I'd be really interested in learning more about the Olympic level mental gymnastics one has to go through to write this off as O.K. but then turn around and say that a bunch of random people on an open public forum saying to buy an over-shorted stock is market manipulation. They don't even have the purchasing power to make a difference here.
> That's pretty hand wave-y. If there is money in it companies will do it.
Right. And if there was concrete evidence that this was the case then investors (especially controlling interest ones that I work with) would DEFINITELY being doing it.
It isn't "my logic", it's the definition of a Ponzi scheme: early investors were paid out by later investors, with the bottom falling out for the later investors. That hasn't happened, because the story is still unwinding. It might not ever happen. It will only be obvious in hindsight.
Besides, I own many stocks, and they return income to me.
>Buying a share does not give you the right to future profits in a company.
>it gives you ownership and control over a percentage of the corporation
For someone critical of "logic", those two statements contradict each other.
A company is expected to be profitable, and owning a stake in it entitles me to a share of those profits. What do you think Zynga is promising when they sell me a share of the company at IPO? Do you really think they are saying, "Here's part of this company. It might make money, or it might not, but perhaps someone will buy it from you for a higher price at a later date"?
Good luck with your portfolio if you base it on a different philosophy.
>Whether or not they bought a lemon is the fault of the public investor.
Well, I'm sure the SEC would disagree with you on that statement.
>It is _not_ a ponzi scheme, it is the exchange of assets.
One does not preclude the other. Ponzi's original fraud involved the exchange of assets. The scam is in what they tell me the asset is worth and what it is actually worth.
It's a nearly guaranteed loss, and and pretty much the only people who will invest in it are those that are too incompetent to realize that. It smells like a legal con to separate those people from their money.
>I actually buy the reasoning behind it - but putting out a corporate speak like this instead of trying to emotionally relate to upset users? Smh
Their reasoning makes no sense. If someone isn't buying on margin, who are they protecting exactly? Citadel and Melvin Capital, that's who. The funds weren't "protected", were they?
>But you agree people still want to invest in them right
No... people may want to invest in them because they are being actively mislead. You can't just ignore the fraud aspect, it literally makes all the difference.
> Does it feel good to get one up on a hedge fund idiot that was trying to manipulate GameStop the other way? Yes - but this is, at best, financial vigilantism.
Hedge funds do this to each other every day. Why is it suddenly wrong when it’s retail investors on the other side of the trade?
I truly do not understand the naïveté of arguments like these. Only the wealthy should be allowed to game the price of assets and rip each other off?
>Appreciate your point of view. First of all, there seems to be a lot of skepticism around this project and I found that surprising.
Really? You made a crazy claim with no details at all.
Here's my assumptions on this thing:
1. Your algorithmic strategy is only performed on a small selection of stocks, that you have semi-randomly picked, aka not a part of your system.
2. These stocks have had a crazy run.
3. When the NSE had troubles in Nov. and Dec. your conservative stop losses triggered and you stayed out of the market.
4. Your decision on when to re-enter the market was a personal decision, not a part of your system.
5. You have given this thing more money to invest with than we are being led to believe.
Which ones did I miss on?
I gotta be honest, it really does seem like a nice little way to plug you business but I don't believe you're lying. I think you're overstating its performance by leaving out details and were lucky to get that performance in the first place.
I was thinking the same, but then again, the investment is rather low, so it is a lot easier to dump that investor, if values don't align in the future. I might be reading it all wrong, but it also seems like the money comes from 42 different investors, making it even easier to part ways.
> Calling it a Ponzi scheme is uninteresting and not really the point here. Was GameStop a Ponzi scheme when the stock price soared?
I’d argue that the intent of GameStop was not to provide a solid investment as it was just as a collective intent to make short sellers fail.
I have serious trouble seeing how “collective agreements” has any intrinsic value. To me, it’s effectively the same as saying “the value of coin X is that people believe in its value”.
It seems like at least this CEO recognizes it for what it’s worth.
> So borrowing money from investors to compete with somebody is now a despicable thing, maybe even a crime?
Running at financial loss just to drive prices down so you can kill competition is at least unethical in my book. Also I believe it is illegal, for good reasons, in some countries.
A better comparison would be a stock brokerage that took your money to buy specific stocks on your behalf but then did something totally different, including “investing” in illiquid assets.
If they had just bought the stock you requested, then they could just liquidate your stock at market price when you said you want to sell.
This was not the situation that FTX was/is in.
Instead, the way FTX allocated money/assets was suspicious (at best) if not flat out irresponsible and deceptive.
Also, FTX was not and is not a bank, and the idea that this is levering in the same way regulated banks lever is laughable.
>It's simply how much money you can generate for the business
I find your excessive faith in businesses disturbing.
Markets aren't rational [1] and the wage-labour market isn't either. Sometimes there's no good reason for something, only a bunch of chain of consequences that don't necessarily have to make logical sense from an utility perspective.
I'm not advocating it. I'm saying there is a logic to it.
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