AOC, Ted Cruz Slam Robinhood for Freezing Some Trades Amid GameStop Volatility (techcrunch.com) 154
With Reddit's interest in sending some stocks soaring showing no sign of slowing down, the trading app Robinhood started restricting some transactions Thursday morning. Reddit wasn't happy -- and neither are some lawmakers. From a report:The incident apparently struck an unusual bipartisan chord, with Texas Republican Ted Cruz throwing his weight behind progressive Democrats who called out the company. Rep. Rashida Tlaib called Robinhood's decision "beyond absurd" and suggested that the House Financial Services Committee hold a hearing on what she deemed "market manipulation" from the personal finance startup. "They're blocking the ability to trade to protect Wall St. hedge funds, stealing millions of dollars from their users to protect people who've used the stock market as a casino for decades," Tlaib said. Her colleague Rep. Alexandria Ocasio-Cortez -- a member of that committee -- chimed in with support for a hearing on Robinhood, calling the situation an "unacceptable" step to prevent retail investors from trading. Seeing Cruz and Ocasio-Cortez line up on anything right now is unusual, to put it mildly. Silicon Valley Rep. Ro Khanna also flagged Robinhood's decision to stop some trades, slamming the startup for freezing out small investors while powerful hedge funds scramble to get control of the situation.
FUBAR (Score:5, Informative)
When AOC and Ted Cruz are on the same side of the table you know things are seriously fucked up.
Re: FUBAR (Score:2)
Perhaps. I had always heard that if both sides are pissed off with your decision you must have done something right.
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Every trade is market manipulation. The hedge funds are engaging in market manipulation by shorting the stocks of retail chains during a pandemic. The reddit users are showing support for those retail chains by buying their stock before an inevitable recovery when the pandemic is over. Shutting down the ability of retail investors to show their support for their preferred brands is the real market manipulation here, putting all the control of share prices back in the hands of the hedge funds "where it bel
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Every trade is market manipulation.
Try to explain your theory to a judge.
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Every trade is market manipulation. /quote
Most trades are just "the market happening." Manipulation is something else.
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Market manipulation is illegal, whether or not you imagine yourself to be stealing from the rich.
The retail consumers are Affecting, not manipulating the market - traders' decisions are the market. The brokers' and their trade execution or clearing companies artificially refusing orders may be manipulation - since, seemingly, some of the clearing brokers or a vendor they absolutely rely on for their business apparently have a vested financial interest in the funds carrying the short interest who stand t
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retail consumers are Affecting, not manipulating the market
"Intentionally affecting" is synonymous with "manipulating".
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If the purpose of your boycott is to manipulate a stock then you better keep your bags packed for hotel fed just to be on the safe side.
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Boycotts for the purpose of affecting a stock price are NOT market manipulation.
Advertising or promoting without deceptive conduct is NOT market manipulation, either --
Nor is encouraging or inducing anything that naturally results in a change of supply and demand.
Manipulation of Security prices is ONLY the things specified in the law, 15 U.S. Code 78i.
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Boldface shouting does NOT strengthen your argument.
Organize a boycott, buy the stock cheap, boast about it on Twitter, see what happens to you.
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Promoting a stock in a public forum and expressing sentiments about it is not market manipulation
It is if it is coordinated. One particularly obvious example would be having multiple accounts. Of course nobody on wallstreebets would do that, no0o...
Another obvious example is being seen to be cooperating in public. Rather simplifies the work of a prosecutor.
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You know there is Bachelor of Economics, right? Bachelor or Arts isn't it.
Re: FUBAR (Score:5, Informative)
You know there is Bachelor of Economics, right? Bachelor or Arts isn't it.
Well the standard you set in your previous comment was:
Both of them are evidently devoid of the slightest competency in economics or finance,
So I think an Economics program in the Faculty of Arts, which seems to be a completely standard way of getting an undergraduate economics education [wikipedia.org], would easily qualify. Hey, did you know Milton Friedman had a Masters of Arts [wikipedia.org]?
Market manipulation is illegal, whether or not you imagine yourself to be stealing from the rich.
And what would you call preventing people from buying a stock in order to tanks its price?
Market manipulation is illegal, even if you are the rich.
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You know, every single wingnut has a different number, I've seen up to 800 million thrown around. This is rather indicative of a random number pulled out of one's nether regions.
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100-300 million seems to be the most common spread that I see, but it's still a random number pulled out of the air. The CIA has estimated 30-250 million killed in the Cultural Revolution and the Great Leap Forward (depending on who their audience is), but since they didn't have anyone in the country who could give an authoritative estimate at the provincial level much less a national number it's just hand-waving. I've even seen people blaming all the deaths on both sides in WWII on communism (the 800 mil
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Not necessarily. To cite an obvious example, a certain Stephen Hawking (CH CBE FRS FRSA) started his academic career with a B.A. in physics. In that case, a Bachelor of Arts meant that it was awarded by a prestigious university which was awarding B.A.s before anyone even suggested distinguishing between "arts" and "sciences" degrees.
Degree Name Does not Matter (Score:2)
She has a vanity degree. A Bachelor of Arts means its focus is the humanities rather than technical.
That is simply wrong. I have a Master of "Arts" in physics because the research-intensive university I got it from was founded before 'science' was a thing and it is a master's degree because the bachelor system also came later. The names of degrees vary from one institution to the next for a variety of historical reasons and you should not read too much into them. To understand what a degree means the subject and the institute that awarded it is far more important than the name.
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Boston University is not Oxford and AOC is not Stephen Hawking.
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I'm well aware of what a B.A. with economics concentration means in terms of effort and prestige. You would too if you had gone to college,
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Karl Marx was an economist.
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Not everything is partisan, some things are just bad.
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Not everything is partisan, some things are just bad.
My general rule is if politicians on opposite sides agree for opposite reasons, they're usually wrong, but if politicians on opposite sides agree for the same reasons they're often right.
Re:FUBAR (Score:5, Interesting)
Two things can be true. Yes, Redditors organizing online to pump a stock price in order to hurt a hedge fund can likely be prosecuted as stock market manipulation. Not sure how the SEC would even begin to try enforce this though.
But, trading sites blocking operations just to cover the asses of those same hedge funds is arguably as illegal.
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Redditors organizing online to pump a stock price in order to hurt a hedge fund can likely be prosecuted as stock market manipulation. Not sure how the SEC would even begin to try enforce this though.
There are plenty of charges the SEC can use for pump and dump schemes. Section 17(a) of the Securities Act and Rule 10b-5 of the Exchange Act are commonly used statute for market manipulation. They could also potentially be hit with wire fraud. There are also state laws across the country to hit them with if the SEC doesn't get involved.
Re:FUBAR (Score:5, Insightful)
If you told me you had borrowed the entire supply of toilet paper in a city in order to sell it off at a premium then repay the loan with TP you were going to buy from the next shipment, I would definitely buy some TP from that shipment in order to make you pay me for it. I'd tell all my friends about your risky business too.
Now, of the two of us, which one is engaging in manipulation?
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of the two of us, which one is engaging in manipulation?
Both. Got a hard question?
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Both. Both are.
Ask the poor guy trying to buy TP in the meantime.
Not to mention (Score:2)
I agree; in fact, it's common that there is more than one bad thing going on at a time.
The bigger question is whether these giant financialization schemes are a benefit to anyone except traders.
They seem to have re-configured our economy to be fragile.
Re:FUBAR (Score:5, Interesting)
You're presuming to know the reason why RH decided to block GME trades.
That "why" is yet to be known, but the fact that Citadel is Robinhood's biggest customer and a main investor in Melvin Capital should raise multiple red flags here.
The rumor right now is that reloaded a bunch of their shorts right after they forced Robinhood to stop trading GameStop stock.
Re:FUBAR (Score:4, Insightful)
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It's a little different mechanic. I think most of the people buying at the inflated price knew it was a losing position and were not doing it trying to gain from it.
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The fact an online forum is involved is neither here nor there, as it could have happened in a town square full of people, with one person pointing out the facts, and others using that information.
The discussions being in an online forum are the most damning part. If it was done with handshakes in a cigar room there wouldn't be much proof. Market manipulation is hard to prosecute because it is often hard to identify and prove. Collaborating in an open forum which is well documented is not a good approach though.
Re:FUBAR (Score:4, Insightful)
Collaborating in an open forum which is well documented is not a good approach though.
Capitol rioters all over again.
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In principle I agree, but there were bots hyping this so it may not be as simple as individuals making rational choices. Too early to say really.
Either way it's the ordinary investors who get screwed.
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Pump and dump is when you talk other people into buying while you intend to sell. If you buy too, it isn't pump and dump.
OTOH, the short sellers are involved in a sort of inverse pump and dump where they want to convince everyone to sell so they can buy cheap. That SHOULD be illegal but isn't (yet). But that wasn't enough, so now they're trying to FORCE others to sell (or at least stop buying) so they can buy it up cheap. They're just ticked off because it isn't working so far.
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It's called a poop and scoop. Short selling, especially massive short selling, has the additional twist that you *have* to do the scoop.
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Thank you. It's nice to have a name for it.
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I had to look it up. It's a great name though.
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Isn't this more like a dump and pump?
The short seller dumped the shares and now it gets hurt by those people pumping it up again?
Well of course, how long they hold on to those stocks is the next question...
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It's an organized short squeeze. There is nothing wrong with a short squeeze, it's the organized part that is problematic in the context of securities.
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Except it's not a pump and dump.
A pump and dump requires someone to buy a large amount of stock, then talk it up high and get people willing to pay for that stock to sell high.
Here it's going high because some people on an online forum saw someone is going to have to buy a bunch of stock soon. So they simply bought lots of stock, pushing the stock higher in price knowing that eventually, that som
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I know, right? Pump and dump schemes should only be organized in person atop Manhattan skyscrapers.
If you want to get away with the same crimes as the big boys you better be able to hire equally capable attorneys.
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When AOC and Ted Cruz are on the same side of the table you know things are seriously fucked up.
Ted is only ever on his own side... In this case, AOC asked him to fick off, from 'You almost had me murdered 3 weeks ago': AOC rejects Ted Cruz's support for her criticism of Robinhood [businessinsider.com]
But Ocasio-Cortez, a leading voice in the House progressive coalition, rejected Cruz's endorsement and called for his resignation because of his complicity in the election disinformation that inspired the siege on the Capitol on January 6.
"I am happy to work with Republicans on this issue where there's common ground, but you almost had me murdered 3 weeks ago so you can sit this one out," she tweeted. "Happy to work w/ almost any other GOP that aren't trying to get me killed. In the meantime if you want to help, you can resign."
She added: "You haven't even apologized for the serious physical + mental harm you contributed to from Capitol Police & custodial workers to your own fellow members of Congress.
"In the meantime, you can get off my timeline & stop clout-chasing," Ocasio-Cortez said. "Thanks. Happy to work with other GOP on this."
Cruz was one of seven Republican senators who voted against the certification of electoral votes after the siege, and he backed President Donald Trump's campaign to overturn the election result.
Sens. Ted Crus and Josh Hawley aren't going to have a fun year ... Personally, I think Ted should be forced to go back to the Mirror Universe, but without his beard.
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In this case, AOC asked him to fick off
That's because she's a poisonous shit that overreacted like a fuckwit on 6th January.
If she's really concerned about her personal safety she can buy a fucking gun - hell, she's going to need it if the police get defunded, as she wants.
Thanks. It's abundantly clear that you're part of the problem, not the solution.
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If the problem is calling out the idiocy of lying politicians, then I'm fucking proud to be part of the problem.
Or do you actually think Ted Cruz tried to have AOC murdered?
Do you?
Really?
Calm down or you'll be too tired out for your next White Power rally...
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Um... Mr. I can't read, I never made any accusations, I simply quoted AOC. If you have a problem, which you clearly have *and* have with her, I suggest you take it up with her and a therapist. I stand by my observation, from your commentary, insults and bias ("poisonous shit that overreacted like a fuckwit"), that you're part of the problem, and, now I see, obviously incapable of intelligent, cogent discourse. I regret that, going forward, you'll find your heroes on The Right to be greatly lacking in mora
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I never actually accused you of attending White Power rallies, just made an assumed, based on your rhetoric. If I was wrong, my bad. Your language describing / toward AOC, clearly betrays your bias and position, though -- which, of course, prompted my assumptions about you.
As for whether Cruz tried to have AOC murdered, I don't know, I'm not Ted. That's AOC's belief, not mine. (All of which should be obvious ...) On the other hand, you are clearly asserting that he didn't mean to murder her. Did he confi
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When you lie to people that an election has been stolen then, yeah, you're begging for half-witted sheep to try to storm the Capitol and target liberals and any Republicans, such as Mike Pence, who dare to question this idiocy.
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We had that mass hysteria on Jan 6th 2021. ... probably?
Not really sure about human sacrifice, but know that Ted Cruz eats three meals a day, so
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What next?
Cruz burns his white grievance card and runs out the clock as a democrat. AOC attends his birthday party.
Re:FUBAR [but wait until AlphaGo Zero plays] (Score:2)
Congratulations on the unusually good FP, though I would have modded it Funny. The resulting threads seemed beneath your opening move.
I actually wanted to root for the small guy, but when I went to the GameStop website to see if they have any games I want to buy, all I got was an Access Denied. Actually managed to get a deeper link to the Website from their Twitter page, but still couldn't figure out what they are selling or even if they might be interested in selling something new that I want to buy. (I've
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An AI able to declare bankruptcy would be the end of the world as we know it.
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When AOC and Ted Cruz are on the same side of the table you know things are seriously fucked up.
Or what they're both saying is stupid and wrong... which is pretty normal for both of them. Ideological differences aside, they both tend to say a lot of dumb things.
Which is the case here. Robinhood made a sensible decision to limit their risk in an unusual situation. See: https://news.slashdot.org/comm... [slashdot.org]
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Right, my point. Thanks for clarifying.
You have to wonder about the average age behind those thousands and thousands of reddit and twitter posts all subscribing to the theory that if the mob is doing it then it must be right. Kinda reminds me of a capitol storming mere weeks ago.
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So a group of people who notice that short sellers have (a) shortsold more shares than exist and (b) have to buy have decided to make money off the short sellers by acquiring what they are mandated to buy is TOTALLY the same as storming the capital to overturn an election because you don't like the result.
Because there are lots of people involved on the internet.
Wat.
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The common element is a sense of mission, allowing them to justify doing something illegal. I grant you, the Capitol invasion vastly trumps the market manipulation in terms of sheer evil. But both are illegal activities engaged in by a mob all the same. It's a study in human nature: just how does a mob convince itself that wrong is right?
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The common element is a sense of mission, allowing them to justify doing something illegal.
Is what they're doing illegal? It's not pump and dump... noticing someone is massively overexposed on a short then trying to buy as many as you can with a hope to turn a profit... there's no misrepresentation going on here so it's not really market manipulation. No more than HFT, and probably not legally so.
Also it's a risky path to plough from "X and Y have thing in common so X reminds me of Y", because it has no en
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When I agree with both AOC and Ted Cruz at the same time they are agreeing with each other. Hell, has officially froze over.
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Citation needed for AOC
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Cruz directly retweeting AOC's post isn't sufficient citation?
https://twitter.com/tedcruz/st... [twitter.com]
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No.
Re:FUBAR (Score:5, Funny)
You forgot this gem: https://twitter.com/AOC/status... [twitter.com]
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No, you're exaggerating and perhaps projecting. This is personal.
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So basically to the left, the only cooperation is to shut up.
Translated to plain English: "People basically hate me for the awful and stupid things I'm prone to saying so for whatever reason I'm sure they would have hated me equally even had I been a saner person."
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Halting trading is fine - a cooling off period hits everyone equally. The move by Robinhood creates an unbalanced ability for large funds to move stocks but stops everyone else.
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Nah, this is special treatment for a very very special person. Ted Cruz is an embarrassment to the country.
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I mean a citation for her supporting violent insurrection.
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"reddit shitposters united the left and right on something" - seen in a comment.
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Proposition: "nah. they both support violent insurrection."
Rebuttal: Citation requested.
Response: twitter link
Finding: linked twit did not discuss violent insurrection.
Conclusion: No support for proposition.
Re:FUBAR (Score:5, Insightful)
You sure about that? Because I remember quite well there were other federal buildings across the country that were invaded, captured, grafitti'd, smeared, firebombed etc all in the last 4 years.
How many of those were actions were carried out with the express intent to capture and/or assassinate government officials and forcibly disrupt and/or alter the democratic process? That's the key distinction between "riot" and "insurrection" (aka failed coup)
How much does it cost to get them to do this? (Score:1)
Serious question. If I go to robinhood and ask them 'turn off the buy button for this stock' or 'turn off the sell button for that stock', how much would it cost me to get them to do it?
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probably cheap, on par with the slip fees for a yacht.
It’s one banana, Michael. What could it cost, $10?
Re:How much does it cost to get them to do this? (Score:5, Insightful)
Serious question. If I go to robinhood and ask them 'turn off the buy button for this stock' or 'turn off the sell button for that stock', how much would it cost me to get them to do it?
Well, the real question here is why they would do that. At first glance, it makes no sense for Robinhood to stop trading GME stock, as they don't do any brokerage themselves. They're effectively turning down good profit in the middle of a stock bubble craze.
The thing is, Robinhood relies on Citadel for all brokerage operations. Which likely means they got a phonecall telling them to stop trading GME as it's hurting their hedge fund operations. So yeah, AOC, Warren and (gasp!) Cruz are 100% correct in wanting to investigate this issue further - that's textbook stock market manipulation.
Do-over until I win (Score:2)
The game I win is the final one, all the ones before that where you win are just practice.
isn't it illegal collusion? (Score:2)
I thought the SEC was fully within their rights to crack down on any large groups of people/investors planning to do pump and dump scams on any stock? Isn't a freeze on these stocks a fairly sane "CYA" for Robin Hood and other brokers that the groups might be heavily favoring?
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The SEC, yes. But outside of the Robinhood app, these stocks are still tradable. This is not an SEC trading freeze, retail investors using a specific platform have been frozen out to limit the liability of hedge funds who have been shorting stocks to make a profit from a declining retail sector.
Re:isn't it illegal collusion? (Score:5, Interesting)
It isn't pump and dump. It's buy and HODL (Hold On for Dear Life). They don't plan on dumping. They want to hold the stock so that the short sellers can't buy them back except at an inflated price if at all. The goal isn't to profit but rather to screw the hedge funds. The reason they chose gamestop is because even before this started, there were more shares shorted than actively being traded.
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I found myself wondering if holding GME might become equivalent to Bitcoin. If enough people just decide that there's value in the trading symbol in and of itself, and the nature of exchange on which it's traded provides the necessary controls, what really is the difference between that and a virtual currency?
Re:isn't it illegal collusion? (Score:4, Insightful)
I found myself wondering if holding GME might become equivalent to Bitcoin. If enough people just decide that there's value in the trading symbol in and of itself, and the nature of exchange on which it's traded provides the necessary controls, what really is the difference between that and a virtual currency?
The problem with this is that GME shareholders can vote more shares into existence, the whole thing with Bitcoin is the supply is limited through the "mining" costs associated with generating new Bitcoin.
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Yeah, but would they though? That doesn't seem likely.
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Yeah, but would they though? That doesn't seem likely.
If I was Game Stop, I definitely would. There are 69M shares outstanding which were worth a total of 300M before this bubble. At $300 a share, they could sell 1M shares and have more money than the entire company was worth a few months ago while only diluting their shares by 1/70 or 1.5%.
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They can't just create more shares, they have to compensate current shareholder if they did, and it wouldn't solve the problem the hedge funds have anyway.
effect of new shares (Score:2)
1. No, that's wrong. There is no payment to existing shareholders when new shares issue.
2. when a company issues more stock, it takes in the same amount of cash. The existing shareholders benefit from the bigger company.
3. In this case, existing shareholders would benefit *massively* from GameStop issuing new shares at existing prices. Currently, the underlying business is worth something like $20 a share. Whatever it is, it's well under $100. If new shares issue at several times that value, cash paid
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the whole thing with Bitcoin is the supply is limited through the "mining" costs associated with generating new Bitcoin.
The supply of Bitcoin is determined by the emission schedule, which is fixed and doesn't depend on anything.
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Difference here is that the party holding the bag is a matter of public record. Or was. Now it's time to sell and take your $5 billion payout.
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I thought the SEC was fully within their rights to crack down on any large groups of people/investors planning to do pump and dump scams on any stock?
The SEC is within their rights - If they determine that it is such a scam and that the action is appropriate, And the actions taken by the SEC to halt trading would apply to Everyone most likely - Not excluding the hedge funds and allowing them to continue their actions in attempt to push the price down.
Isn't a freeze on these stocks a fairly sane "CYA" fo
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this morning, it came out that two of the leading proponents of this stock on the reddit were the same person.
His socks *claimed* that GameStop was undervalued. He worked for a financial services company.
One person doing this, pretending to be two and riling up a crowd, *could* be consistent with a pump-n-dump, but could also be consistent with both a belief that it's undervalued, and a recognition that the ridiculous level of short position locks in an absolute need for them to buy shares (but in both c
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this morning, it came out that two of the leading proponents of this stock on the reddit were the same person. His socks *claimed* that GameStop was undervalued. He worked for a financial services company.
Well, if that's what happened, then the use of additional accounts to create the deception of multiple people plugging it is bound to NOT end well for that person once the SEC has a few months to investigate, Well at least if that person or their company was positioned in stock when they were plugging
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While the SEC may have jurisdiction they were stripped of staff and authority during the Trump administration.
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The people pumping up the value are technically the short sellers. The people buying in are just taking advantage of an existing situation.
Robinhood had some serious issues anyway (Score:2)
You couldn't even search for anything for ~1/2hr because there were so many people on the platform this morning.
It's feeling a little colder than normal today... (Score:2)
Did hell just freeze over?
How does this not qualify as market manipulation? (Score:2)
Considering Robinhood's size, how is it preventing the buying, but allowing the selling, as well as closing out positions, not market manipulation?
I say this as someone who has severe doubts about Gamestop's stock value - to me, without looking that closely, the rapid increase in gains seems to be pure hype. But that being said, RH should not prevent its users from making foolish decisions.
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I say this as someone who has severe doubts about Gamestop's stock value
Well it does, after a fashion: it has value because people need to buy it (short sellers). The fact that someone needs something is effectively what imbues it with value.
Trading is about to crumble. (Score:2)
With Microtransactions, easy trading via app and social media driven reality warping, trading is about to become even more disconnected than it already is. When you're average bricklayer can use his lunch money to do some trading in his break or commute and turn this game into a regular mobile one like clash of clans, we have yet another nail in the coffin of last centuries capitalism. Add in post-scarcity economy and capitalism is in for a big shift in function and impact, just as Marx, Keynes and many oth