GME - Game Stop Corp

[formthirteen]

91 pre market

 

GME was up more than 100% at one point (~$130). I was watching it live. Grab some popcorn… :P

[TwoCitiesCapital]

Thoughts on this? Is it really an infinite gamma squeeze happening?

 

 

I actually buy the argument that what we've witnessed so far IS a gamma squeeze. There's been no appreciable drop in shares short from what I can tell (would love anyone with access to a BB terminal to confirm).

 

So either every short that was covered, new shirts have stepped in OR it's been retail buyers flooding the stock/options to drive it higher which results in a gamma squeeze which forces the stock even higher which forced more retail to buy stock/options and so on.

 

I doubt that they could trigger an "infinite gamma" squeeze - but could retail continue to push this higher in the near term with additional share and options purchases? Yes.

 

Does the fact that we're out of options strikes mean that this goes in forever? Or is about to exhaust itself because retail investors can no longer to force the market's hand with hundreds of times leverage and will have to put up real cash to enter positions?

 

My vote is on the latter. And this is exactly how people lose more on the way down  than in the way up. Their first positions were probably in calls that cost pennies and it worked. Now they're all about to flood calls that cost $5+/share which will be the last hurrah.

 

Also - dunno how the options markets are regulated with new strikes. I thought it was at regular quarterly intervals...ubt I'm seeming call options going out to $120 now on Schwab so seems like new ones were released over the weekend.

[stahleyp]

That guy is probably clicking close to $20 million now. That's insane.

[Gregmal]

Yea.....What did folks think was going to happen going into/over the weekend? Everyone reads their feeds and gets the impression these are dangerous and sells Monday morning? Of course not. I played it like a pussy and bought old reliable Dillards, but damn, some of these others are ripping nice too. BBBY, FIZZ, etc. There's a predictability to behavior of the masses.

 

[Foreign Tuffett]

I think an important part of the story is the Citron debacle.

 

In the middle of the trading day on Thursday Citron released this video. One of the statements made in the video is "you won't see a squeeze from here on in."

 

https://www.youtube.com/watch?v=mEi2axM4hwI&feature=youtu.be

 

Roughly 24 hours later Citron released the attached statement. I would imagine that bulls, not without reason, saw this statement as complete capitulation. So one way to think about this is that, ~24 hours after denying a short squeeze would happen, Citron probably played a not insignificant role in creating one.

 

[Pelagic]

Thoughts on this? Is it really an infinite gamma squeeze happening?

 

 

I actually buy the argument that what we've witnessed so far IS a gamma squeeze. There's been no appreciable drop in shares short from what I can tell (would love anyone with access to a BB terminal to confirm).

 

So either every short that was covered, new shirts have stepped in OR it's been retail buyers flooding the stock/options to drive it higher which results in a gamma squeeze which forces the stock even higher which forced more retail to buy stock/options and so on.

 

I doubt that they could trigger an "infinite gamma" squeeze - but could retail continue to push this higher in the near term with additional share and options purchases? Yes.

 

Does the fact that we're out of options strikes mean that this goes in forever? Or is about to exhaust itself because retail investors can no longer to force the market's hand with hundreds of times leverage and will have to put up real cash to enter positions?

 

My vote is on the latter. And this is exactly how people lose more on the way down  than in the way up. Their first positions were probably in calls that cost pennies and it worked. Now they're all about to flood calls that cost $5+/share which will be the last hurrah.

 

Also - dunno how the options markets are regulated with new strikes. I thought it was at regular quarterly intervals...ubt I'm seeming call options going out to $120 now on Schwab so seems like new ones were released over the weekend.

 

Somewhere in the morass of WSB someone quoted a CBOE rule I didn't realize existed. Essentially for stocks trading above $20 options can exist up to +/- 50% of the stock price unless there is demonstrated demand for further strikes. On the surface this makes sense, preventing MMs from taking advantage of retail or something like that I suppose, but given the volatility here a 50% move is probably less than 1 standard deviation, why they didn't open up more options last week is probably something market makers will be asking themselves when they review this.

 

Anyone use TD's think or swim? The think back feature will have the at the money straddle price, would be curious to know what that was last Monday for Friday's expiry to see what MMs were expecting vs actual.

[hillfronter83]

What prevents company issuing more shares to retire debt? I guess it probably won't add value to "shareholders".

[Foreign Tuffett]

,

What prevents company issuing more shares to retire debt? I guess it probably won't add value to "shareholders".

 

Note that GME filed to issue up to $100 million in new stock on Dec. 8th.

[Spekulatius]

The $30 GME puts are exploding in value at the same time the stock goes up 56%. Looks like the singularity is close.

 

This is like free booze in a titti bar.

 

I predict that the worse the quality of a stock, the better it will perform in the short run.

[TwoCitiesCapital]

The $30 GME puts are exploding in value at the same time the stock goes up 56%. Looks like the singularity is close.

 

This is like free booze in a titti bar.

 

I predict that the worse the quality of a stock, the better it will perform in the short run.

 

Interesting. I've been reading a few threads on WSB - these guys aren't just buying calls. Many of them are doing synthetic positions on margin. (Selling a put, using the proceeds to buy calls) and the cash to cover the put is the margin loan.

 

This is going to go very poorly for some people...

[bizaro86]

The $30 GME puts are exploding in value at the same time the stock goes up 56%. Looks like the singularity is close.

 

This is like free booze in a titti bar.

 

I predict that the worse the quality of a stock, the better it will perform in the short run.

 

Yeah. I bought July $17 puts on this about a 3 bagger ago. I'm up materially on the position.

[Xerxes]

Looking at GME, I think it is really clear to the Tesla-is-fairly-valued crowd that speculation and the WSB crowd are even moving non-disrupters.

EDIT: i dont know how Lupe Venture and other major bulls, dont look at that say maybe this is not all Elon halo

[TwoCitiesCapital]

The $30 GME puts are exploding in value at the same time the stock goes up 56%. Looks like the singularity is close.

 

This is like free booze in a titti bar.

 

I predict that the worse the quality of a stock, the better it will perform in the short run.

 

Yeah. I bought July $17 puts on this about a 3 bagger ago. I'm up materially on the position.

 

This is amazing! Thanks you implied vol!

[Fly]

Anything with high short interest is in the sights of WSB now. They have done it once and will roll their profits into the next:

 

https://www.highshortinterest.com

[stahleyp]

I know this is a different company but any idea why these guys are pumping BB if there isn't high short interest?

[Gregmal]

I know this is a different company but any idea why these guys are pumping BB if there isn't high short interest?

 

low $ starting share price. liquid and plentiful assortment of options(pun intended), tight float. Stuff Ive looked at like DDS, FIZZ, BIGC dont have the option chains GME or BB have. BBBY looks a lot more like GME than BB, IMO. They also have an active buyback. That said, I think today was the top for a lot of these names.

[Junto]

I know this is a different company but any idea why these guys are pumping BB if there isn't high short interest?

 

low $ starting share price. liquid and plentiful assortment of options(pun intended), tight float. Stuff Ive looked at like DDS, FIZZ, BIGC dont have the option chains GME or BB have. BBBY looks a lot more like GME than BB, IMO. They also have an active buyback. That said, I think today was the top for a lot of these names.

 

The stock I hear is next is AMC...

[Gregmal]

AMC is interesting indeed. Puts have some juice too. I'll probably look at selling some puts @ 3/3.5/4s with expirations this and next week.

[RadMan24]

,

What prevents company issuing more shares to retire debt? I guess it probably won't add value to "shareholders".

 

Note that GME filed to issue up to $100 million in new stock on Dec. 8th.

 

I think Gregmal was postulating whether they were doing this, but an ATM would be perfect to execute. Question is whether Jefferies is able to sell it to any institutional buyers, given the insanity going on at the moment.

[TwoCitiesCapital]

,

What prevents company issuing more shares to retire debt? I guess it probably won't add value to "shareholders".

 

Note that GME filed to issue up to $100 million in new stock on Dec. 8th.

 

I think Gregmal was postulating whether they were doing this, but an ATM would be perfect to execute. Question is whether Jefferies is able to sell it to any institutional buyers, given the insanity going on at the moment.

 

Might could sell it to the shorts  ;D

[dpetrescu]

So if there are half a million Robin Hood accounts with very immense paper gains - in recent WSB posts they’re talking about Buying Tesla’s and Lamborghinis when this is over - I’m wondering, how does this end. I really like the idea of a Reddit group taking down billionaires, look forward to see the Michael Lewis movie.

 

But won’t this end like the final scene of The Good The Bad and The Ugly? Someone will have to draw first, and then the movie ends? Most gains will have been just paper gains.  GameStop seems almost obsolete, like Blockbuster 15 years ago when they started an online plan to compete against Netflix.

[stahleyp]

 

He's up to almost $14 million. Looks like it may have been up to $25 million part of the day. He also cut his position some.

[KJP]

,

What prevents company issuing more shares to retire debt? I guess it probably won't add value to "shareholders".

 

Note that GME filed to issue up to $100 million in new stock on Dec. 8th.

 

I think Gregmal was postulating whether they were doing this, but an ATM would be perfect to execute. Question is whether Jefferies is able to sell it to any institutional buyers, given the insanity going on at the moment.

 

Would an offering by GameStop be a betrayal?  The emotional narrative underlying the WSB-GME story is that GameStop is semi-beloved piece of childhood nostalgia that would be revived by Ryan Cohen but for the depredations of Wall Street hedge fund types (the shorts).  In other words, the jocks are once again picking on the nerds.  So, the nerds are fighting back against the jocks (Wall Street, hedge funds, etc.) by trying to corner the market for GME shares and thereby crush anyone who is short and has to deliver the cornered shares.  Corners are broken by new supply. 

 

So how would it look for GameStop itself to break the corner of its erstwhile supporters by creating additional supply of shares through an offering? 

[hillfronter83]

,

What prevents company issuing more shares to retire debt? I guess it probably won't add value to "shareholders".

 

Note that GME filed to issue up to $100 million in new stock on Dec. 8th.

 

I think Gregmal was postulating whether they were doing this, but an ATM would be perfect to execute. Question is whether Jefferies is able to sell it to any institutional buyers, given the insanity going on at the moment.

 

Would an offering by GameStop be a betrayal?  The emotional narrative underlying the WSB-GME story is that GameStop is semi-beloved piece of childhood nostalgia that would be revived by Ryan Cohen but for the depredations of Wall Street hedge fund types (the shorts).  In other words, the jocks are once again picking on the nerds.  So, the nerds are fighting back against the jocks (Wall Street, hedge funds, etc.) by trying to corner the market for GME shares and thereby crush anyone who is short and has to deliver the cornered shares.  Corners are broken by new supply. 

 

So how would it look for GameStop itself to break the corner of its erstwhile supporters by creating additional supply of shares through an offering?

 

Arguably the board can destroy shareholder wealth (market cap) by creating shareholder value (intrinsic value of the company), lol. So what should be their fiduciary responsibility in this case?

[TwoCitiesCapital]

,

What prevents company issuing more shares to retire debt? I guess it probably won't add value to "shareholders".

 

Note that GME filed to issue up to $100 million in new stock on Dec. 8th.

 

I think Gregmal was postulating whether they were doing this, but an ATM would be perfect to execute. Question is whether Jefferies is able to sell it to any institutional buyers, given the insanity going on at the moment.

 

Would an offering by GameStop be a betrayal?  The emotional narrative underlying the WSB-GME story is that GameStop is semi-beloved piece of childhood nostalgia that would be revived by Ryan Cohen but for the depredations of Wall Street hedge fund types (the shorts).  In other words, the jocks are once again picking on the nerds.  So, the nerds are fighting back against the jocks (Wall Street, hedge funds, etc.) by trying to corner the market for GME shares and thereby crush anyone who is short and has to deliver the cornered shares.  Corners are broken by new supply. 

 

So how would it look for GameStop itself to break the corner of its erstwhile supporters by creating additional supply of shares through an offering?

 

Arguably the board can destroy shareholder wealth (market cap) by creating shareholder value (intrinsic value of the company), lol. So what should be their fiduciary responsibility in this case?

 

It's certainly NOT to being forced to support the share price at bubble levels - that's for sure. They'll likely be gone in 2-3 years (and even that only bought with the recent offering). Another offering now could keep this zombie around for 5+ years as they work through whatever turnaround they want. And with the executives all selling shared now, they don't have the disincentive NOT to do an offering.