GameStop fiasco

[Anonymous]

Rarely on DCUM and usually am hovering over the parenting forums if I am. Not savvy in the finance world in the least. Can someone explain in idiot terms what is going on?

[Anonymous]

Look at this thread

https://www.dcurbanmom.com/jforum/posts/list/60/944594.page

[Anonymous]

Big banks bet big on GameStop going bankrupt. Specifically that GameStop stock would tank by this week. Reddit organized a massive group buy of the stock by amateur investors. Price went way up. Banks lost their bet. Some amateur investors made $$$$$. Banks shut down little guy day trading to save their skin. Banks still lost billions.

[Anonymous]

On Monday Hedge fund borrows stock and promises to return stock on Friday.

On Monday afternoon hedge fund sells stock for $10 on the hopes that it can buy stock Friday morning for $3 and return stock back to owner. If all goes well hedge fund will make money $10 from Monday sale minus $3 purchase on Monday. So $7 profit.

But - on Tuesday Reddit peeps learn about hedge funds plans and decide en mass to buy up the stock. The increased demand drives up the stock value. So that on Friday the stock is worth $18. Hedge fund promised to return the stock on Friday so now it must pay $18 to buy it to meet the agreement.

So, instead of making $7 as hope, the hedge fund is out of pocket $8. (The difference in the $10 it received on Monday for the stock sale and the $18 it had to pay to buy the stock on Friday).

[Anonymous]

On Monday Hedge fund borrows stock and promises to return stock on Friday.

On Monday afternoon hedge fund sells stock for $10 on the hopes that it can buy stock Friday morning for $3 and return stock back to owner. If all goes well hedge fund will make money $10 from Monday sale minus $3 purchase on FRIDAY. So $7 profit.

But - on Tuesday Reddit peeps learn about hedge funds plans and decide en mass to buy up the stock. The increased demand drives up the stock value. So that on Friday the stock is worth $18. Hedge fund promised to return the stock on Friday so now it must pay $18 to buy it to meet the agreement.

So, instead of making $7 as hope, the hedge fund is out of pocket $8. (The difference in the $10 it received on Monday for the stock sale and the $18 it had to pay to buy the stock on Friday).

SORRY - I fixed a mistake above.

[Anonymous]

Title correction: GameStop Revolution

[Anonymous]

Anonymous wrote:On Monday Hedge fund borrows stock and promises to return stock on Friday.

On Monday afternoon hedge fund sells stock for $10 on the hopes that it can buy stock Friday morning for $3 and return stock back to owner. If all goes well hedge fund will make money $10 from Monday sale minus $3 purchase on FRIDAY. So $7 profit.

But - on Tuesday Reddit peeps learn about hedge funds plans and decide en mass to buy up the stock. The increased demand drives up the stock value. So that on Friday the stock is worth $18. Hedge fund promised to return the stock on Friday so now it must pay $18 to buy it to meet the agreement.

So, instead of making $7 as hope, the hedge fund is out of pocket $8. (The difference in the $10 it received on Monday for the stock sale and the $18 it had to pay to buy the stock on Friday).

SORRY - I fixed a mistake above.

NP. Thank you! Could you please explain why would the price drop by Friday?

[Anonymous]

So that brings us up to this morning. Today, as Wall Street panicked about the short squeeze, they pressured Robinhood and several major clearinghouses to stop retail investors from buying but allowed retail investors to sell, some of whom did. That way, the price of the stock was driven down.

It was shocking.

[Anonymous]

Anonymous wrote:

Anonymous wrote:On Monday Hedge fund borrows stock and promises to return stock on Friday.

On Monday afternoon hedge fund sells stock for $10 on the hopes that it can buy stock Friday morning for $3 and return stock back to owner. If all goes well hedge fund will make money $10 from Monday sale minus $3 purchase on FRIDAY. So $7 profit.

But - on Tuesday Reddit peeps learn about hedge funds plans and decide en mass to buy up the stock. The increased demand drives up the stock value. So that on Friday the stock is worth $18. Hedge fund promised to return the stock on Friday so now it must pay $18 to buy it to meet the agreement.

So, instead of making $7 as hope, the hedge fund is out of pocket $8. (The difference in the $10 it received on Monday for the stock sale and the $18 it had to pay to buy the stock on Friday).

SORRY - I fixed a mistake above.

NP. Thank you! Could you please explain why would the price drop by Friday?

Hedge funds were shorting the stock en masse putting downward market pressure. Where the market makers want the market to go, it goes. GameStop could have gone bankrupt as a consequence of this. They will also put people on CNBC and the like talking about how it’s a bad stock etc to encourage people to sell. So they short it then manufacture the crash. Redditors broke the system buy not only buying en masse but then refusing to sell, even at sky high profits for themselves, to keep the price up.

[Anonymous]

Citron Research
@CitronResearch
Tom morning at 9am EST Citron will be presenting a major announcement that all individual investors should watch. Free Speech and Cautious Investing to all
10:32 PM · Jan 28, 2021·Twitter Web App

[Anonymous]

GME going to the moon tomorrow.

[Anonymous]

Wall Street always wins:

[Anonymous]

23:18 here. Click the tweet to read the entire thread.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:On Monday Hedge fund borrows stock and promises to return stock on Friday.

On Monday afternoon hedge fund sells stock for $10 on the hopes that it can buy stock Friday morning for $3 and return stock back to owner. If all goes well hedge fund will make money $10 from Monday sale minus $3 purchase on FRIDAY. So $7 profit.

But - on Tuesday Reddit peeps learn about hedge funds plans and decide en mass to buy up the stock. The increased demand drives up the stock value. So that on Friday the stock is worth $18. Hedge fund promised to return the stock on Friday so now it must pay $18 to buy it to meet the agreement.

So, instead of making $7 as hope, the hedge fund is out of pocket $8. (The difference in the $10 it received on Monday for the stock sale and the $18 it had to pay to buy the stock on Friday).

SORRY - I fixed a mistake above.

NP. Thank you! Could you please explain why would the price drop by Friday?

Hedge funds were shorting the stock en masse putting downward market pressure. Where the market makers want the market to go, it goes. GameStop could have gone bankrupt as a consequence of this. They will also put people on CNBC and the like talking about how it’s a bad stock etc to encourage people to sell. So they short it then manufacture the crash. Redditors broke the system buy not only buying en masse but then refusing to sell, even at sky high profits for themselves, to keep the price up.

Got it! Thanks so much

[Anonymous]

Anonymous wrote:Wall Street always wins:

Well, Wall Street has a bloody nose and Robinhood is done for. Maybe nobody won but some have lost.