WSB is the Reddit community where everyone openly admits to running with pump-and-dump schemes, with the hopes to not be the dumb bagholder at the end.
Its a legally grey zone IMO. Its not a traditional pump-and-dump scheme, but the effects are basically the same.
They choose a stock, somewhat at random to pump. They use WSB to communicate and coordinate when the pump occurs. The idea is to use a stock that has nostalgic value (Gamestop, AMC, BBBY), but is in dire straights.
A shorter term, tactical goal, is to often find highly shorted stocks and/or stocks with high options leverage to cause either a short-squeeze or gamma-squeeze event.
Its all public knowledge, legally and morally grey IMO. I wouldn't touch it personally, but obviously you get a whole bunch of pump-and-dumpers together in one location on the internet, they're all going to be competing for the same money on the same forum.
It certainly has that reputation but it is largely unearned in my experience.
There is no explicit coordination happening to create pump and dumps. There has, on occasion, been some level of coordination when attempting to trigger a short squeeze but that is mechanically different than a pump and dump.
What it does do, though, is spur memetic investment, which can create a short term frenzy for some stocks but it is not a planned event. Thousands of people post stocks each day and every so often a stock will perform well enough to where the community will take hold of it and push it to pretty incredible heights. The most recent one would be TRKA. If you're switched on enough, you can make some pretty massive gains.
However don't take this as me defending their crypto scam. That's just downright not okay.
> What it does do, though, is spur memetic investment, which can create a short term frenzy for some stocks but it is not a planned event
Erm... investing in a security, then trying to create a meme is a pump-and-dump scheme by any other name. You've just changed the name "pump" to "meme", rather than using old-school behaviors like boiler rooms.
Its even "meming" the same information: too the moon, or whatever. In the 90s, it was all cold calls over telephone, but today you can use online forums to do this.
I'd argue that is a very simplistic way of looking at it.
There is always a narrative as to why a stock will go "to the moon". You say it's explicitly a pump and dump and it's not really, no. Look at GME, the idea was to restrict the float so that when the shorts got exercised, they would be trying to buy shares that didn't exist, creating exponential demand which would increase the price significantly. Not an impossible feat[0].
The "memetic" part of it is purely information exchange. That's all. If that's the barrier for entry for being considered a pump and dump, then I'd say anything which reports on a companys action could be a pump and dump. From Financial Times, to Bloomberg, to Mad Money, to StockTwits, to whomever else.
In what way is this different than a pump and dump? You tout the stock and say it's going to 5x, 10x, whatever because of X. Then the suckers buy. Then you sell.
Well, it's different because of whatever X is. X is the reason why the idea can spread through the community. It needs to make sense on some fundamental level in order to get past the onslaught of ridicule that every stock and member is subjected to.
If you say "ABC is going to increase 10x because it has a funny name" that obviously won't fly, but if you give a detailed account of why it is possible (this is called DD - due diligence), this has much more potential to excite people. I wouldn't classify open source intelligence as a pump and dump.
To start, it wasn't that short sellers were ruining the market. If you spent any time there, you'd see that they, too, short stocks.
Second, it definitely wasn't made up. GME was tremendously shorted. And there were more shares shorted than existed. This is not a unique phenomenon and is possible due to a concept called "naked shorting".
Yeah, no one is going to change short selling rules any time soon because it's all jus t made up crap and rumors from WSB to pump GME.
Hate to break it to ya, but you're getting played of you actually think the problem here was short selling.
The problem is that skittery online retail can be so openly manipulated to believe such conspiracies and that this leads to the profits of the small leaders of the crowd.
Nobody is trying to change short selling rules. Like I said, this wasn't a rebellion against short selling.
Also, this is all verifiable information. I'd encourage you to confirm what it is that I'm saying.
Benjamin Graham said that in the short term, the stock market is a voting machine, and in the long term a weighing machine. None of this is anything new. It's just the speed at which information travels that has changed.
Obviously, it was all just a ploy to trick Redditors into buying GME. If people actually cared about short selling, they'd describe new rules or regulations on the issue.
That's all it ever was. There's not much else to the story. I guess I could go over the bull$$$$ arguments over AMC, BBBY or FRC or any of the other meme stocks. But it's all just meming the stocks up in price.
No, at no point was anyone taking umbridge with short selling. They had issues with large hedge funds trying to kill companies, that may be where your confusion lies.
Also, adding FRC in there is an interesting move. Do you blame retail traders for that?
I blame WSB for making up bullshit stories about FRC going to $50 when FRC was clearly collapsing in reality.
It's the same pattern. Meme a lie really really hard, then screw over the community by taking money from the people who believes the lie.
No different from the GME price target of $1000 or any of the others WSB lies that people have fallen for. It's just a means to extract money from sheeple.
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It's all the same pattern. My question is how many times do the WSB Redditors have to get screwed over before they notice they are the marks getting played.
I don't blame retail for getting so blatantly manipulated. Everyone knows they're dumb money who will easily believe these lies.
I blame WSB leaders and moderators for so plainly taking advantage of retail investors and doing so for years.
Is it possible that you lost money following WSB and that's where these opinions are coming from? Because these aren't exactly cogent arguments at this stage.
There is a huge disconnect between people throwing out price targets and a pump and dump, I don't think that I need to spell that out. One is over-enthusiasm, the other is crime.
For what it's worth, FRC was incredibly tradeable very early on in the beginning of the banking crisis, regularly doing very large swings. Though, what I believe you're talking about is the expectation the FRC would exceed expectations on earnings and would go on to return to its pre-crisis prices. This is not a pump and dump and makes sense. If the bank is no longer in trouble then you'd expect normality to resume. This did not turn out to be the case and it ended up being taken over by JPM. This is not a pump and dump in any way.
The price targets of $1000 for GME would have been met should they not have disabled the buy button but I believe that there would have been a really strong sell off at the upper $900s which would have had a big impact on the price and I'm not sure it would've recovered. Please see TSLA as a stock which has gained a huge market cap as a result of enthusiastic investors.
> Is it possible that you lost money following WSB
Nope. Try again.
> The price targets of $1000 for GME would have been met should they not have disabled the buy button
I do pity you that you're so deep in the conspiracy theories that you can't see reality.
GME stopped going up because the short squeeze ended. WSB mods needed to keep the story going so they sold you another lie.
Robinhood literally ran out of money trying to support the insane GME upswing and y'all turn it into a conspiracy theory about buy buttons being disabled.
Do you know what T+2 settlement is? That means Robinhood (or the various middlemen Robinhood uses) needs to hold your money (and stock) for 2-days before the transaction is actually settled. The WSB members were buying so hard that Robinhood (and their middlemen) literally ran out of cash and couldn't buy more stock.
Sure, it was fixed a day later when trades settled and cash opened up again. But this is how WSB takes a normal event and turns it into a conspiracy theory.
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But sure, whatever. You can keep believing the conspiracy theories/lies. Meanwhile, there's ya know, Congressional investigations into this, and questions about what regulations need to change here that have the answers.
But people prefer to trust lies on Reddit over the investigations these days, amirite?
Sorry, no this is factually incorrect, I have already linked you to an article detailing why the momentum stopped. For what ever reason, the ability to buy was stopped on many more brokers than just Robinhood. In the UK, we also had Trading212 turn off the buy button. That is not up for debate, that is historical record.
You're the one currently engaging in conspiracy theories, I hope you see the irony in that.
You buy a stock, post some “open source intelligence” to convince people they should also buy the stock and sell your shares before eventually you run out of people to convince to buy and the stock returns to “market value”.
I’m no Wall Street guru but that doesn’t sound like a pump and dump scheme at all.
Some of the other stuff they do is kind of funny in a “some people just want to watch the world burn” kind of way.
People certainly try but I don't think the community gets the credit it deserves. While it is certainly true that the majority are not seasoned investors, there are plenty in there that are able to be dissenting voices to these obvious attempts and these voices are heard and do shut down the threads.
It's not easy to make up artificial reasons as you will be forced to provide evidence for your claims. You need a solid base to build your argument and you better believe that you'll be fact checked in very aggressive ways.
But you don't need an account to view WSB, you are able to go browse it right now and see that it's mostly just stock market/economic news.
> Well, it's different because of whatever X is. X is the reason why the idea can spread through the community. It needs to make sense on some fundamental level in order to get past the onslaught of ridicule that every stock and member is subjected to.
All pump-and-dumps have an X.
Having a narrative of how the thing you are pumping will go up is not a difference from other pump-and-dump schemes.
It definitely is. A pump and dump is a coordinated effort to artificially raise the price of a stock.
Posting technical analysis and/or positive news that encourages people to take a position is not a pump and dump. No more than any financial article that has ever been written.
> A pump and dump is a coordinated effort to artificially raise the price of a stock.
And with what methods are such coordinated efforts carried out? By communicating a narrative intended to convince people that the stock will go up, so that the audience buys it and it does go up.
The narrative is the central element of the pump of a pump and dump.
Most pump and dump schemes present themselves as intelligence/analysis; there is no content-based objective differentiation, just intent and good-faith.
But, actually, some of the WSB stuff is openly coordinated strategy, not intelligence, overtly seeking to manipulate enough action to cause an outcome, not providing intelligence/analysis on what os likely to occur without active intervention
None of the successful stuff is coordinating a pump and dump. You may get the odd post where someone does try but it doesn't go anywhere.
> But, actually, some of the WSB stuff is openly coordinated strategy, not intelligence, overtly seeking to manipulate enough action to cause an outcome, not providing intelligence/analysis on what os likely to occur without active intervention
That would not be correct, no. If you're talking about trying to trigger a short squeeze then that is mechanically different from a pump and dump.
A short squeeze does not require the participants to raise the price, it requires a restriction of the publicly available float in order to trap "shorts" and then, when their options expire and they must purchase the shares to satisfy the contract, it creates a massive demand for shares on what is now an illiquid stock and this results in the price rising.
There have been many occasions when they have tried to squeeze a stock but I have not seen one where they have tried to attempt a pump and dump.
> None of the successful stuff is coordinating a pump and dump.
Memes are the mechanism to pump.
Selling when everyone else is still meming is the dump. The masses support the prices while you leave and take profits. Its basically a transfer of wealth from apes to the meme-leader (ie: the one who made the meme and pushed it to be popular)
And its 100% blatant. Thats what this whole topic is about: WSB doing a rug-pull on his own community through a cryptocoin.
Memes are information, that's all. Just a way of imparting information in an easily digestible manner. You are really deep into this belief and it's pretty surreal.
It's easy to rug pull a cryptocoin that you created. It is not easy to pump and dump stocks with over 500m market cap. WSB is open, I wish you'd just take the time to debunk your own beliefs.
"Pumping" means giving information (true, or false) to pump a stock.
The pump (meme the stock up), then dump (aka: Roaring Kitty becomes a millionaire). That's it. Its really straight forward. The question is how many people can you trick or rope into the scheme, that's all.
"Boiler Rooms" in the 90s did the same thing, just with far less efficiency than WSB. That's all I'm saying. WSB is the "best" at the job. Yeah, spreading rumors (some true, some not), but all for the purposes of making the rumor-spreader more money. Just because YOU call it a "meme" doesn't change the fundamental rumor-spreading behavior here.
2.5 years after the "MOASS", even after Ryan Cohen rugpulled WSB with BBBY, GME is still 6x the price it was before. Maybe it's all bagholders who are down 75% from Jan 2021, but that's still amazing.
The thing is, the GME situation is still developing. The new thing is that they're buying and directly registering their shares (DRS). This prevents brokers from lending shares out.
As a result of this, they own almost 25% of the company by themselves[0], which is absolutely incredible when you think about it. I know that they're expecting MOASS as a result of this and I'm a bit iffy on whether that can happen but I am eagerly watching to see what happens. Nothing like this has been attempted and it's just fascinating to me.
They're betting on a significant population of slow learners still readily available to be fleeced. Otherwise, it's con artists trying to fleece each other.
What's the relation between the coin and subreddit? Like I get that they share a name, but is it say endorsed on the sub itself? Endorsed by the mods? Is it popular among its users?
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[ 4.3 ms ] story [ 90.2 ms ] threadIts a legally grey zone IMO. Its not a traditional pump-and-dump scheme, but the effects are basically the same.
They choose a stock, somewhat at random to pump. They use WSB to communicate and coordinate when the pump occurs. The idea is to use a stock that has nostalgic value (Gamestop, AMC, BBBY), but is in dire straights.
A shorter term, tactical goal, is to often find highly shorted stocks and/or stocks with high options leverage to cause either a short-squeeze or gamma-squeeze event.
Its all public knowledge, legally and morally grey IMO. I wouldn't touch it personally, but obviously you get a whole bunch of pump-and-dumpers together in one location on the internet, they're all going to be competing for the same money on the same forum.
There is no explicit coordination happening to create pump and dumps. There has, on occasion, been some level of coordination when attempting to trigger a short squeeze but that is mechanically different than a pump and dump.
What it does do, though, is spur memetic investment, which can create a short term frenzy for some stocks but it is not a planned event. Thousands of people post stocks each day and every so often a stock will perform well enough to where the community will take hold of it and push it to pretty incredible heights. The most recent one would be TRKA. If you're switched on enough, you can make some pretty massive gains.
However don't take this as me defending their crypto scam. That's just downright not okay.
Erm... investing in a security, then trying to create a meme is a pump-and-dump scheme by any other name. You've just changed the name "pump" to "meme", rather than using old-school behaviors like boiler rooms.
Its even "meming" the same information: too the moon, or whatever. In the 90s, it was all cold calls over telephone, but today you can use online forums to do this.
There is always a narrative as to why a stock will go "to the moon". You say it's explicitly a pump and dump and it's not really, no. Look at GME, the idea was to restrict the float so that when the shorts got exercised, they would be trying to buy shares that didn't exist, creating exponential demand which would increase the price significantly. Not an impossible feat[0].
The "memetic" part of it is purely information exchange. That's all. If that's the barrier for entry for being considered a pump and dump, then I'd say anything which reports on a companys action could be a pump and dump. From Financial Times, to Bloomberg, to Mad Money, to StockTwits, to whomever else.
0: https://internationalbanker.com/history-of-financial-crises/...
If you say "ABC is going to increase 10x because it has a funny name" that obviously won't fly, but if you give a detailed account of why it is possible (this is called DD - due diligence), this has much more potential to excite people. I wouldn't classify open source intelligence as a pump and dump.
It was the biggest crock of $$$$ I've ever heard, no element of truth to it. But it meme'd really well.
Or am I wrong in my assessment? Then the crowds ate it up and GME mooned. The pumpers then dumped and RoaringKitty became a millionaire.
To start, it wasn't that short sellers were ruining the market. If you spent any time there, you'd see that they, too, short stocks.
Second, it definitely wasn't made up. GME was tremendously shorted. And there were more shares shorted than existed. This is not a unique phenomenon and is possible due to a concept called "naked shorting".
It also didn't stop going up because people pumping it stopped. They literally disabled the ability for people to buy more. That is what killed the momentum. https://www.cnbc.com/2021/01/28/robinhood-interactive-broker...
Hate to break it to ya, but you're getting played of you actually think the problem here was short selling.
The problem is that skittery online retail can be so openly manipulated to believe such conspiracies and that this leads to the profits of the small leaders of the crowd.
Also, this is all verifiable information. I'd encourage you to confirm what it is that I'm saying.
Benjamin Graham said that in the short term, the stock market is a voting machine, and in the long term a weighing machine. None of this is anything new. It's just the speed at which information travels that has changed.
Obviously, it was all just a ploy to trick Redditors into buying GME. If people actually cared about short selling, they'd describe new rules or regulations on the issue.
That's all it ever was. There's not much else to the story. I guess I could go over the bull$$$$ arguments over AMC, BBBY or FRC or any of the other meme stocks. But it's all just meming the stocks up in price.
Also, adding FRC in there is an interesting move. Do you blame retail traders for that?
It's the same pattern. Meme a lie really really hard, then screw over the community by taking money from the people who believes the lie.
No different from the GME price target of $1000 or any of the others WSB lies that people have fallen for. It's just a means to extract money from sheeple.
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It's all the same pattern. My question is how many times do the WSB Redditors have to get screwed over before they notice they are the marks getting played.
I don't blame retail for getting so blatantly manipulated. Everyone knows they're dumb money who will easily believe these lies.
I blame WSB leaders and moderators for so plainly taking advantage of retail investors and doing so for years.
There is a huge disconnect between people throwing out price targets and a pump and dump, I don't think that I need to spell that out. One is over-enthusiasm, the other is crime.
For what it's worth, FRC was incredibly tradeable very early on in the beginning of the banking crisis, regularly doing very large swings. Though, what I believe you're talking about is the expectation the FRC would exceed expectations on earnings and would go on to return to its pre-crisis prices. This is not a pump and dump and makes sense. If the bank is no longer in trouble then you'd expect normality to resume. This did not turn out to be the case and it ended up being taken over by JPM. This is not a pump and dump in any way.
The price targets of $1000 for GME would have been met should they not have disabled the buy button but I believe that there would have been a really strong sell off at the upper $900s which would have had a big impact on the price and I'm not sure it would've recovered. Please see TSLA as a stock which has gained a huge market cap as a result of enthusiastic investors.
Nope. Try again.
> The price targets of $1000 for GME would have been met should they not have disabled the buy button
I do pity you that you're so deep in the conspiracy theories that you can't see reality.
GME stopped going up because the short squeeze ended. WSB mods needed to keep the story going so they sold you another lie.
Robinhood literally ran out of money trying to support the insane GME upswing and y'all turn it into a conspiracy theory about buy buttons being disabled.
Do you know what T+2 settlement is? That means Robinhood (or the various middlemen Robinhood uses) needs to hold your money (and stock) for 2-days before the transaction is actually settled. The WSB members were buying so hard that Robinhood (and their middlemen) literally ran out of cash and couldn't buy more stock.
Sure, it was fixed a day later when trades settled and cash opened up again. But this is how WSB takes a normal event and turns it into a conspiracy theory.
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But sure, whatever. You can keep believing the conspiracy theories/lies. Meanwhile, there's ya know, Congressional investigations into this, and questions about what regulations need to change here that have the answers.
But people prefer to trust lies on Reddit over the investigations these days, amirite?
You're the one currently engaging in conspiracy theories, I hope you see the irony in that.
Explain that. I purchased GME literally during when WSB was filling conspiracy theories about not being able to buy the stock.
So I know the truth here. I literally bought the stock to prove my coworker wrong on that day.
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Lemme ask you again. Do YOU know what T+2 settlement is? This is the law of the USA. It has implications for the trading of US stocks like GME.
> You're the one currently engaging in conspiracy theories, I hope you see the irony in that.
You're commenting on an article about how WSB moderators literally executed a rug pull and pump-and-dumped a Cryptocoin.
The evidence is pretty clear. The question is if you're willing to see it.
I’m no Wall Street guru but that doesn’t sound like a pump and dump scheme at all.
Some of the other stuff they do is kind of funny in a “some people just want to watch the world burn” kind of way.
It's not easy to make up artificial reasons as you will be forced to provide evidence for your claims. You need a solid base to build your argument and you better believe that you'll be fact checked in very aggressive ways.
But you don't need an account to view WSB, you are able to go browse it right now and see that it's mostly just stock market/economic news.
All pump-and-dumps have an X.
Having a narrative of how the thing you are pumping will go up is not a difference from other pump-and-dump schemes.
Posting technical analysis and/or positive news that encourages people to take a position is not a pump and dump. No more than any financial article that has ever been written.
And with what methods are such coordinated efforts carried out? By communicating a narrative intended to convince people that the stock will go up, so that the audience buys it and it does go up.
The narrative is the central element of the pump of a pump and dump.
But, actually, some of the WSB stuff is openly coordinated strategy, not intelligence, overtly seeking to manipulate enough action to cause an outcome, not providing intelligence/analysis on what os likely to occur without active intervention
> But, actually, some of the WSB stuff is openly coordinated strategy, not intelligence, overtly seeking to manipulate enough action to cause an outcome, not providing intelligence/analysis on what os likely to occur without active intervention
That would not be correct, no. If you're talking about trying to trigger a short squeeze then that is mechanically different from a pump and dump.
A short squeeze does not require the participants to raise the price, it requires a restriction of the publicly available float in order to trap "shorts" and then, when their options expire and they must purchase the shares to satisfy the contract, it creates a massive demand for shares on what is now an illiquid stock and this results in the price rising.
There have been many occasions when they have tried to squeeze a stock but I have not seen one where they have tried to attempt a pump and dump.
Memes are the mechanism to pump.
Selling when everyone else is still meming is the dump. The masses support the prices while you leave and take profits. Its basically a transfer of wealth from apes to the meme-leader (ie: the one who made the meme and pushed it to be popular)
And its 100% blatant. Thats what this whole topic is about: WSB doing a rug-pull on his own community through a cryptocoin.
It's easy to rug pull a cryptocoin that you created. It is not easy to pump and dump stocks with over 500m market cap. WSB is open, I wish you'd just take the time to debunk your own beliefs.
The pump (meme the stock up), then dump (aka: Roaring Kitty becomes a millionaire). That's it. Its really straight forward. The question is how many people can you trick or rope into the scheme, that's all.
"Boiler Rooms" in the 90s did the same thing, just with far less efficiency than WSB. That's all I'm saying. WSB is the "best" at the job. Yeah, spreading rumors (some true, some not), but all for the purposes of making the rumor-spreader more money. Just because YOU call it a "meme" doesn't change the fundamental rumor-spreading behavior here.
As a result of this, they own almost 25% of the company by themselves[0], which is absolutely incredible when you think about it. I know that they're expecting MOASS as a result of this and I'm a bit iffy on whether that can happen but I am eagerly watching to see what happens. Nothing like this has been attempted and it's just fascinating to me.
https://www.thestreet.com/memestocks/gme/76-million-gamestop...
community provided liquidity thats is then locked? kind of perfect imo
there’s no reason anymore that a $600,000 sale tanks $50m asset by 90%, just a bad system design where there is no liquidity incentive
why even give nocoiners cannon fodder? just do the thing that already distributes the load well enough and fits the risk profile of enough people
Can't tell who you're asking this of, but as a nocoiner I gotta say it made me giggle... we invest in popcorn, not cannon.