How much evidence is there that the "reddit onslaught" actually moved the price, as opposed to them being the stalking horse for more sophisticated actors with more capital exercising a vanilla short squeeze strategy?
So many conspiracy theories on both sides these days. Don't forget Ocram's razor. I don't think there are many sophisticated actors here at all. I'm speaking as one who did DD on GME back in September and throw some money in (thought it was a great opportunity mainly because of Cohen +
the upcoming console super cycle with a tiny chance of squeeze thrown in) It was a smart discovery by WSB and got a bit more than average attention but then it kept growing.. every week more DD's posted and more attention. Now the entire sub is so dedicated to GME its actually annoying.
I think it really is the simple dumb story of a really bad bet by a hedge fund getting called out online and a with more and more jumping on the wagon and with the hedge fund making more and more dumb mistakes. And everyone is underestimating the redditors who, behind the emojis and crap talk, are actually pretty smart. Collectively they can, and did, cause this.. no need to invent other actors to explain it.
It's virtually guaranteed that this stock popped up on the radars of the funds who run momentum trading strategies. And it would be very weird for a lot of them not to jump on that bandwagon (at the very least because it's their mandate to do so).
I do not agree that Occum's razor is much help here.
AFAIK this is completely unprecedented. A crowd of whomever and bankers with clients money at stake, disagreeing so absolutely about fundamental values. A mass action making the third corner of a very strange triangle.
The explanation you offer (it's sensible, except it is not one hedge fund) is no more or less complex than a conspiracy. What ever is going on there are a lot of moving parts.
I wouldn't call it a conspiracy theory or call this out as an example of Occam's razor.
> Collectively they can, and did, cause this.. no need to invent other actors to explain it.
The thing is, people imagine this requires a lot of capital to pull off. How did WSB get so many people to invest so much into GME as to hit a hedge fund so hard? Do so many people really have that much money just to throw away? There is a need to explain this, and inventing other big actors does explain this much better for people.
This has been my question as well. Especially when you overlay the charts for gme and amc and bb, they move almost identically. I really struggle to believe it's all gressroots. This entire thing was astroturfed if you ask me.
word on the wall street bets street is that there are a couple of big whales that are long on gme,amc and they are trying to generate a squeeze. at this point in time it’s basically a battle of the trading bots with the whole world watching.
My experience of reddit is you can get a "wildly successful" meme or post, yet rarely that translates into more than a few thousand dollars of cash being spent on anything.
All the "wildly successful" kickstarters and stuff seem to have commercial backers lined up to make the social media buzz effect appear bigger than it is.
> All the "wildly successful" kickstarters and stuff seem to have commercial backers lined up to make the social media buzz effect appear bigger than it is.
This is interesting (and not at all surprising). Do you have a link to more information or is this just something you've noticed?
Well, what's the evidence of that then? I think the reddit behaviour explains what happened much better, and then everyone jumped on the train because of the groundwork they set.
The thing that moved the share price up was simple supply and demand.
From what I've read the short sellers had taken a short interest that exceeded 100% of the available GameStop shares.
But remember these are short sellers are selling something they don't yet own.
They are selling a promise to sell shares at some time in the future for given price.
When that future date turns up the they are forced into the market to buy shares at what ever price just so they can full fill their original promise to sell shares.
They have no choice in this as it was the contract they signed.
Now because shareholders weren't prepared to sell, that created massive buying pressure which then drove up the price.
I suspect where reddit played it's part is they spread the word that the shore sellers had taken up such a massive short position, adding to the buy pressure and effectively killing off any sell pressure, which then makes that short sell position even worse..
> From what I've read the short sellers had taken a short interest that exceeded 100% of the available GameStop shares.
When someone shorts a stock, it creates a new long position as well. The term is "short sell" because the borrowed shares are sold to someone else. The new buyer is also long.
Long interest is always greater than short interest for this reason. This is why short interest can be greater than 100%.
The facts didn't really matter in this pump, though. The running joke on Reddit was that no one was reading the "DD" anyway, just hopping on the bandwagon.
I don't know if you're right. But that definitely sounds like a good game plan for state to pretend to be on the side of the little guy, and do what they like to do...
Create a bigger, more sinister enemy...and you can have the crowds on your side.
Yeah, Matt Levine pointed this out in an article last week... the total buy and sell numbers for ‘retail investors' was actually pretty well matched (meaning retails investors bought and sold roughly the same number of shares)
This is not a just simple “Redditors keep buying shares” story
The media portrays it as "Redditors take on hedge funds". In reality, the volume indicates there's hedge funds, as well as a broad group of retail investors from outside Reddit, who have all jumped on the train. Hedge funds are on both sides of this.
A strat that quant funds use are algorithms that look for movement in the market. When they noticed an uptick in gamestop they bought in. When they buy in the price goes up which signals to other algorithms to also buy in. Thus raising the price and causing a tsunami.
robbomacrae|5 years ago
I think it really is the simple dumb story of a really bad bet by a hedge fund getting called out online and a with more and more jumping on the wagon and with the hedge fund making more and more dumb mistakes. And everyone is underestimating the redditors who, behind the emojis and crap talk, are actually pretty smart. Collectively they can, and did, cause this.. no need to invent other actors to explain it.
jcfrei|5 years ago
rantwasp|5 years ago
BoorishBears|5 years ago
worik|5 years ago
AFAIK this is completely unprecedented. A crowd of whomever and bankers with clients money at stake, disagreeing so absolutely about fundamental values. A mass action making the third corner of a very strange triangle.
The explanation you offer (it's sensible, except it is not one hedge fund) is no more or less complex than a conspiracy. What ever is going on there are a lot of moving parts.
I am not making predictions!
unknown|5 years ago
[deleted]
dataflow|5 years ago
> Collectively they can, and did, cause this.. no need to invent other actors to explain it.
The thing is, people imagine this requires a lot of capital to pull off. How did WSB get so many people to invest so much into GME as to hit a hedge fund so hard? Do so many people really have that much money just to throw away? There is a need to explain this, and inventing other big actors does explain this much better for people.
jnordonez|5 years ago
rantwasp|5 years ago
londons_explore|5 years ago
All the "wildly successful" kickstarters and stuff seem to have commercial backers lined up to make the social media buzz effect appear bigger than it is.
I suspect the same happened here.
ClumsyPilot|5 years ago
Judgmentality|5 years ago
This is interesting (and not at all surprising). Do you have a link to more information or is this just something you've noticed?
A12-B|5 years ago
jussij|5 years ago
From what I've read the short sellers had taken a short interest that exceeded 100% of the available GameStop shares.
But remember these are short sellers are selling something they don't yet own.
They are selling a promise to sell shares at some time in the future for given price.
When that future date turns up the they are forced into the market to buy shares at what ever price just so they can full fill their original promise to sell shares.
They have no choice in this as it was the contract they signed.
Now because shareholders weren't prepared to sell, that created massive buying pressure which then drove up the price.
I suspect where reddit played it's part is they spread the word that the shore sellers had taken up such a massive short position, adding to the buy pressure and effectively killing off any sell pressure, which then makes that short sell position even worse..
PragmaticPulp|5 years ago
When someone shorts a stock, it creates a new long position as well. The term is "short sell" because the borrowed shares are sold to someone else. The new buyer is also long.
Long interest is always greater than short interest for this reason. This is why short interest can be greater than 100%.
The facts didn't really matter in this pump, though. The running joke on Reddit was that no one was reading the "DD" anyway, just hopping on the bandwagon.
mclightning|5 years ago
Create a bigger, more sinister enemy...and you can have the crowds on your side.
lr4444lr|5 years ago
np_tedious|5 years ago
zz865|5 years ago
wdn|5 years ago
Retail investors are in no way able to move price.
gnarbarian|5 years ago
Nevermind this is incorrect.
cortesoft|5 years ago
This is not a just simple “Redditors keep buying shares” story
ihunter2839|5 years ago
mmahemoff|5 years ago
julianandjuliet|5 years ago
ogre_codes|5 years ago