When Reality Hits
I can’t get GameStop out of my head. If you want to understand some of the issues around the financial plumbing, and why they stopped trading, read this. I was reading Brian Lund’s excellent Lund Loop this morning and he made a lot of great points but one stuck out to me.
Though they may not have been aware of it before Thursday, WSB must know by now that they don’t control the real levers of power and that if the stock does not start the return to what’s considered a reasonable price soon, regulators will likely step in and suspend trading.
Yet there has been no mass selling. No rushing for the exits. In fact, the Twitter feeds and message boards have been consistent with one singular message – hold.
That’s the type of price action you get when someone doesn’t give a shit about losing money.
And if the longs supporting GME’s price have their money spread out in $500, $1000, or $5000 increments across millions of accounts, maybe they really don’t care.
I mean, what happens if FINRA suspends trading in the stock for 30 days, then when it re-opens, nobody sells.
What do they do then?
Over the course of this week, I have been commiserating online with my old pit trading buddies. For some reason, all of us feel some commonality with the WallStreetBets crowd. We are pulling for them. Not because we hate hedge funds. It has to do with that old pit (Read more...)