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  1. #1
    Thailand Expat harrybarracuda's Avatar
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    2 hedge funds admit defeat, bail out at huge loss as GameStop share surge hits 1000%

    In the David and Goliath saga surrounding the struggling retail chain GameStop, Goliath has fallen.
    Two Goliaths, actually.

    A pair of professional investment firms that placed big bets that money-losing video game retailer GameStop's stock will crash have largely abandoned their positions. The victors: an army of smaller investors who have been rallying on Reddit and elsewhere online to support GameStop's stock and beat back the professionals.

    One of the two major investors that surrendered, Citron Research, acknowledged Wednesday in a YouTube video that it unwound the majority of its bet that GameStop stock would fall. Andrew Left, who runs Citron, said it took "a loss, 100 per cent" to do so, but that does not change his view that GameStop is a loser.


    "We move on. Nothing has changed with GameStop except the stock price," Left said. He did acknowledge that Citron is taking a fresh look at how it bets against companies, in light of the GameStop campaign.

    Melvin Capital is also exiting GameStop, with manager Gabe Plotkin telling CNBC that the hedge fund was taking a significant loss. He denied rumours that the hedge fund will fail.

    The size of the losses taken by Citron and Melvin are unknown.

    The Wall Street frenzy over GameStop began when an army of smaller-pocketed investors on Reddit started throwing dollars and buy orders at the stock — in direct opposition to a group of wealthy investors who were counting on the stock price to plunge by making stock bets known as short selling.

    There is no overriding reason why GameStop has attracted those smaller investors, but there is a distinct component of revenge against Wall Street in communications online.

    Over the past three months, shares of GameStop Corp., which has been buffeted by a shift in gaming technology, have spiked well over 1,000 per cent. Shares were up another 100 per cent at the opening bell Wednesday.

    That has created titanic losses for major Wall Street players who have "shorted" the stock, which means they borrowed shares and sold them, hoping to buy them back at a cheaper price and pocket the difference. As of Tuesday, the losses had already topped $5 billion in 2021, according to S3 Partners.

    The phenomenon does not appear to be fading.


    AMC Entertainment Holdings Inc., the theatre chain that has been ravaged by the pandemic, posted a quarterly loss this month exceeding $900 million.


    It appears, however, that AMC has become the next battleground in the fight between smaller, retail investors and Wall Street.


    Shares of AMC spiked 260 per cent when trading began Wednesday and #SaveAMC is trending on Twitter.


    2 hedge funds admit defeat, bail out at huge loss as GameStop share surge hits 1000% | CBC News

  2. #2
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    strigils's Avatar
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    Some of the scum that occupy positions in these institutions are no better than boiler room scammers, same result in terms of ruining peoples lives.

  3. #3
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    A bit more info on the GameStop adventures, with some info on the Reddit thread r/WallStreetBets, where this whole thing apparently started.

    There are three things to remember as you watch the chaos unfolding with GameStop’s stock price. First, Wall Street is just what happens when you mix money with feelings. Second, the internet is real life. And third, the Street always wins, especially if you’re trading with Robinhood.

    If you haven’t been paying attention, GameStop’s stock has been soaring in a remarkably volatile fashion; on January 22nd, GameStop zoomed upward 69 percent (nice) before it triggered a circuit breaker halt. The following Monday, January 25th, GameStop trading was halted nine times.


    The idea was to punish short-sellers, and for the little guys to pummel Wall Street

    On the surface, this doesn’t make sense. GameStop, founded a year before Blockbuster, is part of a dwindling cohort of IRL businesses that are being starved by online marketplaces. These days, you can just buy video games over the internet instead of going to a soul-killing strip mall in Iowa City to buy a physical copy of the game. GameStop’s business has been suffering as a result.


    Currently, many people are at home and bored, and consequently, interest in day trading has shot through the roof. There is a Reddit forum for this, r/WallStreetBets, which describes itself as being “like 4chan found a Bloomberg Terminal.” A year ago, a user called delaneydi argued that GameStop was underpriced by the market. For a while, the idea that r/WallStreetBets would take over GameStop was a joke — but then it turned serious, Bloomberg reported. The idea was to punish short-sellers, and for the little guys to pummel Wall Street.
    https://www.theverge.com/22251427/re...od-wall-street

  4. #4
    Excommunicated baldrick's Avatar
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    wsb can stay retarded longer than hedge funds can stay solvent

  5. #5
    Thailand Expat Backspin's Avatar
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    This is awesome. The shoeshine boys taking on the hedge fund cocksuckers. Steve Cohen , king cocksucker was forced to bail out one of his subsidiaries

  6. #6
    Thailand Expat AntRobertson's Avatar
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  7. #7
    Thailand Expat Backspin's Avatar
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    Reddit has deplatformed Wallstbets. Of course.

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  9. #9
    Excommunicated baldrick's Avatar
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  10. #10
    Thailand Expat jabir's Avatar
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    CNBC not at all happy, must be Russian collusion, or the Chinese, blimey hope it wasn't fatboy, but we do need regulators to do their job and protect hedge funds that short legitimate businesses to death.

    Fcuk me, what Trump must have done to the US for people to still watch this shit! But all is well, Biden came back from the dead to save us.


  11. #11
    Excommunicated baldrick's Avatar
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  12. #12
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    Shame it's not possible to short Hedge funds- and give them a dose of their own medicine. But this is the next best thing.

  13. #13
    Thailand Expat Backspin's Avatar
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    The video I posted in the Weimar thread, was talking about this as it was happening Before it was even news. Chris Irons deleted the video because the word fuck in the title was hurting his views. Before it was even news. This is turning into a big clusterfuck. The brokers changed the rules in the middle of the game. They should be charged with racketeering. And Janet Yellen, Bidens TSY head, is connected

    Yesterday, when TD Ameritrade became the first exchange to impose "unprecedented" restrictions on GME trading, we predicted what would happen next: "expect many more exchanges to follow suit, because hedge funds clearly need to be protected when faced with the retail daytrading mob."


    24 hours later, we were proven correct when first Robinhood (an "orderflow" cash cow for Melvin Capital owner Citadel), then Interactive Brokers, then Schwab and countless other brokerages announced - as if on preagreed terms - to halt trading in GME, AMC, BB, BBY, EXPR, KOSS, NAKD, NOK, SNDL, ALL and various other names.
    “We’re committed to helping our customers navigate this uncertainty,” Robinhood said in a blog post, but few saw it that way.



    This crackdown on retail trading sparked a firestorm, with retail investors rightfully demanding to know why these stocks (and associated options) were put on some ad hoc restricted list with no warning and threatening to take their money and go to more hospitable brokers, politicians threatening that hearings are coming, regulators threatening that lawsuits are coming, and everyone generally shocked at just how openly broken the market is.

    Following Robinhood’s move, the brokerage was hit by at least two customer lawsuits. Dave Portnoy, a recent participant in the Reddit-fueled rally, was among those who slammed Robinhood for its decision. “Robinhood is dead,” Portnoy screamed on Twitter. Ocasio-Cortez tweeted that she would welcome a hearing in the House Financial Services Committee, to discuss why hedge funds can freely trade the stocks and retail users are blocked.


    It appears that there are several reasons, the first of which may have to do with some backroom deals.
    First, consider that Citadel, which as regular readers know is the biggest source of revenue for Robinhood is also now a part-owner of the insolvent bearish hedge fund Melvin Capital (which as recently as last week had $12BN in AUM) which would have collapsed and been forced to liquidate its longs, had it not received $2 billion from Citadel and another $750MM from Steve Cohen. In other words, while nobody has called it that yet, we just lived through a mini LTCM.


    Here's the problem: with the r/wasllstreetbets crowd continuing to press the shorts, we were about to have a second, not so mini LTCM, because as CNBC's David Faber earlier today noted, Melvin Capital "is in trouble" after suffering "massive losses" and the infusion from Citadel and Point72 "is probably gone."
    Here's the problem: with the r/wasllstreetbets crowd continuing to press the shorts, we were about to have a second, not so mini LTCM, because as CNBC's David Faber earlier today noted, Melvin Capital "is in trouble" after suffering "massive losses" and the infusion from Citadel and Point72 "is probably gone."



    Said otherwise, if the squeeze had continued Citadel and Point72 would have had to bail out Melvin Capital again (which is odd since it was CNBC that also reported yesterday that the hedge fund had closed its shorts... which apparently was not exactly true). And while $2.75 billion may be pocket change for Ken and Steve, $5 billion starts to look like real money. And what if it has to be followed by $10 billion, $20... and so on. On the other hand, if they did not throw more good money after bad, not only would their initial investment be wiped out, but once Mevlin was forced to start selling its longs to fund its margin calls - which also happen to be the names contained in the Goldman Sachs Hedge Fund VIP basket biggest longs for Citadel and Point72 - that's when the real carnage would take place as everyone would scramble to frontrun the upcoming liquidation. The result would have been billions in losses for Citadel and Point72.


    But Citadel and SAC Point72 were not the only ones on the firing line. As Faber also said earlier, "any number of large of large hedge funds have suffered significantly."
    How much? According to financial data analytics firm Ortex, short-sellers - mostly hedge funds - are sitting on estimated losses of $70.87 billion from their short positions in U.S. companies just in 2021 alone! Add puts and other underwater derivatives, and the real loss will be even greater. And just as striking: Ortex data showed that as of Wednesday, there were loss-making short positions on more than 5,000 U.S. firms.


    That's right: Joe Sixpack was quickly sold down the river.


    Why? Because the so-called "retail clients" are nothing but a cost center to the "retail brokers" thanks to the recently introduced $0 commission pay scheme. In fact, brokers would be delighted to dump all but their biggest whales clients. So who pays the fees? Well, just take a look at Robinhood's form 606: Citadel, Virtu, G1X, Wolverine, and countless hedge funds which, like Citadel, are tightly interwoven in the fabric of the market. It's they that made a few phone call and just put dozens of stocks on a market-wide restricted list.


    There's more. While unconfirmed, there is speculation that that "Citadel reloaded their shorts before they told Robinhood to stop trading GME." As the source notes, if true the people behind this should be in jail.




  14. #14
    Thailand Expat jabir's Avatar
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    The establishment's outrage at dumb money blowing up smart money is telling.

    Discord has banned WSB, Reddit has made it private, CNBC have lost the plot, SEC is 'investigating' how such bad people could have fcuked innocent hedge funds that make billions and ruin lives by shorting fundamentally legitimate businesses into the ground, and guess what it's even reached the WH, this should be fun to watch.

    As for the 'victim' hedge funds, they will claw back some if not all of their losses by shorting at $400 instead of $20 for 20x profit.

  15. #15
    Thailand Expat Backspin's Avatar
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    Quote Originally Posted by sabang View Post
    Shame it's not possible to short Hedge funds- and give them a dose of their own medicine. But this is the next best thing.
    The hedge fund cocksuckers, stopped the game when it mattered most. This should result in criminal charges.

    From the article below

    While unconfirmed, there is speculation that that "Citadel reloaded their shorts before they told Robinhood to stop trading GME." As the source notes, if true the people behind this should be in jail.

  16. #16
    Thailand Expat jabir's Avatar
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    Fear not, Biden has come back from the dead to save us.

  17. #17

  18. #18
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    I fully agree charges should be laid, serious ones. Even Ted Cruz and AOC agree on this!

  19. #19
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    --DELETED--

    I gave too much personal info about myself.

    Sorry.
    Last edited by Bogon; 29-01-2021 at 08:45 AM.

  20. #20
    Thailand Expat jabir's Avatar
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    Is that the same JP Morgan which got fined $900m for rigging the precious metals market? Well, they went into mourning for 3 minutes flat before slinging out a cheque from part of their profits. And how did they have the audacity to be so upfront about it, knowing even low level regulators would catch on? Because they've been doing this for years, screwing not even they know how many investors, but knowing they’ll either get away with it and keep the profits or worst way get rumbled and share part of it.

    I can't see JPM batting for dumb money, except as a PR stunt with backroom understandings to ensure everyone ends up happy, or in the case of hedge funds happier than they deserve.

    Meanwhile nothing to do with censorship, but Google is entering the spotlight for mass removal of negative views of RH, which it turns out placed restrictions for their own convenience and safety, having run out of collateral.

    One big fcukup, which will eventually be resolved in favour of the connected that are too big and useful to fail, or prosecute.

  21. #21
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    Quote Originally Posted by Bogon View Post
    --DELETED--

    I gave too much personal info about myself.

    Sorry.
    Oh go on, we won't tell.

  22. #22
    I Amn't In Jail PlanK's Avatar
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    2 hedge funds admit defeat, bail out at huge loss as GameStop share surge hits 1000%-az0nelp_460s-jpg

  23. #23
    Thailand Expat Backspin's Avatar
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    Check out the original tweet that started it all. 24,000 replies. People organizing class action lawsuits.
    https://twitter.com/RobinhoodApp/status/1354805613566410756

    Even got some protesters are Robinhood HQ.

  24. #24
    Thailand Expat jabir's Avatar
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    https://twitter.com/i/status/1354894529208348673

    Janet Yellen accepted $810,000 in speaking fees from Citadel, owner of Robinhood.

    Reporter: Are there any plans to recuse herself from advising the President on GameStop and Robinhood situation?

    Psaki: No and she’s an expert and deserves that money.

    ---

    Citadel is invested in Melvin Capital, which shorted GME and got flattened by the Redditors, which just might be why they bailed out MC. Citadel is also RH's biggest customer, buying investor user data from RH and using it to profit at the expense of retail traders.
    Last edited by jabir; 29-01-2021 at 11:24 AM.

  25. #25
    Thailand Expat Backspin's Avatar
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    ^ Haha wow. They should haul Yellen in at the congressional hearing. Let Ted Cruz shred her

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