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Comment by yakz | Hacker News Reader

Hopefully some (many) people will take it to heart that Robinhood users are suckers.

This wasn't "just" privacy violations or psychological manipulation with ads, this was Robinhood deciding what to do with YOUR money to cover their ass. Whether they lent it to you or not doesn't matter, because if the bad trade were going the other way, then you, the sucker, would absolutely be on the hook.

Whether it's fraud or flawed or whatever else is beyond my experience or knowledge, but after today I think ending up on the wrong side of the deal with Robinhood again will rightfully be met with suggestions that you should have known better.

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> Hopefully some (many) people will take it to heart that Robinhood users are suckers.

While this is all true (and realistically Robinhood has killed their brand and probably won't survive), those same users were also suckers for falling for this ridiculous GME pump.

What Robinhood did was absolutely in self-interest, but it was trying to cover up a mess that fundamentally wasn't of its own devising. They were either going to get sued by a bunch of people that got fleeced in a clear pump and dump scam or they were going to get sued by users they prevented from losing money, and they chose the latter.

I've been watching the market for years. Pump & dumps happen. They are usually over in a few hours max. Sometimes much quicker. This has been going on for days (the majority of the week) and shows no signs of stopping. In fact tomorrow could be the most volatile day yet.

I'm not sure what is making you think all of the RH users were suckers, many of them have made quite a bit off of this. I don't personally use RH currently (although I have in the past). Ideally the bag holder in this situation would be those covering their short positions. But there is no doubt some will get burned. It's far from over though and there has been plenty of opportunity to cash out. In fact it's way up in aftermarket again this evening.

Stock market is a 0 sum game. Someone is going to pay in the end. It’s not the hedge fund, they already covered to the tune of $2 billion and someone has pocketed that money and it’s not retail investors.

Its not 0 sum

It's zero sum the way a poker table in Vegas is zero sum. Every dollar won is a dollar lost by someone else. Meanwhile, the casino takes their rake.

Eh - the poker table doesn't have a concept of dividends. (A free drink or two not withstanding)

This isn’t always true though. If I buy an equity for 10$ and sell it to you for 11$ who then sells it for 13$ none of us have lost money. Only panic sells and crashes are zero sum in the way you are imagining.

I think the reality with the stock market seems to be that eventually the tax payer is left with the bags whether they owned any stocks themselves or not.

Sure. People should be pissed about bailouts using tax payer money.

So what was done was regulations were put in that forced brokers to limit risk. So RH followed those regulations and now people are pissed.

This zero sum claim is intellectually on a level with the flat earth claim, how on this (flat) earth do people still fall for it?!

The math didn't add when they said that they were already covered. They were lying about the position they hold.

I can't speak for the original commenter, but the completely nonsensical claims I've been constantly seeing over the past few days are what's making me think the bulk of them will end up being suckers.

A friend was telling me a few hours ago that she's exiting once GME hits $5000 - yes, five thousand dollars, I specifically checked that was what she meant. She (and a few other friends who didn't name dollar amounts) have been misled about what a short squeeze is, and believe there's some specific future event called "the short squeeze" where they're guaranteed to make money if they're holding GME when it happens.

> This has been going on for days (the majority of the week) and shows no signs of stopping.

It seems that the reddit community has been expecting this for quite a while, though maybe they didn't expect it to get noticed outside of wallstreetbets.

15 days ago, with discussion on upcoming gamma squeezes and eventual short squeeze. Price was $20. https://www.reddit.com/r/wallstreetbets/comments/kwb827/gme_...

1 month ago: "shorts are still ~100% short and running out of time" https://www.reddit.com/r/wallstreetbets/comments/kh9na8/gme_...

4 months ago: "bankrupting institutional investors for dummies, ft Gamestop" https://ns.reddit.com/r/wallstreetbets/comments/ivs6dw/bankr...

(added) another from 4 months ago, focusing even more on a short squeeze: https://www.reddit.com/r/wallstreetbets/comments/ip6jnv/the_...

(I just found these via the search function.)

> I'm not sure what is making you think all of the RH users were suckers, many of them have made quite a bit off of this.

The stock is still up like 250%. By definition, far more of them are still in their positions than out. You only "make" money when you sell.

Quite a few piled in during the last couple of days when GME was over $100. There could still be a lot of losers.

In the words of Zuck, his users are “dumbfucks”.

Facebook is free and supported by advertisers.

And Robin Hood is free because they sell your trade data to the hedge funds — ironic name, “Robin Hood”.

Guess who pays their bills. If their actual customers went bankrupt, how would they make any money? Think about it!

For more info see

https://intercoin.org/nothingisfree

I'd honestly be surprised if "don't loan money to people that fall for a ridiculous GME pump" wasn't directly in opposition to some of Robinhood's objectives until it bit them right in the ass.

Didn't Robinhood's competitors do the same thing, more or less? Why does this kill Robinhood and not E-Trade?

OR they didn't it because a small percentage of their users were causing them a lot of grief for little gain and they decided to stop them for the long term benefit of their customer base as a whole (as well as for the operating model). I'm willing to bet if you dig through their TOS they are allowed to do such things. Whether it's legal or not I guess we'll see what the SEC does about it.

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