There’s shitty people everywhere but only one group described themselves as “like 4chan found a Bloomberg Terminal.”
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That’s the thing. Some people DID make money on this. Shorting had driven the price down to where it made logical sense to buy it. But now the price has shot up to levels that probably ARE unsustainable. The degree to which the people talking up buying Game Stop were simply recognizing that it was undervalued or were trying to pump the price up to sell at the current, unsustainable price, or were in it just for the LOLZ is nearly impossible to figure out. People buying the stock now will almost certainly lose money. But somebody was on the other side of all those shorts that lost money for the hedge funds. Stock prices are close to a zero sum game, except for the dividends. When the price is higher, the buyer is paying more for the right to future dividends. When the price is lower, the buyer is lower they are paying less.
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This. I’ve seen people talking about the language the traders use on the stock market floor, and it rivals anything showing up on WSB’s. Traders are not nice guys in bow ties, they’re reactionary sharks who often are conservative voters. They bankroll GOP candidates and join the Facebook Stop the Steal groups. Wallstreet is a cesspool of shit.
Honestly, I’m just eating popcorn watching the fallout. The ONLY thing I think the SEC should do is reign in stock shorting, because no one should be leveraging shorts to the tune of 140% of outstanding shares of a company. Hold it to 30% max, stop letting people make riches off the FAILURES of companies.
But I think the stock market is bullshit, so what do I know anyway. It’s a way for the wealthy to safely tuck away their money and socialize their losses while putting our pensions on the hook if they fuck things up like they did in the crash of 2008.
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Or they pivot towards memorabilia and gaming lore, fully becoming a comic store. There are lots of things they COULD do, but I don’t know what they should do.
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I don’t know when the last time you shopped at one was - but they are over 1/2 ‘not games’ these days - they are kind of morphing into a ‘video game culture’ hot topic-ish store and while I don’t know what their distribution network looks like - the number of stores and such makes them an easy transition to online shopping I’d think - each store becomes a mini live warehouse in that case.
I can see plenty of things they could do to recover - and like I said they have a crapton of cash on hand to pull it off - they certainly could flip to banking on nostalgia and even make fun of themselves ‘I got 5 dollars for my used game at GAMESTOP’ T-shirts for example.
retail - despite the doom and gloom stories - is larger now than it’s ever been in our country (discounting covid only) - the only reason it looks bad is because big companies that mismanaged themselves for decades keep flopping - malls are flopping - however gamestop isn’t really a big mall store anymore - they are now out in the mini-mall shopping centers and they made that move way before the big malls died.
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They already do; the last time I was in one (pre-pandemic), it had more Funkopops than games.
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The idea of a financial news story that actually hurts rich people more than poor people sounds great, and it’s a real silver lining. But to me it feels a bit like being happy that the volcano eruption is burning the rich neighbourhood first because they built uphill. There are tons of people out there holding, thinking this will go on for just a little longer. People who can’t afford to lose money will lose money because of misplaced trust, foolish optimism or because of their compulsion to gamble. We’ll hear stories about them soon.
I’m also convinced that this is a pump and dump scam, at least from the perspective of someone. Someone pushing this to happen was doing it with the intent to convince others to make money for them. Regardless, the more we act like this is a good thing we more we enable the next pump and dump scam that tries to make itself look like this. “Don’t buy stock because Reddit told you to.” is a motto that needs some help right now.
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They’re talking about pivoting to a LAN cafe model, which could have some potential (especially in the post-pandemic period). They also just put a creative e-commerce guy on the board. No guarantees of success or better fundamentals, but the company isn’t as doomed in 2021 as Melvin Capital wanted it to be.
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And everyone will lose - even people who have nothing invested in the stock market - when the bubble pops, which it will. This GameStop short game may be the pin that causes the big pop.
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I’ve yet to see anyone on WSB who thinks the financials of GameStop are wonderful. Some who see more upside, but most are sanguine about where the company is right now. I’m sure you’re right, though, and I’ve probably just missed their posts (I don’t spend much time there, I find them… obnoxious honestly).
That said, you’re really right, there’s no winners here in this. The entire system is awash with this type of gambling with people’s futures, whether its day traders or pension funds or the company’s themselves being used as the greasy wheel to line the pockets of someone (because money has to flow somewhere, and someone always makes money in these situations). I believe that buying a stock because you believe in a company and want to be part of their success is fine. Buying stock futures in the hopes they will fail so you can make massive profits is disgusting to me.
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A pump and dump scheme involves inflating a stock’s price by spreading false & misleading information. That doesn’t seem to be what happened here. Instead, someone accurately noted that GameStop had short sales well in excess of the available supply of stocks floated in the market, so the hedge funds were going to be on the hook to buy shares that could potentially become very difficult to come by.
As I understand it, the retail speculators here don’t have nearly the capital needed to drive this. It’s primarily that the situation was so precarious that even a relatively small contraction in the supply of the stock was enough to send all the short-sellers into a feeding frenzy to cover their obligations. They put their own dicks in a vise.
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Am I the only one who thinks this feels a lot like the market for frozen, concentrated orange juice?
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Pork bellies.
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This has gone way beyond WSB at this point. People are talking about it on half the Twitch channels I watch. And then there are people just reading about it in the news. We all know the stock doesn’t stay at this price forever, and someone has to own the shares when it crashes.
I think the big problem is basically that America’s wealth (and the world’s wealth) is so concentrated that the number one industry is grifting billionaires. Like this:
The hedge funds aren’t really about getting a return, they are just about convincing people who control money to give them more money. Facebook isn’t about ad revenue, it’s about using users and advertisers as a “big store” con to get investors. Uber was never about driving people from place to place, it was always about the ponzi scheme. But when these things fail, as scams always eventually do, they are so burrowed into our lives that they will cause serious real world repercussions.
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I think you can make bacon from that. Like in a bacon, lettuce and tomato sandwich.
Also, fun fact: gold is also a commodity, but of course you can’t eat gold.
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[Disclaimer: not an investor and have only read a smidgen of the relevant GME stories]
Here’s the thing. At some point in the VERY near future, when their shorts mature, Melvin is going to be on the hook to buy 140% of the Gamestop shares on the market, at whatever the current price is. Yes, those shorts probably don’t execute all at once, but Melvin is the future demand for the stock. This suggests to me that the people who are going to lose money are Melvin. If they go bankrupt in the process, some of the folks with the outstanding shares in GME will probably lose money, but not more than they originally paid for their shares. Melvin’s risk is unlimited and their commitment to purchase is absolute.
[Edit: typos]
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my pastry chef would beg to differ . . .
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The shorts are already out by now so this is the inflection point where it goes from short squeeze opportunity to “everyone’s lost their minds” bubble. By the time you read about these things on the front page it’s already a car crash happening in slow motion.
This is the thing that a lot of people don’t get…there are real people here that are going to get hurt because a bunch of WSB kids are out for the LOLZ. A lot of people will be riding this rocket ship in reverse - as it crashed from $300 back to $3.
You only make money when you sell. Everything up to that point is paper gains. Someone has to be on the other side of that trade so buying or even holding GME right now is stupid and foolish. Many fools will be parted with their money soon.
I know this firsthand…I had Enron and WorldCom 20 years ago. Rode that horse all the way to the glue factory (Blucher!). Still have the stock certificates.
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Well, you can, but as a noble metal it’s inert and won’t break down in the digestive system. That doesn’t stop the grifters, though. [working towards my pedant award. 
]
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Such is the way of the market.
Anyone actively playing around with GameStop stock for any reason other than laughs right now gets no sympathy from me.
I read the other day in the NYT that those can go for a couple hundred each for collectors.
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