I want to refute slightly, that there is nothing wrong with shorting. Nothing at all. It is a consentual exchange, and for everyone one one side of a trade, is another person on the other end. These moves help a stock price find it's 'true value' relative to others. Remember, stocks really aren't a game where money is made through buying low and selling high, thought that's where some work is done. stocks are primarily a share entitlement to revenue, in the form of a dividend. The cost of a stock is generally proportional to the expected dividend that stock will yield in the future with some accounting for the probability of that dividend being higher or lower. For example, A GME dividend may be $0.50 per share in a given quarter. That would make it a great investment at $20 per share but absolutely retarded at $100 per share. At $20 you're getting a 2.5% return in a quarter, that's sweet. But at $200 per share you're looking at 0.25%, which is inefficient because better options exist. Buying, selling, and shorting are all mechanisms by which stocks leverage the mean confidence of tens of thousands of brains working on the problem to arrive at the best guess for it's 'true' value, as well as providing the liquidity that allows people to quickly get into and out of a particular stock. Some people think it's undervalued relative to it's return, others feel it's over valued, and so they buy and sell, or short sell, when they expect changes in that mean confidence level to change as facts and perceptions change. TLDR: It's not evil That being said, punishing groups that fail to account for actual risk is fantastic and I am thrilled that /r/wsb and /biz/ have found an over invested group and punished them for their arrogance - Colluding to short selling 130% of available stock is not a move that helps a stock reach it's true value, and frankly, it shouldn't take a group out 'for the luls' to right this behavior. It was a smart move for other firms to get behind because it was clearly a glass house and someone should have been throwing stones. Kudos to the autists for stepping in where established groups failed.
I want to refute slightly, that there is nothing wrong with shorting. Nothing at all. It is a consentual exchange, and for everyone one one side of a trade, is another person on the other end. These moves help a stock price find it's 'true value' relative to others. Remember, stocks really aren't a game where money is made through buying low and selling high, thought that's where some work is done. stocks are primarily a share entitlement to revenue, in the form of a dividend. The cost of a stock is generally proportional to the expected dividend that stock will yield in the future with some accounting for the probability of that dividend being higher or lower. For example, A GME dividend may be $0.50 per share in a given quarter. That would make it a great investment at $20 per share but absolutely retarded at $100 per share. At $20 you're getting a 2.5% return in a quarter, that's sweet. But at $200 per share you're looking at 0.25%, which is inefficient because better options exist. Buying, selling, and shorting are all mechanisms by which stocks leverage the mean confidence of tens of thousands of brains working on the problem to arrive at the best guess for it's 'true' value, as well as providing the liquidity that allows people to quickly get into and out of a particular stock. Some people think it's undervalued relative to it's return, others feel it's over valued, and so they buy and sell, or short sell, when they expect changes in that mean confidence level to change as facts and perceptions change. TLDR: It's not evil That being said, punishing groups that fail to account for actual risk is fantastic and I am thrilled that /r/wsb and /biz/ have found an over invested group and punished them for their arrogance - Colluding to short selling 130% of available stock is not a move that helps a stock reach it's true value, and frankly, it shouldn't take a group out 'for the luls' to right this beavior. It was a smart move for other firms to get behind because it was clearly a glass house and someone should have been throwing stones. Kudos to the autists for stepping in where established groups failed.
I want to refute slightly, that there is nothing wrong with shorting. Nothing at all. It is a conventual exchange, and for everyone one one side of a trade, is another person on the other end. These moves help a stock price find it's 'true value' relative to others.
Remember, stocks really aren't a game where money is made through buying low and selling high, thought that's where some work is done. stocks are primarily a share entitlement to revenue, in the form of a dividend. The cost of a stock is generally proportional to the expected dividend that stock will yield in the future with some accounting for the probability of that dividend being higher or lower.
For example, A GME dividend may be $0.50 per share in a given quarter. That would make it a great investment at $20 per share but absolutely retarded at $100 per share. At $20 you're getting a 2.5% return in a quarter, that's sweet. But at $200 per share you're looking at 0.25%, which is inefficient because better options exist.
Buying, selling, and shorting are all mechanisms by which stocks leverage the mean confidence of tens of thousands of brains working on the problem to arrive at the best guess for it's 'true' value, as well as providing the liquidity that allows people to quickly get into and out of a particular stock. Some people think it's undervalued relative to it's return, others feel it's over valued, and so they buy and sell, or short sell, when they expect changes in that mean confidence level to change as facts and perceptions change.
TLDR: It's not evil
That being said, punishing groups that fail to account for actual risk is fantastic and I am thrilled that /r/wsb and /biz/ have found an over invested group and punished them for their arrogance - Colluding to short selling 130% of available stock is not a move that helps a stock reach it's true value, and frankly, it shouldn't take a group out 'for the luls' to right this beavior. It was a smart move for other firms to get behind because it was clearly a glass house and someone should have been throwing stones. Kudos to the autists for stepping in where established groups failed.
I want to refute slightly, that there is nothing wrong with shorting. Nothing at all. It is a conventual exchange, and for everyone one one side of a trade, is another person on the other end. These moves help a stock price find it's 'true value' relative to others.
Remember, stocks really aren't a game where money is made through buying low and selling high, thought that's where some work is done. stocks are primarily a share entitlement to revenue, in the form of a dividend. The cost of a stock is generally proportional to the expected dividend that stock will yield in the future with some accounting for the probability of that dividend being higher or lower.
For example, A GME dividend may be $0.50 per share in a given quarter. That would make it a great investment at $20 per share but absolutely retarded at $100 per share. At $20 you're getting a 2.5% return in a quarter, that's sweet. But at $200 per share you're looking at 0.25%, which is inefficient because better options exist.
Buying, selling, and shorting are all mechanisms by which stocks leverage the mean confidence of tens of thousands of brains working on the problem to arrive at the best guess for it's 'true' value, as well as providing the liquidity that allows people to quickly get into and out of a particular stock.
TLDR: It's not evil
That being said, punishing groups that fail to account for actual risk is fantastic and I am thrilled that /r/wsb and /biz/ have found an over invested group and punished them for their arrogance - Colluding to short selling 130% of available stock is not a move that helps a stock reach it's true value, and frankly, it shouldn't take a group out 'for the luls' to right this beavior. It was a smart move for other firms to get behind because it was clearly a glass house and someone should have been throwing stones. Kudos to the autists for stepping in where established groups failed.