Hackernoon logoRobinhood x Gamestop for Dummies - A Conversation Between 2 GenZ by@kien

Robinhood x Gamestop for Dummies - A Conversation Between 2 GenZ

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@kienKien Dao

hackernoon staff. contributing to entropy since '98

This Slack discussion by Kien Dao and Hang occurred in slogging's official #introductions channel, and has been edited for readability.

Kien DaoFeb 8, 2021, 2:52 PM
After a few scans on Twitter and Reddit, I kinda understand the basic definitions and terminologies, with short squeezes and all that. My question is: Do you think there should be a law, or a requirement of some kind when comes to stock trading? I mean for all we know, hedge funds have been doing this “pump and dump” strategy since forever, but the moment a group of individual retailers is doing it, it becomes a problem? It ain’t fair that the hedge funds have the power to pressure platforms like Robinhood to limit their users.
Kien DaoFeb 8, 2021, 2:52 PM
*Pump and dump: a strategy executed to manipulate the stock market. Fraudsters will buy up shares of lightly traded companies, spread rumors or false news about its prospects, and then sell them at a higer price to investors who were tricked by the news.
HangFeb 8, 2021, 2:54 PM
I am mixed actually, this is certainly new to both the regulators and the people who run the platform.
Kien DaoFeb 8, 2021, 2:55 PM
I mean it’s interesting that this is only the first time someone is screwing big guys over like this. It’s unprecedented. Considering the whole situation and the fact that “stock trading has always been for the rich”, I can understand why people are mad at Robinhood and other platforms.
HangFeb 8, 2021, 2:56 PM
Okay, so I think there should be a law to keep people informed before jumping into short squeeze/options in general - that kind of stuff. I remember back in the summer a student committed suicide after playing around with options on Robinhood  (which is totally free and accessible) without understanding it properly. He ended up losing a lot - and we are talking 5 figures here, for a college student with debts and financial dependency. We don’t want the same thing to happen to people who short on GME and/or jumping into the ships without any fundamental finance and stock markets knowledge.

People are mad at Robinhood but the truth is, they’re forced to do such actions. I don’t think this is Robinhood or any other platforms' fault.
HangFeb 8, 2021, 2:57 PM
I myself have account in both Robinhood and Charles Schwab and their response to this issue is familiar. Imagine you have a business, working for it so hard and finally have some success, to find yourself in the middle of the war between the people and the regulators. Big oof.

Looking back, we understand that the finance industry was what made America today. They rise on capitalism and will protect it at all cost, although it's messed up.

I have watched some movies, documentaries and read a bit about the global crisis in 2008-2009 - to learn that they will always get bailed out in one way or another. And I repeat, always.
Kien DaoFeb 8, 2021, 2:59 PM
So, as someone who has been in this game for a while, do you think that it is necessary for platforms like Robinhood to take this kind of action (limiting the ability to buy and trade) towards their users, considering many of them, especially the most recent users, don’t acquire enough knowledge of stock trading? Do you think more of what’s going on may lead to the fall of Wall Street?
HangFeb 8, 2021, 3:00 PM
I think trading and options should be limited because not everyone is informed or educated enough on that matter. Remember that trading and investing are not the same thing. Trading is more risky, short-time, and requires a lot of technical analysis knowledge. Not everyone knows about it.

Also, fuck Wall Street, lol.
Kien DaoFeb 8, 2021, 3:02 PM
Now that you mention it, I agree that it’s important for people to be educated on a certain level to be in this game. And yeah, Wall Street definitely has it coming, lol!
HangFeb 8, 2021, 3:02 PM
However, if people are educated enough to go for options, let them be. But they have to be careful, the lost on option, shorting to be exact, can be limitless. Think millions. That's a lot of money for normal people like us.
Kien DaoFeb 8, 2021, 3:04 PM
Now that Robinhood just announced that they’ll open again (some time tomorrow), what do you think is going to happen? Do you think the same situation will be repeated, or perhaps Robinhood themselves have come up with a solution/system?
HangFeb 8, 2021, 3:04 PM
People will go for it, people are aggressive, lol.

The rich here, a majority of them, boil the people's blood. We are talking about people of all backgrounds, occupations, and educations. They just dump a ton of money on it without factoring in both fundamental and technical analysis. That's their action against the big finance guys.

They try to boo the rich, betting their money in sinking stocks to drive them forward and fuck all who bet against these tickers. Some are even losing their savings. They just hate the rich that much.

There is no way in hell GameStop can thrive in such a short time. The factors for a turnover, new member on board, or renovation in services are not enough to drive a stock to the moon overnight. Especially GameStop. The system sucks. The UX UI sucks. Can't even pay online with my credit card. But they are authorized to sell Sony PS5, lol 😂
Kien DaoFeb 8, 2021, 3:07 PM
Wow, so far the whole thing seems very Hunger-Games like, with the rebellion against the rich in the Capitol and all. I wonder if there’s going to be some kind of war 😂
HangFeb 8, 2021, 3:08 PM
I mean, look at this:
HangFeb 8, 2021, 3:08 PM
Idk 😂 hopefully not. But people will be angry for a while and there will be a stock markets war between Redditors (some of them are knowledgeable) and the hedge funds (backed by the government, duh). Even if they restrict on GME, they will find another stock with potential turnarounds (even very lightly) to bet on. Robinhood can’t just go after them forbidding one by one.

I know one thing - it will be bad for Biden, who just took office for several days and probably is not tech-savvy enough to use and understand Robinhood thoroughly (hopefully his staff will help him out). And for Robinhood too, it plans to go IPO this year.
Kien DaoFeb 8, 2021, 3:09 PM
That’s right, I also read an article saying that the citadel and White House are also behind this. If that’s the case, it’s definitely not looking good for Biden.
HangFeb 8, 2021, 3:09 PM
Yes, that's a lot of pressure. And it's true that there is news about the citadel and White House behind the whole Robinhood restricting GME and other stocks thingy, but nothing is confirmed yet (and it's not like they will confirm it, lol).

Biden can't make all the decisions by himself.
HangFeb 8, 2021, 3:10 PM
Go for Crypto 🤷‍♀️ but Utsav told me to wait, lmao
Kien DaoFeb 8, 2021, 3:10 PM
Bruh, I’m too dumb to be in this game 🤣
HangFeb 8, 2021, 3:11 PM
Just wait, lol. Price is too high 💸

Anw, have you watched Too Big To Fail? You will see a point: once a huge company falls (ie Melvin, pretty huge, but not failed yet), some other companies will fall like dominos.
Kien DaoFeb 8, 2021, 3:12 PM
No, I haven’t, but I do understand the reverse: once a big guy does it, everyone else is following. Take Apple, for example, people ridicule them, first for removing the 3.5mm headphone jack and then for getting rid of the charging brick. But here were are not 3 months later, Samsung is following with their most recent Samsung Galaxy product release. It’s just going to be a matter of time before the other guys do it, too!
HangFeb 8, 2021, 3:13 PM
Aight. So long story short: back then when they let Lehman Brothers go bankrupt, leading to the almost failure of AIG (the biggest insurance company at the time) - the last time I check, it's still here, just not as thriving. That’s one side. On the other side, Lehman’s accounts went frozen, people lost their whole savings, companies lost partners (and people who lend them money). It affects other banks too - as people started withdrawing their money all at once and some banks were not liquidated enough for it. Led to a whole disaster 👀
HangFeb 8, 2021, 3:13 PM
Yes, so when the giants do something (even fail), others follow suit.

Idk if my POV is correct or logical enough, and I may got laughed out as a piece of shit by Wall Street, but that’s how I look at this. I find it hilarious, btw, mostly 'cause I’m staying out and watching. It's cool to see most are like this:
Kien DaoFeb 8, 2021, 3:16 PM
Cool, thanks for the great discussion! Excited to see what’s coming next though I’m not even in the game xD
HangFeb 8, 2021, 3:16 PM
Lol, same. Happy to discuss. However, things seem to have cooled down a bit 🤷‍♀️ Guess people are finding drama in Covid time!

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