IBKR disabled cash purchases of GME and AMC
- Thread starter ScroogeMcDuck
- Start date
GME should do a giant stock offering, buy bitcoin and ethereum and put on their balance sheet. In 6 months their stock price will be justified and it would be hilarious. Microstrategy made more money in a quarter than they did in like 10 years. The same would happen to GME. It would be so hilarous
I was thinking the same, add some bitcoin and breakthrough gene therapy subsidiary.
Counter party risk is what is driving them. Broker has fiduciary responsibility. If customer defaults broker is still on the hook. But why musk? To smoke weed on the floor?
In all the mess I don't belive it is retail. There is a whale or two that is behind and it may wl be the person with letter C and last letter h in the name. Ways speaks everyone is somehow morally corrupt and only he is the savior.
During the financial crises in 2008, everyone wanted to get rid of the Banks & Insurance companies stocks, did brokers suspend selling those names at that time? No, although it was causing a systemic problem in the system.
In my opinion, the hedge funds are to blame for such mess. As an example, one of the heavily shorted stocks is PetMed Express (PETS). Why in hell is this heavily shorted (37% of float and 33% of outstanding)??? On what fundamental basis did hedge funds heavily short this stock? This is a profitable company, with a P/E of 33, a dividend yield of 3% (Has been distributing a dividend for the last 5 years and didn't suspend it during the pandemic), has a 23% ROE, very healthy balance sheet and excellent positive operating cash flow!!!
So on what fundamental basis would this company be a target for shorts???
Investors & Traders disagree on value (And future expected price) but agree on current price. When bets are placed, they must be honored and everyone must be held accountable for the decisions they took.
Would be more logical to issue their own coin on a blockchain and maybe link coin rewards automatically from the blockchain to their sales. There is a coin called Game Credits out there already, but Maybe Gamestop can name it the meme coin or something like this
There is no counter party risk if everyone paid for their purchases in full (100%). In that case, the broker should not be worried for his customers. The counter party risk in here is related to who is on the other side of the trade (You buy a fully funded call option and someone else on the other side is short it, so there comes the counter party risk if the other party defaults, in case of extreme losses).
But this is what margin requirements & collateral are for. Dealers & MMs can quote very wide Bid/Offer prices to account for that, they can do many other things as well to ensure they will not default on their positions obligations. Besides, this is their business, they are in this business & know the risks, take it or leave it, just play by the rules.
