[Kocrachon]

Because a bunch of people don't understand how the market work.

like all these people who think they're buying GME stock is going to save GameStop, cuz they somehow think that GameStop get some of the money from their stock purchases... So yeah I really don't know what the heck is going on in people's minds right now.

[MegaButts]

They don't think they'll save GameStop and almost nobody cares. They just want to see hedge funds lose money, and they've already lost billions so many have already objectively succeeded.

They also love to see Jim Cramer have meltdowns, which is almost every day now.

If you want to hate on /r/wsb that's fine (there are many legitimate reasons to hate that subreddit), but don't pretend to understand something you clearly don't.

[kminehart]

Here's my hot take: they're victims of a pump-and-dump, only instead of enticed by the promise of a get-rich-quick scheme, they're experiencing groupthink while people encouraging and controlling this narrative are running away to the bank.

[MegaButts]

There is definitely a ton of shilling on /r/wsb and people outside thinking there is any single collective entity are ridiculously wrong.

Some people are pushing pump and dumps to make money. Some are ignorantly following along. Some genuinely treat it like a gambling addiction and enjoy it.

The GME thing though is unique, and there really is a narrative to hurt hedgies (in addition to all of the above).

[jjoonathan]

Yep. One hedge fund lost billions while a dozen more who could spare the effort to model these pumps made away with every penny the "rebels" spent!

[Aunche]

>they've already lost billions so many have already objectively succeeded

Hedge funds lost billions to the original WSB actors who wanted to profit from a short squeeze. The activist investors of GME were just handing the hedge funds more money.

Jim Cramer is entirely a performer now. It's his job to put on a show and have meltdowns.

[mlrtime]

Some hedge funds lost billions, other hedge funds maid billions. Some HF will short and still make billions.

[Aunche]

Hedge funds make money by having better information than their opponents. When buy and HODL appears on national news, you know that hedge funds are accounting for this in their strategy. It's naive to assume that activist investors could hurt them at this point.

[MegaButts]

That was the narrative a month ago before Melvin announced losing billions, so much they actually required billions in emergency capital. "We've closed our positions. Now please sell GME."

'The hedge funds are smarter' is as stupid as 'the VCs know better.' It's a narrative they have to push to stay relevant. Otherwise they'd just point towards their balance sheets to shut people up.

It's theoretically impossible for hedge funds, in aggregate, to outperform the market.

https://web.stanford.edu/~wfsharpe/art/active/active.htm

[Aunche]

You're assuming that hedge funds trade like self-professed WSB autists rather than professionals. There is a difference in being stupid and being completely nonsensical. You don't ask stochastic calculus interview questions, and simultaneously risk your entire holdings on HODLing all your shorts.

> We've closed our positions. Now please sell GME

Nobody would expect anyone to behave that way. Hedge funds have clients and need to reassure them that they aren't going to lose all their money. Any rational investor knew that Melvin could have opened up new short positions after GME had skyrocketed.

Hedge funds may not be smart enough be beat the market, but they're certainly smarter than a group of people who learned what a "short" is, after the squeeze.

[xenocratus]

> They just want to see hedge funds lose money, and they've already lost billions so many have already objectively succeeded.

They want to see hedge funds lose money, and some have lost billions while others made billions, so what exactly was acomplished?

[kevinmchugh]

I understand opposition to hedge funds, but it's not the case that they were all short GameStop. Some were long and made a lot of money by selling into the WSB fervor. Others were not especially interested but must have seen the price grow by 20x and seen a great opportunity to short it.

I have a high school friend who posted that they didn't care if they lost their entire investment, this was about sending a message. I'm not sure what that message was.

[rtkwe]

> Others were not especially interested but must have seen the price grow by 20x and seen a great opportunity to short it.

Near the peak I don't think there were shares available to short though, at least not publicly offered who knows what was available through Bloomberg chat.

[fredophile]

There might not have been shares available to short but a hedge fund could still sell a lot of options. If you sold call options anywhere near the peak you could have easily closed your position by now and taken pretty much the entire sale price as pure profit.

[throwaway5752]

Yes, those are very bad investing reasons. And while it feels like a game, they are investing with real money. It's not just entertainment. They will end up making different hedge funds richer, and will only end up poorer and more resentful in the end.

[Barrin92]

>They just want to see hedge funds lose money

more accurately, they wanted to see one hedge fund lose money, others, and plenty of private equity firms like Silver Lake have made a killing because of the spectacle. And I'm sure Jim Cramer loves the attention too even if he has to play the enraged TV personality for a while.

[klmadfejno]

Jim Cramer must hate it when people watch his show

[hntrader]

They can get some of the money, indirectly, through an offering. The price on the secondary market drastically changes a listed company's fundraising prospects.

[mlrtime]

But they haven't and insiders have not sold due to SEC grey area laws.

[hntrader]

They can still raise at elevated prices, GME is still up more than 10x.

AMC did so, dumping their at the market offering at the top.

[calyth2018]

Why does anyone want to save GameStop? They're pretty notorious for shit CS and shit trade-in prices.

Or is this just people who are at the generation where they don't actually remember GameStop's actual practices and wax nostalgic about it?

[mortehu]

Re trade-ins, should GameStop even be allowed to buy back games after selling them to you? That's like short selling.

[mweberxyz]

It's just normal selling.

If I borrow a game from my friend in order to sell it to GameStop, anticipating the re-sale price will be lower then the trade in price, so I can give the game back to my friend and take a profit -- would be like short selling.

[mortehu]

That's a specific type of shorting. In financial markets you can also enter swap agreements, or sell futures or call options. The key is that GameStop seeks to profit from price depreciation.

Just for fun we could imagine GameStop seeks to buy back every game it sells, and that games don't intrinsically decay because they're digital and the packaging is worth zero.

Come to think of it, if games are pre-ordered it's even closer to what could reasonably be considered a short.