[NA]Gamestock[NA]

denverpilot said:
...

The Massachusetts Secretary of State apparently is losing big money or someone in Mass was about to... proposing a 30 day halt in trading.

How a State Secretary of State is involved is beyond me. Follow the money if you dare.

I chuckled at the “protecting unsophisticated investors” schtick though. It’s the unsophisticated ones hammering the hedge funds on this one who are usually the folks who are unprotected from the hedge funds ripping them off. LOL.

https://www.boston.com/news/business/2021/01/27/bill-galvin-gamestop-trading-halt
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I am only guessing, but is there a chance that MA has a lot of State pensions invested in hedge funds that are now looking at bankruptcy?
 
Matthew said:
I am only guessing, but is there a chance that MA has a lot of State pensions invested in hedge funds that are now looking at bankruptcy?
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Gawd I'd hope they wouldn't be dumb enough to toss all the pension fund's "eggs into one basket". Hopefully they're better diversified than that.
 
SoonerAviator said:
Gawd I'd hope they wouldn't be dumb enough to toss all the pension fund's "eggs into one basket". Hopefully they're better diversified than that.
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They probably are, but even institutional investors can get lazy and get an out of balance portfolio.

I dunno - I'm not sure either why a SecState of any State would get involved unless he, his State, or someone worth a lot of votes is losing money.
 
Their clearing house, which they partly own, wouldn't clear their trades. Their balance sheet was the problem, so improving it was an attempt to get the ability to clear back. All that is just my understanding from what I have read. I don't have enough interest to research it myself. I don't understand why it was so successful, but I don't understand why someone would have bought Gamestops at over $50 either. I suspect it will delay its public offering, though.
 
So RH stopped buying but not selling. If you stop demand (which is what they did) and only have supply prices will drop. It drop to about $120 after hours the other night, allowing the hedge funds to cover their shorts at a lower price point. Definitely market manipulation in my opinion. And if they were forced to stop buying then this goes much higher than just a broker.

I know hundreds of traders (literally) and have heard of a bunch pulling their money from RH. Many are going to TastyTrade but wherever they are going, they are leaving RH. Can RH survive this debacle?
 
optionizerSS said:
So RH stopped buying but not selling. If you stop demand (which is what they did) and only have supply prices will drop. It drop to about $120 after hours the other night, allowing the hedge funds to cover their shorts at a lower price point. Definitely market manipulation in my opinion. And if they were forced to stop buying then this goes much higher than just a broker.

I know hundreds of traders (literally) and have heard of a bunch pulling their money from RH. Many are going to TastyTrade but wherever they are going, they are leaving RH. Can RH survive this debacle?
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Hopefully they don't survive.
 
Is there some appeal to online brokers like Robin Hood (which I had never heard of), over something like Ameritrade, which gets most of my brokerage business?
 
optionizerSS said:
Many are going to TastyTrade but wherever they are going, they are leaving RH. Can RH survive this debacle?
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How well capitalized is that newcomer? Sounds like out of the frying pan, into the fire.

Louis has another video about another small-ish brokerage who's adsding stop losses to customer orders that weren't requested. Same proem likely. Not liquid enough to cover their customer's trades for the mandatory two days for clearinghouse settlement.

Use a BIG broker with a BIG clearinghouse if you want your trades to actually take place, I guess is the best course of action.

If people didn't watch it, RH limited 50-some stocks that weren't all involved in memes / online speculation -- including General Motors. They were just flat broke.

After seeing that "Duuuude I started a brokerage" kid running the place in the video, I can't say I'm all that surprised.
 
FastEddieB said:
Is there some appeal to online brokers like Robin Hood (which I had never heard of), over something like Ameritrade, which gets most of my brokerage business?
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Some appeal to small investors by allowing lower initial investment minimums and things like fractional shares purchases for spendy stocks, and super low trading fees by utilizing that "flow based payment" scheme.

Works great until you need an extra billion to not be able to process customer trades for two days... Then everyone figures out you can't run with the big dogs.

Should it be that way? Dunno. Sure motivated their CEO to flat out lie about it on CNBC, though. Didn't want to admit he was a small fish.
 
FastEddieB said:
Is there some appeal to online brokers like Robin Hood (which I had never heard of), over something like Ameritrade, which gets most of my brokerage business?
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a non-useless app, free trades, feeling like you are part of something new and cool instead of just a faceless customer?

...I don't use it, I don't find cheap commissions a compelling reason to move my funds. Commissions have been nearly free for a decade or two.


The optics surrounding robinhood's lack of transparency should damn them. I have no idea if it actually will, however.

TDA's bungling was also annoying, and I may rouse myself to vacate an IRA I have rotting up there. Probably not though. :D
 
RH was marketed to millennials that wanted to try their hand at trading while at work or school. I would never put my money with them and told my kids to get theirs out of there. My step-son just initiated his transfer over to Tasty Trade today. My daughter has a fairly decent size account in my eyes but to her it's pocket change so she hasn't been in in a hurry to move hers. She has like 4 accounts with 4 different brokers, owns 6 rental units and is a financial advisor. She should probably tell herself to get her money out of there...lol
 
RyanShort1 said:
Any thoughts on this:

https://gizadeathstar.com/2021/02/of-reddit-robin-hood-and-gamestop/

???
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My thoughts:

1. I'm opposed to "hacking into his social media accounts, sharing his personal information online, ordering dozens of pizzas to be delivered to his home in the middle of the night, and texting his children with threatening and profane language."

2. I don't think "nosebag mandates" are capable of preventing us from "going into used movie vendors' stores looking for movies."

As for the main points of the article, I don't have much clarity. Perhaps they could be summed up with that old cliche, "there must be more to the story."
 
Palmpilot said:
My thoughts:

1. I'm opposed to "hacking into his social media accounts, sharing his personal information online, ordering dozens of pizzas to be delivered to his home in the middle of the night, and texting his children with threatening and profane language."

2. I don't think "nosebag mandates" are capable of preventing us from "going into used movie vendors' stores looking for movies."

As for the main points of the article, I don't have much clarity. Perhaps they could be summed up with that old cliche, "there must be more to the story."
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Which he points to in this link:

https://wallstreetonparade.com/2021...-et-al-have-made-tens-of-thousands-of-trades/
 
I think FCOJ is going to be the next big thing.
 
weilke said:
Yes, the options on it. If one were to gain inside information that someone was trying to short that market, there would be a great opportunity for a game-stop like runup.
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But both Duke brothers are gone.
 
weilke said:
Yes, the options on it. If one were to gain inside information that someone was trying to short that market, there would be a great opportunity for a game-stop like runup.
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"Once you have a man with no legs you never go back!"

Nauga,
who bruises on the inside
 
weilke said:
Yes, the options on it. If one were to gain inside information that someone was trying to short that market, there would be a great opportunity for a game-stop like runup.
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According to the article linked in Post #101, major short sellers were usually making their positions public, so no inside information was needed. That may change, however.

"Short sellers -- funds that borrow a stock and sell it, betting that the price will have gone down by the time they have to buy it to give it back -- have become the target. Such firms usually would unveil a new position to great attention, expecting to cast a cloud over the company’s shares. The scrum this year over GameStop -- in which retail traders went head-to-head with short-selling firm Citron Research -- suggests that could become a thing of the past, and in fact, Citron’s Andrew Left announced on Jan. 29 that the firm will no longer publish short selling research."​
 
optionizerSS said:
So RH stopped buying but not selling. If you stop demand (which is what they did) and only have supply prices will drop. It drop to about $120 after hours the other night, allowing the hedge funds to cover their shorts at a lower price point. Definitely market manipulation in my opinion. And if they were forced to stop buying then this goes much higher than just a broker.
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YES!

What Robinhood did was absolutely disgusting, and in my opinion is 100% manipulation. They can put whatever marketing BS on it they want "to protect our customers" or blame it on their clearinghouse and a "3 am call", but at the end of the day if you are physically disallowing the free trade (FREE MARKET) then how is that anything BUT manipulation? Make it fair then and don't let anyone trade, or at least stop the selling too..

Robinhood is trash and I really hope that people go after them in whatever legal means possible, this is not something that should be a recoverable event.. hopefully millennials wise up and move on to another app. Not to mention that what they're doing with Citadel is, in my opinion, completely wrong, if not illegal, at least morally bankrupt

Vlad Tenev sucks.
 
I'm also not sure why Google saved RH's skin and deleted the negative reviews that came in.. but that's a whole different issue.
 
Palmpilot said:
According to the article linked in Post #101, major short sellers were usually making their positions public, so no inside information was needed. That may change, however.
.
.
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In case you didn't catch it, a 'short squeeze' on orange juice futures was a plot element in a 1983 Eddie Murphy Comedy.
 
yeah but Billy Ray gave them some seed money when he was reincarnated as an African prince
 
Palmpilot said:
According to the article linked in Post #101, major short sellers were usually making their positions public, so no inside information was needed. That may change, however.

"Short sellers -- funds that borrow a stock and sell it, betting that the price will have gone down by the time they have to buy it to give it back -- have become the target. Such firms usually would unveil a new position to great attention, expecting to cast a cloud over the company’s shares. The scrum this year over GameStop -- in which retail traders went head-to-head with short-selling firm Citron Research -- suggests that could become a thing of the past, and in fact, Citron’s Andrew Left announced on Jan. 29 that the firm will no longer publish short selling research."​
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It's public knowledge how much of the stock is in short status. There's no magic or insider trading. Check this yahoo page for Tesla:

https://finance.yahoo.com/quote/TSLA/key-statistics?p=TSLA
 
weilke said:
In case you didn't catch it, a 'short squeeze' on orange juice futures was a plot element in a 1983 Eddie Murphy Comedy.
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Shorting was a plot element but a 'short squeeze' was not. It was actually a 'long squeeze'.
 
asicer said:
Shorting was a plot element but a 'short squeeze' was not. It was actually a 'long squeeze'.
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asicer said:
Shorting was a plot element but a 'short squeeze' was not. It was actually a 'long squeeze'.
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Ah, close enough. They exploited knowledge they had about their counterparts position and goaded the market at large into a buying frenzy. Short/long doesn't matter, its the psychosis that counts.

The 99% gamblers in the commodities options market give the 1% legitimate businesses who hedge their input cost a bad name.
 
ebetancourt said:
Their clearing house, which they partly own, wouldn't clear their trades. Their balance sheet was the problem, so improving it was an attempt to get the ability to clear back. All that is just my understanding from what I have read. I don't have enough interest to research it myself. I don't understand why it was so successful, but I don't understand why someone would have bought Gamestops at over $50 either. I suspect it will delay its public offering, though.
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That is what I gathered from this episode of Planet Money.

https://www.npr.org/2021/01/25/960454567/cant-stop-gamestop
 
Tantalum said:
I'm also not sure why Google saved RH's skin and deleted the negative reviews that came in.. but that's a whole different issue.
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$$$?
From Jeff Brown's "The Bleeding Edge" newsletter (free daily).

"But the Robinhood backer that really makes me chuckle is CapitalG – formerly known as Google Capital.

Google’s private equity arm invested in Robinhood’s Series D round. And GV (aka Google Ventures) invested in Robinhood’s first two seed rounds back in 2013."
 
^my point was partially tongue-in-cheek.. however this whole thing illustrates that the free market really is not that free at all..

If RobinHood did not have the capital to properly execute their user's trades that does not give them the right to manipulate the market

But in regards to the point about why people would have bought GameStop at an elevated price, a ton of traders today trade strictly based on charts and graphs without an actual interest or knowledge of the actual product of said company.. which honestly I see nothing wrong with, human behavior is so hard to predict anyway and there is so much shady stuff that goes on behind the scenes that we'll never be aware of that you might as well just base it off raw analytics
 
@Tantalum

The failure of RH was to publicly state the root cause of why they had to stop purchases of multiple stocks. The market "manipulation" was the fundamental lie/cover story the CEO stated.
Stopping purchases due to clearing house rules, is legit.

Tim
 
RyanShort1 said:
Any thoughts on this:

https://gizadeathstar.com/2021/02/of-reddit-robin-hood-and-gamestop/

???
Click to expand...

Has an error right up top. The shorts got out just fine on the dip — whether natural or created by those limiting purchases while allowing sales, needs more analysis — but “Goliath” wasn’t harmed much by this.

Tantalum said:
I'm also not sure why Google saved RH's skin and deleted the negative reviews that came in.. but that's a whole different issue.
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They gave up and it’s back at a one-star rating now. As it should have been. Why Google did it? Who knows. Hubris mostly is my guess. They don’t get their usual 30% cut on free apps — a contentious battle currently ongoing at both App Stores, Google and Apple. Apple has even been documented to keep their cut on scam apps that end up being refunded to the in-app-purchase buyer, but the fraud transaction amount refunded is the fraudulent amount MINUS Apple’s fees... which of course ostensibly were paid by all app developers so Apple would keep the fraudulent apps OUT of their walled garden.

As far as the rest of his article, seems like it can be summarized in the old saying, “Follow the money [if they’ll let you].

But the average investor downloading a “hot new brokerage app for the little guy” has no time nor inclination to look up how well capitalized their spiffy new brokerage is, nor who they get that capital from, and is it a loan, etc... they think anybody who can claim to be a broker can’t possibly be close to being... broke. Or at least broke enough they can’t handle a highly volatile day with lots of trades.

They also won’t look up where said broker actually makes their money when the trade fees are waaaaaaay too low for the brokerage to see the little investor as their primary source of income.

They just download the app and hit “trade”... it’s all supposed to be that simple in the Amazon world of instant purchases and gratification while sitting on the can, right? Heh.

Unfortunately it is anything but simple. There’s middlemen piled on top of middlemen to buy a stock from a company, and piles and piles of rules on all of them. And they’re all constantly seeking an angle around those rules.

What we all WANT is a simple escrow service. I send money to escrow, company sends stock certificate (electronic these days), escrow releases to both, charging a small fee for doing it.

But that definitely isn’t how it works.
 
Funniest line of the day...

"Bezos must have made a **** ton on GME and AMC to be able to retire so young."
 
All those people who were unable to buy GME can now buy at a very much better price, so they win. Period.

I wonder how many on this board who are complaining have actually bought GME after the halt? With a bid ask spread of $0.40, the trading desk that is paying RobinHood for the order flow is making a killing off anybody who simply looks at the commission they are paying RobinHood.

With one cent spreads common on regular, profitable companies, forty cents is Robbery, by Hoods.

The SEC investigation of RH will focus on their internal financial strength relative to their exposure to their customers risk, and providing margin accounts to investors without the net worth to make good on bad bets.

I had a broker account for years before I was allowed to purchase without settled funds in my account, and much more net worth before they offered margin loans.

Robbin Hood has allowed a 17 year old guy to make investment commitments that went a million dollars into the red, and committed suicide. Robin Hood lost big on that one, and they are trying to avoid a bigger calamity. That was about a year ago, so old news, not interesting to today's whiz kids with money to gamble with in their IRA's.

To repeat, how many here have bought GME since the stop went off? And how for up are you on the investment?
 
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