Some info on Dentzer
- https://www.wsj.com/articles/william-dentzer-helped-wall-street-unsnarl-its-paperwork-11613055610 (https://archive.ph/HthBH)
- https://susan-g-dentzer.medium.com/the-greatest-father-from-a-great-generation-f9ceb3758066
and a bit of a dive in to DTCC and how it works.
Through a series of complex legal frameworks pretty much all stocks are actually owned by DTCC. They hold the shared to all the publicly traded companies on the stock exchange through their Cede and Company subsidiary.
People who invest in stocks are given a security entitlement through a securities intermediary, i.e. a broker. So, DTCC owns the stocks, and they give out certificates to brokers to trade the shares. The brokers then resell the certificates to the beneficial owners.
Normally, none of this really matters, and it’s just an obscure legal mechanism nobody pays attention to. The time this does start to matter is when a bank or a brokerage goes bust, the way we saw during 2008 crash. At that point the securities go to the secure creditors who actually own them and not to the beneficial owners.
Right. So I do stock analysis, and while a lot of what the gme guys say are technically true, it doesn’t have that much of an impact on the stock price.
As with organizing and revolution, the only thing that really affects the stock price is mass movement. And that is usually affected by potential performance of the company.
If you look at order books, you can see people sink billions into orders, hoping to have the next tick break the trend, only for it to be reversed in the subsequent ticks.
GME is underperforming. Its revenue is declining yoy. It has neither the resources nor a concrete plan to recovery. The only reason it’s been hyped so much was because one person made a lot money and was very public about it. It’s not because of some mythical MOASS. In fact, I suspect that it’s a viral ad campaign by GME perpetuating capitalist realism; you can break the system if you buy the right product (like GME stock)
Contrast with EDU stock (XinDongFang). Though their revenue was massively hit by the new Chinese laws, their financials show that they had a massive amount of cash in the bank, and their stock was extremely undervalued. This shows that they had the potential to pivot to a new market, and that they did, leading to a recovery.
Spoilering this so people don’t have to scroll so far past this wall of text in case they don’t want to see stock nerds argue about stupid shit.
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A few points I want to make here. Mass movement CAN affect stock price but where that movement comes from and where it’s channel through also matters. Market makers routing buy orders through dark pools to prevent buying pressure from pushing the price upward, while routing sell order to the open market, will cause the price to fall even if the buy to sell ratio is high on the buy side. There have been posts showing this in effect. See the buy pressure of GME for the past few years. Buy to sell ratios are consistently showing higher buy to sell yet price seems completely unaffected. Going down on days when brokers like Fidelity show a buy ration of 80-90%. Ken Griffin of Citadel even admitted that market makers can adjust prices of stocks to what they feel is appropriate to the market. We have him saying this is interviews. They admit they can manipulate stock prices if the want to. They are blatant and they are bragging about it. Sure if enough people start buying they can loose control for a bit or get surprised by the buy pressure but they can immediately start shorting it and suppress the prices if they need. Even freezing the stock if they need. We’ve seen them do it dozens of times. The only thing they can’t manipulate are shares purchased or transfered to the transfer agent since they don’t have control over non-DTCC shares.
Secondly I don’t really get the need to bring up some other random stock or even go into the GME stock. My comment didn’t even bring up any real details about the actual stock just the fact that following those guys taught me a lot about how fucked the stock market is but if you want to go there then fine. The company HAS improved on its yearly positions and quarterly positions since the change in management and the removal of certain board members that had ties to the same people shorting the stock which is a whole other conversation on its own how these hedge funds have used corporate sabotage to bankrupt businesses for their gain. Idk if the whole MOASS thing is actually believable and is probably a lot of hopium from that community, but I cannot rag on the company either. Turning a large company around isn’t something that happens overnight. Seeing that quarterly earnings have been mproving upon the previous years quarter, and doing so while the economy is in a recession, I would have to say they are making some decent forward movement. You bring up this other company having a mass of cash in the bank… So does GameStop? When compared to their size and cost of running, quarterly losses, which continue to decline YOY, etc, etc, the company is, at the worst, stable for years. Also the company does have a plan to turn around. They have had one for years since the replaced a lot of board members. It’s what they have been doing for 3 years now. An initial investment into changing some things up then reducing cost and reducing quarterly losses, steadily turning around to become profitable. Just in Q3 2023 vs Q3 2022 they went from a net loss of 8% ($97m) in 2022 to a net loss of 0.3% ($3m) in 2023. That’s in Q3, usually the worst quarter for retail businesses, in a worsening economy. Actually this has been a pretty steady trend since about half way through 2022. Q1 and Q2 of 2022 were a larger loss as they began investing into changes. By Q3 of 2022 they started reduce the net losses. Q4 of 2021 was a net loss of $147m, vs Q4 of 2022 was a net gain of $48m.
Regardless of what you think about stocks though, I think the economy will collapse before it will matter and the working class will loose no matter what they are invested in. I personally don’t have much skin in the game. I bought a handful of shares a while back just to play around but I don’t have really much invested anywhere outside my 401k which will never be enough to retire and has the same problems with all other stocks, stuck with the DTCC and manipulated as they please. My real retirement plan is to work till I’m dead or die defending my store of beans and rice from my neighbors once western society collapses. The best I can hope is to keep educating people on how fucked the system is and hope to live long enough to die with the satisfaction of seeing America crumble.
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Then these market makers would intentionally be temporarily manipulating the price to be on the end of a losing trade, since they bought high and sold low.
I’m assuming you’re talking about the bid/ask ratio on the order book, which is a list of unfilled orders. There’s multiple reasons for this kind of market structure, which could be interpreted as either bullish or bearish. They can either be exits for shorts or enters for longs. But objectively, this creates support for the price which prevents it from falling too far down, not necessary causes it to rise.
The rest of your points are valid, but they’re mostly controls to dampen excessive price volatility, which fucks up limit and stop orders.
What correlates to stock price the most isn’t profit or assets, but rather revenue. How large a company is, is based on how much moolah that it’s able to bring in. Looking at GME’s revenue, it’s down to 60% of its highest revenue in 2011, not accounting for inflation. Since its restructuring, it’s had negative EBITDA and negative cash flow. You can say that it’s kind of stopped the bleeding by switching to non-obsolete revenue streams. But overall, it has downsized and it’s still not profitable.
If anything, the price of the stock is Inflated by the hype, rather than suppressed. When DFV bought in, the market cap to book ratio was roughly 0.5, which indicates that it was severely undervalued, especially for such a high profile company. Now it’s around 2, which is around average for a company that’s profitable.