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u/DeepFuckingValue and the GameStop Reddit mania

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Re: u/DeepFuckingValue and the GameStop Reddit mania

#221

Post by reducesuffering »

billylindeman wrote: post #98
ggggtez wrote: post #63

Earlier quoted context omitted.

Just because he's still in doesn't mean that it's actually worth $300 on the fundamentals. I could definitely see the argument that $20 was undervalued, but it's plain to see that the short-squeeze is now part of the calculation of value. There is no way that GameStop has an actual fundamental value of $300 per share. That price is clearly inflated, and in a few weeks will decrease, probably to somewhere above $20, b…

Any stock that does not pay dividends _has no fundamentals_. It's just supply / demand.

Berkshire Hathaway?

Do you understand the tax-reasons why a company would buy back shares instead of issue dividends?

What about book value, where a company could have $1b in assets (real machinery, tractors, factories, etc), no debt, and no dividend? Does that mean it still has no fundamental value?

Re: u/DeepFuckingValue and the GameStop Reddit mania

#222

Post by nostrademons »

airstrike wrote: post #204
nostrademons wrote: post #161

Earlier quoted context omitted.

I remember when this came out 20 years ago. It was part of the whole wave of P2P filesharing programs that came out between 1999-2002: Napster, Gnutella, Kazaa, Audiogalaxy, etc. Amazing it's still going on. BTW, for folks new in tech - it's amazing how influential that wave of programs were, even though they largely failed in the marketplace. Napster founder Sean Parker later became the first investor and first pres…

Probably proof that who you know is about as important as what you can do, if not more

The interesting thing is that most of those people weren't actually pals when working on P2P stuff, but they were all working on the same stuff. Zuckerburg and Parker didn't meet until Facebook was growing quickly. Scour/Red Swoosh, to my knowledge, had no major connection with the other projects.

I view it more like an instance of synchronicity, where a lot of bright young people looked at the world independently and decided that this was the space they wanted to be working on. And then when that space didn't pan out they went their separate ways, but the fact that they were bright & energetic meant that the successor projects became huge.

(I wonder if a similar effect explains the General Magic, Paypal, and Justin.TV mafias.)

Re: u/DeepFuckingValue and the GameStop Reddit mania

#223

Post by jaycroft »

vanattab wrote: post #92
delaaxe wrote: post #80

Earlier quoted context omitted.

You can always place limit sell orders

Limit sell orders with this kind of volatility is not as safe as you might think. Just because you set a sell limit does not mean your trades will execute at that price.

A limit sell order guarantees the limit price or better. A Stop Loss triggers a market order (at any price available) once crossed to the downside.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#224

Post by SpicyLemonZest »

ralph84 wrote: post #195
seanalltogether wrote: post #54

Earlier quoted context omitted.

matt levine talks about this very thing in one of his other posts on wsj > So if you buy stock with the purpose of pushing the price up so that other people will buy it, that’s market manipulation. If you buy stock hoping that the price will go up because other people buy it, that’s not market manipulation; that’s just normal. Those things are not so different. There is a “traditional four-part test for manipulation…

What is an artificial price and how does it differ from a real price?

It's a price that "does not reflect legitimate forces of supply and demand". One of the canonical examples of an artificial price is spoofing, where you set up fake sell orders to trick people into thinking a stock is crashing so you can buy it at a discount.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#225

Post by rualca »

015a wrote: post #158
amluto wrote: post #110

Earlier quoted context omitted.

I wouldn’t be terribly surprised if some big players have carefully arranged to have large short interest but to be hedged against large upswings. This could be an expensive position to carry, but it could be quite profitable if people thought they were squeezing an unsqueezable short.

Right. My biggest concern with these plays, at this point, is that they're not taking into account the possibility of bankruptcy. There's a ton of "they have to buy it, if we hold all the shares then it'll go to the moon, 1k, 2k, 4k". (1) The sheer variety of financial vehicles available to professional investors is staggering, and while the initial DD was really good, we probably missed something at this point, and…

> My biggest concern with these plays, at this point, is that they're not taking into account the possibility of bankruptcy.

Whose bankruptcy? The WSB crowd are very vocal in their goals of bankrupting hedge funds who have a lot riding on forcing gamespot's stock price to plummet.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#226

Post by yreg »

tinyhouse wrote: post #149
yreg wrote: post #131

Earlier quoted context omitted.

Why do you think a crash of GME would cause a full blown crash of the stock market?

I don't think that.

You replied to a comment discussing making use of GME as an insurance against a market crash related to this possible short squeeze.

If the market doesn't crash then GME can go to $0, as it won't be needed for the insurance purpose anymore.

Re: u/DeepFuckingValue and the GameStop Reddit mania

#227

Post by jaycroft »

jondwillis wrote: post #142
cecilpl2 wrote: post #61

Earlier quoted context omitted.

OTM calls are super expensive because the IV is through the roof (it has been over 700% most of the week).

However, if Melvin had picked up deep OTM calls before the (literal in both senses) volume started ramping up about two weeks ago, they might have done a little better. To be clear, I don’t actually think they did.

And even if they did, who's on the other side of those options now that they're in the money?

Re: u/DeepFuckingValue and the GameStop Reddit mania

#228

Post by derptron »

015a wrote: post #158
amluto wrote: post #110

Earlier quoted context omitted.

I wouldn’t be terribly surprised if some big players have carefully arranged to have large short interest but to be hedged against large upswings. This could be an expensive position to carry, but it could be quite profitable if people thought they were squeezing an unsqueezable short.

Right. My biggest concern with these plays, at this point, is that they're not taking into account the possibility of bankruptcy. There's a ton of "they have to buy it, if we hold all the shares then it'll go to the moon, 1k, 2k, 4k". (1) The sheer variety of financial vehicles available to professional investors is staggering, and while the initial DD was really good, we probably missed something at this point, and…

>more funds are playing with WSB than against them.

sheer conjecture

Re: u/DeepFuckingValue and the GameStop Reddit mania

#229

Post by ignoramous »

optimalsolver wrote: post #209
ignoramous wrote: post #106

Looking back at (u/deepfuckingvalue) Keith Gill's comments on r/wsb, it looks like they had a solid theory to cash out by Jan 2021 for $8+ a share (most of their calls starting June 2019 were 80 cents a share or less [0]). This was by no means a strategy to make money by squeezing the short, though one user, conspicuously named u/burrym, speculated that it ought to be [1]. [0] https://archive.is/Y953e , https://archi…

What broker is he using?

E Trade.

https://archive.is/G2crI#selection-6646.0-6646.1

Re: u/DeepFuckingValue and the GameStop Reddit mania

#230

Post by spyder »

IntFee588 wrote: post #105

I know this forum is capitalist to the core, but there is a lack of appreciation for this moment and an undue air of cynicism. This whole situation breaks a ton of fundamental assumptions about how markets work and will change hedging strategies for a lot of investors moving forward. Yes, we know there are hedge funds on both sides of this equation (Blackrock owns 12% of Gamestop, Burry made a ton and smartly got out…

"will change hedging strategies for a lot of investors moving forward"

Great, that was one of their goals: To make them think about if shorting 140% is a good thing or not.

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