> Left claims that the “mob” has overstepped the mark and harassed him and even his family in a way that is actually illegal. If that is true, shame on them, and those involved should be prosecuted. This must be condemned without hesitation; nothing excuses that type of behavior. Online harassment of those with different opinions, particularly in pursuit of profit, is disgusting and becoming all too common, and standing up against it is important. (...)
I'm a bit lost with this article. What have an "angry mob" been doing to Andrew Left and his family in an "actually illegal way"? Seems to me this article is swaying to some type of narrative someone wants to propagate rather than aiming to be somewhat objective regarding current events.
> Seems to me this article is swaying to some type of narrative someone wants to propagate rather than aiming to be somewhat objective regarding current events.
Note the "If". Left had indeed claimed that there were attacks on his personal peers, and I agree that if it were true it is overstepping their right to privacy and probably life if the claimed attacks were death threats.
HOWEVER, if it turns out that Left is lying I will agree that Left have commited defamation against a group of possibly hundreds of thousands of people and I would really suggest to him at that moment (apart from what the law thinks appropriate, which is a somewhat long prison time) to really apologise and permanently stay outside of the stock market.
He is English and I knew from reading their (in a country sense) opinion pieces that they tend to put distance in unsure or unverified information, possibly because of the much stricter libel/defamation laws there (see as an example https://youtu.be/z49LjJj3VTI that discusses why there is avoidance on the phrase "tired and emotional" which acquired a different meaning in UK). I guess that this is just an unintentional carryover especially that American opinion pieces don't really delinate fact from opinion in their writing.
They probably don't want to share details for the sake of the family's privacy. I assume it's the typical online harassment stuff: threats to the family's physical safety because of Left's opinions.
This story is constantly being framed as "the angry mob" vs "Wall Street hedge funds". But surely other professional investors ((hedge) funds, high frequency traders, algorithmic traders) are also jumping on the bandwagon, to (1) eliminate a competitor and (2) make a profit themselves on the way. I read yesterday that (at least one platform for) algorithmic traders have been monitoring subreddits like /r/WallStreetBets since the start of 2020, to immediately buy what is mentioned favorably there before retailers bring the price up.
The way I see it, is that among the professional investors, one will lose hard (Citron), while most others will profit. When the sell-off starts, they'll be able to sell first, thanks to their sub-ms connections to exchanges, algorithms that monitor media in real time (including reddit!), and employees that are constantly monitoring this whenever the markets are open (as opposed to retailers doing this in their free time).
Among the retailers, a few will win big (/u/DFV), while most will lose. They'll either stubbornly "HODL" if they're in it to "get a message across", or if they're in it for profit, they'll notice the sell-off too late and act too late, probably exacerbated by RobinHood suffering outages at that point.
So my prediction is that in the end one hedge fund will go down while others will profit from it... Most retailers will lose. Then what was the point?
I mostly agree with your analysis, and I don’t have any money invested in GME (I usually do private investments).
But at the same time, I think there is incredible value in exposing how much of a lie “the free market” is...
So much this. I've been rolling my eyes at the "fight the power" narrative, since I assume there are other hedge funds or shadowy figures taking the other side of the bet, and stoking the short squeeze.
I still feel like these stories are missing a core distinction.
If these WSB folks rallied around GME because they were true believers of a beloved brand with faith in a turn around plan, god love em. I think that’s an interesting phenomenon that upgrades retail collective trading in much the same ways mutual funds behave on behalf of loads of retail investors.
But that’s not what happened. The brand is irrelevant. It’s just math and vengeance and in the end...a lot of retail folks are going to be left holding the bag as prices drop down to earth. That cannot be a good outcome for anyone. I don’t think we want a system to function like this.
Why is now when we start caring about that, though? I don’t think the current position of GME is a reasonable one, but neither is the situation in which 140% of its shares have been shorted. And it’s not just academic: that makes it difficult for the business to grow. The hedge funds are literally trying to suffocate it into bankruptcy.
And yet no one raised the alarm then. No one worried about retail investors with a long position in GME, or the workers who could be laid off. The truth is that almost no one at all cared about the market being detached from reality or the ordinary people left holding the bag when the hedge funds were set to profit. But now that they’re losing, suddenly everyone is beside themselves with worry.
I disagree. The brand isn’t everything but it isn’t nothing. Look at the targets so far. Companies for which there is a nontrivial amount of 90s and 00s nostalgia. If wsb is driven by 20-30 year olds, a narrative involving a fondly remembered company is going to stick better than one that nobody knows. I don’t think people truly believe in GameStop as a long term success, but the story travels faster if people can remember the name.
Look at Tesla. Musk’s cult of personality is clearly a component of the interest in the stock. I don’t think these are just abstract objects made of balance sheets.
I think you don't understand what wallstreetBETS is all about.
It's not investments. It's playing the casino. They are betting. And proud of it.
And this is one of the first times they have an advantage over the rest of the table. Because a couple of hedge funds overplayed their hand on a stock small enough to be influenced by the people active in that sub.
They are ready to lose it all just for the lulz. It's entertaining. Expensive, but thrilling.
The same counts for BTC "investments". There are no fundamentals. It's all irrational bets. Bad for the solvency of some, but that's what all casino's are.
I'm pretty sure bringing up fundamentals is intentional FUD. Nobody is investing in any of these because of fundamentals. It's the public vs hedge funds and GME et al is the battlefield.
The more people take part and have strong hands, the more the losses will be democratized, on the way to the real desired outcome against naked shorting hedge funds. I don't mind losing a couple hundred bucks investment for this.
It is fine to say "this is a bad situation and we need new regulations to prevent it".
What is not OK is bending and breaking the existing regulations to stop a group of individual investors who are individually doing nothing wrong in order to protect a hedge fund that was exploiting the existing (bad) regulations.
Also, it seems insulting to suggest that the only "good" reason for someone to buy a stock is faith in the fundamentals of the company when finance media has been yapping up the joys of derivative trading for decades.
Nobody complains about hedge funds making short-term trades based on technicals. Momentum traders, swing traders, automated high-frequency traders front-running order flow, that's all kosher. But let a bunch of retail traders step outside of long-term fundamentals and beat the funds at their own game, and suddenly that's a problem.
People keep assuming the WSB crowd are idiots. I don't think it's a given that they can't do risk management, and in a short squeeze it's generally the short sellers who end up holding the bag.
Anyone who FOMOs in this week is probably in for a hurtin', but the ones who got in before this was all over the media have a good shot at significant profit.
This is a distributed movement, some people have been holding the stock for over an year+, others bought into it on the past few weeks.
There are people who bought it as a meme stock, when it was relatively stable, as the devaluation from the market transition towards digital media had already mostly been factored into the price. Steam is not a new thing, after all. The fundamentals at the time supported the price, in hindsight it was about the lowest price the share has ever been at[1].
The CEO change precipitated other people to buy into the fad. This combined with the short overexposure counterbalanced the speculative attack from the hedge funds.
> But that’s not what happened. The brand is irrelevant. It’s just math and vengeance and in the end...a lot of retail folks are going to be left holding the bag as prices drop down to earth. That cannot be a good outcome for anyone. I don’t think we want a system to function like this.
Not sure what you suggest be done about it. Hopefully people learn their lessons but it is not like we can eliminate the possibility of doing dumb things, and doing so would be quite illiberal.
I agree with you, and on the flipside we need hedge funds and other “pro” investors to abide by the same rules. Big banks sure didn’t feel much pain in 2008...
I think there are two internally consistent approaches here.
Either you go full on Eugene Fama and claim that you do not even understand what market manipulation means as long as there is no hidden information, as markets are efficient and it is just market reflecting unidentified changes in the fundamentals or random fluctuation around the correct value or whatnot.
Or, you can say that yes, this is just exhibit N about how prices can be manipulated, which means that prices are not always correct. Which means that we can't trust blindly on markets to allocate resources efficiently, but we need to have careful discussion about in which circumstances it is prudent to restrict the market operations (including price, supply and demand).
What is weird, is how rare it is to find either of these approaches in public discussion. (For the record, I am in the latter camp. And no, I do not propose fullo on communism and regulated markets, but "to have careful discussion about in which circumstances it is prudent to restrict the market operations")
> The brand is irrelevant. It’s just math and vengeance and in the end...a lot of retail folks are going to be left holding the bag as prices drop down to earth.
The hedge funds have retreated, yet WSB is doubling down on the frenzy.
The posts over there are just insane. QAnon levels of delusion against an enemy that has already retreated.
Wall Street is just a straw man now, and WSB is using it to cannibalize WSB.
This article claims the catalyst for GME’s meteoric rise was a change to their board altering the company’s narrative. Josh Gross claims it’s because u/DFV liked their 10-Qs. So which is it? One? Both? Neither?
I've seen way too much rationalization of this from mainstream financial media "pundits". Lol'd when I heard Andrew Ross Sorkin's take on it.
I do know that the DFV post was the match, but I think stimulus + people generally wanting to take revenge + the WSB post that revealed that Melvin was shorting GME, so let's fuck it up + Robinhood's post-pandemic popularity were the reasons for this to go out of control unlike other previous movements.
One thing it has shown is how much vulnerable the US financial system is. Although this time it was retail investors left holding the bag, this situation could be destructive very easily.
Imagine now, if Russia wanted to take down the US economy. They could create a buffer hedge fund, maybe 3-5B, which would be obliterating itself anyways. Then get some bots to bump up activity around a particular stock, maybe generate fake short interest against GS (smallest big 6 bank, so I chose it). Then create a CtA on WSB, calling for a mass short to dethrone GS based on fake information, and pump it up with bots. Retail starts shorting, Algobots might pick up on the momentum and join the trend, followed by traditional HFs joining the crowd. In the end, you'll have GS being shorted for no particular reason, but enough to cause some serious damage momentarily. Price goes down, they get deemed overlevered, and they're forced to take a bailout (highly damaging to the politicians in Congress who support it) or led to fail (which would cause shockwaves across the street). It's likely the politicians will sacrifice themselves for a cushy job post politics, but the current ruling party would lose all legitimacy in front of its voters.
I imagine such a scenario would be easily plausible in Europe, where the banks are much weaker financially (save for the Swiss ones).
This feels like "damning with faint praise": "Yeah, yeah, sometimes they break the rules but they say there's no significant court case they lost."
>They are very open about the fact that they or their clients may already have short positions in the stocks concerned and as I said, most of what they say is publicly available information. Clearly, they are not doing anything illegal, or even underhand. They have been sanctioned a few times by regulatory authorities and lost legal battles overseas but, as founder and Executive Editor Andrew Left has frequently pointed out, they have never lost a significant court case in America.
Off topic but I noticed a large number of large empty white spaces. Then I realised that my browser is blocking all those ads. Kind of sad how much of that page is ads.
When the GameStop valuation jumped to ridiculous levels, it was obviously noticed by others who started shorting.
The end result of this is that some in the WallStreet are making even more profits than Citron Research. This time it's on the backside of those retail investors who think "holding the stock" is protecting it's price.
Citron Research was caught on surprise by WSB, these new speculators have the benefit of weighting and analyzing WSB group action. They can take account possible short squeeze risk and duration and take a long view.
I agree that Citron and especially Left is indeed ironic in this situation (and the refreshing reminder that a: American English is derived from English English and b: the internet is not just Americans). The small-scale market (as a group) is doing the exact things as him in other instances, but the call for restrictions is, to say the least, confusing.
I sincerely hope this comment ages well, but I doubt it will. A scenario where a majority of the retail traders in GME right now come out ahead would be surprising.
Unfortunately, the hedge funds will be 100% fine and probably capitalize on this event and somehow still come out ahead. The WSB folks who started this have probably already sold out so they're fine. It's average everyday folks who bought into this robin hood (not the app) story and purchased stock at recent prices who will lose a lot of money
The irony of manipulating markets against market manipulators is delicious.
This will also punish over exposed players who are probably reviewing their short positions as this unfolds.
I keep seeing folks saying that retail will be left holding the bag. Retail folks are buying GME and holding. Worst case they're out their initial investment. GME shorts like Melvin Capital are out many multiples of their initial investment, their losses are unbounded. Retail (r/wsb) understands this, and is willing to lose their $600 or whatever to screw over the institutions.
The institutions can game all the way up though. The mistake the retail guys made in this instance was not accounting for the other institutional vultures Who had no prior interest in it, but would opportunistically pile in.
It’s becoming clear that a better designed attack was necessary. Unless government steps in, this attack will enrich market makers and a lot of hedge funds, while cleaning out retails who may not have fully understood the dynamics of this attack.
In my view though, that’s the market. It’s a learning process. Retailers will gain more understanding and the next attack will be better designed.
How are people missing that the original bet on this was founded around the newest generation of consoles shipping with Optical Drives? That was the entire basis on which Gamestop reapproaching retail with a new mindset and new investment led to wsb getting behind it in the first place.
Source, u/DeepFuckingValues earliest comments on reddit on GME around Mark Cubans involvement
Andrew Left of Citron Research today announced that Citron will no longer research and invest in shorts. They will now cover long positions. He's trying to reverse his image with WallStreetBets. I hope it is in good faith, he likely just sees an opportunity.
Ahh I love financial reporters. Just because Left has never lost a court case doesn’t mean he isn’t doing anything illegal. There are two tiers of justice in this country, and the rich can by their way out of crime.
user_error|5 years ago
I'm a bit lost with this article. What have an "angry mob" been doing to Andrew Left and his family in an "actually illegal way"? Seems to me this article is swaying to some type of narrative someone wants to propagate rather than aiming to be somewhat objective regarding current events.
zinekeller|5 years ago
Note the "If". Left had indeed claimed that there were attacks on his personal peers, and I agree that if it were true it is overstepping their right to privacy and probably life if the claimed attacks were death threats.
HOWEVER, if it turns out that Left is lying I will agree that Left have commited defamation against a group of possibly hundreds of thousands of people and I would really suggest to him at that moment (apart from what the law thinks appropriate, which is a somewhat long prison time) to really apologise and permanently stay outside of the stock market.
He is English and I knew from reading their (in a country sense) opinion pieces that they tend to put distance in unsure or unverified information, possibly because of the much stricter libel/defamation laws there (see as an example https://youtu.be/z49LjJj3VTI that discusses why there is avoidance on the phrase "tired and emotional" which acquired a different meaning in UK). I guess that this is just an unintentional carryover especially that American opinion pieces don't really delinate fact from opinion in their writing.
loganfrederick|5 years ago
downrightmike|5 years ago
kodt|5 years ago
JW_00000|5 years ago
The way I see it, is that among the professional investors, one will lose hard (Citron), while most others will profit. When the sell-off starts, they'll be able to sell first, thanks to their sub-ms connections to exchanges, algorithms that monitor media in real time (including reddit!), and employees that are constantly monitoring this whenever the markets are open (as opposed to retailers doing this in their free time).
Among the retailers, a few will win big (/u/DFV), while most will lose. They'll either stubbornly "HODL" if they're in it to "get a message across", or if they're in it for profit, they'll notice the sell-off too late and act too late, probably exacerbated by RobinHood suffering outages at that point.
So my prediction is that in the end one hedge fund will go down while others will profit from it... Most retailers will lose. Then what was the point?
cannabis_sam|5 years ago
I mostly agree with your analysis, and I don’t have any money invested in GME (I usually do private investments). But at the same time, I think there is incredible value in exposing how much of a lie “the free market” is...
SilasX|5 years ago
drewcon|5 years ago
If these WSB folks rallied around GME because they were true believers of a beloved brand with faith in a turn around plan, god love em. I think that’s an interesting phenomenon that upgrades retail collective trading in much the same ways mutual funds behave on behalf of loads of retail investors.
But that’s not what happened. The brand is irrelevant. It’s just math and vengeance and in the end...a lot of retail folks are going to be left holding the bag as prices drop down to earth. That cannot be a good outcome for anyone. I don’t think we want a system to function like this.
jakelazaroff|5 years ago
And yet no one raised the alarm then. No one worried about retail investors with a long position in GME, or the workers who could be laid off. The truth is that almost no one at all cared about the market being detached from reality or the ordinary people left holding the bag when the hedge funds were set to profit. But now that they’re losing, suddenly everyone is beside themselves with worry.
UncleMeat|5 years ago
Look at Tesla. Musk’s cult of personality is clearly a component of the interest in the stock. I don’t think these are just abstract objects made of balance sheets.
spiderfarmer|5 years ago
It's not investments. It's playing the casino. They are betting. And proud of it.
And this is one of the first times they have an advantage over the rest of the table. Because a couple of hedge funds overplayed their hand on a stock small enough to be influenced by the people active in that sub.
They are ready to lose it all just for the lulz. It's entertaining. Expensive, but thrilling.
The same counts for BTC "investments". There are no fundamentals. It's all irrational bets. Bad for the solvency of some, but that's what all casino's are.
briefcomment|5 years ago
The more people take part and have strong hands, the more the losses will be democratized, on the way to the real desired outcome against naked shorting hedge funds. I don't mind losing a couple hundred bucks investment for this.
josephorjoe|5 years ago
What is not OK is bending and breaking the existing regulations to stop a group of individual investors who are individually doing nothing wrong in order to protect a hedge fund that was exploiting the existing (bad) regulations.
Also, it seems insulting to suggest that the only "good" reason for someone to buy a stock is faith in the fundamentals of the company when finance media has been yapping up the joys of derivative trading for decades.
DennisP|5 years ago
People keep assuming the WSB crowd are idiots. I don't think it's a given that they can't do risk management, and in a short squeeze it's generally the short sellers who end up holding the bag.
Anyone who FOMOs in this week is probably in for a hurtin', but the ones who got in before this was all over the media have a good shot at significant profit.
gabriel34|5 years ago
[1] https://www.nasdaq.com/market-activity/stocks/gme/advanced-c... select log scale, period=max
cheph|5 years ago
Not sure what you suggest be done about it. Hopefully people learn their lessons but it is not like we can eliminate the possibility of doing dumb things, and doing so would be quite illiberal.
S_A_P|5 years ago
beefield|5 years ago
Either you go full on Eugene Fama and claim that you do not even understand what market manipulation means as long as there is no hidden information, as markets are efficient and it is just market reflecting unidentified changes in the fundamentals or random fluctuation around the correct value or whatnot.
Or, you can say that yes, this is just exhibit N about how prices can be manipulated, which means that prices are not always correct. Which means that we can't trust blindly on markets to allocate resources efficiently, but we need to have careful discussion about in which circumstances it is prudent to restrict the market operations (including price, supply and demand).
What is weird, is how rare it is to find either of these approaches in public discussion. (For the record, I am in the latter camp. And no, I do not propose fullo on communism and regulated markets, but "to have careful discussion about in which circumstances it is prudent to restrict the market operations")
xwdv|5 years ago
This is like going to war, all will give some, but some will give all. At least we’re talking about money and not lives.
ckastner|5 years ago
The hedge funds have retreated, yet WSB is doubling down on the frenzy.
The posts over there are just insane. QAnon levels of delusion against an enemy that has already retreated.
Wall Street is just a straw man now, and WSB is using it to cannibalize WSB.
MontagFTB|5 years ago
https://twitter.com/endtwist/status/1354547622133051393?s=20
fakedang|5 years ago
I do know that the DFV post was the match, but I think stimulus + people generally wanting to take revenge + the WSB post that revealed that Melvin was shorting GME, so let's fuck it up + Robinhood's post-pandemic popularity were the reasons for this to go out of control unlike other previous movements.
One thing it has shown is how much vulnerable the US financial system is. Although this time it was retail investors left holding the bag, this situation could be destructive very easily.
Imagine now, if Russia wanted to take down the US economy. They could create a buffer hedge fund, maybe 3-5B, which would be obliterating itself anyways. Then get some bots to bump up activity around a particular stock, maybe generate fake short interest against GS (smallest big 6 bank, so I chose it). Then create a CtA on WSB, calling for a mass short to dethrone GS based on fake information, and pump it up with bots. Retail starts shorting, Algobots might pick up on the momentum and join the trend, followed by traditional HFs joining the crowd. In the end, you'll have GS being shorted for no particular reason, but enough to cause some serious damage momentarily. Price goes down, they get deemed overlevered, and they're forced to take a bailout (highly damaging to the politicians in Congress who support it) or led to fail (which would cause shockwaves across the street). It's likely the politicians will sacrifice themselves for a cushy job post politics, but the current ruling party would lose all legitimacy in front of its voters.
I imagine such a scenario would be easily plausible in Europe, where the banks are much weaker financially (save for the Swiss ones).
TameAntelope|5 years ago
I am very suspicious of WSB generally, but just like with Anonymous, there apparently are some skilled folks in the horde...
holtalanm|5 years ago
blendergeek|5 years ago
SilasX|5 years ago
>They are very open about the fact that they or their clients may already have short positions in the stocks concerned and as I said, most of what they say is publicly available information. Clearly, they are not doing anything illegal, or even underhand. They have been sanctioned a few times by regulatory authorities and lost legal battles overseas but, as founder and Executive Editor Andrew Left has frequently pointed out, they have never lost a significant court case in America.
sschueller|5 years ago
markwkw|5 years ago
martin_a|5 years ago
If anyone wonders, this is what the page looks like on Firefox with uBlock Origin: https://imgur.com/bvrLMTv
nabla9|5 years ago
When the GameStop valuation jumped to ridiculous levels, it was obviously noticed by others who started shorting.
The end result of this is that some in the WallStreet are making even more profits than Citron Research. This time it's on the backside of those retail investors who think "holding the stock" is protecting it's price.
Citron Research was caught on surprise by WSB, these new speculators have the benefit of weighting and analyzing WSB group action. They can take account possible short squeeze risk and duration and take a long view.
https://isthesqueezesquoze.com/
>GME shorts have not begun to close their positions in substantial numbers.
>the situation (1/28 5 PM ET):
>- short interest: 100% of float by Ortex, 123.25% of float by S3 Shortsight
>- change in short share availability: +9,000
Matt Levine covers all scenarios nicely, must read as always: https://www.bloomberg.com/opinion/articles/2021-01-28/knowin...
zinekeller|5 years ago
moolcool|5 years ago
heartbreak|5 years ago
wpasc|5 years ago
gonzo41|5 years ago
gabriel34|5 years ago
metalliqaz|5 years ago
UncleMeat|5 years ago
flerchin|5 years ago
bilbo0s|5 years ago
It’s becoming clear that a better designed attack was necessary. Unless government steps in, this attack will enrich market makers and a lot of hedge funds, while cleaning out retails who may not have fully understood the dynamics of this attack.
In my view though, that’s the market. It’s a learning process. Retailers will gain more understanding and the next attack will be better designed.
bloqs|5 years ago
Source, u/DeepFuckingValues earliest comments on reddit on GME around Mark Cubans involvement
vga805|5 years ago
JohnJamesRambo|5 years ago
NKosmatos|5 years ago
adamcstephens|5 years ago
ChrisRR|5 years ago