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Today I learned that DTCC, which owns vast majority of the stocks in the market, was founded by a CIA agent by the name of William Dentzer. (susan-g-dentzer.medium.com)

submitted 10 months ago by [email protected] to c/[email protected]

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Some info on Dentzer

and a bit of a dive in to DTCC and how it works.

DTC retains custody of more than 1.4 million active securities issues valued at US$87.1 trillion, including securities issued in the US and more than 131 countries and territories.

Through a series of complex legal frameworks pretty much all stocks are actually owned by DTCC. They hold the shared to all the publicly traded companies on the stock exchange through their Cede and Company subsidiary.

People who invest in stocks are given a security entitlement through a securities intermediary, i.e. a broker. So, DTCC owns the stocks, and they give out certificates to brokers to trade the shares. The brokers then resell the certificates to the beneficial owners.

Normally, none of this really matters, and it's just an obscure legal mechanism nobody pays attention to. The time this does start to matter is when a bank or a brokerage goes bust, the way we saw during 2008 crash. At that point the securities go to the secure creditors who actually own them and not to the beneficial owners.

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[–] [email protected] 1 points 10 months ago

spoiler

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.

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.

Buy to sell ratios are consistently showing higher buy to sell yet price seems completely unaffected.

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.