It's the first mob in 2020/2021 that's not dividing the country down party lines. We should do this more often :)
And maybe not party lines but the stench of hypocrisy is overwhelming. This mob helps no one. It's just a lot of people making bets against each other and manipulating the market.
Just because one side is an angry mob on Reddit does not make it right or moral what happened. I would hardly call r/WallStreetBets 'the people.' It's nothing more than an angry mob.
Yes, a mob does not automatically make them right or moral. But let's be fair about the WSB mob, they're going straight after an oligarchy that has done some fucked up shit to the general masses. As one tweet put it, they're going to force a lot of people to sell their second yacht to afford the payments for the first one. I also love how many other big CEOs of real companies that produce real things are backing the WSB folks.
Dont get me wrong about short sellers too. The act of short selling is technically good. There are some good firms that pay for investigations into large public companies to expose complex crimes, then short sell to recoup and profit. Melvin isnt one of them.
Why can't they recoup their costs through put options?
In my view, short selling is a legalized form of fraud. A share of stock is "borrowed", but not with the actual owner's knowledge or permission. Then it is "sold", but unlike with a normal sale, the actual owner still thinks they own that share, as does the buyer. They can't both be correct. In a normal sale of some thing, when the buyer takes ownership, the former owner must relinquish ownership. And they'll both, henceforth, behave accordingly.
In a short sale scenario, both "owners" think they own the same share of stock. The "demand" they collectively create for two shares of the stock is sated by one share. So the price drops. When you have the ability (i.e. the money) to do it on a large scale, you drive the price of the stock down. That's the scam. It's not hard to understand.
IMO, the only reason short selling is legal is because it makes very rich and very powerful people even more rich and more powerful.
The people are starving on the streets and unemployed. Too far gone to make bets on their iPhone 11s using something like Robin Hood.
This is Goliath vs a somewhat more organized and entrenched Goliath. This is not David vs Goliath.