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Thursday, January 28, 2021

GameStop takedown of hedge funds is Trumpism

GameStop's stock closed at $4.21 a share a year ago today. It fared OK during the covid 19 stock crash the next month, losing less than 50 cents a share. And then its price started to climb as it closed stores and moved online. The video game industry has exploded.

And GameStop's price exploded. It peaked at $469.42 a share on Wednesday.

That cost a hedge fund $13 billion because its managers bet against the company's price rising.

This run-up of the stock began with the social media monster Reddit, which has a subreddit (chat room) called WallStreetBets. A fellow using the pseudonym DeepF**kingValue got people to bet on GameStop beginning in September.

The New York Post reported, "The massive surge in GameStop’s stock price has made three of its biggest investors billions of dollars richer.

"The video-game retailer’s top individual shareholders racked up a collective gain as large as $5.5 billion as Reddit day traders drove the shares to dizzying heights.

"The biggest winner is Chewy.com founder Ryan Cohen, who joined GameStop’s board of directors earlier this month."

The story also said, "Cohen owns about 9 million GameStop shares for which he paid an average of $9.12 apiece, putting his an initial investment at roughly $82 million, according to Bloomberg data. His 13 percent stake in the company had ballooned to a market value $3.4 billion at Wednesday’s peak share price of $380, giving him a paper profit of more than $3.3 billion."

Well that is on paper.

His actual gain may be 50¢ when GameStop's price falls to the reality that it is worth the $9.12 he paid. And GameStop will be better off having a successful online merchant on its board.

But the fallout is on Reddit because hedge funds don't like to lose money. And hedge funds have friends in powerful places. And as helpful and loyal to the Cause as Reddit has been (it banished its popular The Donald subreddit), Reddit enabled a ragtag group of nobodies to kneecap a hedge fund.

Stacey McCain loves the story to death. He has 13 billion reasons to like it, one for each dollar lost.

He wrote, "Prison gang rape is the only metaphor that comes to mind for how badly the hedge funds got screwed on their GameStop shorts. How bad was it? So bad that NASDAQ intervened, so bad that Discord shut down the WallStreetBets chat channel, so bad that the Securities and Exchange Commission is now investigating the Reddit crew."

Robinhood, an online stock trader that targets people under 40, has blocked purchases of GameStop, AMC, and BlackBerry stock. It turns out Robinhood really does not want to make you a millionaire, kiddies. Sorry.

Glenn Reynolds wrote, "In the words of George Carlin, it’s a big club and you ain’t in it. But this is especially awkward for Robinhood, which is acting like a Deputy Sheriff of Nottingham. I assume its status as a cool brand for millennials and Gen Z will take a major hit."

Young Robinhood customers are learning a life lesson that while people can get rich quick, they are not one of them. You have to be part of the In Crowd. Martha Stewart thought she was. She went to prison over a $45,000 trade. (A jury convicted her of conspiracy, obstruction of an agency proceeding, and making false statements to federal investigator.) Conrad Black also went to prison for a bad stock deal. (A jury convicted him of three counts of fraud and one count of obstruction of justice) No one at that hedge fund will do time for losing $13 billion.

The media immediately blamed Donald John Trump.

Well, why not?

Chris Cillizza of CNN wrote, "What's the end game for the GameStop surgers? Like, now that they have proven the point that they can take a stock that the pros have declared moribund and revive it -- at least for a moment -- what do they do now? Because they don't really believe that GameStop is suddenly the new Amazon or Apple or Google. It's still mostly a business that derives its value from brick and mortar stores in malls. Which, again, is not exactly a big growth area in the coming years.

"The point is that there is no real point beyond showing up the pros -- proving to them that they aren't as smart as they think they are and that they don't have the ability to control everything.

"Which, again, has its roots in Trumpism. The entire notion of Trump's candidacy and presidency was to stick it to the elites. And then, well, uh, there wasn't really a plan beyond that. The screwjob was the point."

I agree, though.

We are sticking it to the elitists. Cillizza called them elite but there is nothing rare about their willingness to screw others for personal gain.

A hedge fund tried to short GameStop and got caught.

Good.

Charles Payne at Fox said, "The shorts, first of all, all this nonsense, all of this noise, all this whining by Wall Street, it’s making me sick! 140% of GameStop was short. I didn’t hear one person on TV complaining about Wall Street trying to crush GameStop, 140% short!”

"Neil, you can’t allow Wall Street to short 75% of a stock and nobody says anything, crush these companies into the dirt, and then when the individual investor makes money everyone is up in arms.

"Oh, they’re going to lose their shirt? Don’t you think people are trading, traded 80 billion shares today. People are ringing the register. I have a kid who bought a house. He made $50,000 and bought a house. So yeah, some people are going to lose, some are going to win. But if they want to change the rules of the game now because the general public is making money after decades of the shorts crushing thousands of stocks into the dirt, I watched stocks being crushed completely to zero and no one ever whispered anything because those stocks didn’t have Wall Street sponsorship."

This is a small payback.

The elitists gutted our Midwest in the 1970s and shipped the jobs to Mexico and Japan. Reagan tried to reverse that, but he was hobbled by the Republican Party. The Bushes, Clinton, and Obama followed, and the jobs moved to Red China because slave labor is cheaper than paying a worker $13.50 an hour to make widgets.

The American economy lost trillions. We know that because Red China's economy gained trillions.

We elected Donald Trump president and Washington went into open rebellion. Federal employees sabotaged his administration. The elitist insurrection shut down the economy, printed money to keep Wall Street's fortunes rising, and still had to rig the election to get him out.

The elitists bragged that this is a new post-industrial society. This is the information age, they sneered.

OK. So a bunch of people did what the elitists do and the elitists are hopping mad because the wrong people won and made them look silly.

They know who DeepF**kingValue is, and they will do to him what the British did to Guy Fawkes but without the hanging.

It is their game and their rules. I say we learn to ballot harvest.

66 comments:

  1. Some trading sites have now blocked certain buyers from buying more shares. They can only sell. Sounds like the election.

    ReplyDelete
    Replies
    1. So, Jeffery, you admit it was stolen.

      Good for you. admitting you're a thief is the first step.

      Delete
    2. Hahaha! But Step 2 is the more difficult one: Coming to believe that a power greater than Jeffery can restore him to sanity.

      Delete
    3. The government thru FINRA stopped trading. Guess what? All those contracts between the individual and Broker/Dealers are now nulll and void. No liability anymore for the crimes committed. Problem solved.

      Delete
    4. Get off my leg, psycho. I predicted it would be stolen well before it happened, you f--ktard. A blind man could see it coming.

      And calling everyone who intellectually beats you into the ground "Jeffrey" only emphasizes your lack of an argument, putz.

      Delete
    5. Cuckregime humping his master Edwina's leg for a belly rub. How cute.

      Heckle and Jeckle, gaslighting [to feebly attempt] to hide their stupidity since 2015.

      Delete
    6. Thank you, edu!

      ***

      Agreed: "Young Robinhood customers are learning a life lesson that while people can get rich quick, they are not one of them. You have to be part of the In crowd."

      Don Surber's ability simply amazes me at times. This is one of them.

      "Martha Stewart thought she was. She went to prison over a $45,000 trade.

      Here, I must disagree to a minor extent with the above, because the fall of Martha Stewart was more complicated than described above.

      She literally, until she got caught, Could Do No Wrong.

      Just ask Jane Clayson, who naively, and as it turned out, infamously, thought that the media was obligated to ask serious questions during interviews.

      As a result of what follows below ("Notably"), Jane no doubt got an in-house, closed-door lecture on why "news" programs have celebrities on morning shows who are on TV, more often than not, because Jane's bosses answered to the public relations firms that can dictate which of their clients will be on such shows, doing "softball" interviews.

      (Even softballs, if winged with oomph, can damage. Make that "ping pong balls."
      Later on, when media executives get fired, they often parachute gracefully into these same PR firms.)

      After that, Jane was (very quietly) Returned To Sender, Salt Lake City, her career terminated:

      "Notably, on June 25, 2002, CBS anchor Jane Clayson grilled Stewart on the air about ImClone [the stock that Stewart had illegally dumped thanks to her broker's warning] during her [Clayson's] regular segment on The Early Show."

      (Steward, WP copied 01/28/21. I digress. It should be also recalled that this too was a complicated situation. At that time, the CBS morning news shows, thanks to their insane managements, were infamously inept, drew far fewer viewers than their temporarily competent competition, and their on-air "talent" came and went like customers at a bordello, which, come to think of it, probably isn't a rhetorical simile.)

      [Continued next post]

      Delete
    7. At any rate, the pre-prison-striped Martha Stewart Kostyra, it will now be recalled, in 2002 WAS a Member of "The Club."

      And HOW!

      And she did everything humanly possibly to get herself thrown out of it.

      At that time, she was --- as it turned out, only temporarily --- Female Empowerment Idol Number One, the filly Secretariat who won the Belmont Stakes by 31 lengths.

      Simultaneously, the American media by 2002 was rapidly changing into the Soviet Pravda that it is today (remember how self-satisfied we were that we got Dan Rather fired? He was instantly replaced by worse ideologues).

      But there were still enough of the old guard media members --- all gone now; Don Surber and I remember them --- who knew that what Stewart did was wrong, and, in the end, Martha paid for the price of having been born in 1941, not 1981.

      Bottom Line: When the feds caught her, she gave them the middle finger.

      The feds KNEW that she was A Member, and ignoring her Leona Helmsley-trademarked defiance, did everything humanly possible to accommodate her, offering plea bargaining agreements that all but legalized insider trading of stocks.

      To each proposal, she told them, vehemently, to f*** off.

      She was MARTHA STEWART, ya see?

      She didn't take orders from lowly Fordham and Rutgers law school graduates.

      And not, definitely not, from you and me, the butlers in her kitchen and the guys mowing her lawns.

      I digress: This is on top of the dozens of her business partners and employees who she royally screwed, possibly even worse than the description above of what happened to the GameStop shorters!

      This list of degenerate unfortunates includes the stock broker mentioned above, who, if my memory serves correctly, Stewart egregiously betrayed in a last-ditch/futile effort to safe herself.

      (Unfortunately for him, he wasn't sent to the same prison that Martha ended up in, although there was every reason in the world that he should have been.)

      Back to the main story:

      Finally, the feds HAD to indict her, if only to avoid an even worse scandal.

      And that, my friends, is why she had to go to jail. And BFD, she spent what, less than a year in the WVA penitentiary? "Five months."

      Hey, at least she got a good education in why it is necessary to bring a checkbook with you when the door slams shut behind you and your civvies have been mailed, COD, back to your former residential address.

      Aside from that, she learned nothing.

      Which has surprised no one.

      Delete
    8. What are you thanking that fool for? Falsely labeling someone so he can make bogus attacks for pseudo-intellectual public masturbation exercises?


      If you think Edweenie has anything to offer you may wanna loosen your ball cap.

      Delete
    9. Big Fake will be signing copies of his 39th autobiography at Walmart (the DC Comics section) this Saturday --- don't be late!

      Pick one up for me, while you at it, I hear it's the best way to keep mice out of your basement library.

      (Which is why Big Fake currently can't get into his basement, with his previous, unanimously-remaindered 38 autobiographies taking up a good deal of the space.)

      Delete
  2. Look, personal attacks are one thing but when you start with that inbred West Virginia bullshit you get bounced.

    ReplyDelete
    Replies
    1. (Begins slow clapping)
      (Big grin)
      (Claps faster)
      (Rises from chair)
      (Clapping louder)
      OHHHH YEAHHHHHHH!

      Delete
    2. You think it's funny, Jeffery?

      You pull that stuff at Pirate's cove all the time.

      Surber isn't the softie Teach is.

      Delete
    3. Inbreds?? I think the most current example would be the left wing “elites”. They exhibit the classic traits of inbreeding....

      Delete
    4. Your absolutely right. I’m wrong. Total fool. Been too upset about what has happened. Won’t do it again.

      Delete
    5. Edweenie gain with the Jeffrey crap. You have a rare and strange obsession. Thankfully, nobody here gives a damn what gaslighting punks like you have to say.

      Delete
    6. Hat tip to Susie. Apologizing for an overstep (which I never saw, btw) shows class.

      Delete
  3. Maybe Robinhood is just the guy wearing a C4 neckless forced to rob a bank. Their platform just a** f**ked some serious people. Just wondering.

    ReplyDelete
    Replies
    1. You know, you may be on to something.

      It would indeed be cool if it was PDJT and co. who engineered this.

      After all, son-in-law Jared *was* a big hedge fund manager at some point... just saying... :-)

      Delete
    2. Don't know about Jared. He's a developer like his father-in-law. At the time the Donald was revving up his campaign, Jared was rehabbing a piece of the Brooklyn waterfront near the old navy yard.

      Delete
    3. Jared is a bigger moron than Edweenie, Cuckregime, and Obtuse Olsen--combined or singly. That takes effort.

      Delete
    4. To my knowledge, Jared has had nothing to do with Wall Street firms. His father was independently wealthy and J. could go anywhere, do anything he wanted. And he did.

      Delete
  4. I like Charles Payne and agree with him. Hedge funds and those that can I nvest in them are an exclusive club. They deserve this wake up call.

    And yes, we must learn to ballot harvest.

    ReplyDelete
    Replies
    1. Comment posted on You Tube:

      [start]

      When poor people lose money, poor people are "irresponsible"

      When rich people lose money, the poor people are responsible.

      [End]

      Delete
  5. Soros runs a hedge fund, doesn't he? And since he's the de facto owner of the Democratic Party... expect some pretty serious legislation against something like this from ever happening again as the Democrats rush to save their sugar daddy...

    ReplyDelete
    Replies
    1. George Soros Broke the Bank of England and Made $1,5B in the Process.

      Delete
  6. A commenter over at Ann Althouse made an astute observation

    "This is a lot like the Trump years, just compressed."

    ReplyDelete
  7. after spending 5 years flying perfectly good gliders into the ground during WWII, my old man entered really dangerous territory by working on Wall Street for a number of firms over 45 years. I learned a thing or two about investing at his knee, but have given up trying to explain the concept of "short selling" to colleagues who ask...I just tell them my dad tried to sell short once in the 1950s and got burned so badly he never went near that stove again! Do not try this at home!

    ReplyDelete
    Replies
    1. I tried this once as well. Thought I was going to lose my home.

      Delete
    2. My father, may he rest in piece, used to describe stock market downturns as sheep shearing time.

      Delete
    3. HH: Get a hold of an inexpensive, used copy of "The Other Side of Time," a WWII memoir by Brendan Phibbs.

      Delete
  8. Happy for the Chewy.com founder. Chewy is a great online pet store.

    ReplyDelete
  9. "Young Robinhood customers are learning a life less"

    Last word should be lesson.

    Cheers

    ReplyDelete
  10. It is their game and their rules. I say we learn to ballot harvest.

    You may want to blow up the warehouse where Dominion keeps its voting machines. Seems that's more useful.

    ReplyDelete
    Replies
    1. That's the sine qua non moving forward - if the successful rigging methods aren't countered, elections will have no meaning.

      There's been an arms race for decades, largely driven by the left's "innovations" (sic) at the ballot box. I don't know how far back this goes, but by the 1990s at least they were making more and more aggressive GOTV efforts (such as sending people out to scoop up homeless people and get them to the polls). It really burned in 2000 when they swiped *four* very close Senate contests because of this (total margin summed in all four was less than 15,000, in populous states no less). The GOP had to counter that with its own GOTV.

      In 2018, they sprung ballot harvesting in CA and stole a bunch of long-red seats in SoCal - the GOP matched that in 2020 and got the seats back.

      They used Dominion to rig the election in 2020. What's the response to that? I recall some original Mission Impossible (Peter Graves edition) episodes where they went into various murky jurisdictions and counterhacked voting machines so that the real results were produced. So do we do that? Or just hack the machines better and use our own fake results to settle scores?

      Delete
    2. Also learn how to resurrect deceased voters.

      Delete
    3. Why don't we play their game. Take Georgia, for instance. There are more red counties than blue counties. We flood our red counties with ballots like they did Atlanta and Philly. I would bet if we dump 300,000 ballots in red counties and flood the system, they will be begging for election reform. Simply put, we have more control of counties to count. We should just start playing by their rules.

      Delete
    4. Yeah, sure, Edweenie, that'll stop them from running the same ballots through dozens of times. /sarcastic blue


      You schmuck.

      Delete
  11. Beating the robber barons at their own game...beautiful. #trimthehedges

    ReplyDelete
  12. They keep using that word..."elite". I don't think that word means what they think it means.

    The proper word is "snobs" ('cuz it's a family site)

    ReplyDelete
    Replies
    1. One problem isn't just the snobs but the large number of failed snobs. As Prof. Reynolds has noted by quoting an article regularly from four or five years ago, the degrees that various airheads get that they think will be a pass into the virtue-ocracy have created a vast oversupply of such aspirants... while demand has basically either remain constant-and-low... or just dried up.

      Something has to break with regard to the so-called "elites" - too much incompetence, and too many failed aspirants trying to get in on the gravy train...

      Delete
  13. The Other McCain ended his post with this, but it deserves a replay - actually, MANY - for anybody who didn’t click Don’s link:

    “The way the establishment works is, they win, you lose. Then they say well, that’s just the rules, better luck next time! Then if you actually have better luck next time, they change the rules. Then they tell you the rules are the price we pay for civilization.”

    ReplyDelete
    Replies
    1. From The Prof, Glenny Reynolds!

      Delete
    2. The problem with the "establishment" is that they've morphed into the French aristocracy of the 1780s without even being sufficiently self-aware to realize it.

      As I've mumbled a few times before, the left has had this decades-long-running fantasy of replacing the gentile, restorative American Revolution with the destructive, bloody French Revolution. They may get it soon - but with THEM on the receiving end.

      Delete
    3. One writer at townhall.com compared the Gamestop action to the storming of the Bastille.

      Delete
    4. The Bastille huh?

      Well, they call all of us who disagree with them Nazis, Trump gets called Hitler, so like Edweenie and his cuck brigade of dopes they're full of hyperbole but not very creative.

      Delete
  14. Cue Mr. O'Toole as T.E. Lawrence:
    As I walk along the Bois de Boulogne
    With an independent air
    You can hear the girls declare
    "He must be a Millionaire."
    You can hear them sigh and wish to die,
    You can see them wink the other eye
    At the man who broke the bank at Monte Carlo. ZB

    ReplyDelete
  15. How the election was stolen: download this link before its taken down if you can that is

    https://www.deepcapture.com/2021/01/how-djt-lost-the-white-house-introduction-why-i-was-involved-before-november-3-and-what-i-learned-by-doing-so/

    Patrick Byrne does yeoman's work again.

    ReplyDelete
    Replies
    1. The crucial video is the 6th one down the page

      Delete
  16. Re: GameStop. I love it. My kids love it. RobinHood is bogus and Tucker alleged that it sells its customers' data, possibly to hedge funds. The elites have rigged the game. I laughed out out when I read the quote the Reddit guys posted: "We can remain re****ed longer than they can remain solvent." I did not type out the word in qudstion due to the ferocity of the woke brigade. Do not shoot the messenger --that was their comment.

    ReplyDelete
  17. Reddit is not exactly a Trump rally.

    ReplyDelete
  18. I've been trying to sell 100 GME short thru E*Trade at market when it's around 350 for three days now and they're refusing using excuse after excuse! Latest is they want CASH 3 times the proceeds in the account to try to locate shares to borrow despite holding securities woth 5 times the proceeds. This is ridiculous! Note no one other than me has mentioned the Northern Pacific corner of 1902 (which this one resembles) or Commodore Vanderbilt's TWO corners in Harlem during the Civil War. Bet E*Trade won't allow me to do a corner squeeze in reverse: Buy GME at 150 and then wait to sell it at 300 to someone who needs it a day later. But when the game's over some are going to lose of course. Those of us who have TIME--that is the rarest commodity there is!

    ReplyDelete
  19. Some years ago..OA the late '90's when we had annual fall panics I was looking at the annual statement/report of my broker's small brokerage and realized my cash was 0.5% of their total cash! I reasoned if I took 40,000 up I might crimp their support of margin and shorting operations. So I had them mail me a check which they did and a week or two later the market edifice began to slide; maybe others reached the same conclusion. Looks like here a lot of people came to the same conclusion--helped further by locations to spread their idea(s) much more widely. Note that shares were bought now WITH instructions AGIANST lending them to short sellers--hence my difficulty in shorting GME now. Actually, in the Erie Wars Jay Gould used the technique of tying up cash and shares to his advantage. But once it blew up in his face. He had ERIE certificates for 10 shares each and used them on British purchases. He expected these certificates to stay in England. But all summer long they came over by the bales on Cunard steamers and were bought by Wall St.'s small fry, washerwomen, anyone with a few bucks to pay 10% down to buy Erie at bottom prices. Jay Gould and Jim Fisk built a bear trap in Erie for Daniel Drew and sprung it--only to have Drew buy up all these ten-share certificate. The Street's small fry did quite nicely.

    ReplyDelete
  20. Watching GameStop's stock price is like watching a titanic struggle between the forces of good and the forces of evil. Oh, and Shakespeare's Henry V speech to his troops was made for this moment: https://abardseyeview.com/we-few-we-happy-few-we-band-of-brothers-henry-v-and-the-gamestop-squeeze/

    ReplyDelete
  21. Idk about that. I mean it reflects the tenor of trumpism but this has been brewing since 2008.

    Take from wall street on parade
    https://wallstreetonparade.com/2021/01/gamestop-shares-dark-pools-owned-by-goldman-sachs-jpmorgan-ubs-et-al-have-made-tens-of-thousands-of-trades/

    Take from Torrance Stephens
    https://torrancestephensphd.substack.com/p/from-little-big-man-to-wallstreetbets

    Take from Matt tabbi
    https://taibbi.substack.com/p/suck-it-wall-street

    I do agree, the impact of China on all of this is barely mentioned.

    I love your perspective, wish comments could be more civil bit that is just me

    ReplyDelete
    Replies
    1. Thank you. As far as the uncivil comments, true, but as I understand it, that's the price we pay for freedom of speech, now on the dead run from Fake President's Demo-Communist henchmen, in worse shape than Louis XVI when he tried to make a break for it in 1791 and got nabbed in Varennes, partly because of all the baggage that they had tried to flee with, which slowed their wagon train's flight to safety to a crawl.

      It's a shame that Matt Taibbi's baggage, likewise is a millstone around his neck in 2021, because he disgraced himself with his anti-Trump rants (2016-2019) --- which, ironically, failed to save him when he started to criticize the Woke DC's and Rolling Stone turned on him. Which is why he is now self-publishing on that site you directed us to.

      Funny man, that Matt. He thought that he was owed a decent shake after all these years.

      What he failed to do was to take a refresher course in What Is Guaranteed To Happen Next by re-reading Arthur Koestler's "Darkness At Noon" (1939).

      Now, if you will excuse me., I have three cats, and have to rig the election as to which one gets the catnip first.

      Delete
  22. "its managers bet"

    The fact that you call what Hedge Fund managers do 'betting' demonstrates you have NO knowledge of the financial markets and their functions WHATSOEVER.

    ReplyDelete
  23. I AM Making a Good Salary from Home $6580-$7065/week , which is amazing, under a year ago I was jobless in a horrible economy. I thank God every day I was blessed with these instructions and now it’s my duty to pay it forward and share it with Everyone. go to home media tech tab for more detail reinforce your heart……… USA ONLINE JOBS

    ReplyDelete
  24. I AM Making a Good Salary from Home $6580-$7065/week , which is amazing, under a year ago I was jobless in a horrible economy. I thank God every day I was blessed with these instructions and now it’s my duty to pay it forward and share it with Everyone. go to home media tech tab for more detail reinforce your heart……… USA ONLINE JOBS

    ReplyDelete