I do agree that it would have been unethical (or at least pretty dubious) for the company to sell the stock knowing it’s massively overvalued.
Overvalued is in the eye of the beholder, in this case the market. There were people willing to buy the stock at that price, why not sell it to them? If the buyers really believed it was going "to the moon", then you could just as well argue they cheated a lot of potential buyers out of the chance to get in on that action.
Finally, if you do think it's overvalued, arguably the best thing to do as a company is sell more stock, to maximize the amount of money per share you get. This is the way Tesla does it for example: they only sell more shares into the market when the stock price is particularly high.
I wonder if there are there any markets anywhere in the world where company shares are publicly traded, valued by a quantitative means, such as a multiplier of revenue or profit?
So the answer to your question must be no, there are no stock markets where shares are traded on a purely quantitative base. This is because the only way for price discovery on such a market is by perfectly predicting the future, which is not (as far as we know) possible.
I don't think reported actual figures are enough to form a good enough image of the worth of a company. The proverbial example would be of buggy whip companies (selling whips for horse drawn carts) reporting record profits the year that Ford opened his first automobile factory. Clearly the buggy whip companies did not have a bright future ahead of them, but you wouldn't be able to tell from reported figures.
Edit: I was just nitpicking the analogy, I agree that the “common folk vs hedge fund” narrative is totally delusional.
People on WSB had some arbitrary price targets in mind and are in denial that the stock hasn't squeezed yet because they haven't hit those (completely made-up, with no basis in anything) targets.
Almost certainly not. We will learn, in time, how much of the run was shorts closing out and how much of it was momentum.
Keep in mind, too, that most institutional short sellers hedge their risk with out of the money calls. Given the increase in volatility, those calls would have more than covered the short losses.
Is it? Without the retail investors (gamblers) nothing of that would have happened. And Melvin Capital lost a couple billion dollars while quite a number of Redditors got a massive payout, so a net win for society.
Side note: As an European, the amount of GME-related "paid my student loan" and "paid my medical bill" posts on Reddit are heartbreaking to read.
Given that 6 million of the current 8.5 million WSB subscribers joined after GME popped, I think most retail investors probably lost money. At this point it's a minority who got in early and made a lot of money.
And quite a lot of Redditors suffered massive losses. There's not shortage of WSB posts with 7 figure losses. Overall it's pretty hard to assess whether on net "Wall Street" made or lost money to retail. Melvin certainly wasn't the only player here.
It's likely that other funds jumped in on the squeeze, and were much better in terms of timing their exit. Some funds may have shorted on the way back down, and made a killing.
But most importantly, intermediaries like HFTs, option market makers, internalizers, and stat arb funds made a killing. Almost entirely at the expense of retail flow. It's like a casino. Some win, some lose, but the house rake always wins.
But even if retail on net made money, it probably wasn't a benefit to society. 20 people losing their life savings so that /u/deepfuckingvalue can become a multimillionaire isn't exactly a heartwarming story.
Works(ed?) for Mass Mutual.
It is, because the open corruption of the stock market, the absolutely disgusting behavior of major players and especially the arcane rules (like T+2 settlement, made necessary by the US's fossilized banking infrastructure) became dragged into the spotlight.
Wall Street claimed to have learned their lesson after 2008ff? GME proved that they all haven't learned a single damn thing.
> 20 people losing their life savings so that /u/deepfuckingvalue can become a multimillionaire isn't exactly a heartwarming story.
It's called wallstreetbets for a reason. I'm sorry but people dumping their life savings into the stock markets on a crazy bet by anonymous Redditors, that's just... dumb. (On a side note, such cases are why basic financial education should be mandatory at schools!)
(Disclosure: sunk a couple hundred into AMC and NOK, planning on holding all of it until at least the pandemic ends)
Also laying blame on deepfuckingvalue seems ridiculous to me. He was basically the only one that invested in Gamestop as a value investment.. about a year ago. Everyone told him he was stupid but he kept with his plan. Then at some point a horde of crazies jumps on the train and now he is taking money from "20 people losing their life savings"? meh...
This whole topic reeks of simplifications, misguided blame and populism.
I do not think this is usually the case on WSB, where people regularly show off trading on margin several times larger than their total account size :)
Even without margin, it's not uncommon to see people freely admitting they put everything they have into a single position (and mods happily verify it).