GameStop, the world's biggest retail video game chain has had a wild and turbulent 12 months to say the least. As the video game market continues on its inevitable trek to becoming more and more of an entirely digital industry, GameStop has clearly been struggling to adjust to the changes. GameStop drama has been covered here on GBAtemp in the past, from its switch to focusing on merchandise and legacy games, to its decision to remain open following the COVID-19 pandemic, to its reversal of that decision. However, perhaps GameStop's craziest story has very little to do with the financial success of the company itself.

Prior to this month, GME (GameStop's stock ticker)'s 5 year high was approximately $33 in April of 2016. However, that figure drastically plunged down to under $4 in 2020. This month however, that figure has absolutely skyrocketed above anybody's expectations--closing out today (January 27th) at $347.23 a share. Many factors went into this large stock price; primarily a battle waging between investors of the /r/wallstreetbets subreddit and the short seller Melvin Capital. In essence, Melvin is betting that the stock price will fall below $60 by Friday, while hundreds of thousands of investors on /r/wallstreetbets have been rallying together to keep the price above $60 in hopes that it will skyrocket even further. Allegedly, "$1,000 GME by EoW is not a meme!"

Always remember to invest at your own risk, and know that nothing posted on GBAtemp or /r/wallstreetbets regarding this situation should be construed as financial advice.

Source

 

[leon315]

Uhmmmmm... Yeah let's wait as see. Good luck, wish you all the best with that strategy.

anyway, I'm not using money to gambling which I can't afford to lose.

 

[White_Raven_X]

anyway, I'm not using money to gambling which I can't afford to lose.

I just think you got in too late to make any money. I'm not knocking your choice... Just saying that I hope it turns out for you.

 

[leon315]

I just think you got in too late to make any money. I'm not knocking your choice... Just saying that I hope it turns out for you.

but seriously how did u guy know in advance that SPECIFIC SHARE is going to skyrocket?

I know i'm just a follower, it kinda sucks that other claim the glory 1st.

 

[DeMoN]

It skyrocketed because it went viral. You can't know if something will go viral on the internet, it has to happen naturally (Advertisers have been trying to figure this out for years and failed).

 

[White_Raven_X]

but seriously how did u guy know in advance that SPECIFIC SHARE is going to skyrocket?

I know i'm just a follower, it kinda sucks that other claim the glory 1st.

People who have been following market trends for years know when to sell or "close to" when to sell. Don't forget that it was these people that owned alot of these shares that enticed people (followers) to buy. They were saying to hold because they wanted to make as much money as they could. Once it's been overly discussed online, that's when it's too late. It's fine to follow... You just need to know when to get out....and honestly that's hard to know.
I'm far from being a pro, but I know that there is always money to be made with a solid company over time. Companies that have proven performance. Like SIS, V (Visa)... And so on. Good for the long and steady incline.

 

[leon315]

They were saying to hold

so "they" are those people on WSB? or do they have any other places to "tell us"?

Thanks man, stock trading certainly is fascinating, i'll try get into it once the Gamestop fever is over.

 

[White_Raven_X]

so "they" are those people on WSB? or do they have any other places to "tell us"?

Thanks man, stock trading certainly is fascinating, i'll try get into it once the Gamestop fever is over.

The GME "fever" (I don't think it should be called like That). Was over in 3 days. What you are seeing now is people who read the story or heard about it on the news and are jumping in... But it's too late. I can only presume that GME stock will slowly keep going down to about 20$/share maybe in a month or less...but don't take my word for it.
WSB is going to keep trying to raise stocks that they own and that they want to make money on. If you want to follow them, that's your choice... You might make a few points but don't think you will get rich.
Imo I would bet on something solid that will make gains over time. Go into it for the long run... Just pick wisely.

 

[leon315]

The GME "fever" (I don't think it should be called like That). Was over in 3 days. What you are seeing now is people who read the story or heard about it on the news and are jumping in... But it's too late. I can only presume that GME stock will slowly keep going down to about 20$/share maybe in a month or less...but don't take my word for it.
WSB is going to keep trying to raise stocks that they own and that they want to make money on. If you want to follow them, that's your choice... You might make a few points but don't think you will get rich.
Imo I would bet on something solid that will make gains over time. Go into it for the long run... Just pick wisely.

i do realize those guy keep telling people to hold has something fishy, the goal was to keep price high for obvious reason.

 

[White_Raven_X]

i do realize those guy keep telling people to hold has something fishy, the goal was to keep price high for obvious reason.

Don't forget, when someone says to "SELL" will it actually sell? It doesn't mean someone wants to buy it at that price. Every stock has a different market liquidity.

 

[White_Raven_X]

... and by the way... Those guys who sold when GME was high and made millions.... They will most probably wait until it goes back down to 10-20 dollars per share and they will buy some more for the long run. Lol... That's just the way it goes.

 

[smf]

So what’s to say of a free market? It’s not okay for RH et all to restrict purchases. Responsibility falls to the person who bought in. It’s their fault they made the purchase, regardless of how this plays out. You can’t go to Target and cry that it’s their fault you bought a blue blanket when you knew what the blanket was that you were buying.

If the blue blanket lets out poisonous gas then you can complain to target.

Robin Hood had to limit sales due to rules on capital.

but seriously how did u guy know in advance that SPECIFIC SHARE is going to skyrocket?

Michael Burry (played by Christian Bale in the big short) posted about the short position last year when the shares were like $4 each, knowing they would go up in value as the positions were closed. Then wsb pumped the stock to try to push the price up and limiting supply so the positions would be expensive to close, knowing that when it started hitting the news then more money would roll in. Youtube videos showed up promising the stock would go to an infinite price with lambos and strippers all round. They will probably make more money out of the views than anyone coming in now.

I'm not 100% convinced the hedge funds weren't trolling by shorting > 100% and have some way of making money out of all this retail money coming in.

If you bought at $4 and sold at $400 then you probably did ok, if you bought in >$200 and have diamond hands/hold until death then I think you might have just donated money to some other investors. I'm sure they are grateful in some way.

 

[leon315]

you bought at $4 and sold at $400 then you probably did ok, if you bought in >$200 and have diamond hands/hold until death then I think you might have just donated money to some other investors. I'm sure they are grateful in some way.

I believe everyone here are followers just like me, and I made some money last week when the stock skyrocket to 480+, bought from 260 up to 310.
Those who bought earlier ones at 4-150 were incredibly lucky.

 

[smf]

Those who bought earlier ones at 4-150 were incredibly lucky.

Lucky in some respects, because it wasn't guaranteed to go up to these levels, but they took a long term risk and it paid off.

Buying in now on a dip and selling on a peak requires much more luck to actually make any money.

At $4 a share you could put in $50k and there was a low chance of downward movement with a chance for big rewards, putting $50k in at todays prices there is a big chance of downward movement with a small chance for big rewards. There is a limit the prices can multiply now because people will be scared that bleeding the hedge funds dry will make them bankrupt leaving the shares worth $4 again. I don't think there are enough people willing to just lose all their money to punish the hedge funds like that.

To make real money you needed to know about this before it hit the news.

There are some things the hedge funds could do to get out of the situation that are questionably legal, but as some of the wsb posts are also questionably legal the SEC might take it's time investigating & then just fine them a million $.

 

[leon315]

There are some things the hedge funds could do to get out of the situation that are questionably legal, but as some of the wsb posts are also questionably legal the SEC might take it's time investigating & then just fine them a million $.

Yet we know that hedge found aka Melvin still have positions/return GS stocks they borrowed to cover up, and NOW, forced to borrow money from Citadel and sold many longterm stocks to cover all this shit.
Now to see how long this rally will last we need to know how many positions they have yet to cover!
Anyone has some reliable sources??

 

[smf]

Yet we know that hedge found aka Melvin still have positions/return GS stocks they borrowed to cover up, and NOW, forced to borrow money from Citadel and sold many longterm stocks to cover all this shit.
Now to see how long this rally will last we need to know how many positions they have yet to cover!
Anyone has some reliable sources??

It doesn't really matter, Melvin capital lost 53% of their money in January. If they haven't closed their position then I doubt they could buy the shares at the current price & once they go bankrupt they won't need to buy them and the price will go down.

If they closed their position already using whatever method, then the price will go down.

The price needs to stay within the realms of possibility for the remaining hedge funds to actually buy them without going bankrupt & they would probably rather go bankrupt borrowing money to pay interest on the shares than handing it to the people who fucked them.

I have a feeling the $469.42 might have been the peak. https://www.reddit.com/r/wallstreet...i_suspect_the_hedgies_are_illegally_covering/

the short sale may result in a fail to deliver position at Trader A’s clearing firm. Rather than paying the borrowing fee on the shares to make delivery, or unwinding the position by purchasing the shares in the market, Trader A might next enter into a trade that gives the appearance of satisfying the broker-dealer’s close-out requirement, but in reality allows Trader A to maintain its short position without ever delivering on the short sale. Most often, this is done through the use of a buy-write trade, but may also be done as a married put and may incorporate the use of short term FLEX options. These trades are commonly referred to as “reset transactions,” in that they have the effect of resetting the time that the broker-dealer must purchase or borrow the stock to close-out a fail. The transactions could be designed solely to give the appearance of delivering the shares, when in reality the trader has no intention of meeting his delivery obligations. Such transactions were alleged by the Commission to be sham transactions in recent enforcement cases. Such transactions between traders or any market participants have also been found to constitute a violation of a clearing firm’s responsibility to close out a failure to deliver."

I imagine the people who are getting the shares back know that the price is going back to $4 when it's over, so it's not in their interest to even get the shares back. If they were offered a reasonable amount of money instead, they would probably take it....

 

[leon315]

If they closed their position already then the price will go down.

That's why I'm asking you guys if you ever have heard any news, bankruptcy shall be the last resort for any Hedge funds.

that's why we need, have to know when this GOLD FEVER ends, we HAVE TO KNOW how many positions they still required to cover all positions.
Anyone those days ever came across any of information about this?

 

[smf]

that's why we need, have to know when this GOLD FEVER ends, we HAVE TO KNOW how many positions they still required to cover all positions.

I think in reality they have to buy 0 shares.

It's gotten too big, they'll buy their way out some other way.

They claim they have covered their short position, I would assume they are telling the truth.

 

[leon315]

I think in reality they have to buy 0 shares.

It's gotten too big, they'll buy their way out some other way.

Which one? How many options do they have rather than go BANKRUPTCY?

 

[smf]

Which one? How many options do they have rather than go BANKRUPTCY?

I think the money they borrowed was to buy out of the shorts, without actually buying shares.

Remember at the end of the movie "the big short" where they all just phoned up and did a deal?

The total short hasn't gone down, because new shorts have been created as it's pretty likely the share price is now going to go down.

It could go on forever. From wsb

Fwiw, the SEC does read this sub forum. They very much know what is going on right now. But a lot of the allegations on here, while perhaps true, aren’t financial crimes. Conversely, a lot of people on here don’t understand how shorts work.

I think melvin will even recover their loss if people keep buying gamestop...

Im not saying they can cover all the shorts, but they can increase free float by unlocking from Blackrock, and Fidelity etfs (they are insiders), and get few millions of shares to keep fighting. At the end of the day, with right algos and strategies, hedge funds will not only won't bankrupt, but also make billions on gme, with some help from rh, of course.

 

[leon315]

I think the money they borrowed was to buy out of the shorts, without actually buying shares.

Remember at the end of the movie "the big short" where they all just phoned up and did a deal?

The total short hasn't gone down, because new shorts have been created as it's pretty likely the share price is now going to go down.

It could go on forever. From wsb

Fwiw, the SEC does read this sub forum. They very much know what is going on right now. But a lot of the allegations on here, while perhaps true, aren’t financial crimes. Conversely, a lot of people on here don’t understand how shorts work.

yeah, ur right, now we have to take a bet:

If bankruptcy is the last resort, the borrow money just to cover shorts instead buy back stocks from from who screw them up, sound very legit and probable.

It could be a great help if someone here know how many positions Melvin initially borrowed and how many they still required to cover up?