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The Complete Moron’s Guide to GameStop’s Stock Roller Coaster
The Complete Moron’s Guide to GameStop’s Stock Roller Coaster:
Last week, an epic short squeeze had driven GameStop stock up to $40 a share, a roughly 1,500 percent increase from its low point nine months ago. Little did anyone know at the time that this would only be the beginning of the story.
As I write this, GameStop's stock price is hovering around $350, up another 775 percent or so since I wrote about this situation eight days ago. By the time you read this, that number may be horribly outdated, as the stock continues to bounce up and down with extreme volatility hour by hour (it dipped down as low as $61 and peaked as high as $159 on Friday).
The current stock price now gives the company a market cap of about $26 billion.
On the surface, that means the market currently thinks GameStop is worth more than twice as much now (during a potentially existential threat to brick and mortar game sales) as it was during the height of the Wii boom in late 2007, when console game downloads were barely a thing.
Also at: Business Insider.
Melvin Capital, Hedge Fund Targeted by Reddit Board, Closes out of GameStop Short Position
Melvin Capital, hedge fund targeted by Reddit board, closes out of GameStop short position:
Melvin Capital closed out its short position in GameStop on Tuesday afternoon after taking a huge loss, the hedge fund's manager told CNBC's Andrew Ross Sorkin.
GameStop, hedge funds' most-hated stock, was targeted by an army of retail investors who marshaled forces against short sellers in online chat rooms. In the Reddit forum "wallstreetbets" with more than 2 million subscribers, rookie investors encouraged each other to pile into GameStop's shares and call options, creating massive short squeezes in the stock.
CNBC could not confirm the amount of losses Melvin Capital took on the short position. Citadel and Point72 have infused close to $3 billion into Gabe Plotkin's hedge fund to shore up its finances. On Wednesday's "Squawk Box," Sorkin said Plotkin told him that speculation about a bankruptcy filing is false.
GameStop shares have soared more than 400% this week alone to $347.51 apiece, driving its January gains to 685%. The stock was worth just $6 four months ago.
Reddit's WallStreetBets is locked as AMC, GameStop stocks fall after-hours
For the past week, Reddit's WallStreetBets community has been the center of an epic war between large Wall Street investors and small scale social media betters. Now, it's been locked, and spooked investors appear to be dumping their shares.
Shares of GameStop and AMC dropped dramatically in after-hours trading shortly after Reddit's community was made only viewable through an invite.
See also: Reddit traders cause Wall Street havoc by buying GameStop
GameStop and Elon Musk send Reddit and Robinhood to the top of the App Store charts
'Dumb Money' Is on GameStop, and It's Beating Wall Street at Its Own Game (archive)
(Score: 2) by FatPhil on Thursday January 28 2021, @08:43AM (3 children)
From what I've seen (I can only read the top 3 comments on any reddit thread), these redditors ain't the smartest cookies in the knife draw.
For example, they think they're going to nuke JPM here:
https://www.reddit.com/r/wallstreetbets/comments/l68ill/the_biggest_short_squeeze_in_the_world_slv_silver/
And it looks like all they've managed to do is buy shares in one miner: https://stocktwits.com/symbol/AG
The paper silver that they were trying to short squeeze, e.g. https://www.bloomberg.com/quote/ZSIL:SW seem to be down 1% on their attempts to boost its value by a factor of 40.
And of course, actual silver is also down about 1%: https://www.kitco.com/charts/livesilver.html , so they've not managed to disconnect the paper price and the delivered price.
They also don't seem to realise that if they were to pump (their money into) silver ETFs, then JPM could just crash the market hard enough most of the WSBers idiotic enough to use leverage (I heard a tale of someone using 125x leverage the other day) would lose everything because of margin calls, and those "smart" enough to not use leverage would be sorely tempted to quit whilst their paper's worth something. Of course, they might view that as a DTFB. Human stupidity is unbounded.
I wish they weren't so idiotic - my pension is basically being long silver, and I'd happily tranch on the way up. But it ain't going to happen, they don't understand what they're dealing with.
It seems they may already have given up on that idea, given that they did the wrong thing and it didn't work, and they've set their sites lower - apparently DOGE is going to a dollar! OK, it reached $0.0125, and is now back down to $0.0105, and across all exchanges, there are 0% buyers, and 100% sellers. Well, I call them "sellers", but if there are no buyers, that's not technically accurate. "The ultimate bigger idiots" is probably more accurate.
They're just banzaing the Risk board before they become irrelevant, and they aren't even making a good job of it. Their only success was one low-hanging *contrarian* fund. They've helped out much of the rest of wall street with their activity. Even those who were vulnerably posistioned now have advance warning they need to rebalance their holdings. And they're *hedge* funds - they're already hedging, they expect losses somewhere, sometimes even 100% losses (as per Citron's announcement).
For reference, I have several more bullet points why these guys are idiots, but this is long enough already. (spoilers - check who owns Citadel, BlackRock, Ameritrade, etc. - they expect the owners of funds to assist them damaging their own funds.)
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 5, Informative) by takyon on Thursday January 28 2021, @08:56AM (2 children)
Replace "www" in the URL with "old", and try to browse on that subdomain.
https://old.reddit.com/r/wallstreetbets/comments/l68ill/the_biggest_short_squeeze_in_the_world_slv_silver/ [reddit.com]
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 2, Interesting) by Anonymous Coward on Thursday January 28 2021, @04:48PM
For less typing, replace www/old with a single 'i'
https://i.reddit.com/r/wallstreetbets/comments/l68ill/the_biggest_short_squeeze_in_the_world_slv_silver/ [reddit.com]
(Score: 2) by FatPhil on Friday January 29 2021, @10:17AM
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves