[ExI] robin hood steals from the poor protects the rich?

Stathis Papaioannou stathisp at gmail.com
Fri Jan 29 05:25:18 UTC 2021


On Fri, 29 Jan 2021 at 14:40, spike jones via extropy-chat <
extropy-chat at lists.extropy.org> wrote:

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> *From:* extropy-chat <extropy-chat-bounces at lists.extropy.org> *On Behalf
> Of *Adrian Tymes via extropy-chat
> *Sent:* Thursday, January 28, 2021 7:24 PM
> *To:* ExI chat list <extropy-chat at lists.extropy.org>
> *Cc:* Adrian Tymes <atymes at gmail.com>
> *Subject:* Re: [ExI] robin hood steals from the poor protects the rich?
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> >…Robinhood forcibly sold many individual investors' stocks in GameStop
> without their consent.
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> >…Also: it can encourage sabotage, and not just industrial.  The hedge
> funds were short selling in a way designed to force GameStop into
> bankruptcy (when it was merely marginal beforehand).  That is, their
> financial practices themselves were designed to sabotage the company they
> were short selling.  Realizing this was part of what motivated so many
> people to rally to GameStop's defense and buy their stock.
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> Cool thanks for that concise understandable explanation Adrian.  For all
> my breezy talk about making a buttload of money, I have never taken much
> interest in the games of the stock market.  I don’t understand it well
> enough.
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> I never really thought about it until today when the news was all about
> short sellers.  If a stock market non-hipster could easily imagine someone
> short selling a product known to have a scary aspect, such as Tesla with
> all those lithium batteries, then arrange for the scary thing to happen,
> then cash in, surely the bad guy will think of it too, dreaming up and
> perpetrating even greater evil than I can imagine on my evilest day.
>

Tesla has indeed been one of the most-shorted stocks in the US stock
market, which is why Elon Musk hates short selling. The usual reason to
short a stock is that you believe it is overvalued, and the price will
fall. Direct manipulation to make a stock rise or fall in order to profit
from your long or short position is illegal. There is nothing in principle
wrong with short selling as ultimately an efficient market will find the
"fair" price of a stock, so short sellers who misjudged will lose, just as
those who go long and misjudge will lose.

-- 
Stathis Papaioannou
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