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And it couldn't have happened to a nicer guy! If there was one short seller I wanted to see fall from this it was that joker.
He did one of his "reports" on a company I was holding back in 2018. Put out false information about the company being a sham and suckering investors. In a matter of hours, stock went down about $10 per share (it was around $12 at the time I think). No a huge amount unless you are holding 20000 shares of it.
Thankfully the entire "report" got torn apart piece by piece reasonably quick and it eventually went back up. But man, looking at that paper loss each day sure did hurt. Once it got back up to pre-short level, I sold all but 1000 shares (for other reasons, not because of the short seller).
But if you hear most Wallstreet types tell it, short sellers usually lose money, help discover the true value of securities, provide liquidity, and we should basically feel sorry for the valuable short sellers .
Couldn’t read more than the first couple paragraphs of that article before hitting a paywall. But the author says Andrew Left is a good guy who fights against fraud (paraphrasing). Sure.
I'm all about free markets - short what you like, and yes they provide liquidity and price discovery. But it's a risky move, and when it blows up on you it's on you and nobody should have to bail you out.
But also naked shorts should not be allowed, I don't understand how it has become an acceptable or permitted practice
Agree regulators were allowing hedge funds to drive down the stock and allowing naked shorts, so they can't or shouldn't complain about and help out the short sellers being squeezed now.
Shorting is a fools game...the most you can gain is 100% and you are also working against inflation, the fed, and in the case of leveraged ETFs and short funds, built in decay that erodes the value over time. If the hedge funds blow up and go bankrupt, so be it. They should do the silver market next using futures.
I’m a bit torn. I agree with the free market and don’t like the sec shutting things down. But this type of artificial “pump and dump” type of market manipulation is not what the market was created to do - which is invest in companies and help them raise capital.
You may enjoy Roger Martin's book "Fixing the Game", it very much focuses on what the stock market's function should be vs. what it actually is. The current debacle is perfect vindication of his thesis - which is that the stock market is supposed to reflect the decisions made by company leaders, not dictate them.
Wall Street treats the stock market like a casino, but one where they have the house advantage. They just don't like to see that house advantage temporarily taken away.
You may enjoy Roger Martin's book "Fixing the Game", it very much focuses on what the stock market's function should be vs. what it actually is. The current debacle is perfect vindication of his thesis - which is that the stock market is supposed to reflect the decisions made by company leaders, not dictate them.
This is part of the problem with all these big national corporations formed or the result of activity like this with a lot of local regional companies being bought out or forced out of business. The CEOs do little to salvage a company or have the guts to reorganize via bankruptcy. Some try and others open the door for these hedgefunds and others.
The save us from ourselves generation is in charge of tech now. so you'll see this type of stuff with Twitter Facebook and the trading technology companies. Which coincidentally is how we handle everything else. It's the new paradigm shut things down when the risk gets too high. Whether it's stores, restaurants, Twitter accounts or online trading you can apply the methodology to all of that.
I’m a bit torn. I agree with the free market and don’t like the sec shutting things down. But this type of artificial “pump and dump” type of market manipulation is not what the market was created to do - which is invest in companies and help them raise capital.
CNBC has spent decades promoting "Pump and dump" salespeople on their shows. Turn it on and see for yourself. They will be doing it again today, just as they do every day.
If you want to be indignant about "Pump and dumps," that needs to start with the "Pump and dump" industry, which is dominated by hedge funds and billionaires, who are featured routinely on CNBC and other such venues.
If you want to enforce regulations against "Pump and dumps," for this to be legitimate it needs to start with the biggest offenders. Implement and enforce that for a while and then broaden the parameters to include smaller investors in a decade or so.
Taking this moment when the little guys rise up for a once and now decide that this is the time to take a stand against "Pump and dumps," while still refraining from any real actions against the financial establishment elites, that is just despicable.
The big boys are watching and when the little guys had their fun, they will short these moribund companies from a much higher price point so even more profit. The companies arent undiscovered diamonds in the rough with high profit potential. Of ones mentioned, AMC might been under priced, it got knocked on its rear from pandemic. But it was no great bargain.
Should small investers be locked out of making unwise purchases? If so how about lot of unwise other CONSUMER purchases. If we are prevented buying unwise stocks, how about big brother preventing us getting 8 year mortgage on $75k pickup or car???? Thats pretty unwise, but dont hear anybody trying to protect the consumer from that. You know the ones the big boys make lot profit off of? I say open up the market for all. Freedom to be unwise. If you got the money or credit enough to be unwise with, then go for it. You wont have the money for long.
The real reason the consumer brokerages shut down trading was lot pressure on them. Notice many now dont charge any fee for stock trades. How do you think they make their money?
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