"Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order to cause a short squeeze is illegal."
But in this case, people are literally admitting "Yes, I would like to engage in your proposed felony." Even manipulation aside... conspiracy itself is a crime. I don't think conspiracies suddenly become legal just because they were very large.
ehhhhhh... I've seen plenty of BUY BUY BUY posts. Unless I'm missing your point. I understand what WSB isn't a corporation or entity in and of itself, but it is still a (somewhat) organised group of uh... "investors".
The bar to qualify this random association of people as organized seems pretty high.
I qualified "organised" with "somewhat", because nothing in this kind of place is ever really organised, but I mean just look at what they've done. You couldn't do this with a fully disorganised group.
- Reddit has your IPs logged for 100 days.
- The SEC knows all financial transactions.
Shouldn't be too hard to triangulate u/TigBitties_450 if he actually did any trading on the stock.
They should take this in the chin as a massive failing on their part to regulate the market just like they did in '08 aftermath when trillions of dollars and the world economy crated because of those same banks and hedge funds.
in theory you're right. The practice though says differently- the mass conspiracy and violation of medalion laws (Uber) and zoning laws (AirBnb) got treated as new phenomenon - "sharing economy" - instead of RICO because it was that massive and coordinated.
There is also another aspect here. The huge short interest on GME was most probably naked (illegal) in significant part, and those huge shorts were probably made in order to drive the price down (market manipulation, illegal). So, these crooks wouldn't have been caught with their pants down if SEC was doing its job and wasn't allowing (by lax enforcement at least) all these shenanigans to their hedge fund buddies. In that situation SEC suddenly becoming a crusader against market manipulation and going after WSB retail investors would look a lot like selective enforcement and a regulatory capture by the crooks.
"During the epic verbal battle between Icahn and Ackman that was televised on CNBC in January, Icahn predicted that Ackman’s Herbalife investment could produce the “mother of all short squeezes.” Shortly after that incident, it became clear that Icahn had taken a big position in Herbalife’s stock. He has since expanded that position, bought 16.5% of the outstanding shares and gotten two representatives on Herbalife’s board."
https://www.forbes.com/sites/nathanvardi/2013/07/22/carl-ica...
"Investors and prospective investors should be cautious of rumors on chat rooms where the intent of nameless and faceless computer users is in doubt."
So it'd be a question of which is it? Is it don't trust internet forums or is it people shit posting memes is a coordinated attack?
Logically and morally you can't have it both ways. But we're seeing how morals don't matter when you go after the money.
That statement is just advisory for investors to 'be cautious'.
In my opinion, if you have to state multiple times in your plan that what you're planning isn't illegal/manipulation, it's very grey at best.
The fact that one of the premises presented here for the price going up is "We buy a bunch of options, to force (ie, manipulate) someone else into buying the stock, so that the price can go up" doesn't boad well for a "it's not market manipuation" argument either.
Straight from this post:
> It looks like this: RH Call Option buying -> MM Delta hedging/share purchase -> short squeezing -> Greater retail/RHers price action chasing/call option buying -> MM Delta hedging/share purchase -> short squeezing -> Institutional and new channels flip the script -> GME to $400+
They've presented a chain of events that starts only with "We try to buy a lot of it", has a bunch of "other people have to buy based directly on our actions", they even through in a "other people see the price going up and try to pile in" (ie, screw the rest of retail).
> the extent of their sympathy for the little guy will determine the outcome
I don't see the masses of people ending up facing consequences here. I wouldn't be surprised if a group of WSB pushers who made out like bandits do see consequences. I also think it's going to be difficult to consider them the little guy if they make a bunch of money, and the much larger mass of non-WSB retail lose their shirts.
I don't think this is logical. One could also say, "If people are accusing you of doing something illegal/manipulative and you don't respond by stating that it's not illegal, it's very grey at best."
Can we agree this is hyperbole?
The SEC could step in to resolve the squeeze and everyone who bought at 350 left holding the bag when the price drops to 30.
Do you think that people who bought $200/share option contracts this week are all going to end up with 100 shares that they are going to be able to sell for $525 each?
Do you also want cancer charities to stop asking for donations? Should start up founders not be allowed to ask for investor money?
I could totally see the market manipulation argument if this was done in backrooms, with multiple accounts to hide the moves, several shell corporations holding the funds, etc. But these folks are publicly declaring their intent. And the first person to uncover the gamestop shorts has been saying it for over a year. Out in the open with frequent updates.
The short sellers have had a year to get out and leave the company alone, but they were so obsessed with watching a company die that people got pissed and wanted some blood.
The chain of events doesn't start with "we buy a lot and blah blah blah" - the chain of events starts with someone declaring over a year ago "fuck these guys for going all in on destroying a quality company for no reason other than the lulz."
Surely a large group of people getting together and saying "GME is way too shorted, buy buy buy and don't sell until $5k" should either be absolutely definitely market manipulation, or absolutely definitely not?
This. I recall seeing a post recently that essentially said that any action could be construed as securities law violation.
I'm going to assume this wasn't your point, but come on. Don't compare the current actions WSB and others are taking right now to curing cancer.
> Should start up founders not be allowed to ask for investor money?
Startup founders are already not allowed to ask for investor money buy posting on reddit or buying social media ads.
> with multiple accounts to hide the moves, ... these folks are publicly declaring their intent
I don't think anyone has fully look in to what accounts have been pushing things, and at this scale it will be incredibly difficult to do.
> Out in the open with frequent updates.
Just to be clear, I have absolutely no issue with anything DFV (who I assume you're referring to) has done in this situation. But DFV is not the entirety of "retail" that could have crossed a line here.
> "fuck these guys for going all in on destroying a quality company for no reason other than the lulz."
Lol I'm not even going to respond to this.
Where is that done? I think you’re confusing everyone’s ‘this is not financial advice’ shenanigans with “this is not illegal.”
Straight from this post ...
> This is not fraud. There is no manipulation here. We aren’t forcing anyone to do anything. It’s going to happen with or without us. But I want to ride.
Joking aside, the "we just like the stock" "this is not financial advice" stuff is as much a defence as the Someone Who Isn't Me thing I remember seeing on drug-related forums years back. You feel like it's protection because you're not getting prosecuted for admitting something you know is at least in the ballpark of law-breaking, but in reality you're just small-fry that nobody cares about. The moment a big-time dealer is under the spotlight, no amount of SWIM is protection.
I don't expect anyone from WSB to receive repercussions for this, but afaik this is dangerous legal territory and their defensive phrasing is a facade.
It was a perfect set-up for a historical short squeeze if the right catalyst came along. And that catalyst wasn't simply the people on WSB, there were other catalysts such as the Chewey founder coming in, and then earnings reports.
Once those factors played out, the people who noticed the precarious position the hedge funds had put themselves in got to watch their exact predicitions come true.
I don't see how that can be confused with a pump-and-dump scheme or any sort of market manipulation.