I don't want to over-romanticize WSB, but this all seems fairly wholesome and even old-fashioned.
A hoard of like-minded investors put a lot of money into AMC because they felt it was under-valued and with a little push could ride out the pandemic. Now that it's on the rebound, they're not immediately cashing out with their short-term gains, instead they're encouraging the company to avoid wall street games like stock issuance and instead focus on organic growth as the economy recovers.
We were warned they were going to take down whole markets, but at this point they seem like agents of stability.
(Yes, I understand I may be giving the lads way too much credit here, but one can hope.)
This had been my feeling watching all this unfold, but I'm starting to reconsider.
I was there in the early days of 4chan. Back then, brigading/mob justice felt the same: a force for good, a bunch of snappy underdogs thumbing their noses at jerkoffs like the Scientology crowd, or animal abusers. Who could find fault with that?
But the problem with mob justice is that it never stops there. Image board campaigns became increasingly dire and cruel: hacking, ddoss-ing, harassing people that maybe didn't deserve it as much, or at all. And eventually the idea hit the broader culture, mixed with radical left ideology, and mutated into what we now call Cancel Culture.
It's satisfying on a primal level to see institutional investors lose even a little control. But it's just that primal satisfaction that makes mob justice so dangerous. Maybe this is a blip and won't go anywhere. But if it's indicative of a trend, the implications are sinister. The Mob has just gained the ability not just to end people's careers and reputation, but to end whole companies, and potentially even destabilize the whole economy. It's great right now, because we're still in the "harass animal abusers" stage. What happens when we hit the "someone started a rumor about this company, so let's run it into the ground" stage?
Rule by tyrants is bad. Rule by the mob is even worse. Which would you rather live under: Henry the 8th, or the French Revolution?
I think what was not expected was for so many to keep the momentum going after the initial GME and friends buying craze at the beginning of the year. So many pundits dismissed it. Of course those with the most providence in AMC were rewarded since the stock didn't really spike until June.
Ideally, yes. If AMC investors are primarily responsible people putting in money they can afford to lose out of a genuine desire to make AMC successful, this is a great story of democratizing finance.
But the top thread on /r/AMCStock right now is about how you should never ever sell your position, even if the price seems to be going down, because there will eventually be a "real squeeze" where all AMC investors will become fantastically rich. The top commenter is proud that he's choosing to invest in AMC stock rather than paying off his debts or saving for the future. So I think there's a real concern that people might be investing money they can't afford to lose, based on assurances from the "meme stock" community of guaranteed profits.
where all AMC investors will become fantastically rich
On paper. But, really, what's the endgame if you never cash out? Sooner or later the shorts will leave AMC and everyone will be long. Mission accomplished.
But, eventually, someone will need to liquidate. Then what?
Readit News
A hoard of like-minded investors put a lot of money into AMC because they felt it was under-valued and with a little push could ride out the pandemic. Now that it's on the rebound, they're not immediately cashing out with their short-term gains, instead they're encouraging the company to avoid wall street games like stock issuance and instead focus on organic growth as the economy recovers.
We were warned they were going to take down whole markets, but at this point they seem like agents of stability.
(Yes, I understand I may be giving the lads way too much credit here, but one can hope.)
I was there in the early days of 4chan. Back then, brigading/mob justice felt the same: a force for good, a bunch of snappy underdogs thumbing their noses at jerkoffs like the Scientology crowd, or animal abusers. Who could find fault with that?
But the problem with mob justice is that it never stops there. Image board campaigns became increasingly dire and cruel: hacking, ddoss-ing, harassing people that maybe didn't deserve it as much, or at all. And eventually the idea hit the broader culture, mixed with radical left ideology, and mutated into what we now call Cancel Culture.
It's satisfying on a primal level to see institutional investors lose even a little control. But it's just that primal satisfaction that makes mob justice so dangerous. Maybe this is a blip and won't go anywhere. But if it's indicative of a trend, the implications are sinister. The Mob has just gained the ability not just to end people's careers and reputation, but to end whole companies, and potentially even destabilize the whole economy. It's great right now, because we're still in the "harass animal abusers" stage. What happens when we hit the "someone started a rumor about this company, so let's run it into the ground" stage?
Rule by tyrants is bad. Rule by the mob is even worse. Which would you rather live under: Henry the 8th, or the French Revolution?
I call them "idiots" as it's a somewhat nicer term than what they call themselves (presumably jokingly).
I love it either way.
It also means they're responsible for their decisions and if they screw up they lose their investments.
But the top thread on /r/AMCStock right now is about how you should never ever sell your position, even if the price seems to be going down, because there will eventually be a "real squeeze" where all AMC investors will become fantastically rich. The top commenter is proud that he's choosing to invest in AMC stock rather than paying off his debts or saving for the future. So I think there's a real concern that people might be investing money they can't afford to lose, based on assurances from the "meme stock" community of guaranteed profits.
On paper. But, really, what's the endgame if you never cash out? Sooner or later the shorts will leave AMC and everyone will be long. Mission accomplished.
But, eventually, someone will need to liquidate. Then what?