture finally reaches the deepest and most protected pockets of society. The past day has seen the kind of demented activity on the stock market that normally comes with an era-defining crash – except in this case it was Reddit readers who are, um, having a laugh while …

  1. sanmigueelbeer Silver badge

    Old timers used to do this in the past: Pump-and-Dump

    NOTE: It may not be the same now/today but it sure looks very similar.

    1. Francis Boyle

      Sounds

      more like Tulip Mania multiplied by the power of the internet.

      1. Steve K Silver badge
        Angel

        Re: Sounds

        Did you mean BitCoin......?

        1. Doctor Syntax Silver badge

          Re: Sounds

          I was thinking it makes a nice change from Bitcoin.

        2. oliverr

          Re: Sounds

          Cryptocurrencies would have been banned had it not been for the aura of tech and mystique that only very few understand. Hide all value and transactions in the crypto-cloud so nothing can be taxed and watch society as we know it fall apart.

          1. Loyal Commenter Silver badge

            Re: Sounds

            To be fair, it's pretty hard to short-sell bitcoin, when it's pretty hard to "borrow" from an anonymous bitcoin wallet without actually putting that transaction onto the blockchain. It has been up and down like a yo-yo for the last few weeks anyway, so there are plenty of "traditional" risks to take instead.

            I see bitcoin as much more of a technological curiosity. I bought some cheapo "mining" gear for about £150 about 6 years ago, when it was still practical to use the USB miners in a mining pool. The fraction of a bitcoin I managed to mine while it was still practical is now worth around £2000, so on paper it's a profit. I'll hold onto it for another five years or so, and see where it is then. Either it'll be worth less than I "invested", or potentially enough for a deposit on a house. Either way, it's a long-shot curiosity, on an amount of money I can afford to write-off.

          2. Blackjack Silver badge

            Re: Sounds

            Not only the things can be tracked, they can also be taxed. If you want privacy use cash.

            1. Loyal Commenter Silver badge

              Re: Sounds

              Indeed. The history of all transactions is written into the blockchain in perpetuity. It is essentially, a massive ledger that gets cryptographically signed again with each new entry (or "block"), so once a certain number of further blocks are "mined" (essentially calculating the key for the hash), typically ten, to statistically prevent race conditions, those transactions are set in stone.

              Each transaction is between two "Wallets", each with its own id, so you can trace all transactions between wallets and know how much has moved from any one wallet to another.

              What isn't so easy to know is who controls each wallet address, as they are essentially anonymous. However, it is not impossible to identify wallet owners with a bit of detective work, if you know enough about the timings and transaction amounts, especially if those transactions occur on exchanges, where they authenticate the users and their wallet addresses.

              Sure, it's possible to "mine" a block, if you have the computational power to do so, and then transfer that to someone else's address, without anyone ever knowing who you are, but the moment you want to do that for cash, you either have to deal directly with the person paying, and take the risk of them ripping you off, or go through an exchange (and hope you can trust them) and your identity is known.

              If governments got their act together, they would be passing legislation to ensure that such exchanges are well regulated, with requirements to properly identify users, and to make those identities known for law enforcement purposes, with a proper warrant. Encouraging established banks to operate bitcoin exchanges, for example, would reduce the need for in-person cash transactions, and then I'd really have no problem with such in-person transactions being outlawed. That would help put the pinch on cyber-criminals who use Bitcoin as a means for extorting money from people as well, as it would make laundering it potentially that much more difficult.

              1. Def Silver badge

                Re: Sounds

                I can remortgage my house with less documentation than I needed to show to register on exchanges transferring money to the EU.

                1. Loyal Commenter Silver badge

                  Re: Sounds

                  Remortgaging your house is also a much less useful tool for criminals laundering money. That documentation is required by law to prevent vast sums of money moving through the system from organised crime. See also: "unexplained wealth orders", and the wives of jailed Azerbaijani bankers who can't explain how they finance their shopping sprees in Harrods.

            2. jmch Silver badge

              Re: Sounds

              "Not only the things can be tracked, they can also be taxed"

              Yes and no. All the transactions are publically available on the blockchain, but what is really known is that wallet ABC made an income of x bitcoins. AFAIK, the identity of the owner of the wallet is private.

              Probably there are some ways depending on the wallet setup for governments to get identity data or infer it from exchanges if the bitcoin is cashed out into the traditional banking system. However governments in western democracies aren't usually allowed fishing expeditions, they would nee dto have specific suspicious evidence to obtain a warrant for specific data from the intermediaries.

              Othewise, again as I'm aware, bitcoin exchanges are not currently required to do the same level of 'know your client' due diligence on their account holders as a noral bank

      2. bombastic bob Silver badge
        Pirate

        Re: Sounds

        I was just thinking of that, the Tulip market thing a couple of centuris (or so) ago.

        https://en.wikipedia.org/wiki/Tulip_mania.

        Also demonstrated in fiction, in the 2nd season of 'Spice and Wolf' (pyrite market manipulation)

        Still I have some Schadenfreude for the hedge-funders, one in particular [and no news whether or not this person, "the man who broke the bank of England", lost any significant money in this, but he probably DID].

        Normal stock investors are long term, and a rising tide lifts all boats. The hedge-funders are basically selling SNAKE OIL and making money at the expense of others. Like I said: Schadenfreude.

        1. Anonymous Coward
          Anonymous Coward

          Re: Sounds

          Again, NO, Soros is not some deep state operative funding left-wing fanatics who want to turn you into communists.

          Always with the right wing and their projection: Oil/Gas/Pharma/Health insurance/military contractors are the ones corrupting america, not the people who want to give you healthcare.

          get a grip. You're 60-61 years old. You should know better.

          1. bombastic bob Silver badge
            Stop

            Re: Sounds

            No

            1. Anonymous Coward
              Anonymous Coward

              Re: Sounds

              As the anonymous coward you are replying to, I respond "fair enough! Sorry for the inconvenience"

              And have an upvote!

              :-)

      3. HildyJ Silver badge
        Boffin

        Re: Sounds

        No. The fact is that this is two groups of speculators fighting each other. The hedge funds were betting that GameStop would, essentially, go bankrupt. The Redditors were betting that if the price went up the hedge funds would start buying shares back to reduce their positions, i.e. to hedge their bets, and driving the price up more. The Redditors turned out to be right. They could just as easily have been wrong.

        If you haven't seen it, watch Trading Places which is about speculation in the commodities market (and is also extremely funny).

        Two last points. First, Elon jumped in because he hates hedge funds which for a time were heavily betting against Tesla.

        Second, what ever you are investing in, you need to know when to Take the Money and Run (another very funny film).

    2. Joe W Silver badge

      Walks like pump-and-dump, quacks like one...

      There are many stars that did try to play that game with options and in fact lost everything. The fun thing is that when buying regular stocks you can only lose all of your investment. With options you can lose more than you invested. There is a rather direct relationship between possible gains and risk, the likelihood to really lose big time. This is not always entirely true, like those investing into, let's say Greek or Cypriotic, banks before 2008, which came with potential high gains but was in fact a risky investment... but I disgress and I am terribly sorry for opening that can of wriggly things.

      1. alexmcm

        You can buy $10K worth of options to buy share X at a certain price in the future. If share X goes above that price, you would exercise the option and take the profit. If it doesn't go above the exercise price, you wouldn't exercise the option and you lose your $10K. Your loses aren't limitless, they are limited to the amount you bought of the option.

        1. Steve K Silver badge

          You need the cash too

          If you are exercising your option to buy then you also need the cash to buy the shares/commodity at the strike price

          1. katrinab Silver badge
            Boffin

            Re: You need the cash too

            No. If you buy a *future* you are required to buy at the strike price. An option is optional, you don't need to buy. They are more expensive than futures for that reason.

            *Selling* an option is a different matter, because you don't have the option, the person you sold it to does.

        2. Graham Cobb Silver badge

          Options to buy are safe - you can only lose what it cost you to buy the option.

          Simple options to sell are also safe enough: if you own share S and sell someone the option to buy your shares on a particular day at a particular price, you are limited to losing your share for a lower price than you could have got on the market.

          What is dangerous is selling someone the option to buy share S at price P on day D without actually owning the share. There is nothing stopping you doing that, and if the buyer doesn't exercise the option, all is fine. But if they do exercise the option then you need to buy the shares from someone in order to sell them. That is what can lead to an unbounded loss, as you have to buy the shares at whatever price they happen to be at the time..

          1. katrinab Silver badge

            You can buy an option to buy. That is safe(ish).

            You can buy an option to sell. That is also safe(ish).

            You can sell an option to sell. That is not safe.

            You can sell an option to buy. That is especially not safe.

            1. T. F. M. Reader

              None of these is safe. Equally. Options are not safe investment instruments.

              Let's say you have $1000. You can buy stock, call it XYZ. After a month it may appreciate - your investment paid off. Or the price may fall, say, by 5%. You lost 5% of your investment - you are down 50 bucks. Damn.

              Or you can use your $1000 to buy a call option to buy XYZ at its current price in a month's time (just an example). This is a way to leverage your $1000 to control many more XYZ shares (options are, of course, cheaper than the underlying stock). If the share price goes up you will borrow money to buy the stock, sell he stock at a profit, return the loan - thanks to the leverage you'll earn a lot more than if you bought the shares. But if the stock goes 5% down you lose a thousand bucks, not 50. Not safe. You hope for a higher reward, but you take on a much higher risk - that's the general rule.

              That's not how options are used. The real use case is not investment but hedging. Buy XYZ shares and in addition buy put options to sell at the current price (again, an example). If the stock goes up - you win (minus what you paid for the puts). If the stock goes down, you still sell at the original price and the only thing you lose is what you paid for the option (a small part of the original investment - basically, insurance against adverse market movements).

              Short-selling hedge funds (if they are worthy of the name) could cover their bearish bets with call options (to buy at a specified price). I have no idea if they actually did, but that's on them.

              1. katrinab Silver badge
                Meh

                Safe(ish) as in the worst that can happen is that you never see your money again. Though the risk of that happening is far higher than with other investments.

                Selling a call option is especially dangerous, because you could be obliged to buy the shares at whatever price they happen to be at the time, and the sky is not the limit for that.

                The risk to hedge funds using call options to cover their losses is counterparty risk - that the person who sold them the call option can't afford to buy the shares needed to close the option, and goes bankrupt. In a situation like this, that is a very real risk.

              2. Twilight

                If you want to get even more complicated on investing and "insurance" on investments, then there's credit default swaps. I worked for a company that dealt with securities information about these 10+ years ago. My boss at the time and I were betting they would be the next big scandal/crash (still surprised it hasn't happened yet).

                Unfortunately, I don't remember many of the details of CDS any more...

                1. katrinab Silver badge
                  Paris Hilton

                  Credit Default Swap:

                  You pay some money. If a default event happens at a particular company during the period of the contract, they run an auction for the debt of that company. They then pay you the difference between £10m (or whatever) and the price obtained at auction for £10m (or whatever, same as previous number) of debt for that company.

                  Like an insurance policy, but claims are dealt with much quicker, and you don't need to prove that you actually suffered a loss from the default event in order to make a claim.

                  Suppose you were owed money by Debenhams who went bust recently. If you had a credit default swap for the balance of the loan, you would put your debt into the auction, and you would receive full payment for the loan from a combination of the auction proceeds and the swap payout.

                  Suppose you weren't owed money by Debenhams. You could still buy a credit default swap and receive a payout even though you hadn't lost any money from their bankruptcy. That's the difference between a credit default swap and a credit insurance policy.

                  Another difference is that you can sell your swap to someone else, and if Debenham's credit rating had dropped from when you bought it, you could make a profit on that sale.

          2. T. F. M. Reader

            you can only lose what it cost you to buy the option

            Professionals phrase it a bit more positively in security prospectuses: "Losses are limited to the amount of initial investment".

            1. katrinab Silver badge
              Alert

              Or from a randomly selected trading app near the top of my Google search results:

              "CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

              "The purchase of real/cryptoassets is an unregulated service and is not covered by any specific European or UK regulatory framework (including MiFID). In the event that cryptoassets are purchased on a real/physical basis and not traded in the form of a CFD you will not benefit from the protections available to clients receiving MiFID regulated investment services, such as access to the Cyprus Investor Compensation Fund (ICF)/the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service for dispute resolution.

              [...]

              "Past performance is not an indication of future results.

              "You should seek advice from an independent and suitably licensed financial advisor and ensure that you have the risk appetite, relevant experience and knowledge before you decide to trade. Under no circumstances shall eToro have any liability to any person or entity for (a) any loss or damage in whole or part caused by, resulting from, or relating to any transactions related to CFDs or (b) any direct, indirect, special, consequential or incidental damages whatsoever.

              "Trading with eToro by following and/or copying or replicating the trades of other traders involves a high level of risks, even when following and/or copying or replicating the top-performing traders. Such risks includes the risk that you may be following/copying the trading decisions of possibly inexperienced/unprofessional traders, or traders whose ultimate purpose or intention, or financial status may differ from yours. Past performance of an eToro Community Member is not a reliable indicator of his future performance. Content on eToro's social trading platform is generated by members of its community and does not contain advice or recommendations by or on behalf of eToro"

      2. GBE

        With options you can lose more than you invested.

        No, you can't.

        You're thinking about either futures or buying on margin.

        1. This post has been deleted by its author

        2. Sawari Ma
          Mushroom

          Yes, you can lose more money than you invested. If you sell options, you can lose a hell of a lot like the people that have shorted GameStop. For example, if you sold a call option on Gamestop @ $4 a share (because you believed it fall), and the stock rockets to $500 by the time of the option expiration date, you are obliged to buy shares at $500 each and sell them to the option holder at $4 each. Each option makes you responsible for 100 shares. Let the math sink in. The same works in reverse for selling put options. You can lose everything. Selling options is not for the faint of heart, or the inexperienced trader. You are thinking of buying options, which limits your risk to losing everything you invested in the option, ie. it expires worthless.

          1. T. F. M. Reader

            Your description is right, but even in your case you have not invested anything at t=0 (just got paid for the option you wrote). Then you have to buy the stock from the option holder, which is your only "investment", and even then it's not a 100% loss - the stock is worth something, albeit not as much as you paid for it.

            Usually you own the stock you write a call on, so you won't even have to buy it at an inflated price at option exercise. What you lose in that case is the so-called "opportunity cost" - you lost the chance to sell the stock you own at the inflated price. But that is not your initial investment.

    3. Anonymous Coward
      Boffin

      @Sanmigueelbeer... not exactly.

      Yes, I agree all the hallmarks of the pump and dump.

      Only if the author is correct, they didn't buy the shares but options.

      Its an all or nothing bet.

      You spend 10K on an options bet, if you don't exercise the option when it expires, they expire worthless.

      There are a couple of problems.

      If the SEC reviews, they could say that these people worked in concert and go after them.

      The other problem...

      The share price is influenced based on the options price.

      So what happens when they start to exercise the options?

      What goes up, must come down.

    4. chivo243 Silver badge
      Facepalm

      This was my first thought... crap stock inflated, and at a predetermined moment, the colluders all sell. Profit!

      1. veti Silver badge

        There are no colluders. That would require mutual trust. I doubt that exists in this case.

        There's just a race to sell, while trying to cover your tracks by pretending you're still holding.

      2. katrinab Silver badge
        Alert

        Only problem with that is, if a $expletive+ton of shares appear on the market all at once, nobody is going to buy them at the previous market price.

    5. Christopher Reeve's Horse

      The Big Short Squeeze

      I'm not sure this is the same as a pump and dump at all. I think it's been identified (someone please say I'm wrong if this is the case) that certain Hedge Funds are hugely overexposed to their own short options, like I think I saw the number that 140% of the entire float of GME shares is in short options. That's right, there are apparently substantially more shares being shorted than actually exist!

      By my limited understanding the big funds are obliged to have to buy the stocks on expiration of their options, so there's every chance that the price will continue to increase and the hedge funds loose billions more by being forced into buying at super inflated prices - which continues to drive the price further up. It's not like loosing an investment, this is like turbo-charged hyper loosing. Obviously I'd love to be sympathetic etc. A big bluff is being called by lots of people with relatively low risk individual stakes. It's hilarious.

      Just to be clear - I have no financial position on GME (or anything else). I think the phrase is "we. just. love. the. stock"

      1. James Anderson

        Re: The Big Short Squeeze

        You hit the nail on the head,

        A short contract obliges you to return the borrowed shares on a specific date.

        If you do not you get thrown off the exchange and can never trade again.

        This is the magic of the current situation -- the hedge funds have to buy the shares.

        As long as most hedge funds keep making bigger bets to try to cover their losses the share price will go up. So its a question of which fund loses their nerve or goes bankrupt first. The last hedge fund standing will clean up.

        1. amanfromMars 1 Silver badge

          Re: The Big Short Squeeze ..... The Sting* on Steroids ‽ .

          As long as most hedge funds keep making bigger bets to try to cover their losses the share price will go up. So its a question of which fund loses their nerve or goes bankrupt first. The last hedge fund standing will clean up ..... James Anderson

          Oh? Are you really so certain, JA? The last hedge fund standing dealing in the trade is paying a king's ransom fortune to return a ponzi zombie dead man walking stock which it never ever owned in the first instance.

          Not the smartest and shrewdest of moves, methinks, however a great way to lose stashes of other folks money and shred to tiny pieces all of your own carefully conceived and conserved credibility.

          * ..... https://en.wikipedia.org/wiki/The_Sting

          1. J. Cook Silver badge
            Boffin

            Re: The Big Short Squeeze ..... The Sting* on Steroids ‽ .

            .... Sort of. It was mentioned in the movie, but the stocks got dismissed as they didn't think they could run a stock play against a banker.

            The big con in that movie was getting a gangster to bet a huge amount of money on a horse that they already know is going to lose as opposed to win.

        2. Zolko Bronze badge

          Re: The Big Short Squeeze

          The last hedge fund standing will clean up.

          if the Redditers have the nerve they'll be the ones: all they have to do is wait and watch the building burn. When the short matures the price is going intergalactic.

          1. veti Silver badge

            Re: The Big Short Squeeze

            Yeah, that's what happened the last two days.

            And that's precisely the trouble for small investors in a scam like this: they never know when to bail. Everyone knows that it's going to be necessary sooner or later, but nobody wants to sell too early because greed. And by the time they realise they've missed the boat - they've missed the boat.

            1. Alan Brown Silver badge

              Re: The Big Short Squeeze

              MOST of the small investors in this case are accepting they're going to lose everything when the stock inevitably tanks - BUT (and here's the thing) their individual exposure is small and when the shorts come due the hedge funds will have to buy what's available at whaeever price it's selling for at the time - meaning they might be approached to sell what they hold ffor whatever figure they care to name if there's a shortfall of actyal share numbers on the trading floor (this is unlikely to happen)

              As long as people don't lose their nerve or attempt to cash out, the tanking only happens _after_ the shorts come due and hedge funds get wiped out.

              The current high value is purely illusory because as soon as people start cashing out the stock will tank. As long as you accept that, and you bought low you can set a few hedge funds on fire for a low overall cost when the $70 (or less) stock drops to $5 from $700-$2400. Only a couple of greedy people can cash out and in all liklihood they eneterd the game late/paid high anyway.

      2. DCFusor

        Re: The Big Short Squeeze - Naked shorting

        It's illegal when I do it. What appears to have made this all worse is that the big hedgies - who mostly haven't been performing anywhere near well enough to justify their 2 and 20 fees ...

        Naked shorted the stock - and a few others. If what I see in reports is the case, more than 100% of the float in this stock was sold short.

        Illegal if I do it....shares not borrowed at all, just made up out of thin air and sold by hedgies.

        You can do that when no one looks at the bits or demands even paper records. Faking is easy.

        OF course, those guys are well connected, since the people they manage money for are politicians and rich folk.

        So they had to call a halt on the poor doing to the rich what the rich have been doing to the poor all along.

      3. T. F. M. Reader

        Re: The Big Short Squeeze

        @Christopher Reeve's Horse: you are right in that the big problem here is liquidity. That problem would probably glare without Reddit: at some point the short-sellers would want to buy shares to return the loan (they borrowed shares and sold them on the market, now they hope to buy them back cheaply and return to the real owners), but there may not be enough shares to buy - a "liquidity hole".

        2 nitpicks: options are not involved - shares are borrowed, and the liquidity hole is not exceeding the number of shares in existence but the number of shares traded on the market (the article has it right). The principle remains.

        I can't help but wonder if any of the short-sellers has the pockets and the nerve to sit this whole thing out to the crush and walk away with a nice profit and a smug face.

        1. Alan Brown Silver badge

          Re: The Big Short Squeeze

          "I can't help but wonder if any of the short-sellers has the pockets and the nerve to sit this whole thing out to the crush and walk away with a nice profit and a smug face."

          They could - IF they have unlmited borrowing time. If they don't, then they have to return the stock at the agreed time - and the fact that they have to go out in an overheated market to obtain those shares will momentarily drive the price to astronomical levels (which the hedge funds will have to pay) before the stock inevitably tanks

          It gets even worse for the hedge fund if the shares aren't available to buy on the trading floor because it means they have to approach individual investors and buy at an agreed price

          Personally if I was playing this game I'd set an automated sell at 4-5 times the current high figure, because when the return comes due, the hedge funds are going to be desperate

    6. katrinab Silver badge
      Megaphone

      It *is* Pump-and-Dump.

      It is absolutely clear to anyone with a braincell that GameStop is the next BlockBuster. The shareholders have been able to cash out at $470 when it is worth at most $3. By the way, it is now $126 at the time of writing and falling fast.

    7. Persona Silver badge

      Technically it's an abusive squeeze. This is a form of Market Abuse. It is illegal in regulated markets and punishable by fines and jail.

      1. Alan Brown Silver badge

        "Technically it's an abusive squeeze"

        Naked shorting is illegal too, but the hedge funds have found a figleaf workaround

        This isn't an organised squeeze or pumpn'ndump and in order to be absolutely covered all the the movers'n'shakers is ensure they're not going to financially benefit from setting a few hedges on fire (ie, by NOT buying gameshop stock, merely commenting on it and pointing out the figleaf shorting)

    8. Alan Brown Silver badge

      This isn't pump and dump

      The redditers involved KNOW they're likely to lose 100% when the stock inevitably tanks and have been saying so up front

      This is about burning down the hedge funds via their figleaf shorting exposures

      Najed shorting was criminalised worldwide a while back because it's outright market manipulation, but the HFs n question have been exploiting loopholes ("Borrowing shares" - an interesting way to describe selling shares you don't own) to carry on with the abuse.

      I suspect that when the dust settled this sidestepping of the ban will be illegal too

      As a side thought, anyone who "borrows" shares to short them exposes themselves badly if the shareholder they "borrow" from buys the shorted shares on the open market at less than the "value at borrow + fees" marker. Expecially if the shareholder in question can mop up enough liquidity of the shorted shares to force the share price high when the time comes to return the borrowed shares

      I can see several HFs under new ownership shortly and a bunch of chronic gambling addicts looking for jobs outside of the sharemarketing industry

    9. IceC0ld

      pump n dump is EXACTLY how hedge funds do their business :o(

      watching some of the people burnt, some were hilarious, a 'billionaire' crying, because he lost so much money, that he had to re finance the loan for his new yacht, is NOT my idea of losing lots of money

      down to listening to SO many talking heads saying how this is market manipulation, and is illegal, yet at the same time ignoring the hedge funds doing exactly the same thing over and over again

      for those looking to find somewhere to peruse a decent overview of WTF is going on :-

      https://isthesqueezesquoze.com/

  2. Sorry that handle is already taken. Silver badge

    The number one rule of internet investing

    Never risk less than you can afford to lose.

  3. Anonymous Coward
    1. katrinab Silver badge

      Re: Yawn. South Sea Bubble.

      This is more of a Volkswagen than a South Sea Trading Company.

  4. amanfromMars 1 Silver badge

    Reading the Runes in Between the Lines ... Karma Sucks Big Time

    The other bad news for amateur investors is that the big boys will always, always get there before you. They have teams of people who do nothing all day but watch the markets and are plugged into the system. And they have access to funds.

    That is as may be, Kieran, but you are both missing the point and have highlighted the whole point of the exercise, a simple program which can be activated innumerable times virtually by practically anyone with half a fully working brain of such a notion, to take unprecedented advantage of a corrupted and perverse systemic abomination, ..... fully endorsed and actively supported by established markets regulations and gilded gatekeepers [think SEC (Securities and Exchange Commissions), FCA (Financial Conduct Authorities). the Fed (Federal Reserve Bank) etc. etc .etc.] by virtue of their all too apparent co-conspiratorial acceptance of short selling profit and loss trading results] ......and in so drawing ever more attention and forensic interest to its fabulous ponzi shenanigans/fantasy wealth creations.

    However, that is just as the breath-taking heart-stopping entrée before the next course of a gluttonous feast, both concerning and delighting excited diners alike with thoughts of what is prepared next to follow on the menu yet to come.

    And will it delight sublimely or disappoint disastrously the assembly of gourmands and one's peers?

    Put plain and simply, now that so many more are so quickly learning of what is so relatively freely available to them to actively participate in .... Do global leading market players still want to blatantly continue aiding and abetting crooked fantasy trades creating fabulous virtual wealth for an exclusively chosen few, or is it all to disastrously collapse like the house of cards built on shifting bottomless quicksands that it is? ..... for they are presently surely the system's only two prime opposing and competing choices. If you know different, don't be shy, speak up, for now is there no better good time.

    It is hard not to equate and realise that is as CheckMate, a Game, Set and Match win and defeat but there are sure to be others with a contrary view would would wish to disagree and to such a degree one would almost think their very lives depended upon it.

    1. Anonymous Coward
      Anonymous Coward

      Re: Reading the Runes in Between the Lines ... Karma Sucks Big Time

      To me it is just the product of the USA's implementation of freedom.

      This freedom comes at a price.

      Their (USA's citizens') freedom comes at a price.

      The freedom to do whatever you like as long as you can get away with it.

      The freedom to exploit your fellowman's psychological weaknesses.

      The freedom to not protect the innocent and weak.

      The freedom to parasitize on the weak and vulnarable.

      Thank you.

    2. amanfromMars 1 Silver badge

      Re: Reading the Runes in Between the Lines ... Karma Sucks Big Time

      The latest share-price shenanigans came as the International Monetary Fund warned “complacent” financial markets buoyed by the rollout of Covid vaccines are at risk of a sudden collapse. .... https://www.telegraph.co.uk/business/2021/01/27/reddit-fever-hits-london-market-short-sellers-feel-squeeze/

      Who's got the popcorn and Belgian chocolates?

      1. Korev Silver badge
        Alert

        Re: Reading the Runes in Between the Lines ... Karma Sucks Big Time

        Whilst I have no love for the Traders and wouldn't be that upset to see them hit by this; you have to remember when share prices go pop that impacts our pensions and may even make our employers reach for the P45s/"Pink slips"/etc

        1. Tomato42

          Re: Reading the Runes in Between the Lines ... Karma Sucks Big Time

          sorry, but what?! what kind of pension provider makes pension money by shorting stock!?

          Gamestop was already at the bottom when it started, *that's why it was shorted so fucking much* nobody with half a briaincell would invest long term in it, and if they did they got out months if not years ago.

          1. captain veg Silver badge

            Re: Reading the Runes in Between the Lines ... Karma Sucks Big Time

            Pension providers don't short. But they hold stock which isn't earning much and which they could lend to shorters for a fee. This is the problem. Shareholders are supposed to be the owners of the company in which they hold shares. Yet they care only about maximal short-term profit, not the well-being of the companies that they notionally own.

            -A.

            1. Alan Brown Silver badge

              Re: Reading the Runes in Between the Lines ... Karma Sucks Big Time

              "Pension providers don't short. But they hold stock which isn't earning much and which they could lend to shorters for a fee."

              In other word: facilitating figleaf shorting. They still get their fee and their shares back (eventually). They're not hedge funds but they might end up owning a few after this blows over

      2. TimMaher Silver badge
        Happy

        Belgian chocolates

        I’ve got a box of Leonidas.

      3. disgruntled yank Silver badge

        Re: Reading the Runes in Between the Lines ... Karma Sucks Big Time

        Given that Godiva is closing all of its US stores, I'm not sure how well we are fixed for Belgian chocolates. Popcorn we may have.

  5. akoepke

    The money has to come from somewhere

    The money made on these shares has to come from somewhere. In order to sell your shares, there has to be someone willing to buy them. If someone is buying them at the peak price, then they are the ones that are going to lose the money when it comes crashing down. In order for one person to make big money on this, there needs to be lots of people who are going to be losing their savings.

    The hedge funds may end up losing money, but the people jumping on the bandwagon due to hype are the ones that are going to be hurt the most.

    1. amanfromMars 1 Silver badge

      Re: The money has to come from somewhere

      You are pimping and pumping and dumping a popular misconception there, akoepke.

      One cannot fault you for that .

    2. P. Lee

      Re: The money has to come from somewhere

      It isn’t quite a pump and dump. Of course its a bubble, but how much of a bubble depends on the size of the hedge fund short.

      My understanding is that the short was huge, so the hedge fund has to buy the stock it borrowed at whatever the market rate is. The bubble will last until the hedge fund buys enough stock to fulfill its obligation to return the stock it shorted. The Redditers aim is to sell the stock to the hedge fund.

      The money comes from the hedge fund which has to liquidate other assets to pay for the stock at a particular time. It isn’t pure speculation, like the original short, the tulip, south-seas, or like high-frequency trading.

      I hear that miraculously the Reddit board was shut down for “hate speech”. What a handy tool that is. Never misused for political or financial purposes.

      I believe Soros used a similar technique to shorting in the currency markets (betting the government wouldn’t be able to prop up the pound) when forcing the UK out of the European Exchange Rate Mechanism and made himself an extra billion or so.

      1. MiguelC Silver badge

        Re: The money has to come from somewhere

        You can also read about when Porsche tried to buy Volkswagen.

        TLDR? It went so badly that VW ended up owning Porsche.

        1. Falmari Silver badge

          Re: The money has to come from somewhere

          Interesting read "when Porsche tried to buy Volkswagen".

    3. Schultz
      Devil

      Re: The money has to come from somewhere

      You say: "The hedge funds may end up losing money, but the people jumping on the bandwagon due to hype are the ones that are going to be hurt the most."

      But the money the hedge fund loses will end up in some pockets -- so on average the people who jumped on the bandwagon will make a killing.

      It's an old game: big traders taking a big position thereby influencing the stock value. The hedge fund probably expected that a large and nicely publicized short position in GameStop would drive down prices, netting them a beautiful profit. Now they got caught out by a larger investor countering their position. This happens every day in the stock market and the only thing special about this instance is that it was nota large investors playing with their money (and your pension funds), but it was a collection of small investors.

      I'll hold back my tears for the hedge fund managers, but also for the small investors who will win or loose depending on when they entered the market. Those who play the casino stocks deserve to be burned. We'll need to introduce a transaction tax to shut the casino down while keeping the actual capital market alive. It would remove the blood-supply for the "great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

      1. amanfromMars 1 Silver badge

        Re: The money has to come from somewhere

        You say: "The hedge funds may end up losing money, but the people jumping on the bandwagon due to hype are the ones that are going to be hurt the most."

        But the money the hedge fund loses will end up in some pockets -- so on average the people who jumped on the bandwagon will make a killing. ....... Schultz

        :-) Digging down deeper for the finer details in the truth reveals ...... The hedge funds managers end up losing colossal sums of other peoples money, and some of those folk are well able to going looking for them to more than just hurt them ..... and it won't be the average Joe making such a killing.

        And it is not a business to be in without accepting it carries exceptional extraordinary risk.

      2. Doctor Syntax Silver badge

        Re: The money has to come from somewhere

        But the money the hedge fund loses will end up in some pockets -- so on average the people who jumped on the bandwagon and got out in time will make a killing.

        FTFY

        1. Version 1.0 Silver badge

          Re: The money has to come from somewhere

          The Hedge Fund investors will lose money, the people running the Hedge Fund will make money.

          1. Alan Brown Silver badge

            Re: The money has to come from somewhere

            "the people running the Hedge Fund will make money."

            or find themselves fired and their hedge funds owned by someone else (most likely the companies they borrowed Gamestop shares from in the first place)

    4. Anonymous Coward
      Anonymous Coward

      Re: The money has to come from somewhere

      I remember thinking exactly the same thing when Microsoft shares went up to $10.

    5. DS999 Silver badge

      The hedge funds have to buy the shares

      When the shares they shorted rise too high they have a margin call. They either need to deposit sufficient funds to cover the margin, or buy shares to cancel out all/part of the short. One hedge fund borrowed $2.75 billion over the weekend from another hedge fund to cover the margin, they later capitulated and stated they had closed their short position. The fund had been worth $13 billion, it may have lost nearly all its value buying inflated Gamestop shares to cover its short positions.

      Another hedge fund supposedly had an even bigger short position, I haven't heard any reports on it, but if they haven't capitulated and had sufficient capital to avoid margin calls they might be hoping they can wait it out. Or maybe they are effectively bankrupt already, and the fund manager has been busy over the last couple days liquidating as many of his assets as he can, wiring the money overseas, and getting ready for a one way trip on a private jet to a country without an extradition treaty.

      There was a huge momentary spike in the Gamestop price from around $230 to nearly $500 and back again just after 2pm NYC time. That looks like another big short seller capitulating.

  6. MikeThelHill

    Would you pay $100 to screw a hedge fund?

    The other way of looking at this is that many reditters may be happy to throw a coupla bucks down the drain to see a Hedge Fund/Short Seller get burnt to the ground.

    The article talks about people "investing" in GME and getting burnt in the end, but maybe many of them are buying and holding a tiny amount to watch the dumpster fire? A million redditers have a bunch more firepower than one hedge fund.

    The professional shorters have long view themselves as hunters of the weak, it's an ironic twist that they find they are no longer at the top of the food chain.

    1. Anonymous Coward
      Anonymous Coward

      Re: Would you pay $100 to screw a hedge fund?

      But can you stay solvent longer the market remains irrational?

      1. Dan 55 Silver badge

        Re: Would you pay $100 to screw a hedge fund?

        Why is it irrational? The invisible hand of the market has spoken. It does not want GameStop to get closed down.

        1. Alan Brown Silver badge

          Re: Would you pay $100 to screw a hedge fund?

          " It does not want GameStop to get closed down."

          Gamestop is irrelevant to this exercise. The object of the redditers is to burn down the hedge funds and Gamestop happens to be the convenient way to do so

          The really fun part would be if Gamestop's original share owners were the major purchasers of the borrowed shares the hedges were throwing into the market, knowing that they'll have to pay higher figures to get them back. It's one way of burning them down and owning the carcass

    2. Adelio Silver badge

      Re: Would you pay $100 to screw a hedge fund?

      T.B.H i have never felt truly happy with the concept of shorting, it just seems so disgusting

      1. lglethal Silver badge

        Re: Would you pay $100 to screw a hedge fund?

        Agreed. I've never been able to understand why it's legal since it seems like it massively encourages illegal or only semi legal activities on the part of the person doing the shorting. If you're taking a million dollar bet (which is basically what you're doing) then of course you're going to try to influence the outcome if you can.

        Having chatted to a stockbroker once in a bar, he couldn't actually come up with a rational reason for allowing it other than that it made him a ton of money.

        Ban shorting and the stock market would be a much nicer place.

        1. FILE_ID.DIZ Bronze badge

          Re: Would you pay $100 to screw a hedge fund?

          Ban shorting and the stock market would be a much nicer place.

          The market will simply route around that inefficiency, much like the Internet is able to route around outages (sometimes).

          This is why we also have futures and options markets.

        2. Greybearded old scrote Silver badge
          Devil

          Re: Would you pay $100 to screw a hedge fund?

          It's legal because the people doing it are wealthy and donors, sorry friends (err, colleagues?*) of those in power. They can buy the laws they want.

          * Is there a way to describe that which doesn't sound as utterly corrupt as I believe it to be?

          1. Loyal Commenter Silver badge

            Re: Would you pay $100 to screw a hedge fund?

            I have to say, seeing these people get burned fills me with delight. Let's hope the stock price remains high until those short options expire (does anyone know when this is?) and the Redditors don't bottle it and cash out first.

        3. DS999 Silver badge

          Re: Would you pay $100 to screw a hedge fund?

          How does shorting encourage illegality more than owning the stock? One way and bad actors will spread false rumors trying to hurt the value of the stock. The other way and bad actors will spread rumors trying to pump up the value of a stock.

          It only SEEMS like crimes are more common around shorting, because of how few people are willing to short stocks. If you assume 1% of people in the stock market are "bad actors" willing to violate the law in order to make more money, then you only see 1% of people are "pump and dumpers".

          But since only a small percentage of the total are willing to short, then a large percentage of the shorters will be "bad actors" who do the opposite of pump and dump. If say 5% of all stock traders are willing to short stocks, that would mean 20% of the shorters will be bad actors! You would see the same thing if you looked at any other subset of stock traders, such as options traders. If 10% are willing to trade options then 10% of them will be bad actors...

      2. First Light Silver badge

        Re: Would you pay $100 to screw a hedge fund?

        Agreed. Except, that it can act as a pressure on companies to get and/or keep their act together instead of faffing around. Short seller Chanos saw red flags in Enron's filings that no one else was bothering to pay attention to. Hence he made a killing.

        When regulatory organizations have too cosy a relationship to the companies they are regulating, you can argue this is one way to restore balance. It's far from ideal, but if the regulators are incapable of doing, or not permitted to do, their jobs, or there is continued fraud, then the short sellers' investigations can sometimes be the only check scary enough to affect the Board & Executive decisions.

        1. Dave 126 Silver badge

          Re: Would you pay $100 to screw a hedge fund?

          > It's far from ideal, but if the regulators are incapable of doing, or not permitted to do, their jobs, or there is continued fraud...

          The excellent 'Against The Rules with Micheal Lewis' podcast series is all about the different ways that regulators and referees can become undermined, toothless, under-resouced or captured.

    3. John Brown (no body) Silver badge

      Re: Would you pay $100 to screw a hedge fund?

      "The professional shorters have long view themselves as hunters of the weak, it's an ironic twist that they find they are no longer at the top of the food chain."

      Yes, even the King of the Jungle can be brought down by a large enough pack of Hyenas :-)

    4. OldSod

      Re: Would you pay $100 to screw a hedge fund?

      Sounds something like a Distributed Denial of Service attack; leverage a large number of low bandwidth hosts (low $$ purchasers) to attach a high bandwidth host (high $$ hedge fund).

  7. SecretSonOfHG

    You forgot to explain a crucial point about options

    Is that the number of shares involved in an option are not limited by the number of shares that ha company has. That is, the total sum of call and put options people bet on (yes, that's what all this is really, betting) can total more than the actual number of shares issued by a company. This makes for an interesting snowball effect that usually goes under the radar unless something like this happens, and shows that future option trading is more like gambling than anything else.

    1. Zolko Bronze badge
      Mushroom

      Re: You forgot to explain a crucial point about options

      Exactly. And I've read somewhere else that in this case the short-selling covered 140% of the available stock, therefore:

      This is really bad news for the amateur investors for two reasons. For one, literally no one will buy their stocks

      not only are those scrip-kiddies sure that the hedge-fund will have to buy the shares at whatever price, but that that price will even increase when the puts will need to find 140% shares in the 100% available. All the redditers need to do is hold long enough, and they're sure to make a huge win AND will see a hedge-fund burn.

      Unless, of course ... a new legislation is passed to save Wall-Street and screw the rest of the people. But then, the overrunning of the Capitol will look like a boy-scout picnic as compared to what will happen in New York. But if nothing is done, and since all those crooks hold each other by the barb, when 1 hedge-fund collapses, it might take the entire house of cards with it.

    2. diodesign (Written by Reg staff) Silver badge

      Re: You forgot to explain a crucial point about options

      We took out the stuff about the options and futures -- and instead highlighted the short squeeze aspect. GME was heavily shorted, to somewhere around 140%, leaving the hedges particularly vulnerable.

      C.

  8. Alan J. Wylie
  9. Alan J. Wylie

    I wonder whether someone will make a film about it?

    Previously: Trading Places

    1. TimMaher Silver badge
      Pint

      Re: I wonder whether someone will make a film about it?

      Beat me to it @Alan.

      Have a beer.———->

  10. deadlockvictim Silver badge

    Casino metaphor

    If the stock market is a casino, then who is the House? Governments? Stock Exchanges? Goldman Sachs, Blackrock & friends? All? None?

    The answer, as always, is surely 'it depends'.

    Or is the stockmarket not really a casino?

    1. Missing Semicolon Silver badge

      Re: Casino metaphor

      Goldman Sachs. Like always.

    2. Loyal Commenter Silver badge

      Re: Casino metaphor

      The brokers, who make a percentage on each trade. They don't care whether the person selling makes a profit or a loss.

    3. Zolko Bronze badge

      Re: Casino metaphor

      The FED is the House.

      Actually, it's worse than this: it's a casino, but a casino where the clients cannot loose, because if they do the casino is bankrupt (that's the meaning of "Too Big To Fail") so the House pumps money to the clients, always.

      Except that these redditer have gate-crashed the party, legally, and these new clients don't follow the well written script. Because these new clients don't get the easy money from the House, they are actually playing by the real rules, not the crooked ones played by the House.

    4. Anonymous Coward
      Anonymous Coward

      Re: Casino metaphor

      > Or is the stockmarket not really a casino?

      It seems like it attracts people with the same gambler's mindset. The missus and I used to have our Saturday breakfasts at a little restaurant in a Chicago North Shore suburb. Many of the other customers were people I recognized from the daily commuter train trips into the city as people working as traders at the CME and CBOE. Jesus, those people bet on everything -- and I mean everything -- while they were waiting for their breakfast to arrive.

  11. Aladdin Sane Silver badge
    Paris Hilton

    How many of the people screwing the hedge funds have pensions that are invested with the hedge funds?

    Paris, because screwing.

    1. Loyal Commenter Silver badge

      I don't know about you, but I get to choose which funds my pension pot gets invested in (and I have it split over several). I would expect all but possibly the ones rated as highest-risk steer well clear of short-selling, and anyone who puts all of their pension into a single high-risk fund either doesn't have much to lose, or is a fool.

      1. vtcodger Silver badge

        Feedback loops can work both ways

        I would expect all but possibly the ones rated as highest-risk steer well clear of short-selling,

        One would hope. But recall that serious market crashes tend to affect everyone, not just the folks who have been engaging in obviously risky behavior. Example: A major acknowledged cause of the 2009 crash was that vast sums of money were "invested" in mortgage based securities whose risks were, for rather complex reasons, systematically misassessed. When too many mortgages defaulted, the perceived values of some banks and other financial operations dropped. The losses propagated to those who had invested in those investment operations which caused broader loss of value as well causing jobs to be lost which caused more mortgage defaults which ... etc, etc, etc.

        1. Anonymous Coward
          Anonymous Coward

          Re: Feedback loops can work both ways

          Anonymous to preserve my employment.

          "A major acknowledged cause of the 2009 crash was that vast sums of money were "invested" in mortgage based securities whose risks were, for rather complex reasons, systematically misassessed."

          The reasons were not complex. I had to listen to an asshat executive from second mortgage give a speech to first mortgage where he "explained" that the "models" never predicted the "owners" would walk away from their mortgages when they were still quite capable of making the payments. Oh really? Your model told you it was okay to tack a second mortgage on top so homeowners owed up to 110% of the value. And your model didn't tell you when times got tough people would figure out every dollar of their mortgage was going into your pocket instead of their equity? So you sold them left and right, people walked left and right, and the repackaged mortgage-backed securities collapsed because of a "misassessment". That was no misassessment, it was massive fraud where the securities were packaged based on the first mortgage value and ignoring the second mortgage.

          And this asshat from second mortgage business lost his company and his job, but that was okay because he somehow parachuted into the top spot at first mortgage, and literally spoke the words "Nice business you have here."

          1. vtcodger Silver badge

            Re: Feedback loops can work both ways

            The reasons were not complex.

            Greed and stupidity certainly had a role. But there was also a problem with a math tool called Li's Cupola that purported to assess complex risks with great precision. Nobody actually understood the damn thing. But it said that a lot of investments were underpriced. Lots of people assumed that it worked and invested accordingly. After all all the smart kids were using it and they were minting money. Until they weren't. Turns out that the Cupola was ... ahem ... a bit flawed. Here's a link to a pretty good article. https://www.wired.com/2009/02/wp-quant/

            1. vtcodger Silver badge

              Re: Feedback loops can work both ways

              That's Li's Copula. I think a cupola is something architectural. I have no idea what.

              1. Anonymous Coward
                Anonymous Coward

                Re: Feedback loops can work both ways

                Me again. Copula, what is that short for? Hmm, let me think a minute. Anyway, it's a nice story, but it doesn't hold up. Remember, all abusive systems thrive on complexity. Necessary complexity is okay, but complexity for its own sake is a sure tipoff someone is hiding something. Our second mortgage executive hid behind his model. I'm quite sure he knew the model was bollocks *in the long run*, but he was well paid for following it in the short run. The arbitrage folks hid behind their models, Copula or others, which they were also well paid to rely on. If nobody understands the model *so much the better*. Absolutely amazing how fine they made the securities look. What are the odds? Make money while you can, make sure someone else is left holding the bag, "the model" gives just enough plausible deniability to get away with it.

        2. Loyal Commenter Silver badge

          Re: Feedback loops can work both ways

          I'm no expert, but my understanding is that a market crash happens when the stocks being traded plunge in price, usually due to them being overvalued.

          What is happening here isn't going to be a market crash, as it is only going to affect those shorting these stocks. Those brokerage firms may make huge losses, or even have to declare bankruptcy, but that's not going to affect the price of the stocks on the market as a whole (unless they have to sell a whole load of stocks to make up their losses, which would cause those prices to plunge, but only temporarily until other brokers realise they can buy them cheap and wait for the price to rebound).

          If anything, it will strengthen the market as a whole, because it will weaken those players who are getting rich by shorting, which tends to make prices crash.

          When the value of these stocks eventually return to the level they should be at, which is reportedly around the $5 mark, it will be after the short traders have had to buy the stocks at the inflated price, which, if I understand this rightly, will be pretty much all of them. Those redditors won't lose out, because those traders need to buy the shares back from someone, and it will either be from them, or from others who actually hold the shares. To be fair, if I was one of those other shareholders, I'd be selling as soon as the price tops out...

    2. Anonymous Coward
      Anonymous Coward

      If you're posting on reddit about stocks (sorry, "stonks") you bought on Robinhood, you don't have a pension, you're lucky to work somewhere with a 401(k) match. A pension is something my grandfathers collected from US Steel.

      Let the hedge funds burn, but reinstate the rules separating investment and commercial banking. Otherwise the game will always be rigged.

    3. ecofeco Silver badge

      What are these "pensions" you speak of?

      1. Aladdin Sane Silver badge

        It's a lifetime investment that will return a pittance when I get to retire at 90.

  12. cantankerous swineherd

    robinhood are selling their feed to high frequency traders who are front running the retail guys...

    1. FILE_ID.DIZ Bronze badge

      So are all broker providing free no-cost trades.

  13. analyzer

    big short selling

    So 140% of shares of GME are placed in a virtual manner on a bet that they will fall in value, none of this naked short selling stuff going on no sirree.

    Nowhere is it reported about what percentage of shares are now placed in a virtual manner on a bet that they will rise.

    If the fall number is larger than the rise number then the hedge fund could be in very serious debt, sob, sob.

    If the rise number is larger then some redditers will be out of pocket.

    Now the thing about share contracts is that there is usually a time limit to how long you can borrow the shares. So how long are the contracts bought by the HF and /r and do they overlap. If /r have to close first then the share price will collapse and the HF will make big money. If the HF have to close first then how much money /r makes or loses will depend on the percentage of shares in options to rise.

    Also what's the opposite to naked short selling?

    Dressed long buying?

    Naked tall obtaining?

    1. Jellied Eel Silver badge

      Re: big short selling

      Now the thing about share contracts is that there is usually a time limit to how long you can borrow the shares. So how long are the contracts bought by the HF and /r and do they overlap. If /r have to close first then the share price will collapse and the HF will make big money. If the HF have to close first then how much money /r makes or loses will depend on the percentage of shares in options to rise.

      There's also the risk. So...

      I borrow 1m shares @$30 & sell for $30m

      I owe 1m shares to the lender

      I gamble share will go to $5 at option expiry

      I anticipate a $25m profit

      But

      Share price goes to $500

      I now have a $500m liability, and potential $470m loss

      If I don't have $500m, I'm technically insolvent

      Hence the panic, and capital injections while the HF attempts to cover losses & stay solvent. Also why having limits or stop-loss checkpoints can be a really GoodIdea(tm) to limit losses when the margin comes calling. But it's been interesting the way retail investors have copied HF tactics like short squeezes & turned their weapons against them. I've never been a fan of shorting due to the risks, potential for market manipulation, and damage to companies that attract a lot of short interest.

      But like Kieran says, all the risk is probably now on the /r 'investors' given the HFs have almost certainly exited their positions. Or bought new shorts at current prices & a $5 target..

      Also what's the opposite to naked short selling?

      Fur coat and no paper?

    2. Zolko Bronze badge

      Re: big short selling

      Also what's the opposite to naked short selling?

      normal operation: you buy first and sell later. No magic. The Redditers have nothing more to loose than the amount which they have already bought, they don't have any risk exposure, it's an asymmetrical game. The hedge-fund, on the other side, will have to buy back the stock at whatever price there is, therefore their exposure is virtually infinite.

    3. DS999 Silver badge

      It isn't naked short selling

      The way you get over 100% short interest is because shares are fungible, and borrowed shares aren't returned instantly. Let's say I own a share of Gamestop in my Fidelity account. You want to short Gamestop, so you place an order to open a short position and your broker borrows my share from Fidelity. You later decide to close that short position by buying a share from someone else which is held by your broker. In between the time your broker does settlement with Fidelity (at best it is daily, and it may well be weekly or worse for all I know) someone else opens a short position and borrows that share from your broker. My share is now effectively shorted twice.

      It shouldn't be possible to maintain a short interest above 100% for very long, but during periods of heavy shorting activity it is. And if there was ever a time to short a stock if you have enough cash to avoid margin calls until the bubble bursts, it is the last couple days when Gamestop is trading at probably 50x its true value. I imagine some of the really big fish hedge funds that hadn't been involved with Gamestop at all got involved in the last couple days after seeing how big it spiked, and have been gobbling up every short position they can.

      They have access to tens or even hundreds of billions of dollars in lines of credit, so they will never need to make margin and thus can't be forced to capitulate. So they can outlast the Redditers and will make bank when the Redditers get bored and start selling and the stock inevitably declines. They aren't going to hold onto these shares they bought for $50 or $200 for years. Probably not even weeks. The ones who will get REALLY rich are the big hedge funds who waded in the last couple days and shorted the stock when it was at $150 or $350.

      1. Jellied Eel Silver badge

        Re: It isn't naked short selling

        The ones who will get REALLY rich are the big hedge funds who waded in the last couple days and shorted the stock when it was at $150 or $350.

        And possibly any Gamestop insiders who can sell their stock or options. Often insider selling (as opposed to insider trading) is considered a BadThing(tm), but if your options were for say $30 and you could sell for $500, why wouldn't you?

        But short interest is still apparently around 130% of float, which I guess means that either hedges haven't exited their positions, or new ones have piled in.. But the borrow fee's raised to over 100% interest.

        1. DS999 Silver badge

          Re: It isn't naked short selling

          I read somewhere that the insiders are locked up until the end of the quarter. Not sure of the details, or if that's true, but if so they are probably hoping this madness continues for a couple more months but I don't see how it could.

  14. AdamWill

    wow, this is weird.

    OK, first up: this is not a "pump and dump" because a pump and dump at least requires some organized deception. The people who *started* this thing didn't mislead or deceive anyone, they didn't make any false claims about GameStop or anything else. They said "hey, if enough people get together on this we can pull off a giant short squeeze", and that's exactly what happened. I wouldn't be surprised if a lot of them got out by now, but that doesn't make it a pump-and-dump.

    Second, man, the article explains things in a very weird and roundabout way. It gets to more or less the right place eventually, but there are some scenic detours. Kieran, the borrowing isn't because the funds don't have enough capital. It's just because *that's about the only practical way to actually bet against a stock*. Say BobCo is currently valued at $30, and you are convinced that by next Tuesday it'll be down to $20 or less. Now how do you go about trying to make money off this?

    You can't buy AntiBobCo shares, because that's not a thing. You can't buy a negative amount of BobCo shares, because that's not a thing either. No. About the best practical way to do it is to go find a *current* owner of BobCo shares and make them this offer: "if you give me 100 BobCo shares right now, next Tuesday I'll give them all back, plus a fee of $5 per share for your trouble". Assuming they take the deal, you sell the shares immediately for $30 each, then if you were right and the price is down to $20 next Tuesday, you can buy them all back and return them to the original owner, pay the $5 per share, and still pocket $500 yourself. (Of course, if you inadvertently narked off reddit and the shares now cost $450 each, you just dug yourself an extremely expensive hole).

    You're not borrowing shares because you can't afford to buy them, you're borrowing shares to create a scenario in which you can benefit from their price falling.

    1. Evil_Goblin

      Re: wow, this is weird.

      El Reg - give this bloke (assuming AdamWill is a bloke) a job, clearest explanation I've read in the last 48 hours.

    2. MrBanana Silver badge

      Re: wow, this is weird.

      "you are convinced that by next Tuesday it'll be down to $20 or less"

      In this murky world it isn't a random hunch that gives them that notion. Insider trading, market manipulation, etc. weighs the odds very much in their favour - but this time they lost the bet.

      I don't know how much the average Reddit punter has invested in this, but sometimes it's sometimes fun to bet some money knowing that you can afford to loose it. Or even just burn it if you are anti gambling. A curious kind of fun can be had by burning a $20 bill. But a real wild ride to see many millions burn and know you're part of it. Warm your hands, guys.

    3. diodesign (Written by Reg staff) Silver badge

      Re: wow, this is weird.

      Yeah, thanks. We took out the stuff about options and futures and highlighted the short squeeze aspect.

      C.

    4. Alan Brown Silver badge

      Re: wow, this is weird.

      "About the best practical way to do it is to go find a *current* owner of BobCo shares and make them this offer: "if you give me 100 BobCo shares right now, next Tuesday I'll give them all back, plus a fee of $5 per share for your trouble". Assuming they take the deal, you sell the shares immediately for $30 each, then if you were right and the price is down to $20 next Tuesday, you can buy them all back and return them to the original owner, "

      Where this falls down is when the lender of the "borrowed" shares then heads into the market, buys up those shorted shares at a lower rate and sits on them waiting for the bounce. Assuming enough liquiduty is mopped up the HF cannot buy back enough BobCo shares to return to the lender and ends up being burned to the ground (more usually, the real owner of BobCo shares now owns the HF)

      This is why naked shorting is illegal (and why this figleaf shorting should be illegal too. If the HF can't BUY the shares it wants to short in the first place then it can't manipulate prices by selling them down)

      If you have enough people like Elon Musk kicking around with a visceral hatred of shortsellers and who are willing to take relatively small haircuts in order to burn them out the entire shortselling game breaks. Anyone piling into buying the shares after the price spikes is not playing the "burn the hedgefund down" game and is simply trying to cash in on the hype - they're the ones who will lose big, but even they can only lose 100% of the share value at worst, whilst the HF's losses can be many times the value of shares they don't own.

  15. MJI Silver badge

    Hedge fund busting

    It just needs to be done.

    They are killing companies.

    As to pensions, they are not allowed to "invest" in these.

    Can we do this as well to Somerset Capital Management?

  16. Anonymous Coward
    Anonymous Coward

    Stocks market needs to die

    All together, not just short trading. A company is worth what it's worth, not what some MoFos "think" it's worth. The stocks market is just a giant casino, with hedge funds being The House, as somebody else wrote here. They even gamble with no money at all, and that's because somebody decided the "perceived value" of a company is something tangible, and tradeable.

    1. codejunky Silver badge

      Re: Stocks market needs to die

      @AC

      "A company is worth what it's worth"

      And what is that? How much is a company worth? That is only decided by the many small transactions in this world where people trade based on how each individual values a company. Some of the most important and impressive companies started with such negative value until they broke through.

      "The stocks market is just a giant casino"

      Not entirely. There is a reason pensions rely on the stock market, because real growth is reflected in there. Yes there is gambling and people taking a punt, but gambling is not illegal and investment is a risk which MUST be made for anything.

      1. Electronics'R'Us Silver badge
        Thumb Up

        Re: Stocks market needs to die

        How much is a company worth?

        This reminds me of when I was studying macroeconomics many years ago.

        The mantra was (and remains) Any product is worth what a buyer is willing to pay for it.

        1. Anonymous Coward
          Anonymous Coward

          Re: Stocks market needs to die

          Heh...I used to work for some people that preached that mantra. Eventually they wanted me to buy the business from them. Suddenly the business was worth what the seller felt it was.

          Sorry, I don't buy feelings. Looks like other prospective buyers agree with me.

      2. codejunky Silver badge

        Re: Stocks market needs to die

        Apparently I said something 6 people disagree with. Not sure what tho. Anyone to enlighten?

      3. Alan Brown Silver badge

        Re: Stocks market needs to die

        "There is a reason pensions rely on the stock market, because real growth is reflected in there"

        Day trading is not growth, it's pure and simple casino economics

    2. Alan Brown Silver badge

      Re: Stocks market needs to die

      "A company is worth what it's worth, not what some MoFos "think" it's worth."

      The problem is that "money" is only worth what people think it's worth.

      If people won't accept the coin then it's useless - as the Western Roman Empire found out in ~420AD, ironically as a direct result of trying to reform a system that had suffered centuries of currency debasement and ensure that the coin was actually physically worth what it was supposed to be worth

      The lesson there is that "money" isn't coin. it's merely tokens and those tokens only have value if someone will trade for them, whether that's food, services or pork belly futures

  17. Greybearded old scrote Silver badge
    Stop

    The biter bit

    "Woo, and may I even venture, Hoo!"

    Many rich(er) people still have a 19th century concept of deserving/undeserving poor. I see these traders as undeserving rich. They are skimming loadsamoney from the economic activity of people who make or do something that's wanted or needed.

    Tax the trades, it will be a rounding error for anybody who invests and holds stock but hurt the gamblers. High frequency traders especially, wipe them out of business.

    Although any government with the stones to do that will have to explain the big drop in claimed GDP. Once they aren't claiming this nonsense as part of the real economy.

    1. Dave 126 Silver badge

      Re: The biter bit

      > They are skimming loadsamoney from the economic activity of people who make or do something that's wanted or needed.

      The metaphor in my head is of all human productive effort as a big machine that gets people what they want (food, shelter, medical care, fork handles, potatoes) and financial systems as being part of the machine's (distributed) control system. Clearly a control system of some sort is needed - otherwise how to get enough people to plant potatoes months in advance of people wanting potatoes?

      However - does this control system need to consume the fraction of the machine's power consumption as it does? Does the control mechanism makes things more efficient? Is the control system flexible enough?

      1. Alan Brown Silver badge

        Re: The biter bit

        "Clearly a control system of some sort is needed - otherwise how to get enough people to plant potatoes months in advance of people wanting potatoes?"

        People will do that for putre self interest

        The problem is that a lot of the "high stakes" stock market stuff is a combination of gambling and legalised rent-seeking behaviour that's been outlawed in virtually every other arena of society because of the demonstrated damage that rent-seeking behaviour does to GDP

        Monopolist telcos are a classic rent-seeking example - and what happens to them when competition shows up is a good thing. This is why AT&T's "baby bells" across the midwest USA and Canada are terrified of Starlink - it shows up how much rent they've been skimming from the system

  18. amanfromMars 1 Silver badge

    YMMV

    The subreddit is right now full of pleas to people to continue holding their stock, to punish Wall Street and the hedge funds, and not sell their shares, which would trigger a collapse.

    If you are currently holding any GameStop stock, get out, like right now. Take your profit, buy something nice, and be happy. Because it won't happen again.

    :-) That's not so much a stealthy case of biting the hand as sucking on the teat which feeds IT, El Reg ‽ . :-)

  19. Cuddles Silver badge

    The inevitable result

    Surprised not to see a mention of it here, but as happens every time some silliness on the stock market hits the news, some people have managed to make it even sillier and get the wrong company. In this case, GME Resources Limited has seen a nice boost to its share value on the Australian stock exchange.

    1. Dave 126 Silver badge

      Re: The inevitable result

      You make it a new form of typo squatting.

      The Redditors are talking Blackberry and Nokia as their next potential projects... Are there any companies with similar stock market codes? Eg BBRL not BBRI?

  20. happyuk

    It's unfair to assume GameStop is/was a dying company

    It's not at all fair to say GameStop would have died a slow death anyway.

    There are such as thing as turnarounds.

    Many companies, seemingly in the doldrums, teetering on bankruptcies for many years have done just that.

    Some might change their business models, management, applied cost cutting, restructuring etc and went on to become success stories.

    In the world of investing nothing is ever black and white.

    Contrast that with the likes of Enron and WorldCom with their impressive glass palaces and stratospheric earnings / share prices are no longer with us.

    1. John Brown (no body) Silver badge

      Re: It's unfair to assume GameStop is/was a dying company

      I wonder if GameStop took out or tried to take out a big loan based on their recent stock performance? Maybe all they needs is a big cash injection to diversify? :-)))

    2. ecofeco Silver badge

      Re: It's unfair to assume GameStop is/was a dying company

      Gamestop has a well documented history of toxic corporate culture. It was never going to "turn around."

      Or were you being sarcastic?

      1. happyuk

        Re: It's unfair to assume GameStop is/was a dying company

        You don't know that and such things are often impossible to predict.

  21. NomadUK

    'Lose'. Not 'loose'. 'Lose'. Christ.

    1. Palpy
      Pint

      Thank you.

      That particular error gets damned tiresome. Have a beer.

    2. I ain't Spartacus Gold badge
      Devil

      I know. That particular internet spelling error is quite rediculous...

    3. SuperGeek

      @NomadUK: 'Lose'. Not 'loose'. 'Lose'. Christ.

      Be nice, come on now. Anyone can mess up a keystroke and tap twice. Chiclet keys are terrible, ya know. And they're everywhere (thanks, crApple!). And unresponsive (thanks, again, crApple!). My Dell G3 1779 here's looking at you! Great for gaming with a pad but the keyboard's god awful!

  22. MJI Silver badge

    One shorter has cost them

    The equivalent of £3,000,000,000 this year so far.

  23. Potemkine! Silver badge

    as the share price keeps going up, they get richer and richer

    Virtually only. You get the money only when you sell. It's only hot air before that, that can vanishes in a second.

    1. Alan Brown Silver badge

      "It's only hot air before that, that can vanishes in a second."

      Yup - and in the aftermath of varuious crashes I've known people who've wallpapered their houses with now-valueless stock certificates to emphasise that point. A bunch of folk I worked with (also evangelical christians and heavily into Amway(*)) ended up losing their houses, shirts and everything else as they'd obtained large loans using the "face value" of their shares as collatoral

      If shares go from $250 apiece to 0c (or 1000 for $1), the exposure of your loans doesn't drop accordingly and if you no longer have collateral the banks aren't happy.

      It's only profit when you cash out, but gamblers never see it that way

      (*) These kinds of gullibilities seem to go hand in hand. I wouldn't be at all surprised to find many of them had become Trumpettes too

  24. AnAnonymousCanuck

    January 29 is Settlement Day

    Subject says it all.

    LF

  25. Danny 2 Silver badge

    Maybe not a bubble

    GameStop just tweeted :

    For the 8th consecutive year, @GameStop has earned a perfect score of 100 on @HRC’s 2021 Corporate Equality Index. We’re proud of our associates for their continued commitment to promoting #LGBTQ equality in the workplace and community!

    If such positive news had leaked a few days back then it could explain why everyone chose to invest. A perfect 100!

    1. ThomH Silver badge

      Re: Maybe not a bubble

      "Do you treat your employees well?"

      "We treat them equally."

      1. ecofeco Silver badge

        Re: Maybe not a bubble

        I see you are well versed in corporate weasel speak. Have an upvote.

  26. amanfromMars 1 Silver badge

    The Strange Art of Moving the Goalposts to Score Losing Own Goals

    Who says it's not a rigged Great Game? ...... https://www.rt.com/usa/513920-robinhood-gamestop-gme-amc-shutdown/

    If you can't stand the heat, get out of the kitchen if you can without kicking over the cans of worms therein, but where the hell does one then go to escape ? :-) ..... https://www.rt.com/op-ed/513839-gamestop-reddit-wallstreet-panic/

    1. Dave 126 Silver badge

      Re: The Strange Art of Moving the Goalposts to Score Losing Own Goals

      Of course do bear in mind that RT will publish a string of words as a 'story' only if it fits in with their strategic mission. They will even publish the truth if it furthers their cause. Or the truth with heavy spin. Or mostly the truth and a few fibs. Or some total bollocks from time to time.

    2. Paul Hovnanian Silver badge
      Coat

      Re: The Strange Art of Moving the Goalposts to Score Losing Own Goals

      "Who says it's not a rigged Great Game? ...... https://www.rt.com/usa/513920-robinhood-gamestop-gme-amc-shutdown/"

      From that article:

      "Some users reported that they were only allowed to close out their positions, but with nobody to buy, these users stood to lose massive profits."

      That's just Robinhood users. I suspect that the hedge funds will be allowed to buy through their own (proprietary) trading platforms. To cover their short positions, of course. Certainly the game is rigged. The Reddit gang intercepted the football and ran it in for a touchdown. But the referees have asked them to hand it back to the opposing team, go back to their own 20 yard line and think about who owns the field that they are playing on.

      I may just quit watching football and take up soccer. (Sorry about that. I'll just get my coat.)

      1. Alan Brown Silver badge

        Re: The Strange Art of Moving the Goalposts to Score Losing Own Goals

        "But the referees have asked them to hand it back to the opposing team"

        What the referees CAN'T do is force the redittors to sell their GS shares, merely warn them that they stand to lose 100% if the shares tank

        The point is that the original starters of this game EXPECTED to lose 100% and openly stated as much. The payoff is hedgefunds lose 1000%+

        If enough GS shares are held privately then there aren't enough of them on the playing field for the HFs when the return options come due on January 29th and the HFs burn down.

        GS shares will spike to stratospheric levels momentarily and some people might be able to cash out, but GS shares are ALWAYS going to tank at the end of this game. That's been the expected outcome all along (which is vastly different to a pump'n'dump, where investors in a mis-sold share going in are doing so on the basis that the shares will stay high or improve based on fake reports, not in the certain knowledge that the shares WILL crash in a few weeks at most)

        The intent isn't to make money out of GS shares, it's to burn the hedgefunds down.

        If some redditors make money along the way that's nice but it's not the intention of the game.

        Meantime there are a bunch of other daytrading dweebs who have piled in to try and make money because GS shares are high - these deserve to be burned down too (two birds with one stone!)

        1. Paul Hovnanian Silver badge

          Re: The Strange Art of Moving the Goalposts to Score Losing Own Goals

          "The point is that the original starters of this game EXPECTED to lose 100% and openly stated as much."

          It wouldn't be the first time an 'investor' bought up shares in a company to kill off a product or technology and shut it down. Loosing 100% is of little concern and certainly not illegal. The big software houses are sitting on piles of technology and the corpses of numerous competing startups.

          Who are we to question the bigger picture of some Reddit blogger who is doing the same thing? The acid test will be whether the organizers of this movement have dotted their Is and crossed their Ts should the SEC decide that they are providing investment advice. That they were honest about the possibility of others losing 100% of their investments may be good enough.

  27. amanfromMars 1 Silver badge

    What's not to like .. a Conspiracy of Elite Crooks called out. Well, is that not the gospel truth?

    The sweet sound of shit hitting the fan .......... https://www.zerohedge.com/markets/you-can-not-purchase-additional-shares-robinhood-reportedly-removed-shuts-down-buying

    With whom and/or what do your true allegiances lie? The Sheriff of Nottingham Crooks or the Merry Men and Women of Sherwood Forest and Robin Hoods? :-)

  28. yetanotheraoc Silver badge

    Free and fair market

    Short selling has a legitimate place in commodities trading, where an actual producer of a commodity, who owns the physical thing they are shorting, can make a hedge against a price fluctuation. Speculative short selling is a distortion, but it makes sense to allow it *up to a point* because the alternative is some sort of enforcement division to go around verifying that short sellers actually hold enough of the "thing" to cover their short position.

    When the distortion becomes the normal, that's when you know the system has been corrupted. But we all knew that already.

    The real damage here is not to the short hedge funds, nor to the long redditors, but to the reputation of the market system itself. It needs to be *seen* as essentially fair (even though it's far from fair), otherwise there is no way to convince mom and pop to put their retirement funds there. So I predict the SEC will find a way to regulate the redditors and other small-time day traders into oblivion, and blame *them* for illegally disrupting an otherwise free and fair market. Then back to business as usual. The fact that a bunch of hedge fund managers lost their clients a ton of money won't even be a black mark on the resume, just an asterisk and another war story during a round of golf.

    1. ecofeco Silver badge

      Re: Free and fair market

      You can bet on it.

      1. amanfromMars 1 Silver badge

        Re: Free and fair market

        That's a bet worth shorting, ecofeco ........ the bet being the SEC will fix anything.

    2. Alan Brown Silver badge

      Re: Free and fair market

      "Speculative short selling is a distortion, but it makes sense to allow it *up to a point* because the alternative is some sort of enforcement division to go around verifying that short sellers actually hold enough of the "thing" to cover their short position."

      Funnily enough there IS enforcement, precisely BECAUSE naked shorting became a standard market destruction tool and it backfired.

      "When the distortion becomes the normal, that's when you know the system has been corrupted. But we all knew that already"

      The kind of shorting that's going on is "Naked shorting" with a figleaf (the shares have had to be "borrowed" from someone) and has proven to be as abusable as now-criminalised naked shorting practices were

      Unsurprisngly it was hedgefunds which mostly engaged in naked shorting in the past. They just found a away around the rules enacted to try and stop them continuing the practice - and just like years past the regulatory authorities turned a blind eye to it until the stock markets were set on fire - which merely proves who they really work for.

  29. Someone Else Silver badge

    What started out as a fun way to stick the middle finger up at the super-rich has morphed into something that could wipe out billions of dollars, destroy companies fat-asses, and has regulators predatory hedge-fund managers sounding panicked.

    There, Kieran, FTFY.

    1. Emmeran

      Don't forget that these are real people being hurt, people who have multiple house and boats which depend on them.

      1. ecofeco Silver badge
      2. Someone Else Silver badge

        ...oh, and Coke habits...don't forget about the Coke!

  30. Emmeran

    Things aren't always as they appear

    There's a lot of social movement aspect going on with this so it's not just a greed play, I mean who doesn't hate people who spend their entire day figuring out ways to make someone fail (short sellers).

    The Shorters made a big mistake also, GameStop was profitable and didn't carry any debt so the short positions against it didn't make any sense unless someone was trying to drive the stock down to orchestrate a buyout and dismemberment. This brought it to the attention of a lot of people including the Reddit crowd.

    Now people are crowd sourcing against the short sellers and a lot of them are spending a couple of bucks and calling it a donation; basically buying a ticket to piss on Wall Streets shoe.

    The conversation in my house went like this:

    "Honey I blew my beer money in the markets this morning."

    "That's nice dear, please don't forget to take out the garbage today."

  31. Kev99

    The stock market benefits only the gamblers. Other than IPOs companies derive no benefit from it.

  32. Val Halla

    Get shortie.

    I strongly suspect this is a variant on a short squeeze perpetrated by hedge funds.

    1 The traders bought at $5,

    2 Started shorting,

    3 Created outrage on social media,

    4 Suggest how to undo the hedge funds,

    5 Start a movement to increase the price,

    6 Price rises

    7 Sell out shares bought at stage 1 at a profit,

    8 Prices fall,

    9 Close out short orders at profit,

    10 Buy a yacht,

    11 Redo.

    1. Alan Brown Silver badge

      Re: Get shortie.

      The amount of profit which can be made by stiffing the shorters is relatively low - even if someone ends up with a yacht the actual overall profit is small compared to the overall market

      The amount of loss the shorters can incur is virtually limiitless

      The overall benefit to the markets from exposing predatory shorting practices and eliminating the people concerned, is worth the effort

      Shorting has benefits in exposing things like Enron fraud, but predatory shorting is damaging

      Stock trading is something that even the relatively dumb can do fairly easily as most of it is mechanical. Problems arise when people decide they're "geniuses" and "have systems" - which is the mantra of every addict gambler in existence

      Disclosure: I watched my father do exactly this - repatedly, for decades - with horses and stocks. Needless to say he's lost every single "investment" he's been involved in. It's a salutary lesson that gambling is a fool's game

  33. Anonymous Coward
    Anonymous Coward

    0ptional

    ahh

    that M31v1n Man Cap

  34. Anonymous Coward
    Anonymous Coward

    No humans involved at hedge funds

    "They have teams of people who do nothing all day but watch the markets and are plugged into the system."

    No -- much, much worse than that: No humans involved. Read the "Flash Boys" by Lewis.

  35. Alan Brown Silver badge

    The danger of shorting

    If you buy shares, the worst you can do is lose everything

    Shorting can be dangerous and damaging but TRADITIONALLY you had to own the shares in order to sell them in the first place

    Meaning that the worst case scenario is losing everything

    "naked shorting" - where you sell shares you don't even HAVE - was one of the leading factors in the last couple of stock market crashes - This is why "naked shorting" was outlawed a few years ago

    "Borrowing" shares is merely naked shorting with Groucho Marx glasses on and should have been banned too

    Naked/borrowed shorting can result in you losing hundreds of times more than you have when the chickens come home to roost

    Destroying the naked/borrowing shorters is a good thing, they shouidnt' be allowed in the stock exchanges as they're what makes it a full-blown casino

    Elon Musk has put his weight behind the campaign because he _really_ dislikes shorters - and bankrupting the naked/borrowed shorters is in his interest

    1. A.P. Veening Silver badge

      Re: The danger of shorting

      Elon Musk has put his weight behind the campaign because he _really_ dislikes shorters - and bankrupting the naked/borrowed shorters is in his interest

      As such, you (and I) can be fairly sure he put (a very small part of) his money behind it as well. And he probably will make a profit on it as well.

      1. Alan Brown Silver badge

        Re: The danger of shorting

        "you (and I) can be fairly sure he put (a very small part of) his money behind it as well."

        You might be. Personally If I was him I'd be cheering from the sidelines and ensuring my money didn't go anywhere near this as that could be used by the "regulators" to prove that he (and other promoters) were engaging in pump-and-dump market manipulation

  36. Anonymous Coward
    Anonymous Coward

    New game in town

    Who else finds this shorting game much more interesting than computer games?

    How long before MS etc. release their version?

  37. gerdesj Silver badge
    Mushroom

    DFV - a man of few words

    u/DFV is a bit of a legend and this comment sums it up:

    https://www.reddit.com/r/wallstreetbets/comments/kie1dk/gme_yolo_update_dec_22_2020/ggqe63a/

  38. Anonymous Coward
    Anonymous Coward

    so at least one short-seller lost out and says "they won't do it again".....

    https://www.independent.co.uk/news/business/gamestop-citron-research-short-selling-investment-b1794844.html

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