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Old 29th January 2021, 17:24     #41
Lightspeed
 
Laugh Gold

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Old 29th January 2021, 19:22     #42
Know me.
 
Given that robinhood doesn't transact the trades against an exchange and just passes them (maybe) to another market maker that places the trades on an exchange (maybe) there is a great room to fuck people out of their money.

"Sell" people GME stock at $450 and don't actually transact against a real exchange. Place a halt on buys, crash the price to $150 and pocket the $300. Job done.
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Old 29th January 2021, 21:14     #43
Ab
A mariachi ogre snorkel
 
As a startup with an IPO coming up you'd think Robinhood would be more, I dunno, careful about doing things that might expose them reputational damage.
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Old 30th January 2021, 08:48     #44
Cyberbob
 
Quote:
Originally Posted by Know me.
"Sell" people GME stock at $450 and don't actually transact against a real exchange. Place a halt on buys, crash the price to $150 and pocket the $300. Job done.
That's almost exactly what the funds were doing by shorting the stock. Borrow high, sell high, crash, buy them back low, give the stock back and pocket the difference.
But in GME's case, they were 140% shorted, meaning the hedge funds shorted more shares than what existed. They were caught with their pants down and the world (i.e. /r/WSB) noticed. Now they're scrambling to get the capital required to close their positions before the price to buy the stocks back raises any higher - or option B, shady tactics.

I guess the hedge funds think the risk of jail time and class action law suits are less damaging than the potential market impact. They would rather commit securities fraud on a global scale and deal with the fallout of that than lose the bad bet they made. It’s the cheaper option.

I.B. Chairman Admits to Market Manipulation on Live T.V.
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Last edited by Cyberbob : 30th January 2021 at 08:49.
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Old 30th January 2021, 09:17     #45
Ajax
Architeuthis
 
Looks like a lot of WSB folks have moved off Robinhood and onto other platforms. Price war is still raging and many funds must be bleeding out due to the massive interest they have to pay on holding those shorts. Fascinating stuff.
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Old 30th January 2021, 16:02     #46
Ab
A mariachi ogre snorkel
 
I don't think Robinhood comes back from this. That brand is in the dumpster with WeWork now.
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Old 30th January 2021, 20:28     #47
blynk
 
Sounds like Elon was wanting to flex some muscle too today.
Tweeing bitcoin and having the price shoot up to screw over short sellers
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Old 31st January 2021, 11:44     #48
Nich
 
Quote:
Originally Posted by Ab
I don't think Robinhood comes back from this. That brand is in the dumpster with WeWork now.
Biden is a bit fucked too:
- Side with FED & Wall Street: Lose the plebs
- Side with the plebs: Lose the money

The decision may be too hard to make and he’ll just freeze in the headlights
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Old 31st January 2021, 12:18     #49
Lightspeed
 
I think "let nature take its course" might be a valid option. Although that might be siding with the people by default.
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Old 2nd February 2021, 10:43     #50
Ab
A mariachi ogre snorkel
 
Quote:
Originally Posted by Ab
It's like the narrative arc of a slave rebellion/Spartacus/Hunger Games/casino story. You're cheering for them, but you know that at some point in Act 3 a sad mentor figure is going to give the "you had a good run, but you didn't seriously think they were going to let you win, did you? the system is the system and it was built for them, not for you" speech.
Well it looks like the house won in the end, the hedge funds are all still there and all still in control of the system.

For the WSB raid - and that's what it was, it was a MMORPG raid - to be successful, the players needed to be able to communicate with each other, they needed for the client software to work, they needed the server to stay up, and they needed to be in the game and all Leeroy Jenkins at the right time. Just when it looked like the crazy fuckers actually had a chance, every one of those things failed. What are the chances.
  • Discord took down the WSB channel for "hate speech". There goes comms.
  • Robinhood locked users out of the app, executed sales without authorisation, and restricted trading. There goes the game client.
  • The big trading houses like Schwab and Ameritrade halted trading of GME stock. There go the servers.
  • Those three things took care of the fourth - there goes time. Enough of the players were locked out for long enough that the big hedge funds were able to consolidate their positions without interference, and they were able to lean on media channels to write stories about a "mob" of "possible Trump supporters" and have outlets like CNBC lie that "the funds have all closed their shorts anyway so the game's over" and have a million or so brand-new anonymous users register new reddit accounts and join r/wallstreetbeets and start posting "hey it's time to sell I'm selling you should sell too let's try another stock ooh look at that shiny thing over there".

"the system is the system and it was built for them, not for you"
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Old 2nd February 2021, 11:04     #51
Nich
 
The house won the battle, and was forced to show everyone the sausage factory in the process. Robinhood will lose a shit tonne of users, but the next hot brokerage app will also sell user data.

The GME war isn't over yet. The many short positions are still due to close over Feb / Mar. So there's a bit of juice left. Also it's not just retail, there will be opposition hedge funds who will gladly stick the knife in Melvin Capital.

Then there's the fake allies:
Chamath got in on the price rise, but exited his position to take profits (and give to charity). Uh, the point was to buy and hold so the hedge funds cannot buy the stock back at all.

Jimmy Kimmel blames Russia... yawn.
https://twitter.com/TimJDillon/statu...32145924698112
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Old 2nd February 2021, 11:06     #52
Cyberbob
 
So, is anyone going to be held accountable for the transparent market manipulation? Not likely.
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Old 2nd February 2021, 11:35     #53
Ab
A mariachi ogre snorkel
 
Quote:
Originally Posted by Nich
Then there's the fake allies:
Chamath got in on the price rise, but exited his position to take profits (and give to charity). Uh, the point was to buy and hold so the hedge funds cannot buy the stock back at all.

Jimmy Kimmel blames Russia... yawn.
https://twitter.com/TimJDillon/statu...32145924698112
Chamath is a very clever operator and he scares the shit out of me. The fact that his "support" of the WSB tards seems to be wrapped around a campaign for political office scares me every more.

Kimmel? Russia? wtf?
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Old 2nd February 2021, 11:47     #54
Nich
 
One other aspect that helps hedge funds is the ETFs that try to balance GME @ 1% of holdings blew that out to 20% of holdings in the surge. So lots of index funds were rebalancing and selling shares into the market (at a time when only hedge funds can buy).

In the coming days and weeks, we will see if this repertoire of fraud was enough to cover their naked short positions.
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Old 2nd February 2021, 12:18     #55
Nich
 
Elon VS Vlad on Clubhouse

opening salvo: "Vlad the stock impaler!"

from here:
https://twitter.com/NickSzabo4/statu...74364707450880

video link:
https://www.youtube.com/watch?v=2M7X2dsW_Xw
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Old 2nd February 2021, 13:01     #56
Ab
A mariachi ogre snorkel
 
And yet

Robinhood raises another $2.4 billion as broker app deals with retail trading frenzy

Quote:
Discount online brokerage Robinhood said Monday it has raised another $2.4 billion from investors amid the extreme bouts of market volatility.

The $3.4 billion it has mobilized since Thursday exceeds the total amount it has raised since its founding in 2013.

“This funding is a strong sign of confidence from investors and will help us build for the future and continue to serve people through the exponential growth we’ve seen this year,” the company said.

“We’re witnessing a movement of everyday people taking control of their own financial futures, many investing for the first time through Robinhood.”

It said it will use the new funding to expand its programs on financial literacy.

“With this funding, we’ll build and enhance our products that give more people access to the financial system,” the company’s statement said.
Trans: this funding is a strong sign of confidence from the system that we are part of the system and that we are a useful tool in regulating the ability of plebs to interact with the system while milking them like cows
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Old 2nd February 2021, 14:08     #57
Lightspeed
 
So what's the barrier to creating alternative platforms?
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Old 2nd February 2021, 14:20     #58
Ab
A mariachi ogre snorkel
 
The usual for any app. Investors, a business plan, leaders with a vision. It's not like Robinhood is unique, and I think this week's cockup is an opportunity for someone to step up into that space.

I'm not really a stock market guy - I'm interested but not involved, if you get me - and it sounds like the app Public is doing good things. Like, democratising investment but without the gamified gambling addiction vibe of Robinhood. I'm also seeing stock market functions show up in crypto apps lately. All of a sudden I see I can buy not just crypto but stocks within Blockfolio, for example.
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Old 2nd February 2021, 18:00     #59
Nich
 
Scott Galloway is assuming the "concerned Dad" role
https://twitter.com/APompliano/statu...00569091174400

Stop staring at the price of bitcoin on your phone. Cmon son, go outside and get some exercise. Go meet a nice girl! And for godsake get a job!
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Old 2nd February 2021, 18:05     #60
Nich
 
Will ANY news institution admit that these people literally have nothing to lose, no future to look forward to, and this is an expression of that? Rationalise it that way and the nihilism makes perfect sense.
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Old 3rd February 2021, 08:55     #61
Cyberbob
 
Quote:
Originally Posted by Lightspeed
So what's the barrier to creating alternative platforms?
The funds to support the volume and value of transactions.
From Mark Cuban's AMA today:
Quote:
What ruined it on RH is that they didnt have enough cash to deal with the growth in accounts, margin loans and volatility. The EXACT SAME THING will happen at the next broker if you dont make sure they have a MULTI-TRILLION dollar balance sheet to be able to handle these kind of circumstances.

RobinHood and the other zero commission brokers that everyone used didnt have enough capital to fund the fight. They let you down in a big way.

When you load back up, fight a broker with trillions of dollars in assets on their balance sheet. Someone that can be there when the fight starts and wont blink an eye.
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Old 3rd February 2021, 10:05     #62
Ab
A mariachi ogre snorkel
 
Quote:
Originally Posted by Nich
Will ANY news institution admit that these people literally have nothing to lose, no future to look forward to, and this is an expression of that? Rationalise it that way and the nihilism makes perfect sense.
no.
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Old 3rd February 2021, 10:06     #63
Lightspeed
 
I don't think they even realise. It's too abstract from their own experiences.
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Old 3rd February 2021, 10:57     #64
Nich
 
You're right. I'm still shocked these talking heads can so easily lie and manipulate.


This podcast is very good.
Speaking of Bitcoin podcast - Gamestop, Wall Street and the Avocado Toast Revolution (SOB#452)
https://youtu.be/s5-FCS1-2RI

The ending remarks are spot on:
2008 was "too big to fail",
and 2020/21 is "too small to succeed"
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Old 3rd February 2021, 11:29     #65
Ab
A mariachi ogre snorkel
 
I like Scott Galloway, he's a smart dude and he seems to be really grounded for a rich white American. But yeah he is totally hamstrung by the lens through which he's looking at this.

Here's the latest episode of his podcast, in which he and NYU finance professor Aswath Damodaran talk about the GME squeeze:

https://podcasts.apple.com/us/podcas...=1000506946680

It's a great discussion, you guys should all give it a listen even if just the first 10 mins or so.

These guys are brilliant and articulate and and insightful and they just have no idea how much they don't understand what's happened. They have this huge blindspot that comes from being stock market guys. They talk about how the WSB investors need to have an exit strategy and how risky their current investments are and how Gamestop's future earnings look bleak because of changing retail patterns and OH MY FUCKING GOD SHUT UP SHUT UP SHUT UP. The fact that they describe the WSB tards as investors in need of an exit strategy just shows how much they don't get it. The can't seem to get their heads around the fact that to a lot of the core WSB tards money is a meaningless concept because they know they'll never have enough of it. The can't even conceive of the fact that a lot of the tards would happily set 100% of their own money on fire if it bankrupted a hedge fund.

It's weird because Galloway in other pods and interviews reveals that he's aware of the resentment that young people have towards the system that has shut them out of prosperity and financial security, but his commentary on the WSB squeeze seems really blinkered.
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Old 3rd February 2021, 21:01     #66
Know me.
 
The platform just has to adjust margin based on the volatility of the stock people are trading, right down to 1:1 if need be. RH should have stopped leveraged buys early in the piece.
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Old 4th February 2021, 11:47     #67
Ab
A mariachi ogre snorkel
 
Hard-hitting analysis from the Washington Post:

Quote:
Where are the women in GameStop? Wallstreetbets isn't a welcoming subreddit, women say

Women are missing from the GameStop news. Experts blame this ‘fratty’ subreddit. The online forum is ‘not a fun place to be if you’re not a White man’
...
When Katja Gravel joined, she said, she immediately recognized a “bro-ey, fratty mentality.” Commenters would call things “retarded” and “autistic,” and joke about how “all women are cheaters.” “He” and “his” were the default pronouns.

“These were all words I used when I was 12, before I realized they were not okay,” said Gravel, 32, who works in recruitment in Raleigh, N.C. She never flagged the inappropriate comments, she said, knowing she’d get called out for being a “sensitive snowflake” or a “stupid loser.”

“They told all these crude jokes,” Stevens said, “things women just don’t tend to say.”

These jokes are often told with a “wink, wink, nod, nod,” Massanari said. It’s never entirely clear whether commenters are serious. For many women who come to the platform, she said, it doesn’t matter whether the jokes are told “ironically”: They feel uncomfortable, so they go elsewhere.
Masculine pronouns? Someone said a thing that made someone feel uncomfortable? that's a cancellin'.
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Old 4th February 2021, 12:33     #68
Nich
 
Wait till they get into actual Wall Street.
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Old 9th February 2021, 10:41     #69
Lightspeed
 
Laugh

Bill Burr flipping out over GameStop

I skipped the bit where he explains shorting.
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Old 19th February 2021, 10:02     #70
Nich
 
Congress is now making sure Roaring Kitty is the problem that needs fixing... no questions about naked shorts, broker liquidity, or trade halts.
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Old 19th February 2021, 14:01     #71
Ajax
Architeuthis
 
The case against RK based on securities fraud seems weak to me. From what I saw he was mostly just posting about his own investment strategies and positions.
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Old 25th February 2021, 11:00     #72
Nich
 
Round 2 FIGHT!

I'll bet Robinhood isn't the leading broker this time.
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Old 25th February 2021, 11:02     #73
Lightspeed
 
Will it have any impact on hedge funds this time around?
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Old 25th February 2021, 11:10     #74
Ab
A mariachi ogre snorkel
 
DFV/RK's testimony:

https://www.youtube.com/watch?v=ukXQGBpXaVM
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Old 9th March 2021, 14:45     #75
Nich
 
The man, the legend. Story continues, but gets no oxygen on mainstream media.

https://www.reddit.com/r/wallstreetb...te_mar_8_2021/
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Old 1st July 2021, 12:39     #76
Nich
 
https://twitter.com/finra/status/141...198199305?s=21

https://www.finra.org/media-center/n...hood-financial

$70,000,000 is the pricetag, uh “fine”

And here i was thinking they were going to get away with it…
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Old 1st July 2021, 12:58     #77
Ab
A mariachi ogre snorkel
 
What's Robinhood's current valuation... 30 billion?
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Old 1st July 2021, 14:19     #78
Ajax
Architeuthis
 
Quote:
Originally Posted by Ab
What's Robinhood's current valuation... 30 billion?
Maybe but that doesn't mean they have 30 billion in operating liquidity. They would have factored in a large fine as a risk when engaging in their shenanigans but 70 million is a decent wallop.
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Old 1st July 2021, 14:21     #79
crocos
 
Plus that's 30B of mostly other people's money (as shares) they currently have under their management, not just outright theirs. (though the rules there are VERY vague)
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Old 1st July 2021, 16:05     #80
Know me.
 
The fine has got nothing to do with the GME and others short squeeze.
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