Stock Market - Market Manipulation Exposed Worldwide by WallStreetBets!

BananaRepublic

Market manipulation and colluding to manipulate the market are illegal, but I guess it’s hard to deal with so many private investors doing it. 

EthicsGradient

Deleted_User said:

Like it or not, by inflating the price all they are doing is screwing the short sellers who have to buy at some point when their positions end - hence why holding shares is their current run. Plenty of people with small investments on the sub have sold their shares and cashed out.

That would only be true if all the Redditors bought at once, and the only buyers after that were the short sellers. But in reality, the price continued to rise, and the buyers then included more robinhood etc. users. We know that because they complained they were unable to buy at the inflated price. So the Redditors are also screwing the robinhood users - whose only way out will be to drum up enough enthusiasm that other credulous people will pay an inflated price.

itwasntme001

You got to think of the whole situation as entertainment.  Those who are taking part are having a lot of fun.  Many know full well that they will suffer big losses but they don't care.  It is a co-ordinated attack beautifully done.  You got to respect that.

Ethics is down to subjectivity.  I can't see how regulators will go after all or most of them.  Maybe they will pick on one or two poor suckers and make a case out of them.  But if that were the case I really hope there is backlash and uprising by the "little guy".  I can't see how this "manipulation" is any different to hedge funds doing what they do, FED doing what it does and politicians doing what they do.

Civil unrest is our only hope for a fairer society.

talexuser

I've seen a few posts where people are not interested in a quick buck, but still aggrieved over the credit crunch bailouts and lack of reform thereof, and were quite prepared to put a few or more dollars in just to give the hedge funds a bloody nose without expecting anything back. Naturally some will try and pump and dump, and once something like this starts its very hard to control. Still whatever the logical reasons are, it looks like the establishment protecting itself, which will not go down well with the little guys.

Thrugelmir

talexuser said:

Still whatever the logical reasons are, it looks like the establishment protecting itself, which will not go down well with the little guys.

Little guys shouldn't play with real guns unless they are aware of the potential consequences. Turn the stock market into a casino then losing your shirt is a real possibility. Only invest as much as you can afford to lose.  

itwasntme001

Thrugelmir said:

talexuser said:

Still whatever the logical reasons are, it looks like the establishment protecting itself, which will not go down well with the little guys.

Little guys shouldn't play with real guns unless they are aware of the potential consequences. Turn the stock market into a casino then losing your shirt is a real possibility. Only invest as much as you can afford to lose.  

How is what the little guy doing any different to hedge funds, fund managers etc?  It is all one big casino that can be played many ways.  There have been hedge funds and fund managers who have blew up in the past.  The difference is the little guy in this case doesn't care about losing money.

When you have over 1m wsb guys buying just £100 worth of GME shares, given the heavy short, it will move the market.  Last I checked the number of wsb reddit followers is over 7m.  I am pretty sure the average size of the GME bets pp is more than £100.  But a figure they are happy to lose for the sake of causing chaos for the hedge funds.

It's all in the game yo.

DiggerUK

This rising up of the poor wretched masses story is a lot of gob.
It's  a lot of overplayed k'nobheads sitting at home on furlough..._

https://www.ft.com/content/0e3abab6-86a6-4a0a-9d07-d0d69b0daba8

"If you have spent any time following financial news on social media this week, you will have been told a fabulous story. Ordinary people have had it with establishment Wall Street. They’re furious at the way the banks were bailed out in 2008. They’re angry about the amount of money made by the hedge fund industry. They have had enough of inequality, crony capitalism and a world where there’s one rule for the rich and another for the poor. They’re taking action. That action comes in the form of mass buying of shares that the hedge fund industry has bet against. It has all been loosely but effectively co-ordinated on social media chat groups — the key Reddit group, r/ wallstreetbets, has 4.8m users. And it has moved the price of r/wallstreetbets’ target stock — a failing computer gaming shop chain, called GameStop — up by more than 1,000 per cent this year alone. It’s very clever. Once you’ve got the share price rising even a little, you force those who have bet against it — by borrowing some shares, and hoping to sell and repurchase them more cheaply — to buy them, too, to cut their losses. This pushes the share price higher very, very fast. Rinse and repeat. That means pain for the hedge funds or “Wall Street” (their trading losses are around $5bn so far); pain for the likes of share-dealing platform Robinhood (which provides a “free” trading service that many of the retail traders are using); and piles of money for the little man. How’s that for raging against the machine? 

It’s all nonsense of course.  As a fightback against Wall Street, it is hopeless. The money that banks and fund managers make comes from trading commission and fees — not from their investment performance. If they relied on that, there wouldn’t be a rich person left in New York or the City of London. As a way to shift wealth, it is equally useless. At some point, fundamentals-based valuations will reassert themselves and the many small investors left in the game will lose a terrifying amount of money. I have no idea what GameStop is worth but I know that, unless the share price is a hyperinflation canary, it most certainly isn’t $13.5bn. Pushing up the price can’t change the value. 

The truth is that, despite the passionate open letters on Reddit urging users to take a “once in a lifetime opportunity to punish the sort of people who caused so much pain and stress a decade ago”, the social justice story is probably just that: a story. The real drivers here — and in most market action, by the way — are the availability of money and the longing for more money. 

According to a new UK survey by Find Out Now with Boscobel & Partners, 400,000 new accounts have been opened on the main trading platforms in the past year. The survey also found that these account holders are 50 per cent more likely to get investing ideas from social media (“meme investing”) than established investors; they have a higher risk appetite (25 per cent more likely to buy individual stocks and with a tech bias); and their other hobbies tend to include video gaming and online sports betting. 

They also have plenty of time. Around 10 per cent of established investors in the UK are furloughed, and 19 per cent of new investors are. No wonder 20 per cent of the trading volume in the UK and US last year came from the retail investors. In the dotcom era, you had to give up your job to become a day trader. Not any more. There’s a large group of people across the world with spare cash, spare time and a preset gambling mindset. Throw in social media Fomo (fear of missing out), Reddit’s mantra of Yolo (you only live once), and a bull market driven by Covid stimulus, and the GameStop saga looks inevitable. It’s not about The Man. It’s about the money. 

Still, there is one story being told here that may endure. There are new investors in the market — and they are learning that, en masse, they do have power. Right now, this means they get to have a lot of fun (as do all of us watching — the whole thing has cheered up my lockdown no end). But there could be more to it in the long term. These investors might remind corporates, platforms and perhaps even fund managers where the money that flows so neatly into their pockets actually comes from. They might also join together to make stands on issues that really matter. Imagine, for example, that a group called r/shareholderdemocracyaction on Reddit had noticed that GE chief executive Larry Culp was in line for an outrageous $47m bonus if the company’s share price hit $10 — and urged small investors to prevent it doing so. That would send a genuine message about social justice expectations to grotesquely overpaid CEOs everywhere. 

Or imagine if 4.8m investors turned up at GE’s next virtual AGM to complain about the $230m Mr Culp will get if it goes to $16.68. This might be hoping for too much. 

But the idea that small investors have power — and they can use it to make companies behave as they want them to — is not. The financial industry will hope that the new energy of the locked-down retail investor doesn’t last beyond their first Covid jab. But it might be better for the rest of us — and for capitalism — if the energy is sustained, and used, in better ways."
MSW FT 30/01/2021

itwasntme001

DiggerUK said:

This rising up of the poor wretched masses story is a lot of gob.
It's  a lot of overplayed k'nobheads sitting at home on furlough...

https://www.ft.com/content/0e3abab6-86a6-4a0a-9d07-d0d69b0daba8

Who said it was the poor?  It is middle class kids who are seeing the establishment getting away with corruption for so long.

It is a changing of the political landscape shifting the new generation towards an anti-authoritarian mentality.

DiggerUK

itwasntme001 said:

DiggerUK said:

This rising up of the poor wretched masses story is a lot of gob.
It's  a lot of overplayed k'nobheads sitting at home on furlough...

https://www.ft.com/content/0e3abab6-86a6-4a0a-9d07-d0d69b0daba8

Who said it was the poor?  It is middle class kids who are seeing the establishment getting away with corruption for so long.

It is a changing of the political landscape shifting the new generation towards an anti-authoritarian mentality.

Oh stop juicing your underwear..._

itwasntme001

DiggerUK said:

itwasntme001 said:

DiggerUK said:

This rising up of the poor wretched masses story is a lot of gob.
It's  a lot of overplayed k'nobheads sitting at home on furlough...

https://www.ft.com/content/0e3abab6-86a6-4a0a-9d07-d0d69b0daba8

Who said it was the poor?  It is middle class kids who are seeing the establishment getting away with corruption for so long.

It is a changing of the political landscape shifting the new generation towards an anti-authoritarian mentality.

Oh stop juicing your underwear..._

I suppose you believe whatever you hear in a newspaper like the FT.  I suppose that's what gold has done to you - blinded you from the obvious.