Well it IS market manipulation. You're intentionally causing prices to go in whichever way you want. That is the textbook definition of manipulation.
Well it IS market manipulation. You're intentionally causing prices to go in whichever way you want. That is the textbook definition of manipulation.
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Squeezing short sellers is definitely not market manipulation.
https://www.investor.gov/introductio...s%20the%20case.
There is absolutely no way to prove WSB engaged in market manipulation. At best you could go after individuals in the group but even then proving that person engaged in market manipulation is a longshot at best.
It’s not quite textbook, since the WSB manipulation campaign was utterly explicit in its intentions. I don’t recall seeing the same dynamic in any other high profile examples prior to this latest. However, the latter makes it a clearer case of manipulation than it otherwise would be, not less, hence why regulators and the DoJ are taking concrete steps toward a crackdown, beyond simply cautioning against repeat behavior. As we’ve seen, those sympathetic to the David and Goliath narrative shift the goalposts to the likelihood of individual prosecution to try and obfuscate the fact market manipulation occurred by design, and WSB was/is at the center of it. It’s encouraging to see the SEC step in and suspend trading in at least one case since to send a message, which is what they arguably should have done in the first place when this all began. It seems regulators are realizing this now, and it’s significant the SEC cited “a coordinated attempt to artificially influence share prices,” exactly what happened with GME and others (and what I cited from the beginning), as a justification for stepping in. Existing controls compelled brokerages to at least briefly suspend trading anyway, ironically the focus of subsequent conspiratorial allegations.
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It's clearly not.
Banding together to buy up the stock is not market manipulation, you're not a cartel.
Ironically, the short laddering (artificial transactions to lower the price) of the GameStop stock done by various financial actors is market manipulation but again that is hard to prove.
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And yet your source says that what WSB did IS market manipulation. They rigged the price and created artificial demand by causing the price to inflate above what it would ever have gotten. It was an organized attempt at creating artificial demand for a stock. None of those people would have held on to it if it wasn't for WSB.
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No where in my source does it state a reddit group by the name of WSB engaged in market manipulation.
Squeezing short sellers and causing a price to go up is not rigging. That's a normal market and practice that already happens. The demand that happended was due to retail investors grouping together to buy stocks together which is also not illegal. There's also nothing illegal about holding a stock or telling others to hold a stock and not sell it.They rigged the price and created artificial demand by causing the price to inflate above what it would ever have gotten. It was an organized attempt at creating artificial demand for a stock. None of those people would have held on to it if it wasn't for WSB.
https://www.investopedia.com/terms/s/shortsqueeze.asp
It's quite obvious you know jack about short selling. Or else you'd realize hedge funds themselves had to buy GME stock to stop any losses they might.incur which drove the stock price up along with WSB.
If you don't like squeezes, then ban short selling. Squeezes are not illegal.
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It is when done in an organized fashion by more than one party and it results in artificial demand. Check your first source. Here I'll quote it for you
Once people outside of WSB got on it and projected demand started to inflate at a rate of 400% it stopped being a short-squeeze and it became manipulation. I understand that you're happy the WS sharks got a piece of their own medicine, I am too, and I want them to get a lot more medicine in the coming months, but a spade needs to be called a spade. This was a case of market manipulation. Had the few users on WSB who started the whole thing kept it to their own circle, it would have been a squeeze. But you cannot claim that buying the stock of a quickly failing company, with one foot in the grave, and making it look like one of the most sought after stocks in the history of the planet is just a squeeze.Rigging quotes, prices, or trades to make it look like there is more or less demand for a security than is the case.
In fact wikipedia even lists what happened as a form of market manipulation
Last edited by Sir Adrian; February 14, 2021 at 07:28 PM.
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It's not artificial demand. As pointed out the demand went up as word got out about the stock being shorted.
Please point out the law that makes it illegal to organize together to buy a stock. I await your source.
Nope. If you bothered to read my source it mentions in 2019 that Tesla was the most shorted stock on the market in 2019. And yet investors continued to buy the stock and the price of Tesla shot up 400% that year. That's not illegal. In fact the only difference between Tesla and Gamestop is that retail investors caused the short squeeze this time around.Once people outside of WSB got on it and projected demand started to inflate at a rate of 400% it stopped being a short-squeeze and it became manipulation.
Just because you lack understanding about how the stock market works doesn't make this not a squeeze or make this squeeze that was conducted illegal.I understand that you're happy the WS sharks got a piece of their own medicine, I am too, and I want them to get a lot more medicine in the coming months, but a spade needs to be called a spade. This was a case of market manipulation. Had the few users on WSB who started the whole thing kept it to their own circle, it would have been a squeeze. But you cannot claim that buying the stock of a quickly failing company, with one foot in the grave, and making it look like one of the most sought after stocks in the history of the planet is just a squeeze
Did you even read this? This describes companies who have impossibly high debt, high annual losses, and very assets. Gamestop has debt but it's not impossibly high. Gamestop still has over 5000 stores so plenty of assets. This is definitely not a lure and squeeze.In fact wikipedia even lists what happened as a form of market manipulation
Demand went up when word got out about WSB raising the price. It's when you heard about it, it's when I heard about, it's when everyone heard about it. WSB bought stock for over 9 months, the stock was shorted in December 2019, and you only heard about it 2 months ago.
No, the only difference between Tesla and Gamestop is that there was nothing organized with Tesla, it was just investors trading normally, there was no throng of amateurs lured in by inflated demand, there was no coordinated action, there was no campaigning. Tesla was normal trading.Nope. If you bothered to read my source it mentions in 2019 that Tesla was the most shorted stock on the market in 2019. And yet investors continued to buy the stock and the price of Tesla shot up 400% that year. That's not illegal. In fact the only difference between Tesla and Gamestop is that retail investors caused the short squeeze this time around.
If you say so.This describes companies who have impossibly high debt, high annual losses, and very assets. Gamestop has debt but it's not impossibly high. Gamestop still has over 5000 stores so plenty of assets. This is definitely not a lure and squeeze.
Just that the plan was that the shorters bring Gamestop stock to 0 by february. That means bankrupt. WSB got in specifically because it was the perfect bait to harm the hedgies, as GS was sure to go under within the year. So yes, it was a lure and squeeze. In fact the paragraph describes exactly what happened with the shorted stock. You can argue sematics all you want but facts are facts.
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No, one member of WSB bought Gamestop stock years ago. He told everyone the stock had potential for years and people laughed at him. Once stock got massively shorted he convinced people it was the time to buy stock because would go up due to the stock being shorted. That is what caused the demand.
In fact 140% of GameStop's public float was shorted. That's a big reason why the stock even able to ride in price so dramatically.
Again please provide evidence or the relevant US law that makes organizing together to buy stocks illegal. Otherwise it doesn't matter.No, the only difference between Tesla and Gamestop is that there was nothing organized with Tesla, it was just investors trading normally, there was no throng of amateurs lured in by inflated demand, there was no coordinated action, there was no campaigning. Tesla was normal trading.
No it was to lower the price, not make it zero. Its not possible for Gamestop to trade at 0$.If you say so.
Just that the plan was that the shorters bring Gamestop stock to 0 by february.
You do realize the value of a company is not solely determined by their stock price? Gamestop can't go bankrupt solely because it's stock price crashed. That makes absolutely no sense at all.That means bankrupt. WSB got in specifically because it was the perfect bait to harm the hedgies, as GS was sure to go under within the year. So yes, it was a lure and squeeze. In fact the paragraph describes exactly what happened with the shorted stock. You can argue sematics all you want but facts are facts.
https://www.cnet.com/personal-financ...-be-surprised/
Gamestop isn't doing great but it wasn't bound for bankruptcy as you claim it was.. Was GameStop going under before the stock price jump?
Though the retailer struggled in recent years, it wasn't at death's door.
"I actually think they are in a good position to grow revenue and earnings again with the console launches," said Wedbush analyst Michael Pachter. "Earnings power like that supports a price in the high teens or low 20s."
Not quite, this has been going on for almost 2 years. Roaring Kitty made an analysis over 2 years ago on this, Michael Burry (from the famous Big Short movie) even mentioned this about half a year - a year ago. This is not a new phenomenon, it just took off about a month or two ago.
More than that, GameStop being shorted 140% made it a prime target for investigations.
Melvin was forced to cover the shorts, drawing an emergency loan of 2.4 billion USD from Citadel. The same Citadel fronting the Robinhood trades. Hedge funds lost money, not as much as WSB wanted, but they were in serious red territory.Just that the plan was that the shorters bring Gamestop stock to 0 by february. That means bankrupt. WSB got in specifically because it was the perfect bait to harm the hedgies, as GS was sure to go under within the year. So yes, it was a lure and squeeze. In fact the paragraph describes exactly what happened with the shorted stock. You can argue sematics all you want but facts are facts.
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After federal prosecutors joined regulators in a formal probe of WSB market manipulation, European regulators seem to be following the lead and signaling similar considerations. Meanwhile, the poster child of the GME stunt, Keith Gill, has been subjected to a class action lawsuit in federal court, since as a CFA and licensed broker who became known as the face of the “movement,” it is alleged he played a direct role in what became market manipulation via social media. Apparently, the suit has even named a couple of Gill’s current or former employers as defendants, alleging they had a responsibility to monitor his activity as a licensed investment professional.
What’s unfortunate about the way this is all turning out, in my view, isn’t just that my initial assessment of the situation turned out to be correct, or that politicians’ shameless pandering has promoted conspiratorial misinformation. By all appearances, the fallout from this will mark a turn for the worse in what was the promising frontier of comparatively unregulated trading for retail investors. With political pressure mounting, it seems unlikely the feds will be able to just close out their investigations once the dust settles and let things return to business as usual. All I can hope is that whatever new regulation comes down as a result of internet trolls ruining a good thing for everyone else, it won’t hinder the activity of the average investor.
Last edited by Lord Thesaurian; February 19, 2021 at 10:19 PM.
Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII
Retail investors did nothing that other investers and traders haven't done before such as the 2019 Tesla short squeeze.
They didn't ruin anything. They just proved the system is . Previously retail investors had no real power to affect the stock market. With the rise of trading apps along with the pandemic more people are trading stocks than ever. Retail investors group together to buy stocks and were able to conduct a squeeze. Nothing more. And suddenly this is a problem now and not before when the same practices were conducted?
And fortunately after the Congressional hearing it seems like if more regulations are passed than it's gonna be against brokers and not the retail traders. The main focus of the hearing was Robinhood and hedge funds and the actions of the retail investors barely got mentioned.
Politicians were always going to focus on the brokerages. It would be political suicide not to back the little guy in the David and Goliath narrative. It’s politicians who have played a hand in lending credence to unfounded allegations of conspiracy and collusion between hedge funds and brokerages. The Congressional hearings are mostly theatrics, as these tend to be in the first place.
Anyone following the story from the beginning has seen regulatory scrutiny focus on the role social media played in manipulating the market, and how to prevent it going forward. The most I could see brokerages get hit for would be procedural or disclosure related, since it’s already been established that financial requirements, rather than conspiracy, prompted the pause in trading of certain stocks. As noted earlier, federal prosecutors have sought information on users from Robinhood and other brokerages as part of their probe of WSB market manipulation, in parallel with the SEC’s probe into social media posts.
Besides, regulators could indeed crack down on the conflict of interest between brokerages and hedge funds by curtailing payment for order flow, compelling brokerages to route orders to the stock exchange instead of wholesalers (including hedge funds), or even restricting/banning no-commission trades. This would torpedo the very business model that made no-commission trading a reality in the first place, and drive brokerages to pass the lost revenue/increased costs onto retail customers, one way or another.
Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII
Sure it's theatrics. You tell yourself that.
Established? That's a total lie. If financial requirements prompted the pause in trading then why didn't other brokers follow suit? It was only Robinhood and a couple brokers who paused trading. My own broker Fidelity placed no pauses or limits. Just the brokers with very obvious connections to the hedge funds who were losing money.Anyone following the story from the beginning has seen regulatory scrutiny focus on the role social media played in manipulating the market, and how to prevent it going forward. The most I could see brokerages get hit for would be procedural or disclosure related, since it’s already been established that financial requirements, rather than conspiracy, prompted the pause in trading of certain stocks.
No market manipulation has been proven. You also left out key info.As noted earlier, federal prosecutors have sought information on users from Robinhood and other brokerages as part of their probe of WSB market manipulation,
https://www.wsj.com/articles/gamesto...on-11613066950
The feds, SEC, CTFC are all investigating. But as stated in my source they are investigating the brokers and hedge funds as well as the traders part of the Gamestop squeeze.The Justice Department’s fraud section and the San Francisco U.S. attorney’s office have sought information about the activity from brokers and social-media companies that were hubs for the trading frenzy, the people said. Prosecutors have subpoenaed information from brokers such as Robinhood Markets Inc., the popular online brokerage that many individual investors used to trade GameStop and other shares, the people said.
You are making it out to be as if retail investors and their actions are what the feds and regulators are concerned about when they are investigating the brokers and hedge funds as well. No is safe here but I'll bet you right now the hedge funds and brokers have much much more to worry about than the retail traders do from the investigation.
A small price to pay for a fair market.Besides, regulators could indeed crack down on the conflict of interest between brokerages and hedge funds by curtailing payment for order flow, compelling brokerages to route orders to the stock exchange instead of wholesalers (including hedge funds), or even restricting/banning no-commission trades. This would torpedo the very business model that made no-commission trading a reality in the first place, and drive brokerages to pass the lost revenue/increased costs onto retail customers, one way or another.
Your knee jerk accusations of lies merely expose your own. The false narrative you are pushing about collusion between hedge funds and brokerages has already been debunked in this thread, by no less than a former senior counsel for SEC’s Division of Enforcement and chief counsel of the Division of Trading and Markets at the CFTC. From post 45:
You either don’t even understand your own citation, or you’re just lying about it to promote a false narrative about regulators going after brokerages for collusion. The WSJ article says nothing of the sort, and I already said, per your own citation, that prosecutors have sought information about the activity from brokers and social-media companies that were hubs for the trading frenzy as part of the market manipulation probe (you know, the subject of the article), nothing to do with your debunked theory about hedge funds and brokerages.[brokerages] were minimizing their own financial and regulatory risk, not trying to bail out hedge funds.
Robinhood, E*Trade, Interactive Brokers and others restricted trading in GameStop and other names last week after GameStop surged to $483 intraday—a 10,000% increase since August for a historically brick-and-mortar company with declining revenues and a now-downloadable product. The brokers came in for swift, intense—and misguided—criticism.
When clients trade, especially on margin, they use the broker’s money to play. Imagine a client buys 100 shares of GameStop for $400 a share, using $20,000 of his own money and borrowing $20,000 from Robinhood. If the stock drops from $400 to $120 (as it did on Jan. 28), the client’s position may be sold for $12,000 due to the margin violation, leaving Robinhood trying to collect an unsecured $8,000 debt from “u/Thicc_Ladies_PM_Me.” Good luck. Multiply this by hundreds or thousands of similar clients. Option trading is worse because the leverage is much greater.
Among client high jinks that brokers are to prevent is market manipulation. But to quote David St. Hubbins of Spinal Tap: “It’s such a fine line between stupid and clever, isn’t it?” So it is with market manipulation, which has no precise definition. Worse for brokers, clients don’t have to be found guilty of manipulation for the broker to be fined. “Potentially” suspicious activity is enough to put the broker in the soup.
https://www.wsj.com/articles/why-bro...article_inline
The Wall Street Journal has reported that the Securities and Exchange Commission is reviewing the trading frenzy as well. The SEC and CFTC are civil regulators. The burden of proof in a regulatory enforcement action is lower than in a criminal case, which the Justice Department would bring.
Regulators and prosecutors can find out who bought and sold shares, relying on data known as blue sheets, which brokers use to identify individuals behind trades. Tying the trades to public statements is more difficult; most people who talked about GameStop on websites such as Reddit did so anonymously.
https://www.wsj.com/articles/gamesto...on-11613066950Admitting the accuracy of my description of potential regulation and thus conceding my point, is hardly a counterargumentA small price to pay for a fair market.
Last edited by Lord Thesaurian; February 20, 2021 at 10:12 AM.
Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII
You going to address my post or not? It's not been debunked.
I've already addressed above the excuse the brokers have about minimizing risk. If it was about risk other brokers would have followed suit and yet only some brokers paused or restricted trading. Brokers tied to these hedge funds.You either don’t even understand your own citation, or you’re just lying about it to promote a false narrative about regulators going after brokerages for collusion. The WSJ article says nothing of the sort, and I already said, per your own citation, that prosecutors have sought information about the activity from brokers and social-media companies that were hubs for the trading frenzy as part of the market manipulation probe (you know, the subject of the article), nothing to do with your debunked theory about hedge funds and brokerages.
My WSJ article clearly states Robinhood is being subpoenaed and SEC and CFTC are investigating this incident. You even quoted part of for me. That would include the hedge funds and brokers who part of the Gamestop.
You keep perpetuating a false narrative that investigators are only looking at the retail traders which is not even remotely fact.
No where did I once say your assessment was accurate. Do try and address what I actually post. I await your reply.Admitting the accuracy of my description of potential regulation and thus conceding my point, is hardly a counterargument
You haven’t addressed anything. Your one citation completely undermines your claim and supports mine, regardless of your decision to double down on your false claim the requested information was related to allegations involving collusion between brokerages and hedge funds, when in fact the information requested is part of a probe of market manipulation of which WSB formed the epicenter. It’s ok to admit you don’t know what you’re talking about, but you made false claims that have been directly refuted by public information.
Last edited by Lord Thesaurian; February 20, 2021 at 12:27 PM.
Of these facts there cannot be any shadow of doubt: for instance, that civil society was renovated in every part by Christian institutions; that in the strength of that renewal the human race was lifted up to better things-nay, that it was brought back from death to life, and to so excellent a life that nothing more perfect had been known before, or will come to be known in the ages that have yet to be. - Pope Leo XIII