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Thread: A hedge fund placed a $400 Million bet against Nintendo.

  1. #1
    That One Member aMarioFan64's Avatar
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    Exclamation A hedge fund placed a $400 Million bet against Nintendo.


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  2. #2
    Vetus-schola venatus Mr_Nick666's Avatar
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    Market maniplulation...

    Wouldn't it be humane to put all Hedge Funders to sleep?
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  3. #3
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    If by put to sleep you mean via the Ramsey method, sure.
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  4. #4
    Vetus-schola venatus Mr_Nick666's Avatar
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    I was thinking a lime filled ditch but we can do it your way if you'd like...
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    Senior Member Tommy's Avatar
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    I'm so glad he did terrible!
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  6. #6
    Vetus-schola venatus Mr_Nick666's Avatar
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    His gambit's outcome remains to be seen...
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  7. #7
    Senior Member Tommy's Avatar
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    But I read this headline.
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  8. #8
    That One Member aMarioFan64's Avatar
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  9. #9
    Senior Member Tommy's Avatar
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    Serves him for being negative against Nintendo.
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  10. #10
    Banned jpd01's Avatar
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    Short selling isn't market manipulation.
    It can be rather risky, and can blow up in your face.
    Say that you think Sony stock is going to decline in the next 8 months. You lend the stock (shorting it) and sell it. You now owe the lender or broker X amount of that stock that you lent. If in 8 months the stock is lower than what you bought it for you buy that X amount of stock for a lower price and the profit you made was the difference in price between those two months.
    If the price of the stock climbs quickly then you're going to be out of a lot of money.

    It's essentially just the opposite of the regular value proposition that people make in stock. Where you buy and think the price will rise, you can take dividends or sell for a profit.

    Also they generally are a bullish investment firm. Believing in overvaluation, and betting against the market often enough from what u can tell from the article.
    And to be noted they didn't tout their position publicly to make the stock tank, it's a matter of public record, and journalists came looking for comment and made it news.
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  11. #11
    Banned jpd01's Avatar
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    The stock was shorted, when it was falling. The firm hasn't lost any money, they've made money.
    Because it is up from it's previous position, which was down.
    It hasn't recouped it's value, it's just increased from a lower position.
    Last edited by jpd01; 08-02-2018 at 10:53 AM.
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  12. #12
    That One Member aMarioFan64's Avatar
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    And that concludes professor jpd01's lecture about stocks. Any questions, students?

    Gabe?
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  13. #13
    Releaser of the Hounds WoodenSaucer's Avatar
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    I get what you're saying, but it seems like a big portion of the stock market is psychological. Don't you think there could have been a risk of people seeing something like this and jumping ship just because of the psychology of it?
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  14. #14
    Banned jpd01's Avatar
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    There can be. But mom and pop don't buy shares in any of the quantities that would tip markets upside down.

    This fund shorted 400 million worth of Nintendo stock, which was equivlient to under 1% of the available stock on the market.
    Now no one is really going to pay a huge amount of attention to one firm, that is probably shorting multiple companies.
    The decline in their stock came before this particular short, so it did not have an effect.
    Entities buying up stock usually has a lager effect on value than shorting, as shorting is in effect gambling, and is not in particular a high profile move. Multiple sources will be shorting multiple companies at any given time.

    Let's say that you believe that Krispy Kreme is going to have a poor quarterly showing in Q1 and 2. You might short their stock in regards to some analysis that you've conducted. Now other entities may see that, but don't have the same trust in doing so, so they don't follow suit.
    Now KK has a couple bad quarters, and you make good on your short. KK isn't in trouble because yeah their annual figures are solid despite a couple bad quarters and their growth is 6% from the previous year. Shorting is just something that occurs because in essence stocks typically fluctuate in price over a given year while still growing overall. You can make money from that fluctuation, but it's not an indication that the company is in a bad place. Simply that you can have an alternate form of income other than one set form of investment.

    Now the only reason that we are talking about this is because it's Nintendo, you know. And that makes an easy story to write up for someone that is looking for someone to write something about.

    In the grand scheme of things, Nintendo isn't a huge company. But it's generally very recognizable to a large audience.
    We weren't reading stories of this firm shorting Amazon, Netflix, or a bunch of other recognizable companies in past few years because it doesn't attract views or clicks quite in the same way.
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    Hasn’t lost it yet.

  16. #16
    Releaser of the Hounds WoodenSaucer's Avatar
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    Either that, or there were stories, but a Nintendo forum is going to dig up the latest about anything having to do with Nintendo.
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  17. #17
    That One Member aMarioFan64's Avatar
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    I just want people to like us, bro.
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  18. #18
    Vetus-schola venatus Mr_Nick666's Avatar
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    Which was my point on market manipulation. If everyone starts running for the door chances are you'll follow in case they know something you don't!
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  19. #19
    Cuban Pete savinghyrule's Avatar
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    I will save this thread for when I need to fall asleep from boredom. Thanks jpd!

    Sent from my XT1710-02 using Tapatalk

  20. #20
    Banned jpd01's Avatar
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    No problem mate.
    Happy to help those insomniacs among us.
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