Business
The manipulation worked for a moment, but it has a limit: Is the era of the stock game over?
The Gamestop affair was portrayed as a value struggle, but it is by no means close to it.
It is a struggle between people with a clear economic interest, who for a moment managed to fool the public.
Lesson: Do not be the next victim of network cheaters
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stock
Adv. Oded Shafir
Sunday, 14 February 2021, 09:12
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The Gamestop affair, which refuses to make headlines in the US, is described by the American media as a generational struggle. The power of the latter, the masses, stems from the ability of many individuals to unite through social media networks. Without knowing each other, with the power of networks, they want to look strong in the white of the eyes.
It sounds like a broken vision. Only in this way do we part with many Sacred cows by young forces fed up with the power of the giant corporations and through disruptive innovation beat them market on
the thigh.But is this the reality even in the case of GameStop?
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To the full article
Look for the strong in the white of the eyes.
Is that the case?
Gamestop (Photo: ShutterStock)
Before I describe the reality that happened to me in this affair, I will seek to summarize in my words, what we had in this affair.
GameStop is a chain of computer game stores that is suffering from many losses due to the Corona crisis and the move to online shopping.
The shares of GameStop are traded on the stock exchange.
Various investors, including institutional investors, gambled that the share price would continue to fall and invested in a financial instrument called a short that would make them earn as the share price fell.
This is not a casino gamble, usually, these bets are based in institutional bodies on economic research that predicts the decline in the value of the company.
At the same time, ordinary people also traded in the Gamestop stock.
Ordinary people often collect information about the viability of paper trading from analyzes they read, from financial statements, from traditional media and from various sources of information, including social and collaborative media.
Due to the development of technology, the intensification of social networks and digital bulletin boards, an underground discourse has begun to develop in recent years, based on a lot of disinformation and unsubstantiated hypotheses of people, mostly young people, convincing each other to buy and sell securities.
Some of the discourse in these networks is legitimate and kosher and some of it is manipulative, vested and false.
In one of these bulletin boards, calls began to come out to fight "shortlisters," those wealthy institutionalists, and buy the stockstop stock.
Thus the price went up and up and caused huge losses to the shortlisters who gambled as stated on the decline in the value of the stock.
I would like to present another possible explanation for this affair.
Since the event did not take place in Israel I do not have all the details but from the side, as a reader with expertise in the subject, it seems to me that it is not really a struggle for values such as Black live matters or even anarchist groups opposed to the government.
What is there here?
In my opinion this is a struggle between people with a clear economic interest, very manipulative, who took advantage of their power and the power of the masses on the one hand, a large public was swept away by the power of the mass media, who thought they shared a worthy and worthy struggle and instead became common.
Do not be tempted to trade in the field
Adv. Oded Shapirer (Photo: PR, Inbal Marmari)
Naturally, the first to buy the GameStop stock bought it at relatively low prices.
Those people had a big interest in stock prices going up.
The call for struggle and the purchase of the stock, which was also supported by real value people, led to price increases and many people joining the deals.
It was clear to me that day that the affair had been discovered, that the share price would fall.
There was no economic justification for his great aliyah.
And indeed it happened.
Those who bought at a low price, waited for the price to rise and sold, made a big profit.
And who lost?
Right.
All the oarsmen, who thought they were in a value struggle.
Bought at rising prices and had to sell at low prices or got stuck with a stock with a significantly lower value than the price they purchased.
This is my warning call to you readers.
Say, would you buy a stock as a result of a conversation with a casual person on the street?
So why do this as a result of talking to anonymous and online people online?
At best, this is information that is not verified or unprofessional.
In the worst case, these are seducers who will use psychological manipulations to get you to take action on a security and you will not know that the factor that motivated you is the one who may trade in the paper from the other side.
Do not be tempted by deals that seem tempting and do not be the next victims of the network scammers.
To be clear, investing in the capital market is a good alternative to your money.
But securities trading is not a game.
Trading in securities or investing in the capital market in general is recommended only when you have knowledge of the financial situation of the company whose share you are buying and also have knowledge of trading in securities and if not, it is highly advisable to seek the help of professionals, investment advisers and portfolio managers supervised by the Securities Authority value.
Adv. Oded Shapirer is the CEO of the Securities Authority
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