Comment by moeburn on 27/01/2021 at 15:16 UTC

10 upvotes, 2 direct replies (showing 2)

View submission: /r/wallstreetbets is making international news for counter-investing Wall Street firms that want to see GameStop's stock collapse. The palpable excitement is off the charts.

View parent comment

I am very skeptical this is an organic result of internet community meme investing.

• The vast majority of recent purchases of GME stock, of purchases driving up its price, are in the millions to tens of millions of dollars range. This isn't some Bernie Sanders style "millions of people all pitching in a few dollars" scenario.

• WSB and Reddit are prime targets for market manipulation

• It's very easy to buy upvotes on Reddit and very hard to get caught.

• It all reads like bot propaganda; the repetitive "diamond hands" emojis, the "The big rich Wall Street fat cats don't want you to have money or power!" posts, etc

I'm no hedge fund manager, I barely understand half of these words. But even I can understand how easy it would be to manipulate the market and nudge it in one direction or the other by buying a few botfarms and pushing posts about a particular stock to the top. And I could improve my margins by making that a stock everyone else is betting against.

Any time I see any post on WSB that isn't some generic meme post but is actually talking about a specific stock, that's what I'm pretty sure is happening. Someone is manipulating that subreddit to manipulate the market.

Look at Tesla - Elon Musk just tweeted in support of the Gamestop meme stock. You don't think he would throw a few dollars behind a few bot accounts telling everyone to buy Tesla stock?

Replies

Comment by hahahahaha90000 at 27/01/2021 at 19:07 UTC

1 upvotes, 0 direct replies

Noticing the short interest vs available float and realizing that Hedge funds have shorted more 50% more shares than there are total in the float to buy isn’t market manipulation. That’s like saying that noticing a puddle of gasoline next to a flamethrower and calling the fire department makes you an arsonist.

Comment by Delphizer at 27/01/2021 at 19:26 UTC

1 upvotes, 0 direct replies

If a hedge fund buys a short and it starts increasing they'll have a cutoff where they'll buy back the share to cut their losses pretty quickly. Apart from just WSB once this started it was pretty much fair game for other hedgfunds to join in and let their algorithms work. Before it started full swing a hedgefund could have been on the hook for market manip.

When the short expires you had lost 5-10% before you bought back but now you just short it again. Cash your 350$ and rinse repeat. It's very likely the short sellers will eventually come out ahead, it's why they doubled down yesterday. The only way they wont come out ahead is if the fees eventually force them to cut their losses.

If you have access to make the trades lightning fast there is very little chance you'll loose very much money and very high chance you'll eventually come out ahead. The earlier you start shorting and the longer it goes the less they'll make.