What Constitutes Market Manipulation? Featuring
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- เผยแพร่เมื่อ 28 ก.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
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. 😂
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
The Legal Bagel
The Bagel Eagle
The Plain Eagle
The Beagle.
@@neuvocastezero1838 The Plegal Beagle
@@neuvocastezero1838 you beat me to it lol
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
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.
No in one case you make a report
Present research and evidence
While in the other case you just make a statement
Yeah but that doesn’t account for the fraud angle. If I just make stuff up and exaggerate, then in both cases it should be illegal.
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.
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.
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.
@@lancesmith8298legality is based both on intent and outcome, different laws weighing each differently in determining the consequences of breaking them
It constitutes corporate fraud if he lies on his turnover so investors think that the company is more profitable than it is.
My prayers have been answered. This is the collaboration I have wanted forever.
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!
😅Before arresting Roaring Kitty you'd first have to arrest Jim Cramer
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
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.
Kinda sad that Kitty came back to feed into the madness rather than taking his huge win and riding off into the sunset
Welath rots the brain, and scamming is addictive.
I think it's "necessary" to act so risky to get where he is now
@@tomlxyzIt's a real problem for observers because of survivorship bias. Everyone who became extremely wealthy via investing is a massive risk-taker, addicted to the wins (or else they would have walked once they hit 8 figures at most). And there are plenty of them. Not seen: the millions of risk takers who took risks that did not pay off and lost everything. Or even the eventual fall of the successful risk takers when their gambits fail to deliver several times in a row.
Dumbass take, you realize he keeps winning? He is in profit this time as well, why would he not continue...?
What?? He already has a win. He holds as is his own strategy and will do whatever he wants.
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.
This is absolutely massive
Your sense of humor is gold😂
Keith gill video was a masterclass in communication. He basically created a online legal defense, while keeping the stock around so he can cashout. Loved the guy video helped me build my free analysis platform. It gave me a few trades that still are paying off now
Yes, finally! Legal Bagel mashup! A combo that rivals lox and cream cheese
Not the colab we wanted, but the one we needed!
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.
Hey Richard, I appreciate the fact that you’re talking about GME and looking at the situation through a lens that is both critical and impartial. As a current GME shareholder I’m excited for the company’s future prospects (sitting on $4 billion with no debt), but at the same time I do really worry that the community’s focus on labeling criticism as “FUD” and “Shills” creates an echo chamber that makes it difficult to find balanced information.
I would love if you made a video evaluating the notion that HFs and MMs are able to hide short positions through derivatives and other methods. While plenty of reports have come out in the past week showing that short positions have been closed, it seems like the GME community is convinced they have not and cannot close their short positions. I’d also be interested in seeing a video about FTDs as there seems to be a lot of confusion and disagreement over how they work.
The GME community is delusional. GameStop is a failing mall retailer that is propped up by bag holders pumping their stock price up. Sure, the company is now out of debt and has cash on hand, thanks to the irrational stock price. That doesn't mean the company has a long term future or value as a business.
Besides, the ridiculous belief that the stock price can go to phone book prices has nothing at all to do with the company itself. It's just a fantasy of financial deliverance. A Reddit Rapture.
Apple, Microsoft, Berkshire have 100 billion cash and no debt.
@@Heatranoveryou and when you factor in market cap GME is trading at a lower market cap to cash ratio than any of the nasdaq 100 stocks! That isn’t to say that such a statistic is super meaningful, but maybe it shows that we’re comparing apples to oranges.
When evaluating GME’s future prospects, I think you’d be kidding yourself if $4 billion doesn’t significantly factor into your bull/bear thesis!
(p.s., a quick google search shows that none of those stocks has $100 billion cash on hand, Microsoft is the closest at ~$80 billion as of March ‘24, but they’re also sitting on ~$43 billion in long term debt compared to GME’s $15 million. Where did you get those numbers from?)
GME is a stupid company bro. If it weren’t for the memeification of the stock the company would have closed up shop by now.
Imagine having all that money, all these people at their corporate offices and not having the sense to shift their business to an online model like Steam. Stop buying into the hype. GME and AMC need to die, because they refuse to evolve.
I get it, people want to stick it to the hedgefunds, I’m all for it, but you gotta be honest about what is happening. On the business side they are failing and on the stock side the institutions will do what they can to prevent the shorts from getting completely rekt. Wake up! I held AMC until I saw what Adam Aaron was doing. Instead of evolving the business he did some fishy BS with the stock. Don’t get rekt by these frauds.
Excellent! Fundamentals do matter and you need to do the work. 👍🏻
If you're going to do a full video on Keith Gill, why not also do a full video on failure to delivers? Selling a security without having the actual security is far more manipulative of the market than one dude who likes a stock and talks about it online. There are some systematic issues that have been swept under the rug.
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!
Doesn't Jim Cramer or the media do the same thing every day? RC is honest and showed his position.
Thing is, his hedge fund friends are the ones dumping their stocks so there is a separation. Do those friends then give him a cut, who knows.. but probably lol
@@i_i8924and not defense, they might not even give a cut - but some very legal yet still very scuzzy deal
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!
Always find your videos to be very informative. Thanks Richard.
Plain Bagel the funniest show on the net CONGRATULATIONS!!!!
Can you talk about why short sellers can short a stock and release a short report that impacts the stock price in their favour legally?
Gill is both educated and knowledgable about markets and web savvy enough to know the effect of his return. I fully believe he KNEW coming back would manipulate the price directly.
PROVING that intent in court would be something else...
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?
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.
Great thumbnail
First comment to acknowledge it, thank you 🙏 I’m unreasonably proud of it
TLDR; I don't know, it depends.
18 minutes for "It depends, we won't know if it was a crime until after an investigation"
The sequel: We've investigated ourselves and we're not guilty.
Don't watch this video if you're looking for a one-word answer ("yes" or "no"). Do watch it if you want to learn more about the legal landscape around this question.
Yes, but also to explain that investigations are more complex than “it’s kinda sus and I don’t like him, therefore guilty.”
Most of us just want to understand the issue from a legal perspective and what parameters are considered.
Richard, thank you so much for this video. I've been hoping somebody credible would make it
How did you pay legal eagle? Money? Or just visibility? Just curious
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.
A surprising collab, to be sure, but a welcome one!
Can we talk about high frequency trading algorithms influencing the stock price? E.g. exactly when DFV's stream was supposed to start and exactly when the gamestop meeting was supposed to start, even though both started late.
I really expected TPB to talk more about this
What does it mean when the exchange itself halts the stock based on Keith's stream? Is the exchange liable for market manipulation, or do they get a pass?
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
Cool, now lets talk about the naked short selling! Implicating Keith Gill in the event of a second short squeeze is like witnessing a car crash and blaming the brakes instead of the drunk driver.
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
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!
When I watched Dan Olson's (Folding Ideas's) This Is Financial Advice, I was genuinely impressed when I learned Keith Gill "wisely peaced out" when he realized Apes were turning him into a de facto cult leader.
His choice to come back to TH-cam seems like a dangerous choice in so many ways. Especially since it's safe to assume he is comfortably rich after the first GME craze, I personally can't imagine wanting to come back to public life when you could just live a happy, wealthy, and PRIVATE life with your family.
Ngl, disappointed in this video, the stock started running way before he showed his hand.
Wow. I didn’t realise that the guy in Dumb Money looked so similar to Roaring Kitty.
YOOOO plain bagel legaleagle crossover? YES! Hope you join those edutainment circles, they're huge and could get way more people to learn legit financial fundamentals.
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
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.
Thank you Richard!
I’m early as usual!
❤ from 🇲🇾!
sharp!
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.
Feels unbiased but not really at the same time. You fail to mention he converted those options to stock and didn't sell them at their highest price like he could have. You are talking like we don't know what he already did... was that incompetence or malicious
Man, ive been waiting for someone on YT to address this.
Coke Rat Cramer should have a say on this.
On a moral level, I think that riding out a well-known wave of financial conspiracy long enough for a documentary to form, only to hype up a livestream about how you are trading GME with memes and all, is not okay, and also takes advantage of apes as cannon fodder. If you are a figurehead, you have a responsibility to your people.
And on the other hand, the most sensible and evenly enforced solution I can think of is the wholesale ban of broadcasting stock market advice. This stops a good number of bad actors, but also any TV show, TH-cam channel, and radio show from discussing probably the third most destructive force we should be informed of and do something about.
The Crossover we were all waiting for!
The shorts cannot escape. They can kick the can down the road, but at least they'll never get out at their ~$4 entry price 4 years ago. We buy because of RC. We don't buy because of RK, we simply appreciate him.
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
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?
So somebody like Kramer? How are they supposed to disclose? Like if he sell sells and then goes on his show and says he sold. Is that okay?
A pump and dump requires you to dump not convert into more shares.
Did he sell anything in 2021 after the pump? Where did that 200 mill come from?
@@kennyadvocat It came form options trading then converting into shares this last update in 2021 he had 200k shares then in 2024 he has 5mil shares now 9mil share. He's now the 4th largest share holder.
The greatest crossover EVER
I m not sure man. I think Iverson had greater ones
Amazing collaboration!
If you buy a stock and then pay for google to run adds for that company... Does that make it market manipulation?
What if you're the owner?
Huh ? Did you even know what he did ?
@@wildowarkson8774He’s not talking about DFV…
So Devin interacted with someone from Ottawa?! Pretty cool! Ottawa represent :)
FUSION! *Legal Beagle.*
Does this mean stock buybacks count as market manipulation?
Legal Eagle AND Plain Bagle 🎉!
it isnt market manipulation when politicians do it. only when the peasants do it.
Words matter. Whether or not you agree with politicians using their knowledge to make money on stocks, that’s not market manipulation.
@@DoctorBiobrain yes it is. They control the policies that impact the stocks . They have the ability to pass regulations for or against a stock causing it to go up or down.
There is a reason why Nancy invest in options that are no more than a few months out
@@ashishpatel350 That’s not market manipulation. Otherwise every CEO is manipulating the market by making decisions. And anyone who has any kind of influence on a stock price is manipulating the markets.
Market manipulation is about influencing other investors through some sort of fraud. If a politician lied about an upcoming decision to trick investors into selling a stock cheap so they could buy it and sell at a higher price once the truth came out, that would be market manipulation. A politician buying a stock because they know it will soon benefit from a law is not market manipulation.
I personally don’t approve of politicians profiting from their knowledge, but it’s not illegal. It’s not that the SEC is letting them break the law, it’s that there is no law against what they’re doing.
@ashishpatel350 Objection! The statement presents a false dilemma fallacy by implying the topic’s subject (Keith) must fall into one of the two party’s presented (politician or peasant), when there are in fact a number of other potentially more accurate ways to describe him and his relatively unique financial resources and market influence.
Yes knowing the private conversations, business deals, and policies isn’t insider trading come on now.
Great question
Perfect replication of the meme in the thumbnail.
Thanks for the breakdown
I came here to give a thumbs-up for that thumbnail
You absolute try-hard!
Outstanding presentation; 10/10
What's the difference between advertising and manipulation in this day and age?
They the regulators investigate all the politicians who have stocks for long-term insider trading
Has Keith Gill’s position been verified? I knew he was into the millions before the short squeeze happened, but 9 figures…. That he has tied into the stock!? He already won capitalism, what is he doing taking a 9 figure position in GameStop?
It was a funny gambling success story the first time. Going that deep in a company that’s losing relevance every day is mind blowing
Thank you very much for this content!
I do wonder why Keith Gill’s “pump and dump” is a problem. I catch a lot of other TH-camrs talking whilst they are trading. With a large enough followers trading with them, that is almost exactly what a “pump and dump” seems to be, at least to me. A group, playing musical chairs together and someone looses to everyone else’s gain. It feels like that’s what the stock market is anyways.
Especially now with all the trading software and algorithms.
I’m not sure the average trader can make any money honestly, other than buying some stock, waiting for the stock to rise with pre-set sales stops and then hoping you achieve that before the price dumps.
Keith Gill. All the power to you. He’s just doing what everyone else does, and everyone following him is happy enough as long as they don’t lose, but that’s the essence of the markets right? Someone wins, someone loses and no one cares about the broke guy trying to get ahead.
You're whole paragraph is exactly why people care and it is illegal. Manipulation people with extremely speculative, and often entirely made up, reasoning for why they should dump live savings into one trade is only good for the "in" people running the scam. People are just getting punished way too slowly, but some are.
The average investor/trader can absolutely make some money other than just sitting on stock waiting for it to go up. But it takes some time, effort, and thinking that most people are too lazy to do themselves and want a media personality to just tell them what to do.
IRL the question is how much people on either side of the question like him or not. I personally lean to free will on most matters.
what constitutes legality? who the receiving party is
After finding out what a pump and dump is, I have one question; What Isn't a pump and dump?
Your mom isnt a pump and dump.
We're getting married next week.
So all of the sudden one guy with a 1.5M of followers have such influence on the market that daily volume rises to hundreds millions transactions? He is manipulating market so hard that even without any tweet or news from the company, GME stock is rising from 10$ to 18$ XD
I'll give you my opinion on both sides. In the words of George Carlin; "It's all bullshit and it's bad for 'ya".
Omdssss! One of the first viewers. 40 seconds ago. Looking forward to giving this a listen
Wasn't Ryan's court case dropped already?
12:37
Opps, 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.
TIL correlation is in fact causation
I dont think its manipulation when he posted his position and dd in the beginning as its more like something for scrutinization and whatnot. The meme tweet and etc well its more or less indirect implying on a hype ride and we more or less can say he knows it too so we are borderline there at best 😝
WHAT A COLLAB
i just want to stop working because i have to and just work because i want to
In theory I'm anti pump-and-dump especially as it regards to influencers, however I think it's really disingenuous to not recognize that's all the hedge fund guys, public financial gurus, CNBC, Jim Cramer, motley fool etc. are. It's really the pot calling the kettle black.
audio is off around 13:30 or so
Now we just need the lockpicking lawyer added to the mix
Epic Crossover.
To be honest, i can't help but feel as though Keith Gill has been put in a rock and hard place position. I mean, he was summoned before Congress to answer these types of questions, and then he went completely silent. It kind of comes across that Keith Gill can't be online at all because someone might see any vague emoticon message as stock picking advice. It feels like a trap and an easy way to scrapegoat someone when it all goes bad. I know it's not the best comparison, but if you win big at the casino and want to cash out, you can do that. It seems weird that people can follow Nancy Pelosi's stock picks, and earn a lot of money, but Nancy isn't being dragged before Congress on charges of market manipulation