Is Gamestop the end of finance / markets / IB

Based on what happened, it seemed that the market swing for Gamestop was legal??? and that people can rally like that for stocks like gamestop, amc, etc. to go up because of the inflated market demand. 

This has single handedly brought billions of capital to the hands of the "poorer" 99%, and enough capital to manipulate the markets more. What's to stop them from picking more stocks, and using that capital to generate artificial demand to pump up more stocks? Am i missing something, or is this going to just get to a point where stocks are no longer based on their profitability and earnings, but on how high on r/wallstreetbets it gets? Where's the loophole where I'm mistaken where these r/wallstreetbets can't just do this for every stock out there

25 Comments
 

No you fucking nitwit, it's the end of stupid & illegal buyside endeavors until it's out of collective memory. For the next decade+ there will not be another stock that is naked shorted 100%+.

 

Eh, I have no doubt it'll happen again, but not under the current set of laws/regs & while it maintains its place in public memory. Someone, someday will think they can outsmart the world again

 

Pour one out for the bankers stuffed in a room 15 hours a day with no shoot at getting these $gme, $bb, $amc trades approved by compliance. 

 

can someone explain the stock pricing, why doesn't a company lets say APPLE who have been performing well go shoot up or is at a higher price, compared to these companies who have no value

 

People are buying a ton of GME and other stocks like it because they are being shorted a ton by HFs (and Apple is not shorted by nearly anyone), and if the price increases enough those short sellers will be squeezed out of their positions, hence the term short squeeze. When their short positions are squeezed enough, the HFs or whoever has to buy shares to cover the margin they took out to hold a position if there’s a margin call, or simply to satisfy whatever commitments they have in order to hold their short position. This will then further jack up the stock price, so it’s a bit of a feedback loop where the redditors jack up the price by buying shares, which then results in a short squeeze, which then results in the HFs having to buy shares, which all results in the price increasing. This isn’t a trade based on fundamentals at all, it’s simply realizing who is carrying too much risk and how to capitalize on that. The crazy part is that a bunch of redditors are doing it to institutional investors, where in most circumstances those HFs are supposed to be the guys offloading risk to the village idiot, whoever that might be at a given time.

 

Hey,

Equity markets are made for firms to be able to raise capital.If people want to save shitty firms because they associate them with childhood memories, then shitty firms will be saved. 

Interesting idea : Stimulus-> Robinhood->Gamestop/AMC/Carnival etc... -> More jobs for those that need them -> economic recovery. 

In my opinion, the market is doing exactly what it is supposed to do. The tech bubble was a bubble and it popped. But it served it role in enabling tech firms to raise capital and get exposure. Though tesla and a lot of EV/Hydrogen/Renewables are overvalued, people want to give capital to firms that have projects they deem useful to society. In fact, the degree to which a stock is overvalued reflects how much people like the project and the ideas to an extent.

Honestly, if the only thing you can do to justify and investment is dividing one number by the other and say this is low then I don't see why my 8 year old sister couldn't do your job. Its an art, not a science. I know people who can net 100% annualized by looking at charts and high-flying PMs who can't explain to my father why they haven't been able to beat the S&P in the past 3 years.

Sir, this is casino.

67 shares @ 20.54

 

None of these firms get this capital unless they issue a follow-on round of equity at the newly inflated price....

Now if you’re an employee with options, then, yeah you’ve made a nice payday. 

 
Funniest

yeah this is the end of IB and every other job in finance. my bank just fired EVERYONE

 

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