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

 

[GhostLatte]

This is terrible, we want GameStop to tank. They treat their employees so bad, and nothing has changed since Reggie joined them. It's a sinking ship that just had their hull bailed out, but it's still sinking.

Don’t be like Melvin Capital all the homies hate Melvin Capital

 

[Jayro]

Don’t be like Melvin Capital all the homies hate Melvin Capital

What does that even mean?

Anyways, you should watch Camelot331's youtube videos about gamestop. He has someone pretty high up on the inside, sending him inside information and recording meetings and sending them to him. He's got all kinds of juicy dirt on the company, and many MANY horror stories, as he worked for them for over 10 years.

 

[MikaDubbz]

The guys behind the /r/wsb subreddit are saying that Blackberry is next. Don't know how true that is, but with stock around $20 each and some extra money in my account for once, I'm seriously considering gambling about $1,000 on their stock, and I'm aware it is indeed a gamble, no guarantee something like this is about to repeat itself at all, as this isn't normal at all, but I'm willing to take the risk.

 

[Jayro]

The guys behind the /r/wsb subreddit are saying that Blackberry is next. Don't know how true that is, but with stock around $20 each and some extra money in my account for once, I'm seriously considering gambling about $1,000 on their stock, and I'm aware it is indeed a gamble, no guarantee something like this is about to repeat itself, but I'm willing to take the risk.

I like the idea of stock market raids like this, but just know that it IS a form of "insider trading", and that martha stewart went to prison for it. Just be careful.

 

[GhostLatte]

What does that even mean?

Anyways, you should watch Camelot331's youtube videos about gamestop. He has someone pretty high up on the inside, sending him inside information and recording meetings and sending them to him. He's got all kinds of juicy dirt on the company, and many MANY horror stories, as he worked for them for over 10 years.

I suggest you watch the video I linked

 

[Gamemaster1379]

I like the idea of stock market raids like this, but just know that it IS a form of "insider trading", and that martha stewart went to prison for it. Just be careful.

This is literally not insider trading. That implies somebody within Blackberry has confidential information and is trading with knowledge the public does not have.

In this case, the public has no Blackberry knowledge. They're simply rallying around an idea.

Now, if you intentionally mislead the public in such a way, saying that Blackberry is releasing or doing something they are not -- in an attempt to raise their price -- that is manipulation and absolute fraud. That'll get you crucified by the SEC.

But what's going on here is neither insider trading nor fraud. It's literally a bunch of people rallying around the idea of "I'M GOING TO BUY A BUNCH OF STOCK AND THE NUMBER IS GONNA GO WAAAAAY UP". "Foolish trading" doesn't violate SEC regulations and is basically what's going on with AMC (and BB too, but AMC seems to be the real rally at the moment).

In the case of Gamestop, it was a double whammy since someone identified large hedge funds shorting the stock with no ceiling, and shorting more stock than what's available on the public market.

What's hilarious about Gamestop is its price is 100% detached from it at this point. Gamestop isn't even relevant in what's going on anymore. It's just a stomping ground of the masses BTFOing hedge funds.

 

[xdarkx]

What does that even mean?

Anyways, you should watch Camelot331's youtube videos about gamestop. He has someone pretty high up on the inside, sending him inside information and recording meetings and sending them to him. He's got all kinds of juicy dirt on the company, and many MANY horror stories, as he worked for them for over 10 years.

Melvin Capital are just as bad as Gamestop themselves but in a different way. They are short sellers that preys on companies that are not doing well, and are betting a lot of money on this very notion to profit out of it. They would do everything they can to drive the companies' stock price below what the companies actual stock are actually worth.

Also, you don't need to tell me to watch Camelot331's videos. I have watched a couple in the past already. You should, however, check other videos about Gamestop stock (ie. not Camelot331's videos) as well.

Here's another video I suggest you to watch

 

[Valery0p]

Stock trading: gambling except a lot more people are bound to loose everything.

 

[GhostLatte]

Stock trading: gambling except a lot more people are bound to loose everything.

Don’t invest what you can’t lose

 

[MarkDarkness]

G

GG, the world has finished 2020 tutorial, now with new British variant discovered, we are starting 2021 campaign! Anything could happen!

P. S. Which platform /app do you guys use for trading? Ask for a friend.

COVID is way ahead of you. Several dangerous variants showing up all over the globe, not just UK. The Brazilian strand looks """promissing""". Reinfection rates going up as well.

 

[cisADMlN]

Im jn for 50 at $50 and im never leaving until my home is paid off

 

[Andy2001]

Microsoft came in clutch!

 

[CallmeBerto]

So, back in March, I asked how to best get into the stock market. @Ericzander sent me an invite link to Robinhood. As part of inviting me, I got a free penny stock. GameStop, valued at $2.90.

I held onto it this whole time. Just for laughs. Look at me now.

I said this back in March. TO THE MOON, GUYS!

stonks only go up!!!

 

[hamohamo]

And that, boys, is what we call the reggie effect.

 

[MikaDubbz]

Jesus its right at about 300 right now. Of course its after hours so it may not open that high, but holy shit, that's insane, people are becoming multimillionaires off this shit.

 

[Foxi4]

Jesus its right at about 300 right now. Of course its after hours so it may not open that high, but holy shit, that's insane, people are becoming multimillionaires off this shit.

The concept of "price" goes out the window when you're obligated to cover your bad call and there simply isn't enough stock available to do so. Wall Street made a bet that GameStop's stock is going to crash this month and borrowed stock from Market Makers at an average price with the expectation that they will return it later once it tanks and pocket the change - that's how they make money. There's nothing wrong with doing that if it happens naturally, but you can trigger such an event artificially if you have enough volume, which they did.

There's only one problem - retail traders bought the stock in droves and the price shot up instead. Once there is simply no more stock available for hedge funds to buy, at an inflated price or not, the amount of zeroes after $1 is up to your imagination - they have to buy it back regardless. If the price continues to hover at $60, we'll see another short squeeze and the price will shoot up again. If it maintains a level of $115 or higher, we're in full on gamma squeeze simultaneously, which is unprecedented.

From Wall Street talk to human talk, there isn't enough stock available to buy back and return, and there isn't enough capital in the market to cover the difference either, so that $300 can quickly change into $1000 for no reason other than scarcity. For a short blip GameStop's stock might end up costing more than the cure for cancer, and after the blip, once positions close, it will return to previous levels. A similar situation occurred with Volkswagen during the previous financial crisis.



https://www.ft.com/content/0a58b63a-4294-3e07-8390-c3aabef39a26

This situation is entirely Wall Street's doing, they're at fault for failing to manage their own risk. If I open a store, say that I have 10 PS5's for sale and sell them, knowing full-well that I won't be able to deliver more than 5 to customers by the due date, I am taking a risk. I am assuming that I'll be able to buy another 5 on the open market, preferably for a price lower than my asking price. If I don't do that by the due date and I have 5 customers angrily knocking at my door because I pocketed their money and they have nothing to show for it, that's on me. I'll have to deliver those 5 PS5's regardless of how much they are on eBay - I already had my payday, I was hoping that they'll be available cheaper later. They aren't, tough luck.

 

[Arras]

Stock trading: gambling except a lot more people are bound to loose everything.

It's even "better" than gambling because depending on what you do, you can lose more than what you invested.

 

[CallmeBerto]

It's even "better" than gambling because depending on what you do, you can lose more than what you invested.

Options baby!!

 

[Foxi4]

Options baby!!

Infinite risk? Infinite possibility of loss!

 

[Glyptofane]

If I understood this stuff more, I'd have made a lot of money by seeing it happen. I watch Reddit TOP and it's been a thing for a bit.

Kind of the same here. I noticed spillings over of this plan into other subs on reddit long before it was actually happening, but didn't really understand what any of it actually meant. Oh well, we probably still would have messed it up and lost a bunch of money.