GME - Game Stop Corp

[Jurgis]

GME $800 calls expiring on Friday now has 20,000 open interest. Volume is 12,000.

The stock is at $100. This is insane. Is someone really expecting it to go to 800 in 2 days?

 

How do you go broke buying GME calls?

 

Gradually, then suddenly.  ::)

[randomep]

I learned a lot of lessons in 2008 / 2009, one of which was a lot of message boards had uneducated / uninformed participants giving financial advise.

 

I feel strongly that WSB is exactly this - it's leading to a broad base of investors who have no education or information and simply believe whatever they read on WSB (in this case bagholders trying to prop up the stock price of $GME)... uninformed participants don't even realize what they're holding is not worth whatever price the market is still quoting them!

 

Sad state of affairs.

 

I think we can all put to rest the idea that the market will get more and more efficient with more transparency and investing knowledge and information technology and access to the markets.  Economists and especially EMT economists see a future where the collective brains of the masses will squeeze out mispricings. Well practice and reading WSB shows the masses DON'T CARE if the market is blowing a bubble. They DON'T CARE if they are playing a greater fool if they can get their fix for the day.

[shamelesscloner]

I learned a lot of lessons in 2008 / 2009, one of which was a lot of message boards had uneducated / uninformed participants giving financial advise.

 

I feel strongly that WSB is exactly this - it's leading to a broad base of investors who have no education or information and simply believe whatever they read on WSB (in this case bagholders trying to prop up the stock price of $GME)... uninformed participants don't even realize what they're holding is not worth whatever price the market is still quoting them!

 

Sad state of affairs.

 

I think we can all put to rest the idea that the market will get more and more efficient with more transparency and investing knowledge and information technology and access to the markets.  Economists and especially EMT economists see a future where the collective brains of the masses will squeeze out mispricings. Well practice and reading WSB shows the masses DON'T CARE if the market is blowing a bubble. They DON'T CARE if they are playing a greater fool if they can get their fix for the day.

 

These whipper snappers haven't been through a stock market bubble before. And money has never been this close to free before :P

[TwoCitiesCapital]

I learned a lot of lessons in 2008 / 2009, one of which was a lot of message boards had uneducated / uninformed participants giving financial advise.

 

I feel strongly that WSB is exactly this - it's leading to a broad base of investors who have no education or information and simply believe whatever they read on WSB (in this case bagholders trying to prop up the stock price of $GME)... uninformed participants don't even realize what they're holding is not worth whatever price the market is still quoting them!

 

Sad state of affairs.

 

I think we can all put to rest the idea that the market will get more and more efficient with more transparency and investing knowledge and information technology and access to the markets.  Economists and especially EMT economists see a future where the collective brains of the masses will squeeze out mispricings. Well practice and reading WSB shows the masses DON'T CARE if the market is blowing a bubble. They DON'T CARE if they are playing a greater fool if they can get their fix for the day.

 

This has been my point in many conversations I've had around this.

 

The original intent was to squeeze the hedge fund shorts. It's looks like they've done that.

 

But they never had an exit strategy - they all assumed they'd know the right moment to sell to the hedge funds covering...but few sold at $300, $400, or $500.

 

Now they're all stuck in a company at $7B that EVERYONE knows is worth >1B and are trapped.

 

They never planned for this and thus don't know what to do. The buying power to get it back to $500 likely ain't there because the largest part of the reddit horde are now sporting losses > 50% on their investment. It's hard to get excited about tossing more money after that.

 

And the new shorts are harder to squeeze because the positions are established at $200, $300, and $400 and not $10 or $20.

 

Markets ARE efficient - in the longer term.

[rb]

Incorrect! They never wanted to sell to the hedge funds. Which was stupid. That's the whole point of a squeeze. You squeeze the guy to sell to him.

[BG2008]

One other thing to consider, if he liquidated now, who would be the counter party? WSB folks I presume.

 

He’s already got enough to live on, why screw over an entire group of diamondhands?

 

When you watch his early videos, you realize, he is a very rational deep value investor. He apparently bought several deep value positions like Teck, CWH , RFP, Alcoa and a bunch of other commodity in March. Some of those were ten baggers. GME was just one of those things with a skewed risk reward back then. So I think he would usually sell out,  it this is in fact a very atypical situation in  terms of the publicity he got.

 

That's also a very good question to ask.

He got 13M in cash.

Yeah, he can liquidate the rest for 20M yesterday or 7M today.

But really is it better to go out with positive publicity or with "screw everyone I'm rich now"?

 

On yet another hand, nobody ever gets out on top. So CoBF is yet again Monday Morning quarterbacking telling DFV when to get out at the top two days after the fact.

I'm sure if he listened to local experts, he would have sold his position maybe at 500K, maybe at 1M tops.  ::)

The pothead in the big short went out at the top. Gave a big fuck you to everyone (everyone!) and then moved to a Caribbean island to chill and smoke pot. Now I'm not anywhere close to a fan of pot, but that guy's my hero. He didn't make it in the movie of course.

 

I'd probably taken 20M too. But I'd never gotten to 20M on such investment so ./shrug.

And for a young guy publicity/reputation might be more beneficial.  8)

 

Yeah, the reputational aspect shouldn’t be underestimated. i bet he could easily raise $1B in a heartbeat, if he plays his cards right, just based on his reputation.

 

I beg to differ.  Raising capital is one of the hardest things to do.  To get to $50mm, sure.  But to get to $1bn requires taking institutional capital and that's exactly the kind of capital that has a ton of agency gating factor involved.  It won't be easy.

[fareastwarriors]

HODL!

[BG2008]

Not sure if anyone has mentioned this.  Anyone thinks that Elon started to take a break from Twitter because he's been getting threats from GME bagholders?  Wild conspiracy theory.  What if TESLA winds up breaking because Elon won't engage on Twitter anymore? 

[Fly]

Not sure if anyone has mentioned this.  Anyone thinks that Elon started to take a break from Twitter because he's been getting threats from GME bagholders?  Wild conspiracy theory.  What if TESLA winds up breaking because Elon won't engage on Twitter anymore?

 

He's busy buying Bitcoin.

 

Kidding, sort of

[randomep]

 

This has been my point in many conversations I've had around this.

 

The original intent was to squeeze the hedge fund shorts. It's looks like they've done that.

 

But they never had an exit strategy - they all assumed they'd know the right moment to sell to the hedge funds covering...but few sold at $300, $400, or $500.

 

Now they're all stuck in a company at $7B that EVERYONE knows is worth >1B and are trapped.

 

They never planned for this and thus don't know what to do. The buying power to get it back to $500 likely ain't there because the largest part of the reddit horde are now sporting losses > 50% on their investment. It's hard to get excited about tossing more money after that.

 

And the new shorts are harder to squeeze because the positions are established at $200, $300, and $400 and not $10 or $20.

 

Markets ARE efficient - in the longer term.

 

Twin Cities, not sure if I agree on this with you. I mentioned "squeeze out mispricing", that was a bad choice of words. What I meant is not short squeeze.  I am saying this whole WSB fiasco is not motivated by self interest as a economist would define it.  Instead these WSB clowns are motivated by a hate towards hedge funds or insiders or what have you.  They don't care if they lose money so long as those they hate go down.

 

I mean who is to say the short side is not the most rational self-serving thing to do?  No one on WSB has given me a thesis that says GME isn't worth less that $5.  People aren't making decisions based on cold rational calculations, yet economists base their careers on a world where everyone does so.

 

And that's the point of my rant.......

 

[KCLarkin]

Ugh...

https://www.nytimes.com/2021/02/03/business/roaring-kitty-gamestop.html

[rb]

Ugh...

https://www.nytimes.com/2021/02/03/business/roaring-kitty-gamestop.html

What? I agree with most of everything that was said.

[stahleyp]

Ugh...

https://www.nytimes.com/2021/02/03/business/roaring-kitty-gamestop.html

 

Well this sucks.

[Viking]

I learned a lot of lessons in 2008 / 2009, one of which was a lot of message boards had uneducated / uninformed participants giving financial advise.

 

I feel strongly that WSB is exactly this - it's leading to a broad base of investors who have no education or information and simply believe whatever they read on WSB (in this case bagholders trying to prop up the stock price of $GME)... uninformed participants don't even realize what they're holding is not worth whatever price the market is still quoting them!

 

Sad state of affairs.

 

Simba, you call the participants in WSB investors. My guess is most are speculators, not investors, and they do not know the difference.

 

My first individual stock purchase was Bre-X. I lost everything ($5,000) which was a lot of money for me back then. It was the best thing that ever happened to me... it taught me the difference between investing and speculating. Tuition. Afterwards I focussed more on Buffett, Lynch etc and the rest, as they say, is history.

———————-

Bre-X: The stock was originally listed on the Alberta Stock Exchange in 1989, and subsequently in 1996 on the Toronto Stock Exchange and NASDAQ.[8] The stock price of Bre-X rose to CA$280 per share by 1997 (split adjusted) and at its peak it had a market capitalization equal to US$4.4 billion, equivalent to US$7 billion in 2019.[9]

 

- https://en.wikipedia.org/wiki/Bre-X

[LC]

GME $800 calls expiring on Friday now has 20,000 open interest. Volume is 12,000.

The stock is at $100. This is insane. Is someone really expecting it to go to 800 in 2 days?

Robin hood will allow up to 500 share purchases tomorrow.

 

“Lucky” timing.

[shamelesscloner]

GME $800 calls expiring on Friday now has 20,000 open interest. Volume is 12,000.

The stock is at $100. This is insane. Is someone really expecting it to go to 800 in 2 days?

Robin hood will allow up to 500 share purchases tomorrow.

 

“Lucky” timing.

 

Maverick is re-engaging

[AzCactus]

Maybe famous last words but looks like this one is headed back to where it belongs

 

[Patmo]

It appears at first glance that I overestimated the autists' degeneracy. Where are the promised diamond hands?

[RichardGibbons]

Ugh...

https://www.nytimes.com/2021/02/03/business/roaring-kitty-gamestop.html

What? I agree with most of everything that was said.

 

My perspective is that he was an anonymous person posting to a site specifically dedicated to gambling on the stock market. He didn't imply that he was a professional or even an expert. And, after the obvious bubble developed, his "promotional" posts were basically limited to posting snapshots of his account.

 

Maybe there's other facts that I'm missing... I haven't looked at his videos. But if these are the rough facts, I think it's an injustice to even force him to spend time and money defending himself, and would be a big injustice if he were found guilty of something.

 

(If I'm missing something and there's actual evidence of him disseminating inaccurate information in order to manipulate people into buying, then it's worthy of investigation and prosecution.)

[Junto]

I bought 1 $140 put for 2/5... I couldn't resist at these levels. Currently trading at $147.00. Might lose but hope to gain with a fall after options expiration on Friday...

 

It was quite the roller coaster gamble but I sold the put at a very nice profit. Would have made more to go long with momentum and sell on the surge but the returns for a week and two days is not bad either.

 

The amount of pumping and dumping right now is crazy. A trader’s market for sure.

 

In the end, the Reddit rebellion will indicate all they did is poor gas on the fire of a squeeze and then provide liquidity so the hedge funds driving the value up, could get out clean at the top.A Hedge fund war and they were the collateral damage where they happily fell on the sword as if they were righteous. Melvin went down but there is too much smart money out there to outfox them all. The story has played out many times.

 

The story that I am most curious to read is the story on the brokers and why billions were needed at Robinhood and others to shore up the clearing house. Something else went on that we don’t know the details of yet.

 

Good luck everyone.

 

[randomep]

 

Am I reading this right?  GME has

 

70 M shares outstanding

90 M shares average volume?

 

So everyday they have completely turned over all the shares?  So every rich hedge fund can completely get out at over $100 last few days?

[shamelesscloner]

I bought 1 $140 put for 2/5... I couldn't resist at these levels. Currently trading at $147.00. Might lose but hope to gain with a fall after options expiration on Friday...

 

It was quite the roller coaster gamble but I sold the put at a very nice profit. Would have made more to go long with momentum and sell on the surge but the returns for a week and two days is not bad either.

 

The amount of pumping and dumping right now is crazy. A trader’s market for sure.

 

In the end, the Reddit rebellion will indicate all they did is poor gas on the fire of a squeeze and then provide liquidity so the hedge funds driving the value up, could get out clean at the top.A Hedge fund war and they were the collateral damage where they happily fell on the sword as if they were righteous. Melvin went down but there is too much smart money out there to outfox them all. The story has played out many times.

 

The story that I am most curious to read is the story on the brokers and why billions were needed at Robinhood and others to shore up the clearing house. Something else went on that we don’t know the details of yet.

 

Good luck everyone.

 

We need answers about who is on this consortium called the NSCC and how did they "calculate" this $3bn capital requirement from Robinhood?

[Spekulatius]

I bought 1 $140 put for 2/5... I couldn't resist at these levels. Currently trading at $147.00. Might lose but hope to gain with a fall after options expiration on Friday...

 

It was quite the roller coaster gamble but I sold the put at a very nice profit. Would have made more to go long with momentum and sell on the surge but the returns for a week and two days is not bad either.

 

The amount of pumping and dumping right now is crazy. A trader’s market for sure.

 

In the end, the Reddit rebellion will indicate all they did is poor gas on the fire of a squeeze and then provide liquidity so the hedge funds driving the value up, could get out clean at the top.A Hedge fund war and they were the collateral damage where they happily fell on the sword as if they were righteous. Melvin went down but there is too much smart money out there to outfox them all. The story has played out many times.

 

The story that I am most curious to read is the story on the brokers and why billions were needed at Robinhood and others to shore up the clearing house. Something else went on that we don’t know the details of yet.

 

Good luck everyone.

 

What I really hope from this episode is that regulators are looking at the financial plumbing and improve on the T+2 settlement. It is an ridiculous artifact at this time and I wonder if other brokerages could blow up when folks start to trade with ridiculous speed which is now conceivable with no commission trading (not that’s it s good idea). I know we like to dunk on Robinhood, but the problem wasn’t Robinhood per say, it was their customer base and frictionless trading (or at least it appears to be frictionless)

[Spekulatius]

I don’t think this is going to age well:

https://i.redd.it/qe88l45wtkf61.jpg

 

This probably costs a fortune to remove.

[ERICOPOLY]

One of the obvious observations I have from the GME saga is how hard it is to determine what the short interest actually is on a highly shorted stock. You have companies like S3 that build products and systems just to figure this out. It seems like the root cause of this is the T+2 settlement lag. This creates a huge hole for naked shorting and probably other nefarious activity. Even getting the settlement time down to EOD would be a big improvement. I don’t think real time settlement is possible any time soon given the volume (HFTs etc...). It appears options are settled same day, why is the DTCC still living in the Stone Age? Am I missing something? Or is it just sloth.

 

I once spent some time researching a tax topic known as "shorting against the box" which back in the day was used to defer capital gains indefinitely.  The technique involved indefinitely delaying realized gains of the appreciated security by instead shorting an offsetting amount of that security. 

 

I believe that the "against the box" technique was addressed by the tax code in the late 1990s, but it still left open a rule stating that the capital gains event didn't occur until shares were delivered.  And so was born the naked shorting nonsense where a hedge fund could delay capital gains trading an oscillating stock like Fairfax Financial Holdings with an attendant growing naked short interest due to the reluctance of delivering physical shares for tax purposes.