this post was submitted on 03 Jan 2024
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I follow that GameStop stock stuff on reddit solely because they have torn into the inner working of the stock market and how much fuckery is going on. Regardless of that one particular stock and how one may feel about it, the actual amount of research and knowledge sharing those guys have done is impressive. Watching all that shit go down and the reading what these people uncovered actually hastened me going full communist and deciding that stocks and the stock market just should not exist. The entire system exists for the sole purpose of stealing money from the working class. It's a rigged casino at its best. These hedge funds and market makers admit they can and do make the price of a stock whatever they feel is appropriate.
Here's another little fun fact YOU as an individual investor CAN own your stock. Not just the "rights" to it via the DTCC bullshit mentioned in the post but actually in your legal name. To do so you have to either buy the stock through the companies transfer agent or directly register a share to the transfer agent from a broker. Basically, to sell shares to the open market a company first generates shares through a transfer agent. Those shares then go to the DTCC and then on to brokers and other entities at buy/sell them. If you buy from the transfer agent they take the money and buy the shares off the DTCC and register them in your name. They are no longer at the DTCC and no longer able to be traded or available to short sellers or any other nefarious entities. Likewise if you "own" shares through a broker you can have them transfered to the transfer agent in a similar manner. In the event shit goes down your shares will remain yours. They are safe.
So one would think this is a good thing right? More direct ownership of the shares of a company is safe. Because while shares are held by brokers and the DTCC they are able to be shorted out without our consent via a number of little tricks and cheats the people that designed this system put in. But when the shares are held with the transfer agent they are safe from this. So it is I a companies best interest for their stock owners to own through their transfer agent. So why do we never hear about this? Why do companies ot advertise this? BECAUSE THE SEC MADE IT ILLEGAL. That's right, if a company were to tell it's investors "hey did you know you can register your shares directly in your name through our transfer agent [blah]" that company would get the hammer brought down on them by the SEC for " market manipulation." That's right folks, per the SEC it's market manipulation to not let the DTCC and it's cronies have complete control over your stocks.
The system is more fucked than you can possibly imagine. Check out the movie The Big Short. It is really very good at going through some of the fucked shit in the stock market. One of the guys that made a ton of money out of figuring out the system went on to only trade in basically previous metals and real estate because of how fake the market is. This is also why so ma y big banks and other agencies are buying up as much land as possible. They know when the rest of the market is literally built on fake stocks.
It's funny because for years I contributed to the stock purchase plan from my company where they give you a discount of stock purchases. I just did it because, idk I figured I should own a part of the company, even if it's a miniscule amount that won't really matter unless we got like, bought out for a shit ton of dollars. I always wondered why we got a discount. Honestly I'm still not sure but it WAS all through the transfer agent which I didn't even know about all that broker vs transfer agent shit till recently. Most people I know still don't know the difference. It's just insane to see. Like generations of people just throwing money into this system having no idea how fucked it is. Then when you learn and try to tell them they treat you like a lunatic.
Honestly it's almost the same when you try to explain communism to them. I've drawn lots of similarities between the way people start talking to me when I mention either. Sometimes I think the GME thing is part of a psyop or some shit. Like if you start talking about the stock market lots of people will tie it to that and start to think your are some GME reddit crazy and dismiss you. It's a pretty standard play they use when trying to make every criticism of their system sound like it's coming from some crazy conspiracy theories. The media treats them the same way in a lot of respects too. Like running constant repeat articles about how it's going bankrupt and how the investors have all left... Except they repeatedly have said that for like 3 years now? Similar to how China is always about to collapse or the CPC is genociding a bajillion Uighur Muslims every day... For years. Like 10 times the population should have been killed by now using Adrian Zenz numbers or some shit. It's also funny going to those subs and seeing them regurgitate MSM and State propaganda against China whilst talking about how everything in MSM about their stock is propaganda. Goes back to the "The Media lies about everything except those things that I agree with" mentality.
Right. So I do stock analysis, and while a lot of what the gme guys say are technically true, it doesn’t have that much of an impact on the stock price.
As with organizing and revolution, the only thing that really affects the stock price is mass movement. And that is usually affected by potential performance of the company.
If you look at order books, you can see people sink billions into orders, hoping to have the next tick break the trend, only for it to be reversed in the subsequent ticks.
GME is underperforming. Its revenue is declining yoy. It has neither the resources nor a concrete plan to recovery. The only reason it’s been hyped so much was because one person made a lot money and was very public about it. It’s not because of some mythical MOASS. In fact, I suspect that it’s a viral ad campaign by GME perpetuating capitalist realism; you can break the system if you buy the right product (like GME stock)
Contrast with EDU stock (XinDongFang). Though their revenue was massively hit by the new Chinese laws, their financials show that they had a massive amount of cash in the bank, and their stock was extremely undervalued. This shows that they had the potential to pivot to a new market, and that they did, leading to a recovery.
Spoilering this so people don't have to scroll so far past this wall of text in case they don't want to see stock nerds argue about stupid shit.
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A few points I want to make here. Mass movement CAN affect stock price but where that movement comes from and where it's channel through also matters. Market makers routing buy orders through dark pools to prevent buying pressure from pushing the price upward, while routing sell order to the open market, will cause the price to fall even if the buy to sell ratio is high on the buy side. There have been posts showing this in effect. See the buy pressure of GME for the past few years. Buy to sell ratios are consistently showing higher buy to sell yet price seems completely unaffected. Going down on days when brokers like Fidelity show a buy ration of 80-90%. Ken Griffin of Citadel even admitted that market makers can adjust prices of stocks to what they feel is appropriate to the market. We have him saying this is interviews. They admit they can manipulate stock prices if the want to. They are blatant and they are bragging about it. Sure if enough people start buying they can loose control for a bit or get surprised by the buy pressure but they can immediately start shorting it and suppress the prices if they need. Even freezing the stock if they need. We've seen them do it dozens of times. The only thing they can't manipulate are shares purchased or transfered to the transfer agent since they don't have control over non-DTCC shares.
Secondly I don't really get the need to bring up some other random stock or even go into the GME stock. My comment didn't even bring up any real details about the actual stock just the fact that following those guys taught me a lot about how fucked the stock market is but if you want to go there then fine. The company HAS improved on its yearly positions and quarterly positions since the change in management and the removal of certain board members that had ties to the same people shorting the stock which is a whole other conversation on its own how these hedge funds have used corporate sabotage to bankrupt businesses for their gain. Idk if the whole MOASS thing is actually believable and is probably a lot of hopium from that community, but I cannot rag on the company either. Turning a large company around isn't something that happens overnight. Seeing that quarterly earnings have been mproving upon the previous years quarter, and doing so while the economy is in a recession, I would have to say they are making some decent forward movement. You bring up this other company having a mass of cash in the bank... So does GameStop? When compared to their size and cost of running, quarterly losses, which continue to decline YOY, etc, etc, the company is, at the worst, stable for years. Also the company does have a plan to turn around. They have had one for years since the replaced a lot of board members. It's what they have been doing for 3 years now. An initial investment into changing some things up then reducing cost and reducing quarterly losses, steadily turning around to become profitable. Just in Q3 2023 vs Q3 2022 they went from a net loss of 8% ($97m) in 2022 to a net loss of 0.3% ($3m) in 2023. That's in Q3, usually the worst quarter for retail businesses, in a worsening economy. Actually this has been a pretty steady trend since about half way through 2022. Q1 and Q2 of 2022 were a larger loss as they began investing into changes. By Q3 of 2022 they started reduce the net losses. Q4 of 2021 was a net loss of $147m, vs Q4 of 2022 was a net gain of $48m.
Regardless of what you think about stocks though, I think the economy will collapse before it will matter and the working class will loose no matter what they are invested in. I personally don't have much skin in the game. I bought a handful of shares a while back just to play around but I don't have really much invested anywhere outside my 401k which will never be enough to retire and has the same problems with all other stocks, stuck with the DTCC and manipulated as they please. My real retirement plan is to work till I'm dead or die defending my store of beans and rice from my neighbors once western society collapses. The best I can hope is to keep educating people on how fucked the system is and hope to live long enough to die with the satisfaction of seeing America crumble.
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Then these market makers would intentionally be temporarily manipulating the price to be on the end of a losing trade, since they bought high and sold low.
I’m assuming you’re talking about the bid/ask ratio on the order book, which is a list of unfilled orders. There’s multiple reasons for this kind of market structure, which could be interpreted as either bullish or bearish. They can either be exits for shorts or enters for longs. But objectively, this creates support for the price which prevents it from falling too far down, not necessary causes it to rise.
The rest of your points are valid, but they’re mostly controls to dampen excessive price volatility, which fucks up limit and stop orders.
What correlates to stock price the most isn’t profit or assets, but rather revenue. How large a company is, is based on how much moolah that it’s able to bring in. Looking at GME’s revenue, it’s down to 60% of its highest revenue in 2011, not accounting for inflation. Since its restructuring, it’s had negative EBITDA and negative cash flow. You can say that it’s kind of stopped the bleeding by switching to non-obsolete revenue streams. But overall, it has downsized and it’s still not profitable.
If anything, the price of the stock is Inflated by the hype, rather than suppressed. When DFV bought in, the market cap to book ratio was roughly 0.5, which indicates that it was severely undervalued, especially for such a high profile company. Now it’s around 2, which is around average for a company that’s profitable.
Everything I've seen from Redditors in the GME context is baseless drivel. They don't do research and knowledge sharing as much as day-dream and share fiction.
Except for the fact all their stuff some from researching and reading what other industry experts have been saying for years? Everything mentioned in OPs post I already knew specifically because of them. They may be crazy for some stock and have wild theories about it, but they have done more to bring to light the fuckery in the stock market than anyone has in decades. At this point the have more on just how the stock market as a whole than the GME stock which honestly I couldn't care less about. They have an entire library archive of their research and source everything so the only "baseless drivel" is your comment.