The Investment Thread (11 Viewers)

[Turfie]

So the DOJ is investigating Hedge Funds for illegal short selling.

U.S. Justice Dept launches expansive probe into short-selling -sources

The U.S. Department of Justice has launched an expansive criminal investigation into short selling by hedge funds and research firms, according to three people familiar with the matter.

www.reuters.com

My tin foil thinking is that the SEC was investigating and had a holy crap moment. All the SEC can do is pretty much just issue fines. I wonder if it’s possible that they said “Nope, nothing going on here. Thanks GameStop and others for providing documents”. But just handed over everything to the DOJ and said - you’d outta look at this.

Fun fact - one of the deputies that helped take down Enron is leading this one.

 

[DaveXA]

So the DOJ is investigating Hedge Funds for illegal short selling.

U.S. Justice Dept launches expansive probe into short-selling -sources

The U.S. Department of Justice has launched an expansive criminal investigation into short selling by hedge funds and research firms, according to three people familiar with the matter.

www.reuters.com

My tin foil thinking is that the SEC was investigating and had a holy crap moment. All the SEC can do is pretty much just issue fines. I wonder if it’s possible that they said “Nope, nothing going on here. Thanks GameStop and others for providing documents”. But just handed over everything to the DOJ and said - you’d outta look at this.

Fun fact - one of the deputies that helped take down Enron is leading this one.

Interesting, but, I think ultimately, it's going to be a road to nowhere. I think they'll realize that doing anything meaningful will mean pain from which the markets wouldn't be able to recover from. Best we can hope for is finger-wagging and slaps on the wrist for the worst offenders.

 

[Jeff]

Interesting, but, I think ultimately, it's going to be a road to nowhere. I think they'll realize that doing anything meaningful will mean pain from which the markets wouldn't be able to recover from. Best we can hope for is finger-wagging and slaps on the wrist for the worst offenders.

So...... Martha Stewart is going back to jail...

 

[DaveXA]

So...... Martha Stewart is going back to jail...

Lmao, what she did was tame compared to what some of these hedge funds are getting away with. It's bonkers.

 

[Turfie]

Lmao, what she did was tame compared to what some of these hedge funds are getting away with. It's bonkers.

Ken Griffin just lowered the amount of money his investors could withdraw from his hedge fund to 6.25% per quarter (penalty free), this down from 10%.

Source: https://www.bloomberg.com/news/arti...el-winning-the-war-to-keep-client-cash-longer

He also just hired Biden’s top secret service officer David Cho for unknown reasons.

Source: https://www.google.com/amp/s/nypost...o-reportedly-leaves-for-wall-street-firm/amp/

Things are getting really freaking weird with Citadel the hedge fund and the same Citadel the Market Maker.

 

[Jeff]

Lmao, what she did was tame compared to what some of these hedge funds are getting away with. It's bonkers.

Oh, no doubt. What was GME shorted at one point? 140 percent? That was just one stock when they've been stealing from entire markets.

 

[Turfie]

Oh, no doubt. What was GME shorted at one point? 140 percent? That was just one stock when they've been stealing from entire markets.

It’s theft. Crazy thing is…technically it is legal for market makers to print shares in the name of liquidity. But it’s been so abused and manipulated.

 

[St. Geezy]

At this point, to be blunt, what's the point of hanging on to GME? Especially if it was bought about a year ago. There hasn't been much appreciable action, unless you're doing buys and sells on the dips and peaks.

I'll say this, I do still believe an even bigger squeeze is going to come on Gamestop on AMC, I do believe there are some VERY good alternative squeeze plays out there currently, such as ATER and BBIG, to be had for cheaper.

I have some far-dated call options on both at their current low price levels. The low I.V. on the securities makes those options ultra cheap.

 

[St. Geezy]

Oh, no doubt. What was GME shorted at one point? 140 percent? That was just one stock when they've been stealing from entire markets.

What sucks is that you can't really rely on S.I. data being accurate anymore. They have found ways to camouflage actual S.I. via the options chain.

 

[St. Geezy]

It’s theft. Crazy thing is…technically it is legal for market makers to print shares in the name of liquidity. But it’s been so abused and manipulated.

This is the real kicker of the situation...I know The Citadel gets vilified, and I am one of the people that do believe they're shady as hell, but you can't expect to be able to buy shares of a security in unlimited fashion while also crying foul that synthetic shares are being printed.

That being said, have they abused the system for their own gain and/or self-preservation? No doubt, and that's what needs to change.

You should not be able to take out a reckless short position using excess margin on a family of securities, then use your MM status to help make sure those reckless short position don't sink you when the trade turns against you. Market Makers being market participants for the same securities is a problem. The idea that a stock trader can also control the price, to me, is a major flaw in the system that must be addressed.

 

[Turfie]

This is the real kicker of the situation...I know The Citadel gets vilified, and I am one of the people that do believe they're shady as hell, but you can't expect to be able to buy shares of a security in unlimited fashion while also crying foul that synthetic shares are being printed.

It’s a strange game. When massive demand for a stock exists then that creates liquidity problems for people trying to accumulate shares. So essentially the market makers print synthetics and then hope to unwind those FTDs during the next cycle with real shares.

I think that is correct.

The market maker and hedges can make a ton of money during this settlement period. An example - you pay $15 a share for AMC and then they provide you a real share when the price drops later in the settlement period.

And currently there aren’t many firm laws against.

So hedges and market makers have found a legal loop hole to make a killing.

BUT….there is a legal loophole in which retail and long institutions can use the Market Makers strategy of printing shares to create liquidity against them.

And that is Direct Registration through a certified transfer agent. It can be such a damming weapon that the SEC has made it illegal for Companies to publicly encourage its shareholders to do it.

GameStop is treading carefully in these waters while still giving a wink wink to its shareholders to register there shares via ComputerShare.


Ryan Cohen tweeting this funny picture. At first I thought it was him telling us he works 24/7 and even poops while working.

But was he telling us….computer chair….ComputerShare? This was July 23rd.

On August 15th, GameStop updated their investor relations webpage by including information about ComputerShare for the first time. https://news.gamestop.com/contact-us

On September 23rd GameStop had a random tweet


Is this when DFV possibly registered his shares? No one knows if he did or not. But still - a tweet out of left field that may or not be connected.

The next date is the earnings filings on December 8th. For the first time ever GameStop provided how many shares were registered directly with ComputerShare share as of the end of Q3. And it was 5.2 million shares.

And in typical Reddit fashion- there is a major effort to register your shares and track the progress. So far as of yesterday, 98,000 accounts have been created in ComputerShare.



I have 60% of my GME shares in ComputerShare.

There is a massive effort to lock the float. And this creates a no win situation for Hedges. Illegally drop the share price = the faster the float will get locked. Not illegally shorting = eventually will get margin called (maybe). So hedges shorting is like being stranded at sea and drinking salt water for temporary relief.

 

[Turfie]

Panic bought again

 

[Saint_Ward]

I'm probably wrong, but this just feels like a dead cat bounce to me.

Meow...

Yeah, that nice jump was a short term play. I really thought the omicron news was leaning positive.

Back in long hold territory, since I missed that chance to get out way ahead.

 

[Mr. Blue Sky]

Another big fire sale on TSLA today if any of yall have yet to buy some .

 

[efil4stnias]

Another big fire sale on TSLA today if any of yall have yet to buy some .

nah man...it would have to be a CA style wildfire for me to jump in.