In what way is this different than a pump and dump? You tout the stock and say it's going to 5x, 10x, whatever because of X. Then the suckers buy. Then you sell.
Well, it's different because of whatever X is. X is the reason why the idea can spread through the community. It needs to make sense on some fundamental level in order to get past the onslaught of ridicule that every stock and member is subjected to.
If you say "ABC is going to increase 10x because it has a funny name" that obviously won't fly, but if you give a detailed account of why it is possible (this is called DD - due diligence), this has much more potential to excite people. I wouldn't classify open source intelligence as a pump and dump.
To start, it wasn't that short sellers were ruining the market. If you spent any time there, you'd see that they, too, short stocks.
Second, it definitely wasn't made up. GME was tremendously shorted. And there were more shares shorted than existed. This is not a unique phenomenon and is possible due to a concept called "naked shorting".
Yeah, no one is going to change short selling rules any time soon because it's all jus t made up crap and rumors from WSB to pump GME.
Hate to break it to ya, but you're getting played of you actually think the problem here was short selling.
The problem is that skittery online retail can be so openly manipulated to believe such conspiracies and that this leads to the profits of the small leaders of the crowd.
You buy a stock, post some “open source intelligence” to convince people they should also buy the stock and sell your shares before eventually you run out of people to convince to buy and the stock returns to “market value”.
I’m no Wall Street guru but that doesn’t sound like a pump and dump scheme at all.
Some of the other stuff they do is kind of funny in a “some people just want to watch the world burn” kind of way.
People certainly try but I don't think the community gets the credit it deserves. While it is certainly true that the majority are not seasoned investors, there are plenty in there that are able to be dissenting voices to these obvious attempts and these voices are heard and do shut down the threads.
It's not easy to make up artificial reasons as you will be forced to provide evidence for your claims. You need a solid base to build your argument and you better believe that you'll be fact checked in very aggressive ways.
But you don't need an account to view WSB, you are able to go browse it right now and see that it's mostly just stock market/economic news.
> Well, it's different because of whatever X is. X is the reason why the idea can spread through the community. It needs to make sense on some fundamental level in order to get past the onslaught of ridicule that every stock and member is subjected to.
All pump-and-dumps have an X.
Having a narrative of how the thing you are pumping will go up is not a difference from other pump-and-dump schemes.
It definitely is. A pump and dump is a coordinated effort to artificially raise the price of a stock.
Posting technical analysis and/or positive news that encourages people to take a position is not a pump and dump. No more than any financial article that has ever been written.
> A pump and dump is a coordinated effort to artificially raise the price of a stock.
And with what methods are such coordinated efforts carried out? By communicating a narrative intended to convince people that the stock will go up, so that the audience buys it and it does go up.
The narrative is the central element of the pump of a pump and dump.
Most pump and dump schemes present themselves as intelligence/analysis; there is no content-based objective differentiation, just intent and good-faith.
But, actually, some of the WSB stuff is openly coordinated strategy, not intelligence, overtly seeking to manipulate enough action to cause an outcome, not providing intelligence/analysis on what os likely to occur without active intervention
If you say "ABC is going to increase 10x because it has a funny name" that obviously won't fly, but if you give a detailed account of why it is possible (this is called DD - due diligence), this has much more potential to excite people. I wouldn't classify open source intelligence as a pump and dump.