Surprised there weren't any posts (that I could find) about something that's the hype of the internet these days I figured I'd write a quick post about what's been happening. Be warned, though, that everything written in this post may not be accurate and in no way, shape or form am I trying to get people to buy any stock, or sell for that matter.
As far as I understand it, and according to a video from Louis Rossman who explains it in simple terms of what's going on (highly recommend watching it if you're not already really familiar with markets and terms such as shorting, etc)
Few days ago apparently someone on r/wallstreetbets noticed that the GameStop stock, a company that's been going downhill for the past years since it's been having the same fate as Blockbuster had for renting movies, that it was heavily shorted. So much so that it was shorted for close to 150% of stocks that existed, how that is possible or legal is anyone's guess. The stock had been in the single digit $ amount for months and the attention to the percentage that was shorted got some people to say "fuck it" and start buying it. The reason this is being called a meme is because most people don't think GME should be worth more, the company isn't doing great and it would make sense for the stock to continue plummeting in price, but now it isn't.
People are saying that this is mostly cause retailers are sick and tired of institutions and hedgefunds manipulating markets, getting greedy, fucking up, being bailed out with taxpayer money and almost never facing the consequences. In an attempt to stick it to them, it started trending on r/wallstreetbets and everyone wanted a piece of shares of GME. Many who don't care what happens with it, if they lose money, etc, some of course also saw this as an opportunity for a quick profit and some good margin calls. (Margin is where you loan more assets with your funds as collateral to bet on the price of a share being higher or lower in the short term timeframe). Welp, here we are today:
After some more attention to this, some tweets by big influencers such as Chamath Palihapitiya and Elon Musk, people started buying it at a frenzy. Some of the institutions that had been shorting it are getting rekt hard. Reading r/wallstreetbets has been pretty fun the past few days, seeing people turn $10k into millions, others being millions of $ in profit such as the screenshot below:
People are calling this the real Robin Hood event not to be confused with the crappy exchange Robinhood. Retail sticking it to the institutions greed and manipulations and taking some value back as revenge. Some are saying there's a lot more things to it. Melvin Capital which is an investment firm based in New York and prior to this one of the best performing one saw some big losses on the first pump to $150 of GME. Proving that firms like these have been shorting the stock more than they should have, gotten greedy and knowing there's not many consequences kept doubling down time after time. Capital and Point72 recently invested another $2.7b into Melvin recently possibly trying to save them for going completely to 0 on their $12.5b assets they were managing in January this year. Only to be rekt even harder today with another -25% loss according to the math of a Redditor while another Redditor thinks Elon Musk is loving this because Melvin Capital used to short $TSLA for years and bragged about it.
Some real live action popcorn going on in the stock markets these days, it's feeling a lot like crypto and people are loving it, while I assume many forget the other regular people who've trusted the institutions with their money and are getting decimated day after day now. Oh well, that's the markets, expect the unexpected.
Here's a really short and good summary of the recent happenings provided by Reddit user fatalikos:
GameStop is a mall retailer
General trend is they go under (like Sears)
People by default pigeonhole them with Sears and sentiment drops
Covid hits and company suffers
Wall Street vultures want to kill it off and start shorting it
Stock at $4 and they continue with no regard to actual value... Let alone bankrupting a firm that employs 50.000
Some people (Michael Burry) start running thr actual numbers and see there is some value, they start investing (mid 2019)
Few regular joes notice the same thing and find out shorts will continue to fuck with stock and push it down no matter how it is performing. They short it 139%... Sold more shares than there are.
For shorts to cover, they need to buy back the shares. They pay interest on the shares they bought to immediately sell short. If they start buying back the price goes up.
people start buying stock and not letting it be shorted, it drives price a bit up. Hedge funds shorting the company are losing money if they cover so they double down trying to bring the price lower. Mainstream media is giving huge publicity to GME
people continue to buy and hold... Hedge losing money so they start selling options at a crazy premium thinking they will shake us off and collect, after stock dives due to their manipulation (Monday was a great example)
other funds on wall street smell blood and want in. Short hedge funds caught themselves in their own trap. First the gamma squeez then the short squeez (margin call)
they lose 3bn so they get bailed out by their rich friends as not to get margin called.
until here they could have saved themselves if they flipped-
they return the next day and try to repeat. - instead, it backfires and stock keeps shooting up. They are on their knees at market close, about to get margin called ($175 per share)
Elon tweets afterhours and it punches up the stock even higher by other wallstreet funds (like BlackRoc)/($220) probably about to wipe that fund and finish some careers.
As someone who's been pro blockchain and crypto mainly to fuck over all these "wall street traders" who've fucked over the economy and markets on many occasions I can't help but feel some schadenfreude. Even though I don't actively trade these days, let alone stocks and haven't been able to make any gains on these moves it's still quite exciting to follow what's going on and be happy about some random folks over on Reddit who spotted this greed and decided to do something about it along with other influencers and billionaires who felt like teaching them a lesson.
This is what the stock is looking like now "after hours", because in the stock market they just decide to close trading when people sleep or something us crypto folks won't understand. :P
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Great you shared this man! i mean i was wondering when someone would actually sum it up! if you follow wallstreetbets board and have half a brain you could see this coming for a while! want some more ideas on what to post? try to get you hands on a interview about this with Chamath on CNBS people upload the thing but youtube keeps on taking it down, another example of the power hive can have!
Interesting, I'm sure 3speak wouldn't take it down willy nilly.
Lol, this is pretty Hilarious, someone here on leofinance actually wrote something similar to this.
Been hearing of this GameStop shit but I haven't really cared about it as anything Stock gets me paranoid.
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Oh thanks for the link, couldn't find any when I browsed leofinance. Similar to Hive in general I'm hoping people start writing more about current events and get that some trending attention, should do well for SEO and traffic.
They say AMC might be r/wsb's next yolo pump due to a lot of it being shorted, wonder if that will work a second time lol.
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OK, you're blowing me off with this things, I should have done some reading when I planned to, now I would know how to keep this conversation, lol.
Here's another post with this topic, am kinda like everywhere and no where because I don't leave my footprints haha.
Now I should prolly go check out this GME, its sure getting a hype I must be missing out a lot.
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I expect they will just go to the government and cry ...but...but...but...were to big to fail please step up with some bail..
Wait, they stop trading at 5pm each day in that stocks world?! I would get SO bored each evening, watching adventures in crypto prices 24/7 is so much more fun!
That story does sound entertaining to watch but I certainly wouldn't want to get caught up in those antics - well above my head!
Amazing video. I learned so much.
He's awesome, he works on repairing apple products because apple are pieces of shit who make it super expensive to repair and at the same time difficult to do so on purpose.
Open the markets already!
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Thank you for this, the biggest fuck you to the greedy. Love it! learned a lot from this!
GME is working so well because there aren't that many shares available. AMC has 10x the number of shares but i think it's still doable as there are still less than 600 million shares out there compared to billions in other mega corporations.
Tweets by Chamath Palihapitiya and Elon Musk can do anything. There is an initiative started to reply to Chamath Palihapitiya as well for hive. It's surprising that, something which has less value is driven by greed. Hopefully, he will see values in hive.
I came here expecting some memes :)
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I read about it, Redditors do do dank stuff now and then