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The real Reddit moment was the class conscious we gained along the way
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This is the energy I need in my life
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Alice has a bunch of apples. Bob borrows the apples from Alice and promises to give them back soon. Bob sells the apples for $5, then spreads a rumor that apples are actually disgusting and bad. Because of the rumor, the price of apples goes down, so Bob buys them back for $1. He gives Alice her apples back, and pockets $4 in profit.
That’s how it usually works.
Say that Bob sells the apples for $5 and spreads his rumor, but Charlie decides to buy ALL the apples he can afford and spreads a different rumor that apples are actually the cure for cancer and amazing and you should definitely buy them RIGHT NOW. Suddenly, apples are worth $50! Bob still owes Alice all her apples, so he has to buy them back at this higher price, losing $45 in the process.
But Bob doesn’t want to lose $45, so he borrows even more apples from Alice, so he can sell THOSE ones for $50, still in the hopes that his rumor will come out on top and the price will drop and he can buy them back and give them back to Alice and make any amount of money in profit.
Now, in the grand scheme of things, apples are just apples. Eventually, the price is going to drop, that’s a given, it’s just a matter of when. Bob can’t keep borrowing apples forever, eventually he has to give them back. In the short term, apples are seen as the next big thing, so as more people buy them the more they’re worth. This means that when Bob sells his apples in the hopes the price will go down, he’s actually helping the price go up! Apples are worth $100 now, so Bob’s just hoping something ELSE bad will happen to make apples worth less, but there’s no guarantee if or when that will ever happen.
It’s a game of chicken between Bob and Charlie to see who will blink first. Charlie bought a LOT of apples, and the price is high right now, so he could sell them for profit and be done with it, but he doesn’t. He hopes the price will keep going up so he can sell them later for even MORE money! But who knows if the price will keep going up, or for how long? Maybe the prices drop and he ends up losing ALL his money because he bet it on apples and lost.
You have to wonder, why did Alice let Bob borrow her apples in the first place? Why didn’t she just sell the apples herself when they were worth $5? If Bob wins, then Alice loses money. Does Alice root for Charlie now? What happens if Bob can’t afford to give Alice back her apples? The price will eventually drop because, after all, these are just apples we’re talking about. $100 is a lot for apples, but Bob can’t afford to wait for the price to drop because Alice will send Daniel to break his kneecaps with a lead pipe in the morning. Bob is screwed.
But all of Bob’s friends work in produce, borrowing and selling and buying all kinds of different fruit, and they think it’s unfair that Charlie played Bob like that, so they want the owner of the store to make a new rule that says Charlie can’t do that anymore AND they also want the owner to give Bob back all the money he lost, which is unfair to Charlie and everyone else who was playing along all this time. The owners of the store are friends with Bob though, so they’ll probably side with him instead of Charlie and Alice because the produce market is protectionist.
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2020: the world is falling apart
2021: the world is falling apart but in a fun way
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Please madam may I inquire about the turnip prices? ...Ma'am??
Animal Crossing AU, 6/7. Happy Sunday!
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The lengths they'll go to keep us out...
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whats going on with the gamestop stocks? is reddit destroying capitalism or something?
Okay, so I’ll try to give a response in a way that makes sense because I’ve been posting about it a LOT and I’m sure it’s confusing. I’ll do my best to explain it here (and even then it’ll probably be REALLY simplified, so finance nerds don’t attack me)
First thing, if you don’t know how stocks work (because knowing that is VERY important), basically a stock is a VERY small part of a company. The better a company does, the more valuable its stock is. If you buy a stock for a Company like Netflix in 2005 let’s say you bought it for $5. Today, since Netflix is HUGE, the stock is probably now worth $200. You can sell it today and boom. $195 profit! However there’s another thing that effects the price of a stock, and that’s how many people are buying it. If more people are buying it, it becomes more valuable. So basically, someone buying stocks causes its price to go UP. Selling causes its price to go down. The goal is to buy stocks at a low price and then sell them at a high price.
Now I have to explain “shorts”. Let’s say an apple costs $5. What you can do is you can say “Hey, tell you what. Mind if I have that apple for free, and I can pay you back for it on Friday, plus a little bit of interest?” So you take the frankly overpriced apple and sell it IMMEDIATELY, netting you $5! Then Friday rolls around and you see that the price of apples have dropped a lot! Down to $2! So on Friday, you pay the apple salesman $2 because that’s the price of an apple now and boom! You’ve made a profit of $3! Basically, it’s a sneaky way of betting AGAINST a company’s growth. If you think a stock is going down, you can find a way to make profit this way. However it’s also pretty shitty and predatory, since it’s kind of like taking out a loan, and taking stocks from that company.
So billionaires over on Wall Street basically set aside a good portion of their money just to short companies like this, increasing their wealth (these are called “hedge funds”, which is another term you’ve probably seen flying around). And one particular group of billionaires took a look at Gamestop and thought “Wow! That business is going down the drain! I’m going to short them SO GOD DAMN MUCH” shorting out billions upon billions of dollars in Gamestop shares. It’s SUPER pricey, but they were almost certain Gamestop’s stock would keep decreasing, gaining them some good profit.
A group of redditors known as “r/wallstreetbets” (which is basically if 4chan was only SLIGHTLY less edgy, did all of the cocaine, and then started stock trading) saw that these rich asshats were basically doubling down absolutely CERTAIN that Gamestop was doomed. And they did something incredible. They bought SO MUCH GAMESTOP STOCK. So much that the stock EXPLODED in value.
How much did it blow up? Let’s say you hypothetically bought stock in Gamestop about 6 months ago. You bought about......$100 worth in stock. If you were to sell that right this second, it would be worth roughly $6000 (or if you sold at the peak it would be worth a whopping $11,750)
So now if you recall, the rich people have to pay the stocks back. They sunk BILLIONS into this short, and now they’re legally obligated to pay for them at today’s price. They’re going bankrupt. But when they DO pay BILLIONS back to Gamestop, the price of the stock will only go higher.
I wouldn’t go so far as to say they’re actively destroying capitalism, but a movement on this level against the wealthy elites is actually somewhat historic. And the elite are fighting back by preventing people from buying Gamestop trade on apps owned by their sister companies, plus you have the elites crying about “they’re....they’re manipulating the market :’(” despite the fact that this is exactly what hedge funds do all the time. And it isn’t just Gamestop anymore. AMC, Build-A-Bear, Nokia, all of these companies had HUGE shorts placed on them by hedge funds and in response people are using their stimulus checks to purchase stock in these companies, driving up the price to fuck over the billionaires who placed the shorts.
Hopefully this explanation made sense! It’s got a lot of finance jargon, and tbh money isn’t real.
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Logically I know that a stock market crash would be disastrous for everyone, since the top people would freak out and start cutting jobs to keep their 10th yacht, but at the same time I wanna see wall street crumble to the power of internet memes beacuse it would be hilarious
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normally I’m against toxicity in MMOs but when it’s the stock market I can make an exception. griefing hedge fund managers is something that I think all of us can get behind
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Good morning! Here’s your Gamestop stock/WallStreetBets news for 1/28:
- GME soared overnight when retail traders (people like you and me with brokerage accounts through apps like Robinhood) in India hopped onboard the GME rocket 🚀🚀🚀
- Robinhood decided to not allow people to buy GME and a few other meme stocks - if you have a Robinhood account, currently you can only sell (DON’T sell - it’s a trap! They’re trying to scare you)
- People flooded you WeBull as an alternative (especially since WeBull will transfer your Robinhood portfolio for free if it’s over $2.5k), and now WeBull’s servers are down.
- All of this is both shocking and to be expected as we get closer to the Friday expiration date for a significant number of short sell contracts.
- If firms can’t execute contracts by close tomorrow, they’ll have several days after that to resolve them regardless of share price/availability. As long as people hold (and even buy more if you can afford the risk), the price will go up. Expect the peak sometime next week.
If you’re already in - Hold. The. Line. This only works if we all hold. Every time someone sells, the hedge funds buy and cover more of their shorts and the pressure on them goes down.
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