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Reddit r/WSB bankrupts Hedge Fund using Robinhood

PapaGang

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I know one thing... They've been calling us.. All of us on this forum... "unsophisticated" investors for years. What they mean is people poorer than them, people who don't have multi-billions, people that are "dumber" than them because we don't have billions, people who in no way can make smart due diligence on stocks and investing, gamblers,...

They lose entirely on one trade buying 140% short shares, 40% more than shares thats even available. Then get a $2B bailout from their rich friends to double down on a losing position to only lose it all again. Then complain, bitch, wine, and yell fraud. We manipulated the market! But.... how do you buy 140% of something that doesn't even exist? If things went their way and that additional 40% short that doesn't even exist in supply destroyed someone's life; its all good?? Sounds like someone over-leveraged and got exposed... sounds like a free market at work to me.

So... Who's really the "unsophisticated" one?

If there's one thing that this whole information super highway has been since it's birth... its that...

The internet is undefeated.
Not only did they buy 140% of something that doesn't exist, but it's quite possible they lost multiples of that. :rofl:
 
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cviji

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Do you guys think Robinhood will be banned and trading restrictions will get tighter from now on? It seems that retail investors are manipulating the markets just like wall street hedge funds.

Here's a quick rundown of what happened this Friday. Someone read through trading reports. They found out that Melvin Capital an investment firm was shorting the Gamestop stock and would close their position this Friday. Word spread around in multiple online trading forums the main one been reddit. The forum users decided to buy Game Stop stocks to prevent the Capitol Firm from collecting on their closing position. The stock goes from around $50 to over $150 in one day. The hedge fund lose their position and goes belly up.


I got involved with this last week... and I can say its been a lot of fun
 

PapaGang

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Charnell

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Anyone who thinks the stock market is a reflection of how the economy is doing is still scripted, and this just goes to show how it's all just a bunch of bullshit.
 
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G

Guest-5ty5s4

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Wallstreetbets can no longer be accessed on Reddit and their discord was banned. edit: (They're back up)

There it is, the power of hedge funds combined with big tech companies.

We are living in a very strange time.

Don’t you see? The script isn’t just a subliminal thought: it’s written into the laws of the land. The regulators apply the script and enforce the script. You can’t trade this way - you MUST give us a percent of your paycheck for passive stock market gains and a 2% fund fee.

The script will be enforced with an iron fist...
 
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AFMKelvin

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Wallstreetbets can no longer be accessed on Reddit and their discord was banned.

There it is, the power of hedge funds combined with big tech companies.

We are living in a very strange time.

Don’t you see? The script isn’t just a subliminal thought: it’s written into the laws of the land. The regulators apply the script and enforce the script. You can’t trade this way - you MUST give us a percent of your paycheck for passive stock market gains and a 2% fund fee.

The script will be enforced with an iron fist...

Yup. So much for the free market. And this exactly why people did this. To test the honesty of wall street and the federal reserve. How far will they go to maintain the illusion of the "free market." And "looking out" for the American people.
 

MJ DeMarco

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biophase

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Wallstreetbets can no longer be accessed on Reddit and their discord was banned.
Wow, that's crazy.

" it was banned because it continued to allow “hateful and discriminatory content after repeated warnings.”

LOL, all of reddit has that. They just needed a reason to ban it.

I think this will be the beginning of a change in wall street. The next one (crowd buying) won't be so public and WS will wonder what's going on. These hedge funds are going to be looking over their shoulders on large vulnerable positions.
 

AFMKelvin

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Wasn't the Parlor thread locked?
There's a no politics rule for the forum. The parlor thread was getting very political. Also Reddit never banned /wallstreetbets until now so one must assume is because they're protecting wall street.
 
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BizyDad

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Wow, that's crazy.

" it was banned because it continued to allow “hateful and discriminatory content after repeated warnings.”

LOL, all of reddit has that. They just needed a reason to ban it.

I think this will be the beginning of a change in wall street. The next one (crowd buying) won't be so public and WS will wonder what's going on. These hedge funds are going to be looking over their shoulders on large vulnerable positions.
That comment was why the discord server was taken down, not the subreddit. WSB is back live on Reddit.

But this once again illustrates the commandment of control, does it not? Build a commmunity on another's technology and you gain the advantages of ubiquitous adoption but the drawback of being under someone's thumb.
 
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Charnell

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There's a no politics rule for the forum.
That's the point.

There are rules in place, not F*cking censorship. But people cry censorship when they don't agree with the rules in place.

And Reddit didn't ban it, the mods of the sub made it private for a few hours.
 

James Fake

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There are more backups of WSB in many more places than the public knows of.

In other news;

AMC was able to cash some of their stock and now can successfully pay their rent, employees, etc. through 2021 and will be able to weather the storm. Essentially; a crowd sourced driven PPP to them. And good for them. 300% made shorts cover freeing up billions for them to pocket it for good use; and the early people like me believing in the Cause cash out from that same billion(s) in tremendous profit. And the late comers trying to make a quick buck, greed and piggy backing usually don't end very well in any aspect of life.

Eyes are set on a select group of other stocks.

Tomorrow will be another book for history.

Tip: Belief and Entry is where the money is made. If you do; you'll know where things are headed next. If you're looking to make a quick buck, you better make it with quick in and out's before that blade comes down.
 
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AFMKelvin

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That's the point.

There are rules in place, not f*cking censorship. But people cry censorship when they don't agree with the rules in place.

And Reddit didn't ban it, the mods of the sub made it private for a few hours.
Lol Reddit is censorship. Plenty of examples of Reddit censoring boards. Now go back to plebbit won't you.
 
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lludwig

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This certainly is a bubble.

There will be a few lucky people on either side of the trade who will do really well. For most, it will end in disaster.

Best of luck trying to outsmart Mr. Market.

Buy stonks!
 

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There's a no politics rule for the forum. The parlor thread was getting very political. Also Reddit never banned /wallstreetbets until now so one must assume is because they're protecting wall street.
r/WSB also has similar no-politics rules, just as TFLF does, although the WSB-ians practice some politics-related stuff like worshipping 'papa Elon', 'F*ck Melwin' and at one time, cursing RobinHood for its UI shitshows...basically the 'regular Joe up against Big Corp' theme.

There are more backups of WSB in many more places than the public knows of.

In other news;

AMC was able to cash some of their stock and now can successfully pay their rent, employees, etc. through 2021 and will be able to weather the storm. Essentially; a crowd sourced driven PPP to them. And good for them. 300% made shorts cover freeing up billions for them to pocket it for good use; and the early people like me believing in the Cause cash out from that same billion(s) in tremendous profit. And the late comers trying to make a quick buck, greed and piggy backing usually don't end very well in any aspect of life.

Eyes are set on a select group of other stocks.

Tomorrow will be another book for history.

Tip: Belief and Entry is where the money is made. If you do; you'll know where things are headed next. If you're looking to make a quick buck, you better make it with quick in and out's before that blade comes down.
The last tip is spot on.
Reminds me of one of my past stock punts (in my local Bursa market):

This was in the last month or so, when vaccines were coming to Malaysia.
Usually, the government would order vaccines from USA or China to distribute through government-related companies like Pharmaniaga and Duopharma.

For some reasons, some companies like Bintai, Solution Engineering and Yong Tai started arranging memorandum of understanding (MOUs), plans and stuff to package and distribute Chinese vaccines in Malaysia privately...

The funny shit was that all those companies were on the ACE board-they weren't exactly the top companies in the country, and they were NOT medical companies- they were in industrials.

Some of these 'vaccine counters' did have medical subsidiaries like Solution Engineering (SolBio), but they only counted for like 2% of total revenue...and there's a shit ton of approvals, regulations and stuff to obey, which would thin out vaccine profit margins.

But I bought some Solution (SOLUTN) at RM1.20+ just for kicks...it was probably the only one of the brood to start a vaccine fill-facility and appointed as Southeast Asian distributor for CanSino vaccine, so I saw it as one of the more serious counters.

Also had better fundamentals than its vaccine peers (number of consecutive profitable quarters, debt health, profit-margins, core business prospects, etc).

And they even had future plans of distributing non-COVID vaccines after the COVID-crap winded down.

The folks just kept pouring money into the vaccine counters, and SOLUTN flew up from mere cents to above RM1 all through December last year...
1611816890775.png
Notice the ATR below...how it spikes to an all-time high as folks read the news announcements and jumped in on the vaccine stocks bandwagon despite no solid news from the Government...

That was a warning sign that the frenzy was burning out.

Around 7 December, SOLUTN reached an all time-high of RM1.94, but settled around RM1.80.
I read the candlestick on the 1-min timeframe before market closed, and saw some surprising bearish candles.

I thought 'somebody going to sell out?'
Hence I sold most of my positions plus profit.

The next day was an absolute slaughter...
1611817566051.png
RM1.80 dropped down to RM1.40 and lower, before thankfully stopping at support of RM1.15.

Other vaccine counters like Bintai weren't so lucky...from RM1.40 to low of 56 sen in a dismal downtrend even with a Death Cross showing up...
1611817742584.png

These days though, the current news is that Pharmaniaga will be distributing Astrazeneca soon...but the gov said that private parties could distribute other vaccines as long as they were cleared by the Health Ministry, which isn't exactly easy.

Recently though, SOLUTN registered a sudden push-up:
1611818309582.png
There was no vaccine news related to the counter so far, and there was the huge sell-out after...so it could be a 'shark trap' or secret buy-ins by INSIDERS before a major news-either way, there's a level of deception at work.

I still have a little capital left in this though, so I'll just sit back and watch the travesty...
 
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Gepi

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Very funny how on the subreddit they posted 'don't sell, don't sell!' like crazy yesterday, together with those rocket emojis. But I have a vague feeling that what you were writing about the vaccine case in Malaysia @ZF Lee is going to happen here also, some people will get out rather quick now and a lot who just jumped on will be gnawing their teeth very soon.
 

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Very funny how on the subreddit they posted 'don't sell, don't sell!' like crazy yesterday, together with those rocket emojis. But I have a vague feeling that what you were writing about the vaccine case in Malaysia @ZF Lee is going to happen here also, some people will get out rather quick now and a lot who just jumped on will be gnawing their teeth very soon.

Now this article shows up at my local i3investor forum:

Specifically, it names heavily-shorted counters in my country like Top Glove.
Unlike GME, TOPGLOV is actually a solid company, having registered billions in profit in the last quarterly report and consecutive quarters in the green.

One of the top rubber glove companies in the country and the world.

Had a fantastic performance during COVID due to soaring gloves demand, but recently has been on a downtrend on the chart:
1611824376583.png

I entered it around RM6+ and topped up when regulated short-selling opened (RSS) cut it down to RM5.48 support...and then now it sits around RM6.21, which means the short-sellers ain't exactly winning.

This time though, the 'enemy' at TOPGLOV is JP Morgan.
They set a TOPGLOV target price as low as RM3.50...which seemed outlandish:

I can understand cyclical plays (ie investors switching from one industry to another winning one like semiconductors), but this is COVID and healthcare we are talking about.
It would take a much longer time-frame for the price to get cut down that low.

Already, some folks on my local forum were debunking the JP Morgan report:


Turns out, JP has some kind of agenda in promoting the crappy TOPGLOV price, JP has TOPGLOV as its second-highest position in its Malaysian holdings (for unit trust, at least...not too far off from an index)...so maybe it wants to go shopping at a lower price?
1611823712370.png
And the report came around before Malaysia opened up short-selling again.
So far we are suffering more foreign capital outflows due to the COVID and political crap, but I won't deny this looks suspicious...

So I definitely get the conspiracy vibe from the GME team at r/WSB.
Still, other non-Malaysian glove counters like Singapore's Riverstone and China's Intco have been moving nicely up, so maybe TOPGLOV is just being a laggard, or otherwise...
1611824601739.png
1611824709280.png

Still, I'm seeing talk of staging another short-squeeze on the local stock forum.
The folks have heard about the GME short-squeeze, but I just wonder if they have the discipline and the balls to pump the stock that crazy.

If that happens tomorrow, I shall laugh...

EDIT: They've even made some hashtags...#CRASHRSS

EDIT 2: Good Lord, now they've made a Malaysian-inspired of r/WSB:
 
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PapaGang

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There are more backups of WSB in many more places than the public knows of.

In other news;

AMC was able to cash some of their stock and now can successfully pay their rent, employees, etc. through 2021 and will be able to weather the storm. Essentially; a crowd sourced driven PPP to them. And good for them. 300% made shorts cover freeing up billions for them to pocket it for good use; and the early people like me believing in the Cause cash out from that same billion(s) in tremendous profit. And the late comers trying to make a quick buck, greed and piggy backing usually don't end very well in any aspect of life.

Eyes are set on a select group of other stocks.

Tomorrow will be another book for history.

Tip: Belief and Entry is where the money is made. If you do; you'll know where things are headed next. If you're looking to make a quick buck, you better make it with quick in and out's before that blade comes down.
Right. In a sense, this is what Chamath was trying to say on CNBC yesterday when he tore the host a new one.
 

PapaGang

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The AMC story is great.

This is an amazing moment in history where old-school, traditional institutions have ignored the power that technology has given the common person. The signs were there and ignored, institutions undervalue, misjudge, and scoff at the little guys, and then all hell breaks loose and traditional media spend the next several weeks asking dumb questions, completely oblivious to the existence of Stocktwits, Parler, Robinhood, etc.

Large institutions still operate as if the last 10 (20?) years of technology innovation never happened. That's how elections get influenced, capitols get rioted, and hedge funds become the target of short squeeze plays, bankrupting them in less than two days.

We have unbelievable knowledge and tech at our fingertips. We have the same tools the pros do. A small group of dedicated people can use tech to make a statement, to do the right thing, (to do the wrong thing sometimes) and it seems like we're just awakening to what the hell is really going on.

Seth Godin once said "I believe we are wasting the chance of a lifetime" by using it to watch dumb cat videos and make memes. He's right.

What if a small, dedicated group of people used tech to help people live in a beautiful way? Seems like that's happening all over the place.

I've read posts about people making enough money on the GME momentum play to be able to pay for their sister's Lyme disease treatment, to pay their student loans, to get their mom out of a shitty apartment and buy her a house. I've read about Udemy empowing someone to level up their skills and earn more than they could ever hope for. How YouTube helped someone who didn't have a job transform themselves into an expert and a six-figure life. I heard about how podcasting took a young woman from zero to six figures in 16 months.

And people on this very forum do miraculous things and overcome enormous odds every day. Using tech. The power, the knowledge, the tools. All there for us. If you've got that great idea, now is the time to start.

This is the chance of a lifetime.
 

Gepi

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Beautifully said. I recently thought about the Internet as the 'Great Equalizer', so this resonates.
 
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WillHurtDontCare

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ZF Lee

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Apparently now RobinHood blocked them from buying more GE, AMC and other meme stocks...
Not sure if the market and app are really bursting to their seams, or 'market manipulation' is happening, as the WSB-ians claim.

I try to dismiss the WSBians' mental biases, but well, things happen.

EDIT 2: Good Lord, now they've made a Malaysian-inspired of r/WSB:

Local news scooped it up in no time:

Just checked in on their chat lounge, and lots of newbies to stock market investing coming in.
Few folks who actually know the difference in short-selling conditions between Malaysia and USA, but some folks are already explaining what X means or why Y is right/wrong...some educational stuff.
Perhaps I might chime in here and there lol.

But seriously, Fastlaners, listen to MJ and focus on your businesses.
And actually do homework on your buys, if any.
 

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To Melvin Capital: you stand for everything that I hated during that time. You're a firm who makes money off of exploiting a company and manipulating markets and media to your advantage. Your continued existence is a sharp reminder that the ones in charge of so much hardship during the '08 crisis were not punished. And your blatant disregard for the law, made obvious months ago through your (for the Melvin lawyers out there: alleged) illegal naked short selling and more recently your obscene market manipulation after hours shows that you haven't learned a single thing since '08. And why would you? Your ilk were bailed out and rewarded for terrible and illegal financial decisions that negatively changed the lives of millions. I bought shares a few days ago. I dumped my savings into GME, paid my rent for this month with my credit card, and dumped my rent money into more GME (which for the people here at WSB, I would not recommend). And I'm holding. This is personal for me, and millions of others. You can drop the price of GME after hours $120, I'm not going anywhere. You can pay for thousands of reddit bots, I'm holding. You can get every mainstream media outlet to demonize us, I don't care. I'm making this as painful as I can for you.

Based upon this alone, this will not end well. This poor sucker will get burned... badly.

So one wrong deserves a 'right'? Let's assume Melvin did wrong and did manipulate the markets (which by the way is much harder to do when shorting since it's asymmetrical but let's forget that for a min).

So is the answer is that short-sellers shouldn't exist? Is this their solution?

If you think this you are deluding yourself. Short selling serves a very important purpose in price discovery.

This person's response is the 08 collapse was because of Wall Street... So therefore Wall Street must pay for its actions? Where was government and FED policy in any of this? What about individuals who overleverage themselves with loans? Not one single peep about those problems.

This is shortsighted at best, stupid at worse. Not understanding the larger picture of economics and how capitalism works... but hey this isn't a surprise with the demographic making these claims.

What they are doing then isn't itself market manipulation? This is the typical self-righteous bullshit that people use to justify their own wrong actions.

"I'm robbing a bank because the banks lie, cheat, and steal..." please!
 
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Einfamilienhaus

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I think RobinHood will lose a lot of reputation and buyers trust during and after this story.
 

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