[HN Gopher] Hertz, the original meme stock, is turning out to be...
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Hertz, the original meme stock, is turning out to be worthless
Author : prostoalex
Score : 126 points
Date : 2021-03-08 16:01 UTC (1 days ago)
(HTM) web link (www.bloomberg.com)
(TXT) w3m dump (www.bloomberg.com)
| jakearmitage wrote:
| Some people in this thread should check their elitism. It is
| preventing you from seeing the big picture here.
| agumonkey wrote:
| meanwhile GME is back to 200+
| sfjailbird wrote:
| ... and nary a headline. But we do get cautionary tales like
| the above. Sometimes I get the nagging feeling that the
| wallstreetbets conspiracy crowd might be on to something.
| agumonkey wrote:
| The medias are really not a critical piece of society these
| days.. it seems like more than half of it is just noise
| coverage.
| throwaway5752 wrote:
| It's not worth discussing BTC, TSLA, GME, or HTZ. That is missing
| the forest for the trees.
|
| The degradation of even the appearance of an orderly market is
| the story. The money movement (volume of excess trades X
| magnitude of price change) seems out of reach of unleveraged
| retail. Faith in private and public institutions is justifiably
| poor, but also under organized attack.
|
| This is going to end badly for everyone, except perhaps for
| China.
| superbcarrot wrote:
| Seriously, what are the possible outcomes (positive or
| negative) that we can see play out? By what mechanisms can the
| currently inflated markets end and how will that impact the
| rest of the economy?
| MrMan wrote:
| Please whomever has the power to downvote don't allow this to
| be the top comment, or China wins
| Red_Leaves_Flyy wrote:
| >or China wins
|
| Could you elaborate?
| willis936 wrote:
| I think their point is that the top commenter engaged in an
| informal fallacy by painting a jaded picture then saying at
| the end of it China somehow wins, without any amount of
| narrative/justification. To me it seems like you could skip
| all but the last two words of top commenters comment to see
| their message.
| jl2718 wrote:
| Book: "The Bubble that Broke the World" - Garrett 1931.
| ksdale wrote:
| I think in regards to finance, the only thing that's under
| attack is the idea of "stock market as source of knowledge
| about value." But I'm not sure that the stock market has
| actually served that purpose for decades.
|
| IMO, it's good that people are beginning to see the stock
| market as a casino. If people want to "invest," they'll figure
| out more pro-social ways to do it than the stock market, and if
| they want to gamble, well, there's always the stock market.
| jboog wrote:
| Ben Graham said many decades ago that over the short term the
| market is like a voting machine but over the long term it's a
| weighing machine.
|
| There have always been periods of irrationality in the
| markets but there's no reason to believe that equities are
| fundamentally untethered from their inherent value in
| perpetuity.
|
| Eventually most of the overnight WSB stock picking geniuses
| are all going to lose their shirts and we'll see less of this
| GME nonsense. They make up a tiny fraction of trading volume
| anyway.
|
| It happened in '07-08, late 90s dot-com bubble and about
| every decade or so before that for different reasons
| ksdale wrote:
| I like that Graham quote, and you make good points. I guess
| when I say "investing," I mean more like - Purchasing an
| equity entitles you to a share of that business' income and
| potentially assets, but if you buy the equity on the stock
| market, you're not actually investing in capacity, the way
| you would be if you bought an IPO or even just a piece of
| equipment you could use to make something.
|
| And I think people have always given the stock market more
| credit than it's due as being "the economy," when really
| the stock market is a set of signals about the economy. The
| economy is the people and machines and the buildings that
| do stuff and make things, and the economy remains
| regardless of what's happening in the stock market.
|
| If a bunch of silliness happens around a certain stock, or
| if the stock market becomes wildly detached from reality,
| it doesn't have anything to do with peoples' ability to
| produce value.
| rchaud wrote:
| > If people want to "invest," they'll figure out more pro-
| social ways to do it than the stock market,
|
| Will they? Is there any such thing as a pro-social 401K or
| Roth IRA? If money is going from your paycheque into your
| retirement fund, bypassing you entirely, it adds significant
| friction to moving it out into something with more direct
| impact.
| AniseAbyss wrote:
| In the last 500 years my country has gone through economic
| Armageddons. In fact we invented the stock market crash. Things
| never ended.
| tick_tock_tick wrote:
| Original?? Who remembers the glory days of MU!
| CyberDildonics wrote:
| People seem to forget that VW was part of a massive short squeeze
| that made it the most valuable company in the world for a few
| days. It took about a month for everything to deflate.
| tibbydudeza wrote:
| Porsche tried to takeover VAG and it failed and saddled them
| with so much debt that VAG could swoop in later and take them
| over instead.
| mattmaroon wrote:
| "Turning out to be" is a little disingenuous. It was never not
| worthless during its meme tenure.
| ec109685 wrote:
| Investors were warned this was going to be the outcome given
| Hertz's financial situation.
| mattmaroon wrote:
| Right, it was always known and people bought it anyway. Next
| there'll be a headline that GME was only really worth $15
| brandmeyer wrote:
| Hol' up.
|
| While in bankruptcy, some fools ran up the price of Hertz stock.
| Then, while the price was up _in the middle of bankruptcy
| proceedings_ , Hertz sold some new shares to the same fools. The
| final result of the bankruptcy wiped out all of the shareholders.
|
| While the buyers were obviously fools, Hertz should have known
| that zero shareholder value was a likely outcome. How was selling
| more stock in that situation legal? I see that the sale was
| quickly shut down... but it shouldn't have happened in the first
| place.
| skybrian wrote:
| Under this argument, why should it be legal for _anyone_ to
| sell Hertz stock? Should trade be halted?
|
| Or if other people can sell the stock, why not Hertz?
| lupire wrote:
| Shares were available on the old stock (discounted for pieces
| of bankruptucy liquidations)
|
| Hertz tried to create and sell new shares that would never be
| worth anything.
| avalys wrote:
| This is incorrect. The new shares were of the same class as
| the existing publicly traded shares.
| pkaye wrote:
| I think that sale never went through.
| https://www.marketwatch.com/story/hertz-ends-plan-to-sell-st...
| Lazare wrote:
| 1) US securities laws are very focused on disclosure and
| filling out the correct forms. Hertz did _say_ the stock was
| (likely) worthless when they filled out the correct form to
| sell some stock.
|
| 2) People were buying (and selling) Hertz stock every day,
| before, during, and after Hertz's brief offering. If it should
| be illegal for Hertz to sell the stock, why should it be legal
| for anyone else to sell the stock? (The obvious reason is
| "well, what if Hertz had information nobody else did?", but in
| this case, they didn't. And they were required to disclose that
| they didn't.) In a pretty real sense, the victims of Hertz
| selling stock is not the people who _bought_ it (they would
| have done so regardless), but the other sellers who might have
| lost out on a sale (or more likely, made the sale, but for a
| fraction of a penny less than they otherwise would have done)
| to a sucker who ended up buying from Hertz instead. And it 's
| hard to feel too sorry for people offloading worthless stock to
| suckers, no?
|
| (Of course, note that nobody who bought the stock from Hertz
| will have seen those disclosures. It was an at the money
| offering; the purchasers won't have any idea who they bought
| their shares from or how old those shares were. But again, US
| securities law is extremely focused on disclosure to the
| exclusion of all else...even if the disclosure won't be seen by
| anyone.)
| 0xy wrote:
| Hertz in official filings: "Hey guys, this stock is most likely
| totally worthless"
|
| Meme stonk buyers: _buys stock_
|
| Hertz: "Hey guys, here's some new stock. Remember we disclosed
| that it's likely totally worthless"
|
| Meme stonk buyers: _continues buying worthless stock_
|
| Meme stonk buyers: "How could you do this to us?"
| renewiltord wrote:
| Actual last few lines are actually look like the following.
|
| Meme stonk buyers: Guys, look at this loss porn. I lost $2.5
| mil on Hertz LMAO my trust fund is gone.
|
| Other meme stonk buyers: HAHAHA you fucking retard
|
| Third party worrywarts: How could we let this happen?
| joshuaissac wrote:
| > Meme stonk buyers: "How could you do this to us?"
|
| Did this step actually happen? From what I understand, it was
| the SEC, not meme stock buyers, who disagreed with the sale.
| dragontamer wrote:
| > How was selling more stock in that situation legal?
|
| They asked the bankruptcy court, and the bankruptcy court's job
| is to maximize value for the bondholders. Turns out that
| selling worthless stock (for money) is really good for the
| bankruptcy proceedings (getting maybe 70% of the money back
| instead of 60%).
|
| Then the SEC came in (whose job is to protect retail
| investors), and the SEC told them to knock-it-off.
|
| Different jobs for different courts and bureaucracies.
| Ultimately, the SEC determined it was illegal for them to
| proceed. But I guess the SEC assumed the bankruptcy courts
| would do the right thing. When that clearly wasn't the case,
| the SEC stepped in (a bit late: after $29 million was raised.
| But better late than never)
| thaumasiotes wrote:
| What I don't understand is that Hertz specifically wanted to
| sell an amount of shares that wouldn't raise enough money to
| pay off their debts. Their prospectus noted that shares sold
| would automatically become worthless _unless their debt was
| paid off_ , which they didn't anticipate.
|
| But why not try? What if they sold so much stock that the
| bondholders could just be paid back? Why do the stock sale
| specifically planning for failure? Why include a limit that
| guarantees failure even if you would have otherwise
| succeeded?
| dragontamer wrote:
| Many would suggest that such an action you propose is
| fundamentally immoral.
|
| Lets say a hypothetical company is overall $-4 Billion in
| debt (total assets - liabilities). You successfully raise
| $5 Billion from some means.
|
| Now you're in a position where you sold $5 Billion worth of
| shares on a company that (by all fair evaluations) is only
| worth $1 Billion after the capital raise.
| HPsquared wrote:
| The people buying the shares are making the "true"
| valuation of the company, being the ones buying it.
| dragontamer wrote:
| Do you think the buyers of HTZGQ at $5.50 in June 2020
| will be proven correct?
|
| Or do you think, that like most other bankrupt companies,
| HTZGQ will be worthless once these bankruptcy proceedings
| are done?
|
| The stock is almost certainly going to go to $0. That's
| just what happens as bankruptcies play out. If you
| disagree, you're welcome to toss your money into buying
| some HTZGQ yourself.
|
| ----------
|
| The issue is that Hertz CEOs / board / CFO have extra
| information and better ideas into how those bankruptcy
| proceedings are happening. For them to issue shares in
| this time is grossly immoral. Especially when they're
| publicly pointing out that yes, bankruptcy proceedings
| are carrying on as expected: shareholders are expected to
| be wiped out and assigned a big fat $0.
| brandmeyer wrote:
| It already has gone to zero. The bankruptcy proceedings
| wrote off all of the old stock and issued an entirely new
| set of shares, mostly to the debt holders.
|
| (I cannot reply to your response when you edit so
| often... looks like it resets an anti-spam timer or
| something)
|
| The proceedings behind a deal at this scale are so
| private that it is rare to see major salient revisions
| after a public announcement like this. Nevertheless, I
| concede the point that it isn't completely final.
| Presumably they'll be de-listed once that actually
| happens.
| dragontamer wrote:
| Bankruptcy proceedings are still taking place and are not
| finalized. HTZGQ will probably go to zero soon, as what
| you say is almost certainly going to happen.
|
| https://www.prnewswire.com/news-releases/hertz-global-
| holdin...
|
| As of a few days ago, the PLAN (not yet executed) is to
| give Knighthead new shares and wipe out the current set
| of shareholders.
|
| ---------
|
| There is a rival plan to keep HTZGQ shareholders alive.
| These sorts of plans go back and forth, discussed by the
| board, the bankruptcy court, and so forth to determine
| the best course of action.
|
| No plan is ever 100% certain... not until the plan is
| executed. Still: the current plan is that Knighthead will
| be the new owners, old shareholders will be wiped out,
| and old bondholders will get 70%.
|
| If bondholders are only able to get 70% under the current
| plan, it seems unlikely that any alternatively proposed
| plan would bring that to 100% somehow (the precondition
| before old shareholders of HTZGQ to get value out of
| this...). The plans will change, but the amount of assets
| that Hertz owns will not change. So I'm not entirely sure
| where another 500-million buckaroos will come from to
| make the bondholders whole.
| CydeWeys wrote:
| > Now you're in a position where you sold $5 Billion
| worth of shares on a company that (by all fair
| evaluations) is only worth $1 Billion after the capital
| raise.
|
| That's entirely reasonable if you think that by keeping
| the company alive you can build it back up until the
| point that it's worth more than $5B. This is indeed what
| every CEO thinks -- that they can make the company worth
| more next year than it's worth this year.
| smnrchrds wrote:
| Hertz is going through Chapter 11 bankruptcy. It is
| reorganization, not liquidation. At the end of it, there
| would still be a Hertz company, but with new owners.
| dragontamer wrote:
| Hertz agreed to bankruptcy, so that they don't have to
| pay their debts anymore.
|
| That's... literally what's going on. As part of the
| bankruptcy proceedings, shareholders usually get wiped
| out. They wouldn't have pushed this button unless they
| believed that their bonds were hopelessly unpayable.
| dalbasal wrote:
| That's very well explained.
|
| I think that trips people up, in stories like this, is that
| the SEC has a pause button but not a reverse button. What's
| done is done, for the most part.
| ISL wrote:
| Zero shareholder value was the overwhelmingly likely outcome,
| but not completely certain. (If Hertz magically recovered from
| bankruptcy, however unlikely, the payoff might have been
| >1000%).
|
| The prospectus clearly stated that there was negligible
| likelihood of return.
|
| On the flip side, from the creditor's perspective: "We loaned
| you a bunch of money, you can't pay it back, and there are some
| people who would like to buy shares in your company today? How
| can you not sell it to them?"
|
| The unsecured creditors in this situation don't appear to be
| investment banks, they appear to be auto repair companies,
| perhaps exposed to counterparty risks from transacting with
| Hertz[1].
|
| Your question brings to mind part of an exchange from one of my
| favorite pieces of financial cinema [2]:
|
| SAM ROGERS: And you are selling something you know has no
| value.
|
| JOHN TULD: (cuts him off cold) We are selling to willing buyers
| at the current fair market price, so that WE may survive, Sam.
|
| SAM ROGERS: You'll never sell a thing to any one of them again.
|
| JOHN TULD: I understand.
|
| SAM ROGERS: Do you?
|
| JOHN TULD: Do you!!! This is it, Sam, this is it!
|
| [1] https://www.repairerdrivennews.com/2020/05/25/hertz-will-
| con...
|
| [2] https://www.youtube.com/watch?v=7prnY2FOxns
| hrishi wrote:
| Margin Call was exactly what I was thinking as I read this.
| Underappreciated movie - definitely worth a watch for a more
| realistic take on 2008nthan The Big Short.
| brandmeyer wrote:
| No. No! I reject this rationale. Just because its in the
| domain of finance and business doesn't make it ethical. For
| example, you can't just disclose your way into arbitrary
| medical experiments on people. Regardless of how you
| rationalize the principles, it will end up exploiting the
| most vulnerable citizens.
|
| While I readily admit that the law does not forbid all forms
| of unethical behavior, I do believe that it should forbid
| blatantly exploitative acts. Like this one.
| renewiltord wrote:
| Listen, if you guys want to strict-law yourself so people
| can't talk to other people, I think that's fine. There
| should be rules that say people who have strict-lawed
| themselves should be protected from loose-laws and out-
| laws. And strict-laws can then interact with strict-laws.
|
| In fact, I'm even okay with defaulting to strict-laws and
| then one takes a test to allow being a loose-law who can
| interact with other loose-laws.
|
| Then, yes, strict-laws can live a nice safe life better
| than ever before and spend their time arguing on the
| Internet about how r > g etc. etc.
|
| But the problem is that strict-laws won't allow loose-laws
| so until you put that distinction in place, you should know
| that it is true political war and no loose-law will give
| any quarter because while we want to let you to be able to
| occupy your space, you don't want to permit us to occupy
| ours.
| lupire wrote:
| "accredited investor" law is the "loose-law" you are
| talking about.
| dalbasal wrote:
| Is that the case here though?
|
| I like your "disclose your way to arbitrary medical
| experiments" analogy. Things can't be just black and white.
| That said... who is buying Hertz stock _during_ bankruptcy
| proceedings?
|
| I don't see why this exploits vulnerable people in
| particular. As the op says, it's a real gamblers' trade.
|
| Anyway, I think it's an insider-ish trading question.
| Selling stock once you already know the price to be zero is
| a step too far.
| ISL wrote:
| I understand the sentiment and might have had difficulty
| approving the sale if I were on the Hertz board of
| directors, however, there is a chance, however slim, that
| the dumb money knows something the smart money doesn't.
|
| This is much more-readily seen post-GameStop. The AMC
| theater chain, mid-hoopla, managed to discharge much of its
| debt. The gamblers at home literally saved a major US
| business from dire financial straits. Some of them got paid
| for it, too. The company is in an undeniably better
| position today, as are any of the retail investors who
| bought and held. (The share price is up 10% today, too. The
| world is a complicated place.)
|
| On the scale of exploitative acts, enabling informed
| gamblers to play chicken with the Bankruptcy Bus, while it
| may be exploitative at some level, may not be as egregious
| as other exploitation (Casinos? State lotteries?) that we
| tolerate every day.
| jjeaff wrote:
| Then it should also ban gambling.
| Retric wrote:
| We largely did in the US. There are exceptions, but
| generally it's illegal to bet on the winner of a collage
| football game etc.
| https://www.espn.com/chalk/story/_/id/19740480/the-
| united-st...
|
| However, that's slowly been changing over time.
| sigstoat wrote:
| > We largely did in the US.
|
| https://www.cnbc.com/2019/12/12/americans-spend-
| over-1000-do...
| lotsofpulp wrote:
| Even that exchange is not analogous, since Hertz told
| everyone what they were selling is worthless.
| H8crilA wrote:
| This is kind of the core principle of capitalism, informed
| consent. Also the primary objective of the SEC.
|
| Hertz has issued a regulatory filing that basically says "lol
| this is worthless, but we can sell you some shares" and then
| sold some shares. Look up the filing, it's kind of hilarious.
| I've posted it on HN and it got popular, titled it jokingly as
| "Hertz Initial Bankruptcy Offering", the moderation has changed
| the title to the official name of the document.
| fossuser wrote:
| There's a good moneystuff on this, the sale was also stopped by
| the SEC even though it wasn't really illegal (mostly just in
| poor taste).
|
| Hertz's job in bankruptcy is to try and pay creditors, if a
| bunch of dummies want to give you money even though you tell
| them you're bankrupt and their investment will likely be worth
| nothing then how is that Hertz's fault? Arguably Hertz even has
| a responsibility to sell shares if they're able to raise money
| to pay creditors.
|
| The dummies are speculatively buying swings, or more likely
| just seeing the stock advertised as high traffic in Robinhood.
| dehrmann wrote:
| > Hertz should have known that zero shareholder value was a
| likely outcome. How was selling more stock in that situation
| legal?
|
| This disclosure helps:
|
| https://www.sec.gov/Archives/edgar/data/1657853/000110465920...
|
| Since it went before the bankruptcy judge, they might have been
| _obligated_ to bondholders to sell more shares.
| vkou wrote:
| > How was selling more stock in that situation legal?
|
| Why should it not be?
|
| Consider the following situation:
|
| 1. Alice owns 5 shares of Hertz.
|
| 2. Hertz owns 5 shares of Hertz.
|
| 3. Bob is an ape. For some stupid reason, Bob wants to buy 5
| shares of Hertz.
|
| Is it immoral or illegal for Alice to sell her 5 shares to Bob?
|
| If not, why should it be immoral or illegal for Hertz to do so?
| Especially if they are up front about their incredibly bleak
| financial prospective.
|
| Is the sale defrauding someone? Who is it defrauding? Bob? Bob
| wants to buy the stock anyways, because it's a meme stock - why
| does he care if it's Alice, or Hertz selling him that stock?
|
| If allowing Bob to buy stock is such a bad thing that we need
| to protect Bob from it, then the correct thing to do is for the
| stock to be delisted.
| sigstoat wrote:
| and: if it is fine for Alice to sell those shares, what if
| Hertz is willing to sell them for less than Alice? Should Bob
| have to pay Alice's higher price for a worthless thing, to
| avoid some immorality happening?
| djbebs wrote:
| Why would it be illegal?
|
| Hertz was in bankruptcy because it couldnt pay its debts, a
| capital injection might have raised enough cash to pay off its
| debts and exit the bankruptcy proceedings.
|
| They disclosed the low likelyhood of such a thing happening but
| its not the law or the SECs job to make everyone take wise
| financial decisions.
| xur17 wrote:
| > Hertz was in bankruptcy because it couldnt pay its debts, a
| capital injection might have raised enough cash to pay off
| its debts and exit the bankruptcy proceedings.
|
| While I do agree that it shouldn't be illegal, wouldn't they
| know how much money they would raise, and hence be able to
| determine if the capital raise would provide sufficient
| capital?
| geoduck14 wrote:
| If they need to raise $1000, and you but $10 - no one knows
| if your investment is worthless until after no one buys the
| additional $990
| dwohnitmok wrote:
| As usual, Matt Levine covered this pretty well in his
| newsletter:
| https://www.bloomberg.com/news/newsletters/2020-06-12/money-...
|
| The relevant quote:
|
| > Really I can't decide how to feel about this. On first
| principles, you should not sell a billion dollars of stock in a
| bankrupt company to small retail investors who just installed
| Robinhood on their phones a few months ago. On the other hand,
| _people are definitely doing that anyway_ [emphasis original];
| a notable feature of this weird pandemic market is exactly that
| hundreds of millions of dollars of stock in Hertz, which is
| bankrupt, are being sold to small retail investors every day.
| Hertz just wants permission to do some of that selling itself.
| brandmeyer wrote:
| I like his argument. Its pretty reasonable in its principles.
|
| But it doesn't work in this situation. Hertz raised 10^7
| dollars this way when they were 10^9 in the hole. Looks to me
| like the executives saw an opportunity to part some people
| from their money and took it.
|
| An outside investor is sharing shares they already have, or
| short-selling shares with the promise to buy them back later.
| That's wildly different from issuing new shares when you have
| inside information which prices them at zero.
| lotsofpulp wrote:
| > Looks to me like the executives saw an opportunity to
| part some people from their money and took it.
|
| AKA business.
|
| > That's wildly different from issuing new shares when you
| have inside information which prices them at zero.
|
| That's wildly different from Hertz's bankruptcy being
| public information.
|
| If people want to gamble on unlikely outcomes, that's their
| business.
| TomSwirly wrote:
| Selling something that you know will end up worthless
| because you know suckers will buy it is wrong.
|
| It's morally and ethically theft. Gross, filthy, self-
| conscious theft.
|
| The fact that people just laugh and say, "That's
| business!" is an indication of how morally bankrupt the
| business world is.
| lupire wrote:
| Almost everything ever sold ends up worthless. The
| colloquial term for someone who buys something is
| "consumer".
| roywiggins wrote:
| Lots of people sold Hertz stock knowing it was going to
| be worthless, why should Hertz be singled out?
| foerbert wrote:
| That description also fits straight up robbery. I don't
| think it's a particularly meaningful statement in this
| situation.
| lotsofpulp wrote:
| Yes, that's my point. It's a meaningless statement in a
| discussion about fully informed buyers and sellers
| engaging in voluntary transactions.
| stonemetal12 wrote:
| No one chooses to be robbed, people chose to buy garbage.
| brewdad wrote:
| People were buying a lottery ticket. The difference in
| this case is that there were no jackpot winners.
| marshmallow_12 wrote:
| To quote Mark Twain (or someone) "The lottery is a tax on
| people who are bad at math"
| zaphar wrote:
| It's not uncommon for actual lotteries to have no jackpot
| winners in a given timeperiod. That's why the pot size
| keeps growing. At some point the hype from how many big
| the potential but unlikely payout got increases the share
| of people buying the ticket. The different between the
| Hertz stock and a lottery ticket is that eventually the
| Lottery _will_ payout. But with a stock like Hertz there
| is no such guarantee.
| lupire wrote:
| It's more like an NFT or an ICO.
|
| Why not use Hertz stock as a proof of stake? It's as good
| as any other made up currency.
| Lazare wrote:
| > That's wildly different from issuing new shares when you
| have inside information which prices them at zero.
|
| Hertz executives were in possession of no such information.
| The information was _very_ public.
| addicted wrote:
| I mean, they were in bankruptcy court. Those arent secret
| proceedings.
|
| If someone still wants to buy their stock while they are in
| court loudly proclaiming their stock is worthless why would you
| make that illegal?
| Thorncorona wrote:
| The original meme stock was tesla. Get it right.
| llampx wrote:
| I think TSLA and AMD were the original meme stocks.
| perardi wrote:
| AMD was not a meme. If anything it was a proxy for TSMC doing
| well.
|
| The business case was apparent, and it happened: Intel
| apparently decided to get to their next node using, I don't
| know, a magnifying glass and a flashlight, they fell badly
| behind, and now AMD has an extremely solid position in the
| high-end enthusiast market, plus a plum spot in PlayStation and
| XBox sales.
| jboog wrote:
| It's always interesting how the great investments are always
| so obvious looking in the rear view mirror.
| airstrike wrote:
| With TSLA and AMD, people at least had a thesis. One may argue
| those were wild equity stories, but at least they existed.
|
| Hertz is a dying company in a dying industry and while I admit
| I don't follow it closely, I have not seen anyone come up with
| a defensible story for why one should own that stock.
| VHRanger wrote:
| Those at least had a growth story.
|
| HRTZ and GME are pure plays on the other hand.
| ex3ndr wrote:
| Where did you get this about GME? It literally skyrocketed
| once Chewy team started to take over and transform company.
| servercobra wrote:
| Personally, I think 80% of the reason it skyrocketed was
| for the short squeeze, 20% because of the new team and it
| being undervalued if you believed in that new team. $30-$40
| seems reasonable if you believe the team is gonna turn the
| company around IMO, but people were putting thousands and
| tens of thousands into shares because they're hoping the
| short squeeze puts it to $1k+ (at least that's the meme/not
| a meme if you believe WSB).
| camjohnson26 wrote:
| It became a Ponzi effect where buying made the price go
| up and encouraged more buying. Short interest being so
| high helped a lot.
| perardi wrote:
| OK, what does that even mean?
|
| They are a physical store that sells physical games.
|
| Physical stores are in dire straits.
|
| Some new game consoles _don't even use physical games_ ,
| namely the base PlayStation and Xbox.
|
| What do you even transform into? A dedicated amiibo shop?
| The future is pretty obviously download-only for games.
| unethical_ban wrote:
| AMD isn't a meme stock - I knew it was going to be a safe bet
| when it was at 5, but didn't have money to do anything with it.
|
| It is guaranteed to exist, as it is the only x86 competitor to
| Intel, and IIRC their x86 license is non-transferable.
|
| It is nvidia's only main competitor.
|
| It does its job pretty well.
|
| Is it a blue chip in terms of stability? Clearly it is a bit
| more volatile. But it isn't dying anytime soon.
| perardi wrote:
| I give myself one good hard slap to the face every morning,
| because I bought AMD in the ~$5/share range, and then sold
| when it managed to get to ~$7/share because I didn't think it
| was going anywhere. And then I go stand at the window and
| gaze longingly at my imaginary WRX parked outside.
|
| Sigh. If I only had known _exactly_ how badly Intel would
| do...I bought the stock because I figured they'd get a little
| bump because of console sales, and then got impatient.
| camjohnson26 wrote:
| It's all gambling. People need to stop expecting to strike
| it rich and just build wealth incrementally. Central banks
| have made that hard to do though with historically low
| interest rates and rising risks of inflation.
| perardi wrote:
| Mind you, the vast majority of my retirement money is in
| index funds and other boring investment vehicles.
|
| The AMD trade was (reasonable) fun money.
| JoeAltmaier wrote:
| Sounds like advice for a previous generation. Then, it
| contradicts itself by say why it won't work (correctly).
| Maybe its time to rethink those half-century-old memes
| like 'build wealth incrementally'.
| camjohnson26 wrote:
| "This time it's different"
|
| Nothing has changed except central bank policy
| encouraging rampant speculation. The bull market won't
| last forever and every generation thinks the fundamentals
| don't matter anymore, until suddenly they do. To be fair
| it is extremely hard to build wealth incrementally these
| days because of central bank policy, but it's way better
| than yoloing life savings.
| lotsofpulp wrote:
| Is it possible the bull market reflects the realities of
| big businesses, and tech businesses especially, reaping
| the rewards of automation and scalability and near zero
| marginal costs?
| camjohnson26 wrote:
| Anything is possible. That's probably true for Apple and
| Amazon but those are the exception. That's definitely not
| true for Uber, who lost 8.5 Billion (!) from operations
| in 2019: https://d18rn0p25nwr6d.cloudfront.net/CIK-000154
| 3151/f272e03... Not true for WeWork either: https://www.s
| ec.gov/Archives/edgar/data/1533523/000119312519...
|
| Maybe those are exceptions too but seems like the most
| hyped companies have not brought marginal costs near
| zero.
| lotsofpulp wrote:
| What does "most hyped" mean? Why does WeWork matter at
| all in this discussion? They got destroyed for having
| weak prospects when they tried to come near the public
| markets.
|
| I'm looking at this list of the S&P 500 companies, and
| they mostly have very solid earnings and fundamentals:
|
| https://fknol.com/list/market-cap-sp-500-index-
| companies.php
|
| I went through the top 100 companies, and the only one
| that is a "bet" is Tesla, except they have many, many
| cars on the road and have been delivering product that
| people want to buy.
|
| If anything, I'm even more bullish for all these huge
| companies, as absent any government action (which I
| doubt), who is going to take them on? They will continue
| to go vertical and eat each other's business, maybe. But
| that doesn't really affect you if you're holding the
| whole index fund ETF.
| camjohnson26 wrote:
| Well the S&P is an index of the largest companies so
| they're going to be more solid than the rest of the
| market. WeWork was attempting an IPO and had a ton of
| hype, if that hype was because of improvements on
| marginal costs you would have seen it there. The S&P 500
| PE ratio is objectively high right now. Whether it's high
| because of strong fundamentals or bubble effects is the
| million dollar question.
| https://www.macrotrends.net/2577/sp-500-pe-ratio-price-
| to-ea...
| camjohnson26 wrote:
| Respectfully those are meme stock arguments. A company can
| have all those things and be worth between 0 and 1 trillion,
| the question is whether the company is valued accurately by
| the markets and worth the price.
|
| Tesla is valued at what Apple was in 2019, but hasn't made
| any profit ever without tax credits. AMD is at $100 billion,
| which seems high but could be worth it. Doesn't matter if
| they mismanage cash and have to be acquired though.
| scsilver wrote:
| This is starting to feel like a moral crusade when that
| investment reasoning is consided meme/speculative
| arguments. I know retirement planners who manage 200m in
| asse6s who have been in business for 30+ years who look at
| the same reasonings as that. You cant really find an
| undervalued stop without some sort of assumptions. Might as
| well just buy an index fund.
| camjohnson26 wrote:
| It is a moral crusade to try to get people to understand
| risk. I can go all in on TSLA call options and make a
| killing and think I understand how markets work, but the
| risk I'm taking on by doing that is ridiculous. I'd like
| to know how those 30 year experience retirement planners
| did in 01 or 08. Bubbles happen because investors become
| comfortable taking huge risks that are unlikely to
| happen, but when they do they get crushed. Picking up
| pennies on front of a steamroller.
| hilios wrote:
| With AMD you have the clear competitors Intel and Nvidia
| with their respective market share, revenue and valuation.
| There was a real world reason for their low valuation
| (Bulldozer) and a real world reason for there stock to
| recover (Zen). Intel had been stagnant for years and their
| 10nm was obviously not working. With AMD's and Jim Keller's
| track record there was a reasonable case for them managing
| to catch up and their stock to rise accordingly. If those
| are meme arguments the whole market is a meme.
| unethical_ban wrote:
| No, they're stock arguments. They're "fundamentals". Did I
| look at their balance sheet, no. But asking questions about
| their competition and likelihood of being around and
| healthy in a few years isn't meme.
|
| Even "Hey this has short 140% of float" isn't a meme stock
| thing.
|
| The definition of "meme" stock is it being a meme - is it
| getting hyped up on social media and reddit with inside
| jokes and collective action (as much as they pretend it
| isn't collective action).
| camjohnson26 wrote:
| If you didn't look at the balance sheet I don't see how
| you can claim to care about fundamentals. The company's
| ability to be in business in a few years depends on how
| much cash they have and how much they can generate. If
| the market tanks financing dries up, and if they aren't
| cash flow positive then it's game over.
|
| Whether people like the product or not and how they
| compare to competition only matters if they have cash
| figured out. Anybody can sell a dollar bill for $0.80 and
| have a fantastic product, doing it profitably is the
| trick. WeWork is probably the best example, entering high
| risk long term leasing commitments and subleasing that
| space at a loss. They were bid up to an insane $40
| billion valuation based on just this, until they tanked
| pre IPO. Now with the low probability, high impact risk
| of a global pandemic coming about, they're struggling to
| survive and I'm surprised aren't bankrupt yet. Still have
| a better product than the competition though.
| tengbretson wrote:
| > The company's ability to be in business in a few years
| depends on how much cash they have and how much they can
| generate. If the market tanks financing dries up, and if
| they aren't cash flow positive then it's game over.
|
| Sure, and these considerations are all things that are
| downstream of product, competitive positioning and IP.
| jboog wrote:
| >"They're "fundamentals". Did I look at their balance
| sheet, no."
|
| Please for the love of god tell me you are trolling right
| now.
| jboog wrote:
| No what you don't understand is that no one else in the
| market had caught on to the fact that AMD was the main
| competitor to Intel!
|
| If only we had known way back when!
| [deleted]
| jboog wrote:
| Because a company is going to exist doesn't mean it's going
| to jump 10x+ in value in a few years.
|
| I remember following the WSB AMD memery several years ago and
| no one really predicted what would actually happen over the
| ensuing years.
|
| Intel shit the bed on some key foundry investments and AMD
| had some chip breakthroughs to capitalize on their screwup.
|
| So yeah, some people ended up being right that AMD would do
| well but I never saw anyone predict WHY.
|
| ANd I can point you to many many that were predicted to do
| gangbusters and never amounted to anything, funny those
| always get forgotten.
| aphextron wrote:
| The South Sea Company was the original meme stock.
| faceplanted wrote:
| That's kind of misrepresenting what the South Sea Bubble was,
| with meme stocks the public are at least in on the joke, the
| South Sea Bubble was a private conspiracy/social phenomenon
| of a different fashion.
| VHRanger wrote:
| Obviously?
|
| The company was bankrupt.
|
| People who bought HRTZ after bankruptcy had to have known it was
| a game of financial musical chairs, much like GME, TSLA or BTC.
| chrismeller wrote:
| That seems like a bit of a simplistic view spurred on by people
| who don't know what Chapter 11 is.
|
| It's not "we don't have any more money" or "we aren't making
| any money", it's "we need a little court-mandated breathing
| room (from our creditors) to change x, y, and z, and then we'll
| be ok".
| tablespoon wrote:
| > That seems like a bit of a simplistic view spurred on by
| people who don't know what Chapter 11 is.
|
| > It's not "we don't have any more money" or "we aren't
| making any money", it's "we need a little court-mandated
| breathing room (from our creditors) to change x, y, and z,
| and then we'll be ok".
|
| It really depends on which "we" you're talking about:
|
| 1. What you said is probably true, from the perspective of
| the organization itself (which includes its officers).
|
| 2. It's almost always false, from the perspective of the
| current shareholders. They're going to get wiped out.
| chrismeller wrote:
| Yes, the we were Hertz in that case, not shareholders.
| gregschlom wrote:
| "and then we'll be ok"
|
| More like: "and then we'll pay back as much as we can to our
| creditors, and then if there's still money left at the end we
| might be ok"
| chrismeller wrote:
| Well, in this case perhaps. The shareholders may be
| screwed, but at least it gives them (Hertz as well as
| shareholders) a fighting chance, rather than just saying
| "yep, we had a good run" and washing their hands of
| everything.
| Mc_Big_G wrote:
| Hit me up when BTC goes bankrupt.
| camjohnson26 wrote:
| BTC's version of bankrupt is when transaction fees aren't
| worth enough to incentivize mining.
| midasuni wrote:
| BTC goes bankrupt when one person controls 51% of the
| mining infrastructure
| dustingetz wrote:
| that has almost happened multiple times and those times
| correlate with massive tether prints
| camjohnson26 wrote:
| I think it's extremely likely that Tether isn't backed
| and is responsible for most of the BTC price increases.
| Got any links for these events?
| fogof wrote:
| What do you mean by "not enough to incentivize mining"?
| Mining works on a system where the fewer miners there are
| the larger a portion of the total transaction fee share
| each miner gets. Even if the there were no exchanges or
| people sending transactions, I'm sure there would be at
| least a few nerds who would mine on their desktop computers
| for shits and giggles.
|
| A better criterion would be "when transaction fees aren't
| worth enough to incentivize enough mining to keep the
| network secure". But even that isn't a very clear concept
| because you can always just wait longer for more blocks to
| confirm.
| camjohnson26 wrote:
| Well if the hash rate drops far enough all that unused
| ASIC firepower could easily fork the network a million
| different directions and transactions would take forever
| to get through, I don't think waiting would produce that
| much more security because the real chain getting mined
| on the desktops would be a lot shorter than the ASIC
| mined ones.
| tacheiordache wrote:
| GME is not bankrupt yet (it is indeed overpriced and comparable
| to HRTZ), but TSLA and BTC? They don't belong to the same
| categories. TSLA and BTC will see a lot of gains to come.
| Eventually without a definite date what goes up comes down but
| it'd be silly to not take a piece of the pie yourself and keep
| your savings in cash...
| airstrike wrote:
| BTC is not a stock so I really don't follow why people keep
| treating it like it has some underlying value
| Dirlewanger wrote:
| It has value because, again, other people think it has
| value. Otherwise it wouldn't be trading at ~$54k.
| rsynnott wrote:
| I mean, there's an argument for viewing Tesla and Gamestop
| similar to bitcoin; they clearly have _some_ underlying
| value, but it seems largely secondary to hype-induced
| valuation.
| croes wrote:
| Like most stocks BTC's value depends on the buyers hope of
| a rise of the value. Buy low and sell high. For the
| original function of stocks, support a company and get a
| share of the profit, you are right about BTC.
| PragmaticPulp wrote:
| That's not really an accurate comparison. Stocks are
| ownership in a company, which is still subject to all of
| the realities of operating a company. We can't simply
| continue trading Hertz stock as a speculative gamble when
| the company goes under.
|
| Yes, cycles of hype and supply and demand do distort
| stock prices, but it's still a capital allocation market.
| GameStop can choose to sell shares into the hot market,
| much as AMC did, to raise money. Buyers of those shares
| are allocating capital into the company.
|
| One of the draws of Bitcoin as a speculative instrument
| is that there are no fundamentals. Without fundamentals,
| there is no mechanism to suggest if it's undervalued or
| overvalued. The only thing a Bitcoin purchase funds is
| more energy expenditure on mining.
| thaumasiotes wrote:
| > We can't simply continue trading Hertz stock as a
| speculative gamble when the company goes under.
|
| What? Why not?
|
| Not only _can_ we continue to trade stock in a defunct
| corporation, we _do_. Take a look over here:
| https://www.liveauctioneers.com/item/85889867_imperial-
| india...
| gruez wrote:
| That's trading the stock certificates, not the stock
| itself. Nowadays there aren't any stock certificates
| anymore so that point is kind of moot. I doubt you can
| still trade enron shares, for instance.
| thaumasiotes wrote:
| The certificates still exist; the fact that you don't get
| one when you buy stock just reflects the fact that you
| don't technically own the stock. US stocks were not
| dematerialized.
| MrMan wrote:
| I don't mean to quibble but I would say that even though
| bit coin is not a quote unsuited real currency you can
| apply purchasing powrr parity valuation to it and compare
| purchasing power of bitcoin compared to other currency
| like instruments additionally the cost to mint a bit coin
| is not meaningless, just easy to neglect.
| [deleted]
| saalweachter wrote:
| The "original function" of stocks hasn't gone away. The
| S&P 500 paid out half a trillion dollars in dividends
| last year, and performed another half trillion or so in
| stock buy-backs.
|
| Trading happens on the pure derivative of stock prices,
| yeah, and people get rich off of it, sure, but ignoring
| the trillion dollars a year that flows from the profits
| on the economic activities of the S&P 500 back to the
| investors in the stock is ... oversimplifying things.
| pbhjpbhj wrote:
| How does that come with the sum of all monies lost on
| trading with S&P500 shares? Serious question.
| jfengel wrote:
| The sum of all monies lost trading S&P500 shares should
| be negative, since the index as a whole was up. Which
| isn't to say it'll be up forever, but over a scale of
| years it has historically always been up. Even if you
| lost money trading S&P 500 shares, somebody else made
| more, which is why the index is up.
|
| Even so, that figure isn't really relevant to the GP's
| point. Their point was that in addition to the price of
| the stocks, people who owned those stocks got cash money
| paid into their pockets, via dividends. That amounts to
| about 1.1% interest on money you spend buying the
| shares[1].
|
| (That's not actually a great number. 2% is more common
| over the last 20 years. It suggests that as of right now
| the market is overpriced. But that's also for 2020, which
| is not a typical year. So far for 2021, it's more like
| 1.5%)
|
| [1] https://www.multpl.com/s-p-500-dividend-yield
| saalweachter wrote:
| When you factor in stock buybacks -- which are _sort of_
| but _not quite_ the same as dividends -- it 's "sort of"
| like 3%.
|
| (My vague understanding is that for complicated and silly
| reasons, many more companies have preferred stock
| buybacks to dividends in recent decades, but it's still
| money flowing back from companies to investors.)
| jfengel wrote:
| That's a very good point. Thank you; I had missed that.
| [deleted]
| NickM wrote:
| It sort of has underlying value, in that owning bitcoin
| lets you write entries in an extraordinarily inefficient
| append-only database.
|
| (It seems clear to me that this isn't a valuable enough
| capability to justify the current price of BTC, but I guess
| that's a separate discussion.)
| baq wrote:
| BTC is a commodity and trades like one. fundamental value
| is hashed electricity... not much, but guess it counts as
| something for somebody.
|
| for traders, it's something that has a ticker, a price and
| some volume. whatever works.
| this_user wrote:
| Production costs don't equal value of the product. You
| can certainly spend more on making something than it is
| worth. BTC has no intrinsic value. It has some utility,
| but mostly in the realm of illegal activities. But that
| is not the same thing as intrinsic value.
| Judgmentality wrote:
| At the end of the day, people are betting on what they
| believe (or throwing away their money for the lulz).
|
| I genuinely, no bullshit, think TSLA is more irrational than
| GME, and has been for years. I put my money where my mouth is
| and I'm up 5x in 2 weeks. I know it won't last, but hey TSLA
| is crashing too. Nothing lasts forever.
| [deleted]
| tacheiordache wrote:
| Indeed nothing lasts forever but TSLA at least has
| something to show while GME's business is passe. TSLA is
| overpriced but at the moment it crashed and will jump back
| to new heights. Why not take advantage of the notoriety and
| make a gain yourself?
| Judgmentality wrote:
| I think it's obvious that I am holding a substantial
| amount of GME right now, and I think I should disclose
| that.
|
| Ryan Cohen, the guy who founded Chewy, is on the board
| for GME and leading an initiative to transform Gamestop
| into an e-commerce store. In other words he wants to
| compete directly with Steam, and while many don't realize
| it yet, Amazon. And this is one of the only people in
| history who has successfully beat Amazon in a product
| category before. Chewy absolutely dominated the pet
| market for e-commerce.
|
| What I think Gamestop _should_ do is compete directly
| with twitch, and set up an online game store on top of
| that. Basically do what twitch is doing but better,
| because twitch is _shockingly_ bad for an Amazon
| acquisition. Then Gamestop could host online game
| tournaments, and they could even draw attention at local
| brick-and-mortar stores. They 've got the real estate,
| they've got the brand recognition, and they've got the
| goodwill of the public right now (which is something you
| can't even buy, Amazon doesn't have that even with a
| trillion dollar market cap).
|
| I don't think this will happen. But if it did, GME would
| be ridiculously undervalued right now.
| jasonwatkinspdx wrote:
| Twitch in essence is a giant ad for Prime. That's it.
| It's doing exactly what they want. It's a terrible
| business to try and make profitable as its own silo,
| which is why mixer et all have failed.
|
| The only thing happening with GME is some opportunistic
| behavior around their sudden unexpected ability to raise
| speculative capital. Jeff Bezos himself could take over
| GME and there is zero chance it's going to become some
| sort of online ecommerce competitor to steam. They have
| absolutely no comparative advantage for that. All that's
| happening is GME management finding every way they can to
| redirect this influx of cash into their bonuses.
| ludocode wrote:
| > I don't think this will happen.
|
| Do you mean you don't think they'll compete with Twitch,
| or you don't think they'll compete with Steam and Amazon?
|
| Personally I think investing in GME today is no different
| than investing in Blockbuster ten years ago. Competing
| with Steam is a terrible idea. EA tried it with Origin
| and despite having huge exclusive franchises, they're
| essentially throwing in the towel by abandoning the
| Origin branding and moving their newest titles back to
| Steam. There are also few physical goods to ship anymore
| so the experience in selling pet supplies online is
| irrelevant. Something like 80% of PS5s sold are the
| digital-only model; they don't even have a disk drive
| (and 99% of modern PCs don't have one either.)
|
| Most of GameStop's profit was on used games. A game would
| get purchased, completed in a few days, then sold back to
| GameStop. When GameStop re-sells it as used, that's pure
| profit; the original publisher doesn't get a cut. Rinse
| and repeat a few times and within a few weeks of the
| launch of a game, GameStop has made more money off of it
| than the game developers. This is no longer possible with
| digital game sales. These games are locked to accounts
| and cannot be individually transferred. (And if you think
| GameStop's digital storefront will support game resales
| to try to capture this profit, no publisher in their
| right mind would publish their games on it!)
| Judgmentality wrote:
| > Do you mean you don't think they'll compete with
| Twitch, or you don't think they'll compete with Steam and
| Amazon?
|
| I do not think Gamestop is going to compete with twitch.
| I will be very surprised if they do not try to compete
| with Steam.
| candybar wrote:
| How does any of this change GME's valuation? Any company
| can decide to get into anything - the existence of an
| opportunity that everyone is aware of doesn't impact the
| company's valuation unless the company's uniquely suited
| to exploit the opportunity. I don't see how GameStop is
| particularly well-situated to take advantage of
| e-commerce or streaming opportunities. They don't have
| any unique offerings or substantial online presence. They
| obviously don't have any real tech or product talent or
| expertise. They also primarily deal with console games
| and all new consoles lock you into their own online
| store. They are suddenly going to compete for 2nd place
| for PC games?
|
| And, Ryan Cohen has no operational role at the company
| and changing an existing company is very different from
| building a new one. It's not just having some grand
| vision, but having the culture and talent to execute on
| it at every level. And it's unclear Ryan Cohen himself
| would have any particular expertise here - selling
| digital goods is very different from selling physical
| goods.
| Stratoscope wrote:
| > _Chewy absolutely dominated the pet market for
| e-commerce._
|
| Indeed, I think we get as many Chewy boxes as Amazon
| boxes. Of course three dogs and three cats will do that.
|
| Chewy used to send every customer a handwritten
| personalized Christmas card each year. I think they had
| every employee spend some time writing these cards when
| they weren't busy.
|
| Later they switched to printed cards using a handwriting
| font, but those early years of handwritten cards
| certainly left an impression.
| waprin wrote:
| Competing with Twitch is not realistic and I'm surprised
| you think it's bad. Facebook and Microsoft have both
| spent huge sums of money trying to and failed. And both
| those companies have deep engineering talent which
| GameStop does not and it will not be trivial to compete
| with those companies for engineers. Plus livestream is
| just really expensive in terms of compute and network
| costs. Finally and most importantly, Twitch has more
| network effects than people realize with its
| follower/subscriber ecosystem. Streamers spend a lot of
| time building that audience and make more money than you
| might expect when they do it, so it won't be easy to pull
| them away.
| syshum wrote:
| >> Facebook and Microsoft have both spent huge sums of
| money trying to and failed.
|
| That does not mean it is not possible, it is not shocking
| to me that large institutions like Facebook and MS could
| not compete even with their deep pockets.
|
| you seem to have conflated Money with creativity, and/or
| vision.
|
| it will not be a Microsoft of Facebook that will topple
| twitch or you tube, it will be a startup of some kind
| that is completely removed from Corporate culture and the
| extreme chains on innovation that large companies have
| Judgmentality wrote:
| Everybody I know that uses twitch hates it. Like
| seriously, it's _really_ bad. The conversations streamers
| have on discord are very different from what they 'll say
| while streaming. They use it because there is no
| alternative. I am well aware that others have tried to
| compete and failed.
|
| But there is a market and nobody likes the only player.
| Eventually somebody is going to figure it out. And I am
| extremely confident it won't be Amazon. I'd short twitch
| in a heartbeat if it weren't propped up by the most
| valuable company on Earth.
| candybar wrote:
| What in particular do they hate about twitch and what
| type of streamers are they? (top, emerging, casual, etc).
|
| I too hear a lot of complaints about Twitch too but I
| feel that most of them have nothing to do with the
| product, but the zero-sum and competitive nature of
| gaming streaming. It's just difficult to succeed as a
| gaming streamer (or content creator more generally) and
| the vast majority of people who try will never make any
| meaningful amounts of money, so frustrations tend to be
| attributed to the arbitrary quirks of the platform, even
| though that's just the nature of any content business.
| Judgmentality wrote:
| > What in particular do they hate about twitch and what
| type of streamers are they? (top, emerging, casual, etc).
|
| Everything and everyone. Seriously, even the people
| making literally millions on twitch hate the DMCA
| takedowns, the completely capricious bans, the ridiculous
| barrage of forced ads which twitch has straight up lied
| about, the fact that Amazon streamed anti-union ads on
| twitch and then pretended it was an accident, the fact
| that titty streamers get special priveleges...and that's
| what I thought of in just 30 seconds off the top of my
| head.
|
| twitch is fucking awful _because_ it 's owned by Amazon.
| It was great before the acquisition and shortly
| thereafter.
|
| I never said it was easy. I'm saying twitch fucking sucks
| and when somebody makes something that doesn't suck it
| will instantly be an 11 digit market cap company. Right
| now the most likely contender is Gamestop, even if I'd
| only put that at about a 1% chance of happening.
| candybar wrote:
| I don't see how any of these are deal-breakers for the
| viewers and if the viewers are there, the streamers
| aren't going anywhere. The network effect is real - it
| doesn't matter how good your streaming platform is if no
| one is using it.
| Judgmentality wrote:
| People are leaving twitch because it's so bad.
| Unfortunately I can't share that data with you, so I
| don't expect you to believe me.
|
| Anyway, let's agree to disagree because we're not finding
| common ground here.
| candybar wrote:
| Where are they going?
| Judgmentality wrote:
| Netflix? Books? Youtube?
|
| They're giving up on streaming because they hate twitch
| that much.
| candybar wrote:
| You're talking about the streamers? As I mentioned,
| streaming is a tough business, it's going to have a lot
| of churn. In terms of viewership, there's publicly
| available data and it's not going down:
|
| https://dotesports.com/streaming/news/over-27-9-billion-
| hour...
| Judgmentality wrote:
| Yes, I am aware of the publicly available data. I'm
| saying that's wrong, but again I can't share my data so I
| don't expect you to believe me.
|
| We're not going to agree. I'm exiting this thread.
| candybar wrote:
| What kind of data do you have? Do you work at one of
| these companies and know that the data is fudged? Do you
| run an analytics company? There could be some measurement
| errors or biases but it's virtually impossible that it's
| directionally incorrect when we're talking about 67%
| growth y/y.
| jasonwatkinspdx wrote:
| This is a very poor assessment. I'd suggest watching some
| Devin Nash videos. Whoever you're talking to on discord
| is not giving you a complete picture.
|
| Twitch is essentially a hardcore user's platform.
| Engagement is extremely high vs other platforms. That's
| what keeps content creators on twitch, even if they're
| making the bulk of their income from putting the VODs on
| youtube: they can't create the same content and
| interactions on other platforms.
|
| Again, as explained in a sibling comment, competing
| against twitch is a terrible opportunity. It's a
| miserable business to try to make a profit margin on, and
| your #1 competition doesn't care if twitch loses money
| all day. The ad market for streamers is all wonky because
| so much of the content is radioactively toxic.
| nomadKite wrote:
| You're basing the valuation on Gamestop being able to
| build, market and compete with twitch/amazon, when
| they've expressed 0 plans to do so, and are unable to
| even maintain a website? https://www.gamestop.com/ (down
| all morning)
| syshum wrote:
| Does twitch even stream games anymore? ;)
| bpodgursky wrote:
| You probably shouldn't check out TSLA today then.
| elif wrote:
| TSLA is crashing because TSLA is not worth more than the
| rest of the top 10 manufacturers combined, as their market
| cap would suggest.
|
| Other notable differences include actively building the
| largest and most advanced factories on every major
| continent, disrupting the entire automobile industry such
| that even jaguar is going full electric by 2025,
| mainstreaming self-driving, and cutting the costs of
| residential solar in half.
|
| Meanwhile, gamestop is trying to make a profit out of a
| portfolio of dusty commercial real estate.
| ludocode wrote:
| > actively building the largest and most advanced
| factories on every major continent
|
| They are not the most advanced factories, not even close.
| Tesla uses much more human labor per vehicle than its
| competitors; the "alien dreadnought" never materialized.
| "Toyota remains well ahead of Tesla in terms of
| manufacturing efficiency, producing more vehicles per
| employee, while utilizing its fixed assets and inventory
| more effectively":
|
| https://www.forbes.com/sites/greatspeculations/2020/02/11
| /co...
|
| > disrupting the entire automobile industry such that
| even jaguar is going full electric by 2025
|
| The industry shift towards electric vehicles is because
| it's finally becoming profitable to make them. This is
| largely due to a dramatic reduction in battery costs
| which is driven by R&D for smartphones, not cars.
| Personally I don't believe Tesla has much to do with it.
|
| > mainstreaming self-driving
|
| They are mainstreaming dangerous driver assistance
| technologies well before they are ready because they've
| been pre-selling "full self driving" for years. They are
| nowhere close to completing an autonomous cross-country
| drive, something they promised would be done five years
| ago. Waymo is far ahead of Tesla on self-driving
| technology.
|
| > cutting the costs of residential solar in half
|
| I'm not sure there's even any point in arguing this
| because solar is an insignificant fraction of their
| business. They are a car manufacturer, nothing more. But
| in my personal opinion, I think the SolarCity acquisition
| was a fraudulent bailout of Musk's family, the solar
| shingles were mostly a sham, and Tesla has no significant
| proprietary solar technology at all.
| Judgmentality wrote:
| > The industry shift towards electric vehicles is because
| it's finally becoming profitable to make them. This is
| largely due to a dramatic reduction in battery costs
| which is driven by R&D for smartphones, not cars.
| Personally I don't believe Tesla has much to do with it.
|
| As much as I agree with the rest of your comment, I have
| to disagree with this part. Yes, there is a shift towards
| profitability with electric vehicles now and that has a
| lot to do with battery advancements from smartphones. But
| EVs still aren't exactly profitable, and when they are
| it's usually because of tax credits (granted that still
| counts, but it's important to mention).
|
| It's important to remember traditional automobile
| manufacturers have decades of accumulated knowledge from
| spending hundreds of billions, if not trillions of
| dollars, on R&D for the internal combustion engine. Their
| processes are set up for it. Their tooling is set up for
| it. And more importantly, their business model which
| almost always focuses on maintenance costs is set up for
| it. It's like how Kodak invented the digital camera, but
| decided to continue with their legacy business because
| they were already set up for it.
|
| There are many things I dislike about Tesla. But I
| genuinely believe they are responsible for bringing EVs
| to market ~3 years before it would have happened without
| them.
| mikestew wrote:
| _Their tooling is set up for it._
|
| You know what else "their tooling is set up" for? Being
| changed in a short period of time for whatever the next
| hotness is.
|
| _But I genuinely believe they are responsible for
| bringing EVs to market ~3 years before it would have
| happened without them._
|
| How do you reconcile that statement with the fact that
| while folks were waiting for Tesla to fill their Model S
| pre-orders, we were already driving a Nissan Leaf? The
| Leaf was going to happen whether or not Tesla ever built
| a single car, or even if Tesla never existed. I mean it's
| nice that Tesla fans jumped on the EV bandwagon, even if
| a little late, but let's not pretend Tesla wasn't late to
| the production EV game.
| rsynnott wrote:
| > There are many things I dislike about Tesla. But I
| genuinely believe they are responsible for bringing EVs
| to market ~3 years before it would have happened without
| them.
|
| This feels vaguely ahistorical. The best-selling electric
| car platform in Europe today is the Renault Z-E platform
| (or at least it was; VW may have overtaken by now). That
| platform was announced in 2009 or so, with the first cars
| in 2011, and the first Zoe (the popular car based on the
| platform) in 2012. The Nissan Leaf came out in 2010. The
| Tesla Model S came out in 2012.
|
| So given that, it's hard to see what Tesla had to do with
| it, really. Some of the most popular models came to
| market BEFORE Tesla (if you ignore the roadster, a
| contemporary of the Z-E concepts, which you almost
| certainly should).
| Pyramus wrote:
| I'm a Tesla skeptic like parent but I believe parent is
| right: Tesla has advanced the EV market by maybe 3-5
| years.
|
| You are correct about timings. What you are missing is
|
| 1) Adoption and perception. The public and mainstream
| media love 'EV Jesus' and his perceived dedication to
| 'the mission'.
|
| 2) User experience, in particular charging. Tesla still
| today has the biggest charger network and charging is a
| crucial remedy for range anxiety.
| klodolph wrote:
| I agree that TSLA is irrational, and I think that this is
| true regardless of whether you think there are more gains
| to come. My impression of TSLA investors is that many of
| them just want to be a part of the future, and many others
| are trying to make money off the volatility &
| irrationality.
| [deleted]
| elliekelly wrote:
| I think the cult of personality plays a part in it, too.
| Tesla makes cool, futuristic cars and has a rabid user
| base (and even a rabid fan base of people who can't
| afford to be users) but even still I don't think the
| valuation would be anywhere near where it is today
| without all of the Musk super fans & Musk initially
| fanning the flames with his war against short-sellers.
| thaumasiotes wrote:
| Yes. Weird effects in the stock market just reflect
| consumer interest in the stock market. If you think
| Michael Jordan is cool, you express that by buying his
| shoes. If you think Elon Musk is cool, you express that
| by buying his stock. But that's not a comment on the
| value of the stock. It's branding.
| [deleted]
| hellbannedguy wrote:
| GME is going back up right now. I don't believe it's
| disenfranchised Reddit young people anymore (if it ever
| was?).
|
| I guarantee there's hedge funds who infiltrated the group
| playing up this one. Fictional fresh faced MBA from Jamie
| Diamond's outfit, "too the moon homie. Hold forever. They
| can take my wife, but not my GME. We tards are bringing
| down Capatalism." (I used the T word because that the
| vernacular they use.)
|
| I find it sad that the Retail naive investors will get
| fleeced again, but by professional billionaire trading
| outfits.
| MagnumOpus wrote:
| No one from JPM or even big hedge funds was involved --
| this is the one single thing that compliance and legal
| departments would be all over, so any well-regulated
| outfit with a compliance department would have staid well
| away from pump&dump. (The JPMs and Citadels made money
| from market making on stocks and options - there they
| made a year's worth of profits in a week.)
|
| You are likely right that finance bros were (and still
| are) behind the polished 24/7 rocket memes, but they were
| likely small single-PM funds and non-regulated private
| players, posting behind 7 proxies to provide anonymity
| and plausible deniability against the SEC.
| Pyramus wrote:
| From what I've heard and read Wall St was heavily
| involved - I'm not sure why you think this would be a
| compliance issue?
| camjohnson26 wrote:
| All this retail interest in meme stocks is gambling, plain
| and simple. More people entering the market creates a Ponzi
| effect where new entrants pay for the gains of holders, but
| by definition this is unsustainable. You can see this
| basically everywhere in the economy but the meme stocks are
| the most obvious.
|
| Not financial advice, I thought Tesla was laughably over
| valued at $40 a share, never bet more than you're willing
| to lose.
| Judgmentality wrote:
| Investing in any stock is gambling, plain and simple. The
| only difference is your risk tolerance.
|
| Remember when it was impossible for real estate
| investments to lose money 15 years ago?
| philihp wrote:
| Gambling is when the house has an edge, and you will
| statistically lose in the long run. Investing is when you
| have the edge.
| camjohnson26 wrote:
| Gambling is when you take big risks with hope for a big
| payoff. It's possible to invest in the stock market and
| limit risk by diversifying and hedging positions, but how
| many meme stock investors are doing that? It's much more
| likely to see people yoloing their life savings on Tesla
| or GME and hoping to retire from the windfall. Not going
| to be pretty if stocks ever go down again.
| agumonkey wrote:
| crypto is still bubblish.. new field, massive returns ...
| everybody with a bit of mileage know it will feel bad for the
| last week buyer before the top. musical chair.
| jboog wrote:
| If you read some of the posts on WSB a huge number of people
| just really have no clue about capital markets, investing, or
| basic business sense.
|
| I don't know how many times I saw people claiming GME would go
| to $1000 because the new CEO has a brilliant new scheme to turn
| the company around by going digital! Why "going digital" in
| 2021 means your company is worth 100X what it was a few months
| ago I'll never quite understand. I guess no one had yet
| discovered the opportunity of these computer machines and the
| World Wide Web!
|
| Or "it's the short squeeze" By people who didn't even know what
| a short was 72 hours before, long after the shorts had covered
| their positions.
|
| Sure some people acknowledge they are essentially gambling in
| equities, but tons of people truly think they have some
| stunning insight into a business because of some anonymous WSB
| shitpost they read this morning.
| karmelapple wrote:
| Would you say those same people who just learned the phrase
| "short" or "short squeeze" are likely the same kind of people
| going to the casino and thinking they can successfully count
| cards?
|
| As mentioned elsewhere in here, it's ultimately gambling.
| It's putting money up, exposing it to risk that could
| completely wipe you out. If someone doesn't understand that
| about stock investing, I think they're very similar to
| someone not realizing a casino could wipe out your money. But
| making sure everyone fully understands this - educating
| people who are risking money - certainly seems like a
| thoughtful thing for countries to incentivize.
|
| But unless all the financial websites have to be styled to
| look like a casino, or areas of a physical bank space put up
| neon lights and blinking signs to emulate Vegas casinos, I
| don't know if we can ever drive the point home clearly
| enough.
| scatters wrote:
| RobinHood _is_ styled like a gambling app. That doesn 't
| put people off; more the reverse.
| jboog wrote:
| Yeah, I agree it's totally gambling.
|
| There's also the thing where buying equity in a company can
| seem very simple because you see something like Apple where
| they made a cool thing and obviously their stock went up.
| People just have no idea about how complex the markets are.
|
| They also don't remember the very smart people who claimed
| the Iphone would be quickly overtaken by Android and other
| cheaper alternatives (Clay Christensen predicted this a guy
| generally very smart on tech/business)
|
| Hindsight always makes it seem like it was easy to pick the
| great companies that were OBVIOUSLY going to do well.
|
| They don't understand how incredibly sophisticated
| professional investors are who dedicate their lives to it,
| and on average even THOSE people don't 'beat the market'.
| dgellow wrote:
| [deleted]
| eloff wrote:
| No, GME has a failing business. They were losing money on
| their physical stores before the pandemic.
|
| They basically have to pivot into ecommerce and somehow
| compete effectively with Sony, Microsoft, and Valve. I don't
| give them good odds of success there, even with Ryan Cohen.
| [deleted]
| Hypocritelefty wrote:
| too bad that space Karen never took any interest in pumping
| hertz.
| neonate wrote:
| https://archive.is/gQx5w
| croes wrote:
| Didn't Hertz self say, don't buy the stocks because they are
| worthless and we are broke?
| camjohnson26 wrote:
| Yep, as they raised a round of capital. The people buying Hertz
| then were out of their minds.
| f430 wrote:
| do you know how long it took after the short squeeze before
| reality set in?
|
| literally AMC said they have trouble opening their theaters
| ---> wsb likes the stock
| dragontamer wrote:
| Just look at their ticker symbol: HTZGQ
|
| Currently priced at $0.90.
| TaupeRanger wrote:
| "The original meme stock"? The term "pump and dump" is a classic
| phenomenon that is very common and has happened for
| decades...this is neither new nor particularly interesting as a
| specific case.
| bschne wrote:
| I thought ,,pump and dump" refers to coordinated penny stock
| fraud whereas this was less of a coordinated scam and more the
| internet being the internet?
| ENOTTY wrote:
| I deliberately bought a share of Hertz during the craze. I knew
| it had filed for bankruptcy.
|
| If Hertz was somehow rescued, I could make some money and have an
| interesting story. Maybe the shareholder meetings would be
| ridiculous parties with other crazy retail investors.
|
| But even if existing shareholders would be wiped out, I wanted to
| see first hand what happens in this sort of situation. (So far I
| haven't received any paperwork.)
| tomjakubowski wrote:
| I never understood how stock market options worked (calls,
| puts) so I've spent a few dozen dollars buying various stupid
| out of the money options and following them (and then,
| agonizing over when to sell!). This has made me understand "the
| Greeks" better than any textbook alone could have done.
| rjbwork wrote:
| Yup. You gotta pay your tuition to the school of hands on
| trading for sure. It took quite a while for me to really
| grasp how they can all work in concert to move a position for
| and against you even if you are ostensibly right or wrong in
| your overall thesis.
| biolurker1 wrote:
| Why would be curious about corporate bankruptcy procedures and
| spend time and money on it is beyond me but I'm sure that's not
| why the rest bought in.
| lucb1e wrote:
| I'm involved in two cases: MtGox and Grupeer. Neither were
| publicly traded companies that went bankrupt, but they're
| insolvency cases in general. In the former I had some play
| money (by now the coins owed might be worth thousands, but back
| then it was pennies) and didn't spend time figuring this out
| properly, in the latter I have a few thousand euros and
| collectively we (~2500 people) got ourselves a law firm in the
| relevant jurisdiction. With MtGox, at some point some step on
| the website didn't work (I felt like I kept having to reiterate
| that, yes, I still want my coins back) and it seems I now lost
| my claim or something, I don't quit get it. With Grupeer, I
| notice that we're on top of every development, filing disputes
| where necessary, and while I still spent multiple evenings
| reading through documents and collecting my data for evidence,
| we've totally got this.
|
| If you ever find yourself with money in a bankruptcy and it is
| worth more than the lawyer's fee, definitely get a lawyer
| involved. They know what to file, to whom, when to take which
| step. The trustee or administrator is not going to come
| knocking on your door with your dues just like that.
| systemvoltage wrote:
| I want us to get back to reality and fundamentals. These days it
| feels like the entire fabric of society is falling apart.
| booleandilemma wrote:
| "In the short run, the market is a voting machine but in the
| long run, it is a weighing machine."
|
| https://www.goodreads.com/quotes/831517-in-the-short-run-the...
| jl2718 wrote:
| But... "the markets will remain irrational longer than you
| will remain solvent"
| rjbwork wrote:
| It's not going to happen for a while yet. There is more money
| chasing fewer opportunities so we see equity asset inflation.
| This is exacerbated by increasing industrial centralization and
| the longest period of low interest rates on record, causing the
| average retail investors' only logical choice to be to put it
| in the market - be that index funds or individual "meme
| stocks". And if you don't? Inflation will slowly eat away at
| the money you've worked hard for. Classic TINA and "No Good
| Choices"/Catch-22.
|
| But hey, I've 4x'd and 2x'd my GME bets on both spikes so who
| am I to talk, really?
| ericmcer wrote:
| It is kind of miserable though, either invest in a very shaky
| market, or watch inflation chew through your savings. It
| would be a fun game if working 40-50 hours a week wasn't the
| cost of a ticket to play.
| vmception wrote:
| ironic writing this right before $2 trillion is about to get
| distributed to the people by Congress, while the Federal
| Reserve is still buying corporate bonds across the entire curve
| and mortgages using money created at the time of transaction.
| climb_stealth wrote:
| Can someone explain to me what is happening with Hertz? They
| still seem to be doing business in Australia. I have rented cars
| with them in recent months.
|
| In my rental contracts it looked like the company was in the US.
| Has it been bought up?
|
| I have mostly good experiences renting with Hertz and I'd be sad
| to see them go.
| milesskorpen wrote:
| It went bankrupt, but will come out of it and continue to exist
| (with new owners).
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