Stocks

[Ergel]

Can someone please explain in laymen's terms what happened/is happening with gamestop?

Pretty please 

TIA

https://twitter.com/stoolpresidente/status/1354190355013521412

[stooges44]

Rich people bet a lot of money against the  growth of the stock so a bunch of Reddit idiots all decided to invest insane amount of money into the stock so the Rich people lose their bet and money and that is the explanation

So where does "short" come in?

[AsherO]

So where does "short" come in?

The rich people who will lose their money are short on these stocks, they bet against them and will get squeezed as the stock rises.

[madhocker]

I like how we pretend this hasn't been going on forever.

Of course this has been going on forever.

The whole stock market is a big pyramid scheme based on supply and demand. There is no sense in valuing a company at a 20x multiple other than the fact that others are willing to buy it at that level. So why is it wrong to push the stock up to a 1000x multiple?

[aygart]

Very much so
The printing press was invented 600 years ago. The internet was invented 20 years ago. It's orders of magnitude different.
Maybe yes, maybe no. The politicians are already talking about it, but ultimately there is always another jurisdiction. To a large extent, the internet is an uncontrollable wilderness. It's interesting that the Russians never came up with the idea of destroying the West with Financial manipulations.

The internet is only the most convenient current medium

[aygart]

NBC NEWS: Short-sellers lost $14.3 billion today alone on GameStop stock, according to S3 Partners

Many lives destroyed

When short sellers push a stock down it hurts many more small retail investors than when the short sellers lose. Many more live much more destroyed.

[Euclid]

When short sellers push a stock down it hurts many more small retail investors than when the short sellers lose. Many more live much more destroyed.

+1
Small retail investors are much more likely to be long.

[Shmulie]

How are the brokerages allowed to legally limit people from buying certain stocks

Robinhood, Interactive Brokers restrict trading in GameStop stock and options

https://www.cnbc.com/id/106831589?view=story?__source=androidappshare

[Randomex]

So where does "short" come in?

To "short" a stock means you borrow the stock from A and sell it to B. If the stock's price then goes
down, when you buy the stock again to return it, you pay less than you gained by selling it, so you're
left with a profit. If the stock's price rises, though, you'll need to pay more than you got by selling it.

[Definitions]

How did wallstreetbets make it go up in value?

[Randomex]

And now I've found this:



https://twitter.com/sirtur2/status/1354655050778468352

[Randomex]

(Being "long" a stock simply means you bought it and expect its value to go up.)

[shwarmabob]

https://twitter.com/fchollet/status/1354502571243626497

This is so stupid, it's hard to believe that some people actually believe it

[Randomex]

"If group of apes stay strong," hence:

[Euclid]

This is so stupid, it's hard to believe that some people actually believe it

It's satire.

[Definitions]

How did wallstreetbets make it go up in value?

Too general of a question. I'll have to read a little how the stock market works.

[lakewood34]

Their mistake was using put options that they were required to disclosed publicly. Nobody would've known if it was traditional short sells.

I saw a theory that this was Elon Musk taking revenge at Melvin for shorting TSLA loudly a while ago.

I disagree with you
buying a put your loss is limited to what you paid for it
with short selling the stock the loss is not capped

[Ergel]

https://twitter.com/sirtur2/status/1354655050778468352

This isn't true. You could sell more bananas than exist in the world, the same way they sold more GME - you borrow it from the person you sold it to and sell it again

[Abey]

How are the brokerages allowed to legally limit people from buying certain stocks

Robinhood, Interactive Brokers restrict trading in GameStop stock and options

https://www.cnbc.com/id/106831589?view=story?__source=androidappshare

The extreme volatility can leave them without coverage to pay for trades. Actual settlement can be 1-2 days later

[Abey]

This isn't true. You could sell more bananas than exist in the world, the same way they sold more GME - you borrow it from the person you sold it to and sell it again

Hence the epic squeeze when retail buyers refused to sell