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How WallStreetBets Pushed GameStop Shares to the Moon

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Re: How WallStreetBets Pushed GameStop Shares to the Moon

#21

Post by abbbccdefd »

tmpz22 wrote: post #15
Goosee wrote: post #14

For context one short seller (Citron Research) published this video explaining their belief that GME is a $20 stock.[1] The way I see it, Citron believes this fiasco is irrational thought about the future of Gamestop and its value. I think this is actually about the common retail trader manipulating the 'market manipulators'. In other words, let Citron taste their own medicine. I think Citron failed to realize in the…

I wonder if the recent hunger for the new PS5/XboxSeriesX, namely the lack of supply, scalping, and massive web traffic trying to secure online orders, contributed to a short-term distorted view on the stock.

The new console cycle definitely contributed. I think it more had to do with Ryan Cohen, founder of CHEWY, buying 13% of gamestop shares and joining the board with two other CHEWY executives. The assumption is he will play a large role in GameStop's future and buying GameStop stock is a bet on his ability to pivot GameStop into new revenue generating gaming verticals.

Re: How WallStreetBets Pushed GameStop Shares to the Moon

#22

Post by TrackerFF »

Goosee wrote: post #14

For context one short seller (Citron Research) published this video explaining their belief that GME is a $20 stock.[1] The way I see it, Citron believes this fiasco is irrational thought about the future of Gamestop and its value. I think this is actually about the common retail trader manipulating the 'market manipulators'. In other words, let Citron taste their own medicine. I think Citron failed to realize in the…

Let's be real here, WallStreetBets thinks it's about getting 2000-20000% gains in xx months - "sticking it" to some boomer short seller (their words) just sweetens the deal. It's a culture that revolves around pure gambling.

Re: How WallStreetBets Pushed GameStop Shares to the Moon

#23

Post by abbbccdefd »

The hedge funds shorting this like Melvin entered into a very crowded trade where the risk / reward towards the end, when GameStop was trading in the $3-$4 was very questionable. Over 100% of shares were sold short. This was at a time when GameStop had a book value of around $10. There's a reason why certain individuals / value funds have been buying heavily into this stock with 5% ownerships being disclosed at one time or another: Michael Burry, Donald Foss, Must Asset Management, Senvest Capital, Ryan Cohen.

Hedge funds like Melvin have billions of dollars under management and they need to allocate a certain percentage of that pool to each idea they have to make sense financially and they poured too much money into this one short idea than would be appropriate from a risk management perspective. They didn't do their research properly and probably thought the company would go bankrupt. That wasn't the case. GameStop doesn't have much debt and they survived the pandemic. The shorts should have realized their mistake and started covering. What was going on for months this summer and fall seemed like the posterchild of an inefficient market. Instead the shorts doubled down and they've tried to break the momentum of people buying into the stock ever since September when it started rallying by heavily naked shorting and buying large blocks of short term puts. You can observe this by reading level 2 and seeing the entire tape being red and bid prices being rapidly sold off. Numerous articles were written weekly on various financial sites saying the stock rise doesn't make sense and some were even irresponsibly telling retail investors they should short, often lying through omission on important details like Ryan Cohen becoming an activist investor and the extremely high short float and the new console cycle and the new microsoft deal and huge ecommerce growth. I question how many of these authors had connections to the short funds and wrote articles for them.

Re: How WallStreetBets Pushed GameStop Shares to the Moon

#24

Post by woah »

toomuchtodo wrote: post #8
chovybizzass wrote: post #7

Earlier quoted context omitted.

well it just dumped.

You should expect a high amount of volatility for this symbol considering it's high profile currently (Reddit WSB, Bloomberg front page, etc). Disclosure: Long GME.

What’s the actual long GME hypothesis? From WSB, I’ve read 3 things

1. Ryan Cohen joins board. Ok, I like chewy.com but having this one dude on the board is really worth 20x in the company’s value?

2. They plan to sell PC parts. Again, really? And right before a bunch of new consoles are released?

3. People have some vague idea that they might start a Steam competitor. Does GameStop have any expertise, talent, or IP to do this? The only thing they bring to the table is their trademark, and it’s not really a great one.

Re: How WallStreetBets Pushed GameStop Shares to the Moon

#25

Post by seabird »

woah wrote: post #24
toomuchtodo wrote: post #8

Earlier quoted context omitted.

You should expect a high amount of volatility for this symbol considering it's high profile currently (Reddit WSB, Bloomberg front page, etc). Disclosure: Long GME.

What’s the actual long GME hypothesis? From WSB, I’ve read 3 things 1. Ryan Cohen joins board. Ok, I like chewy.com but having this one dude on the board is really worth 20x in the company’s value? 2. They plan to sell PC parts. Again, really? And right before a bunch of new consoles are released? 3. People have some vague idea that they might start a Steam competitor. Does GameStop have any expertise, talent, or IP…

Long just means "not short", and not that they think GME is currently at a reasonable price. No rational actor in this situation believes that.

Re: How WallStreetBets Pushed GameStop Shares to the Moon

#26

Post by [deleted] »

woah wrote: post #24
toomuchtodo wrote: post #8

Earlier quoted context omitted.

You should expect a high amount of volatility for this symbol considering it's high profile currently (Reddit WSB, Bloomberg front page, etc). Disclosure: Long GME.

What’s the actual long GME hypothesis? From WSB, I’ve read 3 things 1. Ryan Cohen joins board. Ok, I like chewy.com but having this one dude on the board is really worth 20x in the company’s value? 2. They plan to sell PC parts. Again, really? And right before a bunch of new consoles are released? 3. People have some vague idea that they might start a Steam competitor. Does GameStop have any expertise, talent, or IP…

[deleted]

Re: How WallStreetBets Pushed GameStop Shares to the Moon

#27

Post by berrynice »

TrackerFF wrote: post #22
Goosee wrote: post #14

For context one short seller (Citron Research) published this video explaining their belief that GME is a $20 stock.[1] The way I see it, Citron believes this fiasco is irrational thought about the future of Gamestop and its value. I think this is actually about the common retail trader manipulating the 'market manipulators'. In other words, let Citron taste their own medicine. I think Citron failed to realize in the…

Let's be real here, WallStreetBets thinks it's about getting 2000-20000% gains in xx months - "sticking it" to some boomer short seller (their words) just sweetens the deal. It's a culture that revolves around pure gambling.

I'm interested in how much volatility this could create for markets going forward, especially as society gets more and more unstable and people get more and more desperate. I have relatives who've recently gotten into trading thanks to all the spare time they would've spent commuting.

Re: How WallStreetBets Pushed GameStop Shares to the Moon

#28

Post by sushid »

seabird wrote: post #25
woah wrote: post #24

Earlier quoted context omitted.

What’s the actual long GME hypothesis? From WSB, I’ve read 3 things 1. Ryan Cohen joins board. Ok, I like chewy.com but having this one dude on the board is really worth 20x in the company’s value? 2. They plan to sell PC parts. Again, really? And right before a bunch of new consoles are released? 3. People have some vague idea that they might start a Steam competitor. Does GameStop have any expertise, talent, or IP…

Long just means "not short", and not that they think GME is currently at a reasonable price. No rational actor in this situation believes that.

Long means that they're holding shares or call options. Not sure why you're redefining a well-known term on the parent commenter's behalf.

Re: How WallStreetBets Pushed GameStop Shares to the Moon

#29

Post by MandieD »

TrackerFF wrote: post #11

As the quote goes "Markets can remain irrational longer than you can remain solvent." Not that the GME stock is necessarily being traded on an irrational basis at the moment - I haven't done any research on it - but I think people need to remember that a lot of the inexperienced robinhood traders are just engaging in speculative gambling, and knowingly or not, pump and dump schemes.

I’ve had to repeat that to myself enough times after getting some “brilliant” idea for a short that I should go ahead and cross stitch it.

Re: How WallStreetBets Pushed GameStop Shares to the Moon

#30

Post by seabird »

sushid wrote: post #28
seabird wrote: post #25

Earlier quoted context omitted.

Long just means "not short", and not that they think GME is currently at a reasonable price. No rational actor in this situation believes that.

Long means that they're holding shares or call options. Not sure why you're redefining a well-known term on the parent commenter's behalf.

I haven't redefined anything; your definition of "long means that they're holding shares or call options" is completely in agreement with my statement that "long just means not short." The parent seems to be conflating having a long position and believing in the long-term performance of the company. They're asking about long-term changes in GameStop's business when the person he's asking about this could very well be planning on being long in GME for the duration of this squeeze (or the most extreme parts of it) and bailing in the next 1-4 weeks after it has played out.
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