Anyone else here happy that the hedge funds had their due? They have been front running consumers for years and now when the tables turn on them, they are aghast? And, Robinhood, initially prohibited "buys" on the stock claiming they are "protecting" investors when in reality their biggest customers are the hedge funds themselves??

Now apparently they are allowing "limited buy ins" on Gamestop and AMC and other "shorted" hedge fund stocks. Hmmm. Whatever happened to the concept of an "open" market?

Contemptible in my view! Great article in the NYT about this debacle. Note it is behind a paywall.

https://www.nytimes.com/2021/01/28/t...top-stock.html

PM me if you want me to copy/paste the article...

Actually, Matt Taibbi just wrote a much better and more comprehensive piece and best of all, I can link it

https://taibbi.substack.com/p/suck-it-wall-street

Really great what the Redditers have done!

absolutely shocking what the platforms did though. block out ordinairy investors but leave the hedge funds still able to short. theft, plain and simple.

Have a read of this thread (from about page 10 onwards), in particular the posts made by DonkeyApple. He’s got decades in the business and from what I understand runs a brokerage in the UK. He explains why the “platforms” who aren’t actually brokerages had to do what they did. It would appear that next to nobody actually understands how these app based low/no cost companies actually make their money. I certainly didn’t. The TLDR version is they run their own off market book and expect their punters (not investors) to lose money. They make money by selling this flow to other dealers. I am also certain that if you had tried to place these trades with UBS/CS you would have been able to trade.

https://www.pistonheads.com/gassing/...t=1909610&p=10

While I have no sympathy for the hedge funds, I do think this is a valuable lesson for the Reddit that they should actually understand what they are doing with their money.

This. It's almost as if the whole thing is rigged...

I think people who don't understand how the market works are consuming the news at face value, and "having fun" at the narrative from the social justice warrior standpoint. What everyone seems to forget is that the vast majority of the retail investors who participate in this run are going to lose a significant amount of money when their positions deflate. Some of them may be able to afford it, some may have purchased pocket money for the lulz, but some will be deep in it. I'm sorry for them.

So I guess you didn‘t bother reading the link I posted.

I don‘t feel sorry for the ones who have wasted their stimulus cheques or even worse borrowed money to do this.

Forgive the noob question but were these consumer investors actually trading the underlying with their own money or were they margin trading / spread betting off-market? If the latter you can kind of understand why the platforms might have locked them out.

Not a noob question IMO. It appears to be the latter, but they didn’t know that’s what they were doing.

https://www.bloomberg.com/news/artic...premium-europe

Pretty interesting saga and reading the subreddit is a real eye-opener, it seems to be a bunch of social justice warriors with hardly any money, investing all that they have in these stocks while being egged on by a few core people who do know exactly what they are doing. All of the frat boy, wolf-of-wall-street-esque gibberish makes my head hurt.

so what's gonna happen to gamestop when everyone ends up selling?

We all buy DogeCoin

The company will probably go bankrupt, before that happens
The share price does not effect the company, unless they wish to raise money by selling more shares.

Well, people just learned the price of free trading. As someone mentioned above, nothing happens when you pay for the trade from a cash account.

The lesson here is to start reading the terms and conditions of the free banking options mentioned mentioned around on EF.

This. I don't know much about the financial markets, but what I doubt is if institutional investors and hedge fund managers have lost much if any of their own money in here...it will be their customers and clients who foot the bill. So most likely, the peasants haven't robbed the rich at all, but rather other peasants.

100% agree. Companies don‘t exist for altruistic reasons. If you are not being charged for something, you should always ask yourself how they are making money. I‘m amazed that these apps aren‘t more heavily regulated and treated as gambling products! In traditional banking, retail clients are ridiculously well protected from their own ignorance/naivety/greed by regulations and banks wanting to protect their reputations.

I don‘t think that this is the case. Peasants are restricted from investing in hedge funds and generally a hedge fund manager is expected to keep his wealth in the fund. So HNWI investors and the hedge fund managers will have lost money rather than a different set of peasants.

The real likely outcome of this is that wealth will be transferred from the hedge funds on the losing end to hedge funds who have organised the rabble. Some peasants will make some life changing amounts of money as a side effect, others are going to lose what they put it, others are going to go bankrupt as they borrowed to gamble. I hope that another side effect will be an investigation and regulation of these trading apps.