What Constitutes Market Manipulation? Featuring
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- เผยแพร่เมื่อ 17 มิ.ย. 2024
- There's been a lot of discussion around whether Keith Gill is manipulating GameStop shares - let's dive into whether or not this could be legally considered a pump and dump.
Thank you @LegalEagle for lending your expertise!
If you'd like to support the channel, you can do so at Patreon.com/ThePlainBagel :)
DISCLAIMER:
This channel is for education purposes only and is not affiliated with any financial institution, although Richard does work as an employee for an investment manager. Richard Coffin does not provide recommendations on The Plain Bagel - those looking for investment advice should seek out a registered professional. Richard is not responsible for investment actions taken by viewers
NOTE - I've removed a segment from the video referencing the recently-dropped Ryan Cohen pump-and-dump case. I had filmed the video while the case was still active so the information around the topic was stale, and I had made the mistake of believing the headlines around the dropped case referenced a different legal action. There are no active pump-and-dump cases against Ryan Cohen. Apologies for the blunder.
never believe the headlines
Could you go through an analysis of GameStop data? Would be interesting to see an end to end evaluation on the business wrt to possible investment. To be clear I would not be in the market for actually investing. My job makes it a ball ache to do.
Could you tell us if you received any money/remuneration from any parties to produce this video?
Thanks.
I'm not expecting a response because I suspect you did.
@@b.bradford7782 sure I can answer that; no I did not. The channel occasionally does sponsorships, but those are clearly laid out, and because of my registration as an independent PM, I don’t carry out any partnerships with finance companies.
@@ThePlainBagel Thanks for the response. Based on the framing of the video alone, and the soft-pedaling of the naked short position thesis to the back end of the video and labelling it as a conspiracy, (but mostly the framing) I figured you were paid. We see a ton of that nowadays which buttresses the short thesis.
Plain Eagle? Legal Bagel? What Is This, a Crossover Episode?
Everything Bagel
Legal Bagel
the crossover you didn't know you needed.
A specialized reaction you could say.
You forgot the coffee-bagel crossover
The Legal Bagel
The Bagel Eagle
The Plain Eagle
The Beagle.
@@neuvocastezero1838 The Plegal Beagle
@@neuvocastezero1838 you beat me to it lol
Investing in GME is Schrödinger's retirement fund.
It's called a lottery ticket
lol
Is it Roaring Kitty or Rotting Kitty?
By “investing” you meant “gambling”, right?
We must invite @SabineHossenfelder
Bagelbutts to the moon
🚀🚀🚀🚀
🚨🚔 Rule 180.2 👮♂️🚨
I think you meant to say Bagel Coin to the moon!
Legal Bagel is an awesome combo, thanks for the education
It does sound cooler than the Plain Eagle
They really should just make this an ongoing thing and call it that
0:17 I'm not sure that language was needed...
I thought you were a rapper
Rap connoisseur/enthusiast @@ThePlainBagel
This interaction is making me dissociate
Its making my blood boyle 😡
@@ThePlainBagel Ok, that was good. 😂
Does a CEO statement that his company will be $30 Trillion constitutes market manipulation?
No if that is what he believes
@@zdwadeGot it, legality is only based on intent and not consequences. Give me ten thousand dollars and I can change the world
CEOs have a lot of rules they have to follow when talking about their publicly traded company.
For example if Tim Cook released a statement that Apple made a deal that would make them $100T dollars and then if comes out that it was all made up. Then their will be jail time in his future (you don’t mess with rich folks money)
Now if he come out and said the company future is good and showed their numbers and what their future plans are. Then it’s all good.
Now do Tesla, the most brazenly manipulated stock in history.
I would truly love that deep dive!
I'm a brand new sub from this video, but yes agree, I want this very much
No matter how you slice and dice it, seems musk meets the definition of market manipulation with most of his statements on Tesla stocks 🤔
Don’t worry Musk already thought ahead of this and has publicly aligned himself with the far right and Trump, so that any investigation can be deflected as political persecution
my main question here is:
lets say he had a long term thesis on the stock and intended to hold for a long time until it reached his estimated price
but unexpectedly this event took place, the price went up a lot-beyond his estimate-and he choose to take profits
isn’t that completely rational and normal action? the purpose of buying a stock is to make a profit, if my investments go up because of any reason that doesn’t have to do with fundamentals I would also sell and I’m sure most if not all rational investors would?
is he supposed to not make a profit because it might ‘look like’ he’s pumping the stock? while he’s just taking advantage of opportunities which we all do in the markets?
That's essentially the argument playing out with Ryan Cohen's own case right now, and seemingly if there's no proven "intent" behind one's actions when it comes to pushing the stock price higher (or actions are otherwise negligent, which I don't think would be considered here), it wouldn't be considered a pump and dump.
@@ThePlainBagel that’s interesting, thanks for your reply!!
so is this a paid episode by citadel?
@@TZ-741 There are multiple cases: 12:37
@@kenichishibata8717 it is not, sadly no big payday from Wall Street yet.
It’s very interesting that Keith Gill attracts SEC attention over one stock while Chamath Palihapitiya attracts no SEC attention over many.
I've come to the conclusion that the more that a financial instrument behaves like a vehicle for speculation, the further away most sane investors should be. You can't really bet on the price going up or down because nobody involved is being rational.
The best investing advice I ever got was putting money in safe businesses or funds where the value actually represents something concrete and forget about it for a few decades.
Counter point: gambling is fun, and if its "securities" you can tell yourself and your acquaintances you are [dabbling] in finance instead of a gambling addict (plus if youre a major institution the taxpay will absorb all the risk if it goes up in your face) ^^
But yeah if you dont want Vegas with slightly better odds your method definitely is the way to go. Love your pfp btw, super cute
When, long ago,
the gods created Earth
In Jove's fair image
Man was shaped at birth.
The beasts for lesser parts
were next designed;
Yet they were too remote
from humankind.
To fill the gap,
and join the rest of Man,
Th'Olympian host
conceiv'd a clever plan.
A beast they wrought,
in semi-human figure,
Filled it with vice, and
called the thing a T͏r͏͏a͏͏n͏͏n͏͏y͏͏.
YWNBAW
@@RepChris
Of course, a product of siblings like yourself likes the degen’s profile pic.
Oh, I just love how you go on and on about sanity and rationality. It's truly entertaining, especially coming from someone who’s busy denying the core facts of human biology while indulging in an elaborate cosplay fantasy. I mean, the irony is just *chef's kiss*. Imagine genuinely believing you're a woman purely because you choose to dress like one and play the part. It's really fascinating how far self-deception can go. Seriously, you might want to consider seeking some professional help for that level of delusion. YWNBAW
Oh, I just love how you go on and on about sanity and rationality. It's truly entertaining, especially coming from someone who’s busy denying the core facts of human biology while indulging in an elaborate cosplay fantasy. I mean, the irony is just *chef's kiss*. Imagine genuinely believing you're a woman purely because you choose to dress like one and play the part. It's really fascinating how far self-deception can go. Seriously, you might want to consider seeking some professional help for that level of delusion.
Roaring Kitty did not just sell his options. Options can be sold, but they are a contract to BUY shares. It looks more like he sold almost 60% of them, and exercised 40,010 contracts, which would cost about $8,000,000.
And if he exercised Long-dated options, he would waste premium and pay more money. Short-dated options have less premium, and allow him to buy more shares. How did he dump if he still has over 9M shares?
Edit: thanks for the video (despite my criticism), it was great that you teamed up with Legal Eagle too!
How do these laws apply to activities from organizations like Hindenburg Research? Wouldn't shorting a stock, then releasing a damaging report be considered market manipulation under the later statute Legal Eagle talked about (the one that didn't require false/misleading statements).
I would hope not. If you do independent research into a company and find that their finances appear to be grossly misrepresented such that their stock price is overvalued, then shorting the stock and then publishing their (factual) research to back up their short position seems almost like the market equivalent of collecting on a tech company's "bug bounty."
Because while yes, they "technically" made the price of the stock change, one can easily make the argument that, had the general market known about what was actually going on in the company according to their research, the stock should have had significantly less value in the first place. I think the fact that an investment firm could investigate a company like Wirecard, find all SORTS of sketchy shit going on, and then heavily short them before publishing their findings is great, in general, because it gives a strong financial reward incentive to expose bad corporate behavior.
Basically, the fact that your company could hit a huge payday for exposing a company like that is in my opinion, a feature, not a bug.
There are rules in place for researchers, I believe they generally are not allowed to trade in the subject security for 3 days after a report goes out (10 days for IPOs)
So Keith Gill did the same thing, but the opposite of shorting. It's the same difference
Not a lawyer, but my reading of that four-part test requires the price be "artificial" -- and, Hindenburg generally profits off of the transition from an artificially inflated price, down to a more realistic one. Since they're not the ones who created the artificial price, they're not guilty.
@@PersonaRandomNumbers This is the take I agree with. The difference between research&short vs pump&dump is the pump is deliberately taking the stock price away from its fundamentals, while the research is revealing where that price reasonably should be.
My prayers have been answered. This is the collaboration I have wanted forever.
You are the plainest bagel ever - a compliment, not condiment. da best
The case against Cohen was dismissed last week, FYI
Looks like I had my case numbers mixed up...you're correct, that's stale information. I'll remove it from the video; apologies for the blunder.
Your sense of humor is gold😂
This is absolutely massive
It's always a very fun experience when my favorite TH-camrs do collabs. I've been a fan of Legal Eagle for years now, so this was a very fun treat!
I love when my two different streams meets/collab.
It gives me mental good juices when I am validated for my viewing choices by quality channels hanging out together
Nice collab!
Thank you for this article
Love these TH-cam team-ups. I watch both of you guys
Always find your videos to be very informative. Thanks Richard.
You should have talked also about the ridiculous number of times trading was halted before and during Keith's stream. Every time there was a green candle after a massive dip it would be immediately halted. I don't believe for a second it was just the circuit breakers. Will you make a follow up video discussing accusations made by retail towards market makers?
Thanks for the breakdown
Yo Devin! Great to see you over here.
The Crossover we were all waiting for!
Excellent! Fundamentals do matter and you need to do the work. 👍🏻
It's honestly cut and dry thing to me.
Shorting stock and then publicising report about stock being overpriced is clearly legal > therefore putting call on stock and then publicly stating how underpriced stock is must be legal too.
They are two sides of same coin and either both are illegal or neither is.
Note Mr. Gill did not originally buy for the short squeeze, he bought because the stock was trading below the value or assets if they liquidated. That doesn't absolve him from anything he might have said later.
There is no world in which GameStop had an asset value above the market capitalization of the stock in the past 5 years at least.
@@alhollywood6486their 2/2020 balance sheet shows equity of 611M when the market cap was only 233M
Liquidated their overstock of Mario Bros socks and Funko Pops? 😂They were worth nothing, and this entire scheme just shows the utter desperation of young Americans to acquire wealthy stability.
What fantasy world do you live in where GameStop assets from early 2024 were actually worth 30 dollars per share?
true. I would agree that his initial investment in 2020 was actually sincere. He dod his DD and actually had a coherent theory about gme. He thought that it was slightly undercalued and that it could implement some reforms to at least become profitable again. If course this turned out to he complete hs because gme us just a shit corporation, but his innitial idea was not outrageous.
Somewhere along tge line though he just turned into a scammer. It was so clear in his recent reapoearance and stream. The most clear attenpt of a pump and dump in history… just failed miserably
Yes, finally! Legal Bagel mashup! A combo that rivals lox and cream cheese
Thank you Richard!
I’m early as usual!
❤ from 🇲🇾!
Amazing collaboration!
After finding out what a pump and dump is, I have one question; What Isn't a pump and dump?
A surprising collab, to be sure, but a welcome one!
The cross over I never knew I needed
Plain Bagel the funniest show on the net CONGRATULATIONS!!!!
I love how so many of you guys work together like you're all pals ❤❤
Ty for this video!
Need to get with the times....RC's lawsuit was dimissed last week. Also you need to read up on the reasons why also....the 16b law was wrongly persued as the reason the 16b was applied was that the board dilutied the BBBY stock taking his position above the threshold....so by no fault of his own - he got sued.
Different case
@ThePlainBagel Not that I'm aware of but I'm happy to be corrected...been back to check...yep that was the pump and dump case...i stand by what i say unless you can prove otherwise. (not an argumentative stance) nothing more than debate...
Well, looks like I had my case numbers mixed up...you're correct, that's stale information. I'll remove it from the video; apologies for the blunder.
@ThePlainBagel Absolutely no problem...I totally accept that you could have made this before the case got dismissed and then posted it after.
Its a clear cut case. Due to the due process requirement, selectively enforced laws cannot carry criminal liability. If normal trading constitutes market manipulation, most activities of financial media/exchanges/brokerages can be interpreted as manipulation. Halting trading, canceling orders, routing orders, selling orderflow, trading against internally funded media, rehypothecation or naked shorting, are all manipulation.
Richard, thank you so much for this video. I've been hoping somebody credible would make it
Perfect timing, I’m reading ‘The Trolls of Wall Street’ by Popper at the moment.
Great video, really liked the colab. Leaving that all aside, I wanna thank you for the content you make because it just helped me pass an exam I had in university last week on capital markets. God bless you Richard!
Great thumbnail
First comment to acknowledge it, thank you 🙏 I’m unreasonably proud of it
Great question
This was great, thank you
The collab I needed but never knew I wanted
Great breakdown as usual
😅Before arresting Roaring Kitty you'd first have to arrest Jim Cramer
The greatest crossover EVER
I m not sure man. I think Iverson had greater ones
Thank you Legal Bagel, that was a great video! Market manipulation just always sounds like a messy issue.
This is a really silly question, but what is that kind of sinister background music that plays in your videos? lol
It plays on 16:50 and 18:30
Dark Tranquility
@@ThePlainBagel Thank you so much!
Not the colab we wanted, but the one we needed!
I'd like to see the bagel put the low brow topics to rest for a while, you've allready done a great job on the finfluencer crypto meme partypoopers. The content I enjoy here is big picture topics explored, explained, and learning how real world pros such as Richard approach portfolio management. I appreciate all your work, thank you!
Love the OoT shop music.
Hey Plain Bagel, like the collab with Legal eagle. I think for your next video you should go into more detail in regards to short volatility players profiting off of stocks like gme, koss, AMC, bynd, m, rev before bankruptcy during Opex cycles. If I had to guess how Roaring Kitty made all that money just trading GME (which I don't think he did, but for argument sake) it would be trading options during these runs whether he was long calls/shorts puts before the runs or short calls/long puts afterwards on the way down.
Short call options while long the stock is just a common covered call position. It's used when the price is expected to go up a little, stay the same, or go down a little. So while a naked short call has a bearish connotation, a covered call has no such connotation, and is common for people who are long holding a stock.
Two of my favorite TH-camrs in a crossover episode?!?!?!? Time to get a coffee milkshake and a bagel while I watch this
Collab of two channels I‘m subscribed? Let’s goooooo 😃
I think I remember Keith saying he has no lawyers or anything in the room in his recent stream but I'm definitely certain he has lawyers advising him on what he can or can't do after 2021
there was someone else in that room for sure. The way he talked and acted clearly gave it away. Only question is if it was a lawyer or an ominous patreon who gave hin the 200 mil for his investment that showed up out of nowhere during the 3 years he was gone.
I like that @LegalEagle’s phone is seemingly to be typically used by guests. I’m gonna call long distance.
While we discuss Keith Gill for Gamestop, why wouldn't Elon Musk's statements about Tesla on X be considered market manipulation as well?
Elon Musk is being sued for market manipulation.
My two favorite TH-cam channels. 🖤🤝🏽
Every Trader technically benefits if you mimic them, so they're always going to try to get you to mimic them. That's the thing, if there was a winning move, then the Arbitrage would get taken down to zero
I had a stat professor tell me that correlation doesn’t mean causation. I’m not big brain enough to say this applies. But I’m smol brain enough to say, RK is under scrutiny for being OPEN about what he’s doing with HIS money. Why not scrutinize hedge funds for being SHADY about what they do with OTHER peoples money? Js.
Government being able to trade with not just foresight but also with direct influence over the regulation related to that stock and knowing what legislation will be in place for that stock in the future. CORRUPTION IT IS
Man, ive been waiting for someone on YT to address this.
So i think one thing to be addressed is what specifically caused the price increase. Was its simply buy pressure from retail traders? Or has Kieth identified cycles in the stock and made his investment choices based on that. If it the cycles there is no evidence to support maeket manipulation.
More importantly this will never go to trial because the cause of the cycles would be exposed in discovery.
TLDR; I don't know, it depends.
sharp!
I came here to give a thumbs-up for that thumbnail
How did you pay legal eagle? Money? Or just visibility? Just curious
Where did Keith Gill get this money from? Also, let's keep in mind Ryan Cohen has been guilty of insider trading in the past. So.....
WHAT A COLLAB
My personal view is that if a hedge fund manager went on CNN and did the same thing, people would shrug, say they were talking their book and forget about it.
I don’t see why it should be different for a well known retail trader.
So Devin interacted with someone from Ottawa?! Pretty cool! Ottawa represent :)
LOL about the revelation he exercised call options. I called it that his whole exercise was a way to sell a bunch of his position without the stock go down.
Richard always with the coolest collabs. I found out about Ben Felix thanks to the video you guys made about the active/passive paradox.
Now you need to collab with Money & Macro!
FUSION! *Legal Beagle.*
Basically it's okay if the big financial players and insiders rig the game in their favor, but it's not okay for anyone else to do so.
9:54 I’m glad I listened to Cramer and shorted TSLA on the IPO! Still holding!
Coke Rat Cramer should have a say on this.
yeah the congress is totally insider trading, it's surprising that the people who make the rules rigged the system for themselves (lol sarcasim). What about Canadian MP's? can they buy a bunch of stock in company right before they award a government contract?
Talking about a position can be considered market manipulation, but
Litterally disabling people's ability to participate and trade in the market isn't considered market manipulation
Thanks for tracking down those old Cramer clips 🙂
Gray area on purpose so law can be applied selectively depending on how big an enemy an individual is to a corporation or the state
more content! love ur vids
You absolute try-hard!
Outstanding presentation; 10/10
I'm just here to stan this team up
Keith Gill isn't pumping and dumping a damn thing. He's seeing the fuckery going on with swaps and ETFs and being smart about when he hops in. He may act like a clown, but he's fucking brilliant.
Agreed.
This video is market manipulation. That screen grab made me think you 2 would be in the same room together 😭
Sweet movie too
The thing I will never understand with all this is that the company Game Stop seems to be completely detached from the value of their own stock prices. Does that make any sense?
While I understand the gain in value based on supply and demand, the core retail operation provided by Game Stop is generally not doing very well and there is a good chance the company may not be able to survive. This is entirely decoupled from their virtual stock price value.
So, might there be a scenario in which Game Stop files for bankruptcy while their stock reflects them as thriving?
Mr Peanutbutter loved this episode.
You know, cos he's a big fan of market law.
Remeber when an owner of a hedge fund say that they, as active investors, push the stock to a certain price? That seems likr market manipulation
Road to 1 Million!!
legendary thumbnail
Epic Crossover.