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Michael Burry, GameStop, The Big Short, NYSE:GME, Finance, Stock How the Subreddit r/WallStreetBets is using GameStop Stock to BANKRUPT a Hedge Fund (Melvin Capital)

We have been given the scientific knowledge, the technical ability and the materials to pursue the exploration of the universe. Short three, two one: zero. All engine running, i actually think uh they’re smart they’re after the ones that are too short announcing, i think gamestop is going to too big he’s like so for today’s video, i thought, i’d wear the t, shirt of a football team that’s named after a soft drink And it’s also sponsored by the soft drink and is considered one of the worst aspects of capitalism in football in germany, but also in other countries as well, because i think it’s quite relevant when we’re talking about things like hedge funds, which are basically these investment firms. Designed to keep really really wealthy people incredibly wealthy. Now this is going to be the story that is still going on right now of a subreddit that had targeted one hedge fund and helped it lose billions because it was shorting stock in companies. They thought were going to die like gamestop in america now i’m, not going to pretend i’m a financial expert i’m, not going to pretend i understand the new york stock exchange or just general stock exchanges around the world. I don’t the only formal education i have in economics is like one module in my masters, where i learned about the you know the economics of the middle east, but that was mainly about oil, so it has nothing to do with stuff like this.

So i encourage people to correct me in the comments and point out where i am wrong, but for this video because i don’t know so much about it, i am going to be reading other people’s descriptions of events, we’re going to be looking at the wall street Bets subreddit and see what’s going on there and i’ve actually been lurking in it for a while, and the only thing i’ll say is that i don’t endorse the language they’re using they use. You know slurs about disabled people and stuff like that, because it’s meant to be. You know this edgy place. So obviously i don’t endorse that and i don’t think any of the posts i’m going to be reading actually use that language just something to keep in mind. But before we go any further, edgier content on my channel is always demonetised. So if you want to support me, monetarily, please check out my patreon thanks so much to everyone who has already done this at the moment the benefits are gaining access to the private discord. Server – and you obviously have your name featured at the end of every video and in the description i’m working for some other benefits that will come in the future. If you want to join our growing community, please check out the discord and the subreddit in the description and if you want to follow me personally, check out at thecavernacle on instagram and twitter, and also you slash tommycahill1995 for my personal reddit.

So without the way let’s get into the video and before we go any further, i put a chocolate orange behind me for every 5k subs i get we’re currently on, i think 23. So i need two more k to get to 25, so let’s keep going for that milestone, but now getting into the video like i said i don’t really want to explain it because of my limited knowledge and things like the stock market but essentially what’s been happening, Is one hedge fund called melvin capital has been investing its clients money in stocks like gamestop and it’s been shorting the stock, because gamestop has been going on hard times the last couple years. Many of you play video games like me, will start to be buying all your games on the digital storefronts nintendo, one, the playstation 1, the xbox one seems like it’s only going to get worse and if i ever buy a physical edition, i might use a more Independent retailer or i’m just going to use amazon because they’re, reliable, so it’s, safe to say things like gamestop are going to die and what’s happening at the moment, isn’t going to save them, but now let’s get into the whole issue. So, like i said, they’re short in stock and the best account of someone you know describing what’s going on, i found was nash across the eighth dimension, so he says that reddit just killed at least one hedge fund, maybe more.

This could end the practice of shorting stocks as we know it, which is essentially gambling and they hate it. So he says in case you weren’t, aware here’s how this completely insane and perfectly legal financial practice works. You see a company in distress like gamestop. In this instance, you think their stock is going to go even lower, so you borrow shares of that company and sell them. Yes, you borrow you can do that. You then, set up a timed order to buy back that same amount of stock, you’re betting. The price of the stock will go lower, so when you buy it back, cheap and return it to who you borrowed it from you will have made a profit. If it sounds like a gamification of the economy yep, however, if the price of the stock goes up higher than the price you sold your borrowed stock at uh, oh you’re, going to have to pay more to buy it back than you sold it for, and you Have to buy it back because you borrowed the stock, so you’re going to have to to buy shares to cover your shorts and when people realize you have to buy this particular stock, the price will shoot up. As you become desperate to find someone to sell you enough shares to cover what you have borrowed, this is called a squeeze it’s, going to be a huge momentary, blip in gamestop stock price and for context. It was 12 a share in october and just going on to talk about hedge funds, he says hedge fund exists not to invest wealth in companies to expand and improve the economy, but to find loopholes and gimmicks to create wealth via financial trickery and maybe a silver Lining he says if you were a regular old 9 to 5 gamestop employee who had shares in the company you’re lining up to have a nice nest egg now just to show you a graph of how much the stock has gone up like that guy said it Was 12 dollars in october? I think it was 25 near the start of the year now.

This will be outdated. Probably by the time you watch this video, but currently, as of you, know, 11 45 a.m. On january 27th, the stock is worth 353. If you were the hedge fund and you were shorting the stock at 25, you now owe over 300 per stock, so the people who have hedge funds are usually the most wealthy people, people like donald trump loads of rich people, democrat and republican. So why are the subreddit wall street bets focused on melvin capital, now we’re going to talk about the ideology driving them just some reporting from institutional investor? The effort to take down melvin appears to have started late last year and by mid january short, sellers began noticing spikes in the price of gamestop they suspected someone was covering well known short sellers, jim chanos and andrew left were known to be short gamestop and had Tweeted about the company, but it wasn’t either one of these men who had earned the most ire of a popular reddit forum wall street vets whose description reads like 4chan found a bloomberg terminal. These retail invested had taken aim at melvin, a fund headed by gabriel plotkin. A former portfolio manager with steve cohen’s sac capital, cohen’s successor firm .72, had more than one billion invested in melvin’s fund. According to the wall street journal about two months ago, a reddit user called stonks flying up posted a video with the title gme squeeze and the demise of melvin capital with trial scenes from the mini series.

Chernobyl, superimposed of texas, certain that melvin capital got too greedy. As well as an explanation of how a short squeeze could occur, the clip concluded with a photo of an explosion with the words melvin capital splashed across it reddit users were able to discover melvin capitals short against gamestop, because it was expressed in listed putt options. Unlike most short positions in the us, these bets must be disclosed in filings with the securities and exchange commission melvin’s. Most recent filing showed that it held 5.4 million, puts on gamestop valued at more than 55 million an increase of 58 during the third quarter. Melvin also disclosed short bet via putts on more than a dozen other stock, and the prices of many of these have also been soaring. Let’S go into the ideology of the group that are driving this little revolution. So on wall street betsy’s page you slash, concierge wrote we are tired of market manipulators and corrupted media. This is time to act. This is not about gamestop stock anymore. This is about setting terms straight. Retail does not want to be manipulated anymore for decades. Wall street was manipulating securities getting away with it and blaming it on others through the media target prices, naked short selling or other forms of manipulation mentioned here. Citadel and many other market manipulators got away with their dirty tactics to make shitload of money and screw people over. They finally got caught in their own game and tried everything to turn it around and it didn’t work.

The media didn’t work more aggressive selling, didn’t work. Now they’re calling through some random crooks for regulations, regulation for what exchange of ideas our own due diligence, winning against you, you and your own game yeah. In most cases, your buddies in the sec would gladly do so if you tell them to anyway. This time, though, people finally came to the realization what you guys are doing over there. It was known by many since 2008, but people forgot quickly and now is the time to remind them that you are no one else’s friends but your crooked buddies. I never thought i’d say this, but this community showed more leadership and guidance than any other media network. Providing knowledge, research answers, many of you proving that you are better people than these guys are billions of dollars. You should be proud of yourselves and you are leading an unprecedented event in the history of finance. This is why you should still guide others and be an example. Of course, we are not an entity, and we never will be just remember that you were part of something great, maybe something that would change the way the financial world operates in a smaller or larger way. Remember that there are sharks among us who got pissed at the dirty games as well. We are not alone, so one more in terms of the ideology stuff ben affleck’s wrote. This is personal for all of us. I’Ve never seen anything like what’s happening with the game.

Stop stock before and i don’t think i ever will see anything like this again. This is a big moment, a tug of war between tradition and the future. Hedge fund managers live in the past and they continue to look down upon the retail investors. They truly believe that we, the average retail investors don’t, know anything about finances or the market and we’re just gambling, our money away, we don’t know any better. We need hedge fund managers to tell us what to do to save us. This is the world they want to live in. This was the past. Remember that scene from the sopranos, where tony’s wife calls to buy 5 000 shares of web onyx after she was manipulated emotionally to do so. Institutions and hedge funds want us to be stuck in that world. They’Re scared of the future they’re scared, because so much more information is available for free there’s, no more fees for trading. We have large communities that discuss stocks and trading openly, so i don’t necessarily agree with the stock market and public trading and everything, but think of that scene in wolf of wall street when he’s scamming, that guy and just think of those old school stock brokers in General, where they’ll advise you, they have the expert knowledge at this firm and then you will pay them a nice commission and remember that scene with uh matthew, conahay and uh dicaprio and he’s basically saying keep them on the hook for as long as possible until they Lose their money because you’re always going to be making commission so it’s nice to see these people breaking the power dynamic where you don’t need stock brokers that work for these massive firms that are in bed with members of the government and institutions within the government or Hedge funds, that just you know, manipulate stock and do all this stuff to make the most wealthy society more money without actually doing anything or working for it.

So as much as i don’t like the stock market and the system of capitalism and everything i do respect, you know doing your own research and playing this game to screw over the rich rather than a hedge fund. Have these massive team of experts who are insanely good at maths, but just manipulating the stock market to make the richest people even richer? Now just to get some reaction, which i think is quite funny. People are saying that, because these people have shown what they can do, it’s going to be regulated by the government pretty quickly justin jackson saying the speed in which congress will probably pass legislation to prevent something like this gamespot thing from happening again will show you the Difference between immediate for wall street and immediate for people waiting on those 2 000 checks. I do agree with that as well ryan grimm, saying when a vulture funds ran a multi million dollar campaign to drive the economy of argentina into the ground, to profit of junk debt, immiserating an entire country. Nobody on wall street called for regulation when they did the same to puerto rico. These people were silent and again it just shows that these people don’t care about gambling manipulation and all this short selling, if it’s rich people and their friends doing it, making money for them as soon as a bunch of nobodies and your average joe on wall street Bets doing it and making money and making a big profit suddenly it’s a problem because they’re targeting the billionaires so anna kasparian saying market manipulation by federal reserve pumping so market manipulation by federal reserve pumping dollars into failing banks and corporations is okay.

Remember when donald trump did this and it literally bumped the market for like a couple minutes and then went straight back down during the onset of the pandemic, but reddit users rallying gamestop is wrong and must be regulated. The entire stock market is disconnected from reality funny. How quickly the financial press cries for hedge funds, and we always knew the stock market was attached from reality in the sense that it’s still chugging along fine, despite most of the world being in a really really bad recession. Now, as on wall street bets a couple minutes ago – and there are some nice stories of people making a lot of money and using them to help themselves in you know, situations that are pretty sad and everything, and this is so much better than donald trump. Making an extra million on whatever stock his hedge fund are, you know using for him and just hedge funds in general. I don’t know if donald trump uses melvin capital, but um on wall street bets stan bomb wrote. I can now write my mom a check and put my sister through lyme’s treatment. This has been a very rough year but i’m, so thankful for every one of you and then you can see his stock going completely up there, another one master of the game right. I want to thank you guys for saving my best friend’s life. Monday afternoon i took my best friend an american bully 2.

5 year old dog to the vet, because he wasn’t putting any weight on his back leg turns out. He needed knee surgery that costed four grand. I broke down because i didn’t have that much didn’t qualify for the payment plan and it was either the surgery or wait until his other knee blew and then put him to sleep. I put all the money i did have in gme around 97. A share and amc, which is another one that has been shorted at four dollars tuesday morning, a little less than 1k, with an exit plan to get out. Once i had enough money for a surgery this morning after market open, i was able to sell enough to pay for a surgery i’m in tears. I’M, really grateful. Thank you, everyone and good luck, so that one story is kind of worth it in the sense that if these guys didn’t do what they did, it would just be business as usual. It would be these hedge funds that are working for billionaires and millionaires, shorting, stock and betting on dying companies and betting on the dying of you know things up the high street just to make their clients a lot more money. So you actually have some good. Coming of this, so they lost a ton of money and they’re really hurt and it’s a tactic. They’Ve been using a lot. These short positions but let’s hope that these guys have crippled them in some way and hopefully their reputation has really really suffered.

So now for the future, i don’t know what will happen because i’ve seen a lot of people on the news talking about regulating this sort of thing, but other people saying there’s nothing illegal about people online. Discussing what shares to buy and like wall street bets are saying it’s, not an entity, not every single person here is doing it, but it is a coordinated movement. Now, because a lot of members of congress and the senate, i imagine either have large investments or play the stock market or use a hedge fund. I would say there probably will be a political movement to regulate this type of thing from amateur people on the stock market. Like some of those tweets were saying, it really wouldn’t. Surprise me, but anyway, no matter what happens i’m just happy. Some people could give wall street a bloody nose and could show these people they don’t need them. Even though it’s kind of like a sick game, the stock market – and you know – is gambling it’s addictive for many people, many people lose it all. It is fun to like, i said, punch the nose of the establishment, give them a bloody nose, and hopefully you know they could end this sort of predatory practice of betting on a company dying and hoping that it dies and basically hoping that thousands of people will Lose their jobs, so you can make loads of money on the short position it’s just really funny.

Knowing these guys would have a v shorts, seeing the stock price go up and up and up and knowing how much they’re going to owe people. So that is the power of reddit. Let me know in the comments what you think of this, please, i encourage any corrections. I encourage any more information on this stuff and also, if you are big on this stuff, let me know what you think will happen in the future with everything if you like my content, please subscribe to the channel like the video maybe subscribe again, we want to Hit four chocolate oranges soon, so i want to hit that 25k.

What do you think?

Written by freotech

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