Hedge funds shorted more than 100% of all shares of gamestop, to do this that means they had to sell more shares than actually existed.
The hedge funds never actually owned these shares to begin with because they were short selling so they never actually paid for them.
Redditors saw this and decided to buy up all these shorted shares to gamestop a company that wasnt failing that the hedge funds would then be forced to buy back as they never actually owned the shares.
The beauty of this is if you knew what to look for you could’ve seen this coming too. It isn’t mystical, it isn’t magic. They made these billionaires pay back more than what they basically stole by being greedy, this is a good thing.
Let me explain a bit
rich hedge funds have the ability to sell stocks they havent paid for yet that other people actually own and then pay for them after a certain amount of time. they can sell these stocks trade them whatever but they will eventually have to buy them back.
So they shorted gamestop shares from 20 dollars all the way down to 3 dollars, meaning they borrowed shares to then massively sell.
they sold shares at like 20 dollars and then 18, etc. and because when investors see massive amounts of shares being sold they get nervous and then sell their shares which drives the price of the stock ever further down.
so they took something worth 20 that they sold for 20 dollars and all its downward prices and instead of paying for it at $3 dollars they thought theyd CONTINUE to short the market, meaning they kept driving the prices down because apparently this obscene amount of money wasnt good enough.
Redditors who dont say the stock market is magic and mystical astrology saw this very obvious evidence that these hedge funds would be forced to buy back all these fucking gamestop shares and decided to drive the price of these shares up knowing that the hedge funds would then be forced to buy back the shares they have yet to pay for at increasingly wild prices.
what they were looking for was over 100% of all stocks shorted on a company that wasnt even failing or in complete disarray
they used this knowledge to bring stock that was 20 dollars brought down to $3 all the way back up to $140
the hedge funds still have to pay for all of those shares they never technically even owned in the first place which these redditors knew so they held onto these stocks they bought in a company whose shares were oversold.
INSTEAD of acknowledging this they decided to have media campaigns lie and make the stock market look even more mystical and crazy to people who dont know shit about finance so that your average folks wouldnt catch them in the act of just getting a fucking 2 billion dollar bailout for being greedy fucking pieces of shit.
They also dont want your average person to KNOW they do this shit especially when they drive shares so deep into the ground ($3)
TL;DR: Every time you call the stock market magic and mystical and ooo makes no sense, you pretty much allow these motherfuckers to get away with robbery of the average person (given a government bailout is paying for this)
Understanding how these things happen and knowing what to look for allows people to work together and not only stop it but rob back from the billionaires when they pull this shit.
financial illiteracy isnt helpful to anyone.
my point about financial illiteracy isnt to make anyone feel bad it’s more saying you shouldnt repeat the myth that these things dont make any sense especially when something like this happens because very set laws and rules allowed for this to happen and mystifying that only benefits hedge funds who dont want people catching them doing this.
Hi hello yes, OP? Hi, hello… thank you. Holy fucking fuck, thank you. Thank you for explaining what the fuck was going on so simply
I still don’t understand and may need flowcharts
Shorting is when hedge funds sell a stock that they don’t actually own. Basically, Bob borrows Ted’s bike and pawns it. Now Bob, legally, has to return the bike to Ted so at some point he has to buy the bike back. Bob makes money by wagering that the pawnshop won’t be able to find anyone willing to buy the bike and he’ll be able to buy it back cheap, return it to Ted, and pocket the difference.
Now, the one thing you need to the know about the stock market is that it is run by PEOPLE. And people are panicky. It really doesn’t matter how “well” a company is doing if its stock is being sold off en-mass. People panic, think that somebody knows something they don’t, and sell their stock/refuse to buy.
The hedge funds basically bought a very specific kind of bike and pawned all of them. They bet that people would see a lot of a specific brand of bike at the pawn shop and refuse to buy because there MUST be something wrong with that brand right? Why else would a ton of them be in a pawnshop? Better ditch your own right now or risk the wheel falling off or something.
So, Gamestop’s stock is in the toilet and the hedge funds are about to make a shit ton of money.
Enter reddit.
Upon seeing that Gamestop’s stock is artificially low because of hedge fund dickery, one forum decides to start buying Gamestop stock out of spite. Buying raises the stock price. The Redditors raise the price enough that the hedge funds start panicking. The time when the HAVE to buy back the stock is coming due and now it is WAY more expensive than they sold it for. Its like Bob walking pass the pawnshop and seeing the bike’s price is now three times what he sold it for. Bob panics. Bob makes a horrible decision. He complains to everyone about this. EVERYONE.
Hedge funds were on tv whiny and attracted the attention of people who REALLY DON’T LIKE THEM. People like Elon Musk whose company has been targeted by shorting before and has no problem finding the cash to buy the inflated Gamestop stock and have the social media platform to shine an even bigger spotlight on this. Now other people outside of the Reddit forum are joining in because they smelled blood in the water.
Remember, the hedge funds HAVE to buy these stocks back. No matter what, come the due date, they will have to purchase the stocks at whatever price they are listed at if they haven’t bought them back before then. Even if that price is a hundred times what they paid. Basically, if Bob has to sell his house to get that bike back to Ted then that’s what he’ll have to do. Considering one hedge fund required a bailout already over this, its looking like a lot of people will be selling their houses over shorting Gamestop stock.
That bike metaphor is literally the first time I’ve seen the concept of stocks explained in a way that makes any sense.
My roommate recently came home pale-faced, like he’d seen a ghost. More like witnessed a massacre. Mass-firings were just done at his company. His job, he’d been assured, was safe. All of his coworkers weren’t so safe, and he had to get texts and phone calls from his work-friends, people he’d worked alongside for years, people he‘d gone out to have drinks with, learn they were no longer employed. To say he had survivor’s guilt would not be hyperbole.
Was this because the company had fallen on hard times? The pandemic has been rough for a lot of industries. No, actually, the company had turned a very nice profit both last year and previous, even in such a troublesome market.
The problem was, you see, the company’s stock price hadn’t risen quite as high as had been projected. They’d made money, sure. Quite a lot of money, in fact. But too many people had projected, i.e., betthe company would do better.
How did the company offset this “loss”? Easy: fire people. Quickest and easiest way to pad the numbers.
No but you don’t understand stock had fallen a percentage point! There was no other way!
We see it all the time. Hugely successful companies reporting ‘record-breaking’ profits then fire huge segments of their workforce - the very people responsible for those record-breaking profits. Why? The money “saved” on personnel costs can boost the stocks even higher!
If your company is struggling, not turning a profit, losing money, people expect layoffs. But to work hard, be successful, your company churning along strong and healthy, and youstilllose your job? For what? Because half a percentage point that was dictated by speculation, guessing, by gambling that things would go up or down a certain amount on a graph of rich-people feelings?
I wonder how next year’s speculations will be affected with the information that the company laid off a lot of the peopleresponsiblefor last year’s profits? Probably not much because the workers are just the components at the company; it’s the leadership that drives the ship, that makes the successes.Those leaders whose bonuses are coincidentally decided by, among other things, the stock price.
Companies are no longer grounded in reality.
“Don’t learn about money, kids. Don’t learn about economics. I know cosmic horror usually focuses on how the biological or astronomical sciences will expose you to the terrible true face of god and you’ll go mad, clawing out your eyes as things that Cannot Exist destroy your life and kill you, but that’s stupid. Biology and Astronomy follow rules.”
“Economics is the tongue of devils and madness and it turns mortal men of moral character into alien monsters incapable of comprehending even the most basic of human connections.”
It’s important to recognize that this isn’t horror, it isn’t insanity, and it isn’t really about companies no longer being grounded in reality.
Sure, it might be comforting to look at business decisions as making little to no sense or being the domain of nightmares, but that doesn’t actually arm you with any useful knowledge in this fight. It just teaches you to treat these things like incomprehensible boogeymen.
You *should* be studying economics. And politics. And the labor theory of value. Because…
Capitalism is highly rational, highly biased, and completely amoral.
Human beings love to find optimal solutions to any problem. The problem capitalism is trying to solve is how to accumulate and centralize the most wealth and power. The kind of behavior described above is completely rational if you understand that capitalism is about meeting that requirement for profit and growth.
It doesn’t care about me, it doesn’t care about you; it doesn’t care about anyone. You can’t make a capitalistic system moral because it does not consider moral concerns when trying to optimize for profit. Literally anything you can do that increases profit is encouraged, regardless of what harm it might do.
These things aren’t alien horror, they’re completely understandable and predictable. And we need to understand them if we’re going to dismantle this kind of system and replace it with something that doesn’t harm people.
There’s a quote that came out of the Ford Pinto Memo:
“If a corporation can make $99 by killing no one, and $100 by killing a thousand people, then a thousand people are going to die.”
I’ve talked about constraint programming. But today I learned that a automatic stock exchange bot accidentally crashed the stock market for 20 minutes, by selling 4.1 billion dollars worth of E-minis in a matter of seconds, because it didn’t have a limitation on how fast it would sell, and it overloaded other automated systems. The total damages are estimated at a trillion dollars.
Below is a video by StandUpMaths on YouTube that describes it in a more approachable manner.
The London based programmer was arrested by the Unite States department of Justice (because it was found he intentionally tampered to buy stocks during the crash)
If you could sell your soul, what would it’s market value be? They could be traded split and bundled like stocks. Imagine what would happen if you built a whole economy based on buying and selling souls.
Personally, I don’t think there is anything illegal about this. How is what they did on reddit any different than someone on CNBC making recommendations to the people to invest in a certain stock? Taking stock advice for any motive isn’t illegal, and neither should be giving greedy hedge funds a taste of their own medicine.
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Hello! Sorry for not posting for too long. I’ve had plenty of life events that took me away from Tumblr for a bit. Will get back to regular posting soon.
In the meantime, how is everyone? Harold
It is a delight to see you back, Harold! I hope life has been treating you Well.
Hello Johnathan.
Certainly is a pleasure hearing from you again. ;-)
Harold, Johnathan! Good to see the men back together again
Hey guys, I know I don’t post much in this blog anymore and I am not exactly sure who will see this but I’m posting this because today is the Philippine Presidential Elections and, just like what other people here are already saying, we’re fighting for our lives right now.
We are fighting against the return of dictatorship in the country. We are fighting against the continuation of corruption and injustice. We are fighting for a better future. We are fighting, so that we may finally know peace.
Today,multiple issues regarding the elections have come up. Vote-Counting Machines (VCMs) “malfunctioning”, SD cards missing, people getting PAID for voting for the dictator’s son and his party, and more. Even the commission in charge of ENSURING FAIR ELECTIONS is failing to fully understand the grasp said issues, wasting people’s time and votes.
If you do find this post and read it, all I ask is that you share the news about the Philippines. Anything about today (May 9, 2022), about Halalan 2022/PH Elections 2022, about BBM and the Marcos Family, about Leni Robredo, Kiko Pangilinan, Chel Diokno and the rest of Robredo’s senatorial slate (+ Neri Colmenares),
and if this is inspires you to learn everything else, then please do.
We are asking for your help, not in votes, but in sharing what is happening here to the rest of the world. Whatever happens, whatever the results are, we want the whole world to see what is going on. (But thank you to the foreign news outlets who have been speaking on this).
All the Filipinos are asking for is a fair government, where lives are recognized and uplifted. We cannot be kept in the dark again, we have had enough.
And if we need to meet in EDSA once again, then so be it.
We need to do this before any possibilities of media censorship again.
I personally don’t want it to reach EDSA once again, but if it comes down to that, I hope many people will pull through.
I found this a while back and it contains some martial law related articles and readings for those interested.
We definitely need to talk about this as much as we can before they take that right from us. Let us hope talaga that media censorship will not happen this time.
Thank you so much the link to the Martial Law Library. Definitely signal boosting it for others to see!
On top of all of these, the current administration skyrocketed the nation’s debt to Php 12.68 trillion (US$ 242.51 billion). And now, BBM, the son of the late dictator whose family hasn’t returned the Php 328 billion ill-gotten wealth and unpaid taxes from the Marcos patriarch’s dictatorship, is leading the presidential elections.
Links regarding the ill gotten wealth (would add more later)
some tags that gives more context to whats happening rn
——-
tl;dr
If you didn’t read it throughout, thats okay, however please take some infomartions if you can any help is good enough. Specially with the links no need to overload yourself, even just an introduction is good enough.
Thank you so much for taking your time
UPDATE: Inquirer.net has published an article stating that the Philippines is being dropped by other countries in their investment lists (just like what other’s have been saying; check the post above!)
As of May 11, 2022 (1:30 PM), this is the latest update from the Philippine Stock Exchange on Twitter:
My roommate recently came home pale-faced, like he’d seen a ghost. More like witnessed a massacre. Mass-firings were just done at his company. His job, he’d been assured, was safe. All of his coworkers weren’t so safe, and he had to get texts and phone calls from his work-friends, people he’d worked alongside for years, people he‘d gone out to have drinks with, learn they were no longer employed. To say he had survivor’s guilt would not be hyperbole.
Was this because the company had fallen on hard times? The pandemic has been rough for a lot of industries. No, actually, the company had turned a very nice profit both last year and previous, even in such a troublesome market.
The problem was, you see, the company’s stock price hadn’t risen quite as high as had been projected. They’d made money, sure. Quite a lot of money, in fact. But too many people had projected, i.e., betthe company would do better.
How did the company offset this “loss”? Easy: fire people. Quickest and easiest way to pad the numbers.
No but you don’t understand stock had fallen a percentage point! There was no other way!
We see it all the time. Hugely successful companies reporting ‘record-breaking’ profits then fire huge segments of their workforce - the very people responsible for those record-breaking profits. Why? The money “saved” on personnel costs can boost the stocks even higher!
If your company is struggling, not turning a profit, losing money, people expect layoffs. But to work hard, be successful, your company churning along strong and healthy, and youstilllose your job? For what? Because half a percentage point that was dictated by speculation, guessing, by gambling that things would go up or down a certain amount on a graph of rich-people feelings?
I wonder how next year’s speculations will be affected with the information that the company laid off a lot of the peopleresponsiblefor last year’s profits? Probably not much because the workers are just the components at the company; it’s the leadership that drives the ship, that makes the successes. Those leaders whose bonuses are coincidentally decided by, among other things, the stock price.
