[HN Gopher] Hertz, the original meme stock, is turning out to be... ___________________________________________________________________ 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). ___________________________________________________________________ (page generated 2021-03-09 23:00 UTC)