The GameStop Story You Think You Know Is Wrong(theatlantic.com)
theatlantic.com
The GameStop Story You Think You Know Is Wrong
https://www.theatlantic.com/ideas/archive/2021/02/gamestop-story-you-think-you-know-wrong/617905/
31 comments
It's their job to write something for a living :p
That's why I usually ignore "breaking" or "trending" news, or consume it in very minimal dose. Too many speculation, weird theory, a lot of he/she/they said, and not enough truth or fact.
(Also fortunately my job doesn't involve having to follow all those breaking news or else I'd gone mad by now)
That's why I usually ignore "breaking" or "trending" news, or consume it in very minimal dose. Too many speculation, weird theory, a lot of he/she/they said, and not enough truth or fact.
(Also fortunately my job doesn't involve having to follow all those breaking news or else I'd gone mad by now)
This article feels pretty disingenuous in a number of different ways. To avoid posting a wall of text, I'll summarize that The Atlantic is creating a narrative about what the narrative was, that way they can act like serious adults while just feeding us their own narrative.
The media was caught on their ass with this story, but never fear The Atlantic is here. With a big dose of Captain Hindsight who knows things that weren't public at the time to trash talk people speaking at the time. To insinuate everyone investing was a dolt that didn't know stocks go down too. And to reassure everybody that the retail investor should never be trusted with anything sharper than a index fund, that there is no takeaway about the market to be found here at all, and we should only worry about pushing politicians for more income redistribution.
The media was caught on their ass with this story, but never fear The Atlantic is here. With a big dose of Captain Hindsight who knows things that weren't public at the time to trash talk people speaking at the time. To insinuate everyone investing was a dolt that didn't know stocks go down too. And to reassure everybody that the retail investor should never be trusted with anything sharper than a index fund, that there is no takeaway about the market to be found here at all, and we should only worry about pushing politicians for more income redistribution.
What I’m curious about is whether the SEC is going to sue DeepFuckingValue and require him to disgorge all of his gains.
He’s not just a Joe Schmoe on Reddit, he’s a licensed broker with like four active Securities licenses which prohibit publicly pumping a stock exactly like he did.
He’s had to sign numerous agreements and passed numerous exams detailing these responsibilities, I don’t understand how he didn’t try to cover his tracks better.
Source: https://wallstreetonparade.com/2021/01/gamestop-promoter-kei...
He’s not just a Joe Schmoe on Reddit, he’s a licensed broker with like four active Securities licenses which prohibit publicly pumping a stock exactly like he did.
He’s had to sign numerous agreements and passed numerous exams detailing these responsibilities, I don’t understand how he didn’t try to cover his tracks better.
Source: https://wallstreetonparade.com/2021/01/gamestop-promoter-kei...
Unless DFV is shown to be the same user that figured out a short squeeze was possible and posted it, there is no basis. DFV's price target wasn't $300 or the $450 it reached, it was much lower, but his analysis makes sense and is equally valid to Cramer's. In-fact, I'd go as far as to say that DFV's analysis is better because he is more transparent than Cramer - somebody who publicly admitted to screwing over stocks and gave analysis on how to destroy a company through a hedge fund - and took into consideration the new board and the change in direction, if anything, every due diligence written by 'boomers' that I read does not match reality.
Cramer doesn’t work for a licensed broker or investment manager, doesn’t have any active licenses, and has never had the level of licensing, including supervisory that Mr. Gill had as an active employee.
Most of what he did was to say he liked the stock from what I gather. You'd need to find the evidence that he himself encouraged a pump and dump which I have not seen anywhere.
The term "not financial advice" is also probably to be found in the most upvoted posts by other users which could be seen as encouraging risky behaviour
The term "not financial advice" is also probably to be found in the most upvoted posts by other users which could be seen as encouraging risky behaviour
“ Gill was a clean cut Registered Rep at MassMutual by day and a long-haired, head-banded, fast-talking stock promoter on social media by night, sending out video promotions for GameStop that were filmed at a trading desk he had set up in his basement. (See this YouTube video by Gill. It has a caption suggesting GameStop could go from $5 to $50.)
This is highly likely to be a serious problem for both Gill and MassMutual. A genuine amateur trader could plead ignorance of industry rules about hyping stocks to the public. A heavily licensed industry professional cannot. The fact that Gill passed all those exams means that he knows what the rules are. In addition, the broker-dealer unit of MassMutual, MML Investor Services LLC, that employed Gill as a Registered Rep, could potentially face charges of failure to supervise.”
This is highly likely to be a serious problem for both Gill and MassMutual. A genuine amateur trader could plead ignorance of industry rules about hyping stocks to the public. A heavily licensed industry professional cannot. The fact that Gill passed all those exams means that he knows what the rules are. In addition, the broker-dealer unit of MassMutual, MML Investor Services LLC, that employed Gill as a Registered Rep, could potentially face charges of failure to supervise.”
Interesting perspective, thanks!
But please note that’s from WallStreetParade, I don’t know enough about securities law to say they are correct and they likely have their biases.
"not a financial advisor" is, practically speaking, much like SWIM (Someone Whom I Met) back in the early days of the Net when talking about drugs was 'likely' to get the police involved if you used your real name etc etc. The majority of the posts I had read on Reddit are way too emotionally persuasive and propagandistic that 'not a financial advisor' is really just meaningless. If I was a judge and had a case involved that sort of language while the information was obviously not balanced or neutral, I'd consider it line noise.
How did he pump the stock? He only posted his gains and losses over a period of several months.
The captions on his YouTube videos stated GME could increase by 10x, while he was an active broker/supervisor at a licensed brokerage and money manager.
And
“ FINRA has strict rules for licensed brokers regarding use of social media. For example, their rulebook states:
“Investors and financial services professionals alike are increasingly using social media for a variety of business purposes. Social Media may be a new medium, but FINRA’s rules on communicating with the public are still applicable. The rules protect investors from false, misleading claims, exaggerated statements, and material omissions…”
And
“ FINRA has strict rules for licensed brokers regarding use of social media. For example, their rulebook states:
“Investors and financial services professionals alike are increasingly using social media for a variety of business purposes. Social Media may be a new medium, but FINRA’s rules on communicating with the public are still applicable. The rules protect investors from false, misleading claims, exaggerated statements, and material omissions…”
Plausible deniability? Emphasis on could, which is not an exaggerated statement, nor misleading; it happened.
Doesn’t matter what happened, it’s exactly the definition of market manipulation the SEC looks for. Again, he’s not you or me, he’s a licensed broker with specific restrictions and responsibilities.
“ “Firms must have the ability to supervise the business-related content associated persons are communicating on these sites, including possible suitability determinations if recommendations are made. A registered principal must review prior to use any social media site that an associated person intends to use for business. The principal may only approve a social media site if the principal has determined the associated person can and will comply with applicable rules…”
We find it highly unlikely that MassMutual would have approved Gill to post on Reddit’s WallStreetBets, whose users appeared to pride themselves on how frequently they could pack the words f** and b**s into a sentence, frequently with representative artwork.
The largest brokerage firms on Wall Street would never allow a Registered Rep to use multiple anonymous user names and promote a $5 stock to a mass public audience because there would be no way to know if it was a suitable investment for the level of risk the individual person could afford to take. The bulk of lawsuits that are brought, and won, against brokerage firms are for “failure to supervise.”
Gill’s YouTube videos did offer a scrolling statement at the end to the effect that this was not meant to be personal investment advice. But if it wasn’t, why was he putting it out on a mass medium like YouTube.
Gill has another potential problem. According to media reports, Gill was posting copies of his brokerage statements at E-Trade showing his GameStop position making millions of dollars in a short span of time while he was employed at MassMutual. Under FINRA Rule 3210, a licensed broker must first get permission from the broker-dealer where they are employed to open a trading account at another firm. (This is common knowledge among 99 percent of brokers on Wall Street.) If the employing firm grants that permission, the other brokerage firm must send duplicate copies of the broker’s statement to the compliance officer of his current employer. This is to prevent the firm’s name from getting dragged through the mud (as is happening currently to MassMutual) because their broker may have engaged in some form of stock manipulation. It is also to fulfill the broker-dealer’s obligation to supervise their brokers and protect the public.”
“ “Firms must have the ability to supervise the business-related content associated persons are communicating on these sites, including possible suitability determinations if recommendations are made. A registered principal must review prior to use any social media site that an associated person intends to use for business. The principal may only approve a social media site if the principal has determined the associated person can and will comply with applicable rules…”
We find it highly unlikely that MassMutual would have approved Gill to post on Reddit’s WallStreetBets, whose users appeared to pride themselves on how frequently they could pack the words f** and b**s into a sentence, frequently with representative artwork.
The largest brokerage firms on Wall Street would never allow a Registered Rep to use multiple anonymous user names and promote a $5 stock to a mass public audience because there would be no way to know if it was a suitable investment for the level of risk the individual person could afford to take. The bulk of lawsuits that are brought, and won, against brokerage firms are for “failure to supervise.”
Gill’s YouTube videos did offer a scrolling statement at the end to the effect that this was not meant to be personal investment advice. But if it wasn’t, why was he putting it out on a mass medium like YouTube.
Gill has another potential problem. According to media reports, Gill was posting copies of his brokerage statements at E-Trade showing his GameStop position making millions of dollars in a short span of time while he was employed at MassMutual. Under FINRA Rule 3210, a licensed broker must first get permission from the broker-dealer where they are employed to open a trading account at another firm. (This is common knowledge among 99 percent of brokers on Wall Street.) If the employing firm grants that permission, the other brokerage firm must send duplicate copies of the broker’s statement to the compliance officer of his current employer. This is to prevent the firm’s name from getting dragged through the mud (as is happening currently to MassMutual) because their broker may have engaged in some form of stock manipulation. It is also to fulfill the broker-dealer’s obligation to supervise their brokers and protect the public.”
I see. Thanks for elaborating. I guess he made enough to afford a good lawyer.
He made enough to afford a GREAT lawyer, and the SEC has a reputation for settling easily. And doesn’t hurt that he’s a grass roots hero.
TBH, I wouldn't be surprised if he had another account with some more shares that he sold near the peak for > 2000% earnings.
How did Trump persuade a mob to attack Congress and interrupt the official certification process? He only said stuff like 'fight like hell' and 'the election was stolen', but no direct orders... Manipulate people's emotions here and there, a bit at a time, and let things snowball as they will..
But what Trump did for the past 4 years ever since he said 2016 was rigged, it is basically a pump and dump. In 2016, there were social media posts about how the 2020 election was going to have to be suspended because of all the illegal immigrants who voted in 2016. yes, seriously.
It is a distributed form of propaganda that leverages the power of social media and an understanding of how mobs form. None of this is really new, but things are such now that manias like the Tulipmania can be easily kicked off without any centralized planning by a small group of conspirators or as organized like what the Nazis did.
I haven't read anything of DFV's old posts - I thought the general thesis was a valid one, maybe GME will turn itself around... but if he did periodically promote how well he was doing to a group of people primed for this like WSB is, then yeah he is guilty of something. Or maybe everything got out of hand, but he is still posting about his 23 million dollar gain...
But what Trump did for the past 4 years ever since he said 2016 was rigged, it is basically a pump and dump. In 2016, there were social media posts about how the 2020 election was going to have to be suspended because of all the illegal immigrants who voted in 2016. yes, seriously.
It is a distributed form of propaganda that leverages the power of social media and an understanding of how mobs form. None of this is really new, but things are such now that manias like the Tulipmania can be easily kicked off without any centralized planning by a small group of conspirators or as organized like what the Nazis did.
I haven't read anything of DFV's old posts - I thought the general thesis was a valid one, maybe GME will turn itself around... but if he did periodically promote how well he was doing to a group of people primed for this like WSB is, then yeah he is guilty of something. Or maybe everything got out of hand, but he is still posting about his 23 million dollar gain...
Every possible mainstream news organization coming on r/wsb with hitpieces is totally setting off my alarms. "Don't root for the retail investors, they are rich and only want you for your money! Root for the hedge funds instead!"
I'm not really alarmed by the negative perceptions, rather surprised how completely off the mark these takes are, even this one. I think Mark Cuban pointed out how this is a result of the media being lazy rather than nefarious.
But this will make me question the News media going forward, not because they might be malicious, but rather how incredibly incompetent they are running stories on such a transparent event. How can we ensure they are diligently reporting on events not as accessible as this?
But this will make me question the News media going forward, not because they might be malicious, but rather how incredibly incompetent they are running stories on such a transparent event. How can we ensure they are diligently reporting on events not as accessible as this?
I think there is a mixture of both nefariousness and incompetence; one news outlet puts out some misleading information through some shady talk, and then other media websites parrot it without doing any further investigation.
Someone being consistently incompetent in favor of something is a nice reason to throw out the Hanlon's razor.
I have some amount of sympathy for 'conservatives' now after reading through the lazy and careless reporting about GME. Lots of articles simplifying what is going on, trying to shove it into a 'common sense' or 'conventional wisdom' type of narrative, and just getting the simplest of facts wrong. And the outright propaganda masquerading as 'reporting' - i have seen some things that really ought to have been labeled as opinion pieces in very big block letters.
Most "Conservatives" may not be actual conservatives these days, but I get the frustration they have with the MSM that they have been complaining about when even the simplest or basic overview of their position is corrupted thanks to lazy biased journalists...
They may be wrong and entirely led by their emotions most of the time (and a lot are now becoming very delusional), but it is gaslighting to deliberately misinterpret someone's emotions or to not and try to understand where they are coming from.
Most "Conservatives" may not be actual conservatives these days, but I get the frustration they have with the MSM that they have been complaining about when even the simplest or basic overview of their position is corrupted thanks to lazy biased journalists...
They may be wrong and entirely led by their emotions most of the time (and a lot are now becoming very delusional), but it is gaslighting to deliberately misinterpret someone's emotions or to not and try to understand where they are coming from.
RH may have ran out of cash but they were still trading all non-meme stocks. how does this author explain that?
The collateral requirements are way higher for stocks that are heavily shorted, if I understand it all correctly. Meaning RH had to front more money for these stocks to continue allow trading during the 2 day waiting period for executions to fall through.
It’s called DTCC collateral requirements. These are things you should know about if you are going to try to profit from a short squeeze.
>Robinhood just ran out of money.
Really? Then why they restricted buying on _some_ stocks, not all. Must be coincidence.
Really? Then why they restricted buying on _some_ stocks, not all. Must be coincidence.
Usually we wait until an event is over to explain it.
I know I don't know the story of GameStop. No one does right now.