Why mainstream media's slander of wallstreetbets pisses me off regarding GME.

hey everybody how's it going today what i'd like to do is talk about market manipulation wall street bets the mainstream media institutional investors and how they are trying to completely pull the wool over your eyes so that you blame the wrong group of people for what's been going on today this makes me incredibly incredibly angry and aggravated because what they're doing in a lot of the articles that i'm reading is they are framing the argument to prime the pump for you to be mad at someone that you shouldn't be mad at they don't want you to be mad at the institutional investor they don't want you to be mad at the greedy hedge fund manager they want you to be mad at someone just like you who's typing on on you know their keyboard some funny crap during work posting little rocket ship emojis and buying stock and most of the time i imagine from what i see from the post fairly small quantity now to be clear here just because i am getting up here to to talk to you about the [ __ ] that money managers and hedge fund managers and institutional investors are trying to get across does not mean that i agree wholeheartedly with everything that i see posted on the wall street bets forum just because i dislike the money managers that appear to be pushing what i believe to be a false narrative doesn't mean i sign off on everything i read here this is a ridiculous place most of the people who are members of this ridiculous place will tell you that they are ridiculous and that this is a ridiculous place i am not saying that i agree with everything they say or everything that they do all i'm saying is that this is a two-sided story and at this point in time i believe that you are hearing one side so what went on and what is it that pissed me off about it and uh how are we gonna dig into this so what we're talking about is gamestop going from around four or five bucks earlier last year to all the way up to a hundred and forty dollars today so gamestop is a retailer of video games as you can see over the past five years their market cap has kind of been bleeding out slowly more people are buying the games online more people are having them shipped to them using other platforms other than gamestop gamestop is not exactly a particularly very like store it's an old blockbusterish model so a lot of people thought that gamestop was not going to to to survive the transition so that we're making in our economy right now whether it's you know retail going away or brick and mortar going away or both when it comes to selling video games so the stock has been going down and as you can see over the past six months there has been a radical comeback here where you know right before halloween it went up to around ten dollars and then right around christmas it was you know hitting around almost close to twenty dollars and then it hit up to thirty five dollars then forty then sixty and earlier today it hit a hundred forty dollars which is absolutely insane and there are a lot of people on this forum on the internet called wall street bets that are saying i like the stock buy the stock you should buy the stock here's why you should buy the stock and they post funny memes which makes them an easy target because they talk in silly terms and they call each other retards and gay bears and curse at each other and all this crap it's they're an easy target to single out and show look at all these bad people when in reality again they're just they're memeing and realistically speaking that that's probably how people talking at uh on the trading floor anyway my dad was a broker in the late 80s and this is this is how a lot of people talk it's actually usually much worse than this so what's going on here well the news is going to make you think that these people are all evil market manipulators that sat down and hacked something or did some evil thing to manipulate the stock to make it go this high as if nobody else had a hand in this occurring what they're not doing is they're not discussing the actual cause they're showing you the funny screenshots of the funny posts they're showing you the high stock price after the funny posts but they're not actually showing you how we got here now in order to explain how we got here i'm going to try to explain the very concept of short selling and every everything else how stocks go up and down because you may think this is all being overly simplistic but these articles that are priming people to not hate the hedge fund investor or the institutional investors that are priming you to hate normal everyday people they're relying on people who don't have a knowledge of the market who don't have a knowledge of finance because those are the people who are going to fall for this stuff so i'm targeting this video for people who don't understand the market which is why i'm going to explain things very simplistically so stocks go up when more people want them because the companies are doing better or they're going to do better stocks go down when less people want them because the that company is doing worse or they did something stupid just like any other good in life if you know if if 10 000 people want this camera and there's only five of them in the store chances are the store is probably gonna raise their price on them and if five of this camera in the store and they're sitting there for a year or nobody wants them it's probably gonna go on sale and be cheaper this is the basic rules of supply and demand which is followed virtually all over the world except for of course new york city real estate we're just gonna pretend new york city doesn't exist for the purpose of this video because new york makes no sense so if you think a stock is going to go up you'll buy it because that means that you'll make money over time so let's say that you think that gamestop is a good company you go over to your broker and you ask for 10 shares when gamestop is ten dollars per share that means that you have now spent a hundred dollars on gamestop stock if gamestop does well and goes to twenty dollars a share now your shares are worth two hundred dollars meaning that you just made money and if gamestop is poorly and goes to one dollars a share it goes to 10 now your your shares are worth 10 you just lost 90 bucks when you're purchasing shares of a stock this is the very important part here the worst thing that can happen is that you lose your initial investment so if you purchase 10 shares of gamestop at 10 a piece the worst thing that can happen to you is that your 100 goes to zero if they go bankrupt and they are insolvent and they go and they go out of business entirely the worst thing that can happen is you lose your initial investment but that's it you put a hundred dollars in you lose a hundred dollars now there's another type of investing called short selling and this is much more risky and this is something that a lot of the institutional investors and larger investors are able to engage in more so than us for reasons i'll explain in a moment short selling is when instead of purchasing the stock let's say the stock is at ten dollars a share and i think it's going to go down to a dollar and i want to make money off that i will borrow the shares from someone and then the moment i borrow that your shares i will immediately sell them to somebody else so let's say it's ten dollars a share i borrowed ten of your shares and then i sell those ten shares to someone else for ten bucks a piece i haven't paid for anything yet so i have a hundred dollars in my bank account and if it goes down a one dollar a share well i have to i don't have to pay you back right now for the shares i can pay you later so i sell the shares i've sold them i have sold 10 shares of gamestop at 10 a piece in this in this scenario i have a hundred dollars and the stock next week goes down to a dollar now i borrowed the shares but i'm paying for them later so if it went down now i only have to pay ten bucks so as a result of the stock going from ten dollars to a dollar me short selling ten shares i am now ahead ninety dollars because i got the hundred dollars last week and now when it's time for me to pay the piper and pay for the borrowed shares i'm paying for them based on the price that they are now which means that i am paying only ten dollars this means that i get to make money off of the stock going down the downside to this approach is that there is infinite downside let's say that the stock goes up to a hundred dollars a share now it's a thousand dollars so i just made a hundred but i have to pay a thousand let's say the stock goes up to a thousand dollars a share i just made a hundred but now i have to pay ten thousand let's say the stock goes up to a million dollars a share my short sale just made me a hundred dollars because i sold it for the ten dollars a share next week they fit you know they find another planet and invent time travel and gamestop is now a million dollars now i owe you 10 million you see here's the problem with short selling you don't just lose your your initial investment because there is no initial investment the potential for loss when short selling is literally infinite and you can typically only short sell with uh if you have an account that has a certain amount of money in it or margin so you usually at your broker at least before the robin hood chick came in and everybody got margin you used to have to speak with someone show them documents and all this other crap and go through this process to get margin it wasn't something that some jackass like me sitting here in a worn out under armour shirt and a crappy old sweater could just get immediately i don't have margin on my account at this point in time this is something that was typically reserved for expert investors large heads funds or institutional investors because when the stock winds up going up you need to have enough money that the broker is not going to come over to you and demands that you sell your stuff now you have to have a broker that's going to be understanding that let's say no i really think it's going to go down just give me a week or two because the broker's going to be on the hook if you don't pay this is something that it's typically done by large institutional investors and hedge funds this is important to understand because it helps give you context as to why the money managers institutional investors and hedge fund owners are as mad as they are right now and are as angry as they are right now and why they want to immediately get on tv or bloomberg or the new york times or yahoo finance and immediately start blaming someone else for what is going on they are this mad because they did not just they're not just an investor that invested and lost their interest investment they decided to make a very greedy investment that is very risky and very speculative and as a result of making that risky speculative investment lost many multiples of their initial investment so what they were doing with gamestop is they were shorting the stock now shorting a stock in and of itself is not the worst thing in the world again you're betting on the stock failing you're going to cause the stock to go down so you're kind of betting on people's misery people losing their jobs it's not the nicest thing but sorting in and of itself is not particularly horrible what happened here is they shorted over a hundred percent of the available shares so instead of saying i think gamestop is going to go down let me make us let me make a small bet on it they decided to literally bet everything they bet more than everything which is why this happened so had the institutional investors had the hedge funds not been as greedy as they were a group of internet kids would never have been able to do what they did the reason that they were able to do what they did is because these people got caught with their dick in the cookie jar and you're not supposed to put your dick in the cookie jar they got caught it's not that the institutional investors were these these kind prim and proper people wearing their bow tie and you know doing everything all prim and proper were just you know as they were on their walk home were robbed by a mob of angry kids no a bunch of kids saw that adult grown up stealing from a house and then they said no [ __ ] that we're reporting you and then they got reported and now here's the thing they don't want to pay the piper and they're hoping that if they're able to pull the wool over your eyes they won't get in trouble see if a bunch of kids catch an adult stealing from someone's home or breaking into a car it's really hard to spin that because you know that that's wrong but if a bunch of kids find an adult going you know short selling in a way that probably should be illegal with more than 100 of the float that's available it's financial mumbo jumbo and if you don't understand the financial mumbo jumbo you're not even going to understand that those kids were not doing something wrong they simply found out that these people were were being greedy and doing [ __ ] they shouldn't done and that hey you know they [ __ ] deserve to get in trouble for it so short selling is something that's actually going to cause the price of a stock to go down because keep in mind what i'm saying is i'm going to buy the stock later i'm not going to buy it now because buying makes the price go up selling is going to make it go down i'm going to sell a bunch of it right now and if you sell a bunch of it right now what that does is it brings the stock price down further once the stock price goes down other people start to get nervous and go wait i don't want to lose the whole value of my investment i don't want to lose all the money that i've made no and they get nervous and they cash out when they cash out it lowers the price even more when the price goes down even more that causes other people to then go oh god i need to sell out when they sell out the price goes down more which causes other people to go oh god and and cause the and cause them to sell out and the price to go down even more and as this continues to occur what happens is the short seller the original short seller could just you know finish their position you know just be done with it or if they're greedy [ __ ] face they could double or nothing it and say no we're gonna short sell again and again and again and that's what happened rather than simply be happy that they were able to beat this stock to absolutely brutally brow beat this thing down from it being worth you know 25 all the way to being worth [ __ ] three dollars rather than being happy that there was an over five or seven or 800 or 900 return on their [ __ ] investment they needed to keep going back and back and back because when you're a billionaire hedge fund manager when you're an institutional investor worth hundreds of millions of dollars well let's just keep doing it let's keep robbing the american people blind let's keep robbing the people who bought this thing blind let's keep manipulating them let's keep making them think that this is going to fail when in reality it's all artificial it's all short selling that is gonna have to be covered later at and when they cover here's the thing yeah they drove it down but they gotta buy all that [ __ ] back which means it's gonna go back up so if the company is truly failing it doesn't matter because you're gonna buy it at a low price because everybody else is selling if the company is not really failing if the company is not really in complete disarray and you short over a hundred percent of the available [ __ ] shares when it goes down it's actually going to rock it back up because again keep in mind you're paying interest on that money so let's say i borrow 10 shares of stock at when it was 10 a share i'm i i borrowed 100 from my broker for them to lend me those shares so now i need my broker to uh to to loan me money they're gonna charge me interest on that now if a stock goes up from three to five ten twenty thirty my broker's gonna call me and say listen man uh you know i know that you're good for the hundred dollars in your bank account i don't know if you're good for 300. so i need you to immediately cover and pay right now you're not waiting anymore for this to go down imagine how bad this is when the stock goes from 10 to 20 to 30 to 40 to 50 to 60 to 80 to 100 to 120 140. that's what happened here and as a result of that happening all of these all of these institutional investors are now being forced to close their positions aka buy the stock that they finally pay for the stock that they borrowed in short sold months ago so these institutional investors as the stock went down from 25 to 20 to 15 to 12 to 10 to eight they didn't sell they never they never closed their position here they waited till it got the [ __ ] three and they kept shorting it so what happens at this point is now a bunch of people found this out because you can see what percentage of the stock or the open shares are short this is easy to find on any website so a bunch of people that had nothing better to do because they probably lost their jobs because they're considered non-fucking essential by andrew cuomo said okay listen i got nothing better to do with my day let me just go through every single stock in the [ __ ] market and see what the shares are available short and compare that to their book value or their total equity or their cash on hand or whatever and a bunch of people did that because they have a bunch of time too because they have no job to go to and they found gamestop and they saw huh hmm this the market cap on this has went down by over five times in the past two year two or three years and it's over 100 share shorted and this is really cheap if i buy this it's going to go up because they need to cover i know that all of these institutional investors are going to need to purchase this stock or need to they're going to need to buy shares to cover their short position so this is going to go up okay cool i'll buy it and then they shared the information with everybody else and said hey i found out that this company with these details has been short sold by all of these greedy institutional investors look at this link where you could see that over a hundred percent of the shares are shorted why don't you listen i'm buying do you what do you think of this information now do keep in mind the way short selling works you are borrowing the shares from somebody else in order to sell them you haven't paid for them yet that's how you make your money you're going to pay for the shares later when you give them back once the shares have gone down in price that's how short sellers make money so because the short seller has borrowed the shares to sell them they are on the hook they need to replace those shares they need to buy those shares back from somebody and if on the open market more short sellers have short sold shares than shares that are actually available that means that we're in a situation where there are only five cameras available there are 10 people that need to buy this camera because they they broke their parents camera and they're going to get in deep [ __ ] and and punished if it's if it's not returned so you have five cameras on the market 10 people that need to buy cameras absolutely must buy cameras what are they going to do now they can't just buy it at the price that it's at the store they're going to have to convince people that don't want to sell their cameras to sell their cameras and how do you do that well by asking more money and that's what they're being forced to do they would not be in this position if they did not try to short more than a hundred percent of the available [ __ ] shares which probably should be illegal because they are greedy so if i'm an investor and i'm able to find this information i may not want to buy gamestop because i see that i know that they're going to have to convince me to sell my shares so if i know that over 100 of the shares are shorted and the company is not in disarray and failing i have i know that if i purchase it that there's a good chance that the stock value will go up not because i'm manipulating it simply because i am purchasing it and i am making a choice which i'm allowed to make that i do not wish to sell right now it's not my fault that they got stuck with their dick in the cookie jar and are now forced to sell in order to give back what they borrowed and sold looking to make a profit off of other people's misery so what people are now doing is they posted saying hey look at the amount of shares that were short with this one stock and look at its underlying fundamentals then other people came in and saw oh wow yeah it's not they don't they're not declaring bankruptcy or anything and over 100 of the shares are shorted all right i'll buy some and then someone else came by and saw this information and said i'll buy some then other people came by and said wow they're that greedy all right cool i'll buy some and then they waited they diamond hands they held now what the media and what the these institutional investors are making it sound like they're making it sound like all these kids just put guns to these people's heads to rob them blind no what you need to understand is that all they did is purchase shares why are these people in the position where they're forced to purchase game stop shares at these insane prices they're there because they short sold over a hundred percent because they're greedy and then when the institutional investors are then forced to cover then they start crying and they start playing the victim because they did something wrong they know they did something wrong they know they didn't close their position when they should have they knew what the [ __ ] they were doing the entire time and now they got caught with their dick in the cookie jar and rather than just admit you're not supposed to put your dick in the cookie jar they're trying to reframe the conversation they're trying to trick you because they know that the average person doesn't have a lot of understanding of investing if you ask me the mechanism through which short selling and all this crap worked even just a few years ago i wouldn't really understand this did it either so they're relying on the fact that if they get on bloomberg and the new york times and cnbc and yahoo finance and all these other places and they present their case and they show you some pictures of people in this group speaking in a manner that that's you know kind of crass and again they're talking about someone [ __ ] their wife's boyfriend and they're using emojis of like gay bear and stuff that they'll be able to start getting programming you to think oh i should listen to the institutional investors that were a suit and tie and look all proper not these people who admittedly self-identify and call themselves retards on this forum that couldn't be further from the truth they are trying to cover the fact that what they were doing was incredibly greedy incredibly damaging probably should [ __ ] be illegal that they should probably be investigated by the sec by pointing the finger at someone else this stock is not going up the way it is because you have some kids on a reddit group that are manipulating the stock market the manipulation occurred before they ever found it the manipulation occurred when these hedge funds and these institutional investors decided that they were going to short sell it over a hundred percent and keep that [ __ ] position driving the stock down to where it was over here the manipulation was not on the way up the manipulation was on the way down this over here is not the manipulation this over here was the [ __ ] you to the people who were doing the manipulating this over here all this this crap going down over here that was what i would call in my opinion the manipulation and what they're trying to do is pretend that that didn't happen in your heart of hearts when you really think the down earth who do you think is looking to to uh pull the wool over your eyes screw you over and take your money more average dude on reddit that probably lost his job multi-billionaire hedge fund manager like just just think about that for a moment just like just just think about that who do you trust more on a guttural level and you have to understand that short selling in and of itself is not necessarily the worst thing in the world when it comes to companies like enron the people that figured out that enron were a scam were short sellers it's good to have a financial profit motive where an investor can make money off of a company going downhill because what it does is it balances things out so let's say let's say that i were invested in gamestop and i would make money if gamestop became more valuable i now have a financial incentive to lie to you and tell you that the company is worth more than it is and to pump it and to talk about it as if it's the greatest thing in the world when it's actually a pile of ship because i make money if it goes up this is then countered or balanced by people that are short sellers because short sellers make money when a stock goes down so a short seller is going to say i think you're being a little bit too overly optimistic there or you see this area where you say you can make 10 million in revenue off of that you actually can only make 100 000 and here's why based on what your competitors are selling and what you're selling so the short sellers and and the and the people who are more bullish the people who are hoping that the stock price goes up they balance each other out the problem is when this goes out of balance and it goes out of balance when you have a stock that is shorted over 100 you have to understand when you're shorting a stock you're not just betting on the company going down you're betting on their employees going out of work if that company is actually in trouble they could use their share price they could use their valuation to you know potentially leverage or borrow money or some [ __ ] like that and to be able to borrow money that would be able to help them out but they're not able to do that if their price continues tanking and their valuation continues tanking so by shorting in this aggressive manner where over 100 of the float is shorted you're kind of creating this self-fulfilling prophecy where you are betting on them failing actually now you're actually helping them fail you're actively causing them to fail and then you put them into a death spiral once you're able to drill the price of the stock down so much you're able to encourage other people to sell when you encourage other people to sell the price goes down more if the company actually then starts failing they're not able to get access to capital the same way they would before and it gets worse and worse you're betting on people losing their jobs you're betting on people losing their life savings and when you short of stock let's be real here it's not your average person that are shorting stocks to tens or hundreds of millions of dollars it's institutional investors it's not you it's not paul daniels it's not jessa jones it's not me it's not paul that's doing this it's institutional investors they have the power to do this more so than your average person that is using reddit because they are the ones that are going to get access to margin they're the ones that are going to get access to large amounts of margin that your average person on robinhood doesn't have access to they're the ones that can actually have the power to manipulate the market and they're the ones that are doing it and what they're going to do is they're going to pretend that that didn't happen you're not going to see the articles that are that are being discussed when they show up on cnbc you're not going to hear the people who have a financial stake in seeing companies like gamestop fail because they shorted them you're not going to see them talk about how it was over 100 of the float that was short they're not going to start with that they never start with that because if they started with that it would change the narrative they want you to focus on the comments in the wall street bets for them i want you to focus on their their silly vocabulary and pretend that their rocket emojis have more power than someone with hundreds of millions of dollars of margin available when it comes to being able to manipulate the market and that's comp in my opinion complete and utter disingenuous [ __ ] what you are seeing right here with this stock uh doing what it is is in my opinion a true representation of the app's name robin hood what they're doing over here is the people that caused this to happen that were responsible for this happening to the extent that it did for this stock being shorted over 100 they are taking that money from those institutional investors and then returning it to the average retail investor which is normal schmucks you know i was listening to cnbc earlier today and there was this one [ __ ] face on cnbc that actually said what if this is a foreign power doing this and they did i i almost lost my [ __ ] like you really think that if iran or china or russia or north korea wanted to [ __ ] with us they wouldn't they wouldn't plant spies in our government they wouldn't uh you know they wouldn't run disinformation campaigns they you know they wouldn't have terrorist cells installed in the nation they wouldn't bomb us they would buy shares of an aging video game retailer really now that's your argument i don't know you let me know what you think in the comments down below uh as i said in the beginning of the video this is not financial advice this should not be construed as financial advice i have not been a shareholder of gme up until today where i bought a very tiny amount solely so that i could say i was a little bit that uh over the course of history when i'm a grandpa or a great grandpa i can look back and say i i bought a few shares of that meme but that this is this is pretty much it so that's it for today as always i hope you learned something again i i would stand behind the idea that this is probably one of the shittiest times in my opinion to put money into the market because you have so many people tossing money in groups like this are are growing in size with more and more people getting excited as they see things go up people are assuming that because this went up because of this circumstance that everything is going to go up all the time many people are speculating that this particular stock market is a bubble i am personally uh scared of having anything in the market right now and i have pulled out of most of my positions in anything so i i sold out of uh the icl and etf i was in a while ago i've sold out of just about every other position that i've had because i'm i'm honest again like [ __ ] just can't keep going up and up and up and up and up forever i know the bears got slaughtered in march and april of 2020 but no we'll see let me know what you think in the comments down below that's it for today and as always i hope you learned something

Channel: Louis Rossmann

Views: 954,557

Keywords: gamestop, wallstreetbets, gme, gme stock, gme short squeeze, gamestop stock, wall street bets

Id: 4EUbJcGoYQ4

Length: 28min 58sec (1738 seconds)

Published: Mon Jan 25 2021