Gamestop

[TruthSeeker]

Are you bringing down the hedge funds who shorted Gamestop?

Melvin Capital is going bankrupt.

 

[chri1673]

This is really quite amazing. Game stop was shorted over 100%, Melvin has a massive short position and has to cover the shorts Feb 1. Redditors buy up all the available shares. Price explodes Melvin has to come up with the money to buy at the new price.

Shorts have lost well over 5 billion on gamestop so far this year.

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www.businessinsider.com

Thread to explain. (I had to look it up)

 

[GopherJake]

I hope Section2 wasn't one of the short-sellers..................

 

[Section2]

Markets are broken. This is a huge warning sign. Lots of gigantic losses and bailouts ahead.

 

[TruthSeeker]

Is Melvin bankrupt yet? I haven't seen anything, but they must be barely hanging on.

 

[LesBolstad]

I shorted 25 shares at $330. Wish me luck! Looking good as of now: 250 9:15am.
Watching it very close and will cover on a spike to 320.

 

[saintpaulguy]

Gamestop will be worth more than Apple by the day's end.

 

[balds]

AMC today. up 242% as I type,

 

[Section2]

Is Melvin bankrupt yet? I haven't seen anything, but they must be barely hanging on.

 

[TruthSeeker]

There's clearly an inefficiency that's been identified and now exploited.

 

[LesBolstad]

Yikes, I'm out at 325! At 375 now. This could go to 1000.

 

[saintpaulguy]

I'm not much of a gamer, but my kid's new Xbox comes in a digital only option. If this becomes the norm, what market will be there to resell removable media? I suppose there is some comparison to vinyl records, but a turntable is pretty much universal. It would be more like an 8track. You would have to find a player to play the game.

 

[TruthSeeker]

This is amazing to watch. Some fat cats definitely lost their a$$es. More will fall.

I have to believe short sellers are thinking twice on all their positions going forward.

 

[Minnesota]

I shorted 25 shares at $330. Wish me luck! Looking good as of now: 250 9:15am.
Watching it very close and will cover on a spike to 320.

dumb ass. Lol.

 

[MplsGopher]

(stupid question time)

This has literally nothing to do with the actual value that the company Gamestop brings to consumers or shareholders, right?

This is pure casino craps shooting? Trying to make a buck without doing anything of value?

Maybe that's the whole point trading stocks in the first place. Legalized gambling, that tries to pretend its not gambling.

 

[TruthSeeker]

I think the entire point is the little guy found a way to break the financial elite.

This isn't about Gamestop. It's about breaking the financial class. Gamestop is simply a vehicle to do it.

 

[MplsGopher]

I think the entire point is the little guy found a way to break the financial elite.

This isn't about Gamestop. It's about breaking the financial class. Gamestop is simply a vehicle to do it.

I'm clueless when it comes to the stock market. I have retirement accounts that mostly own shares of various managed products. I don't personally trade, at all.


Is there any basic primer, for what the hell is going on? I only very basically know what a short even is.

 

[LesBolstad]

I'm clueless when it comes to the stock market. I have retirement accounts that mostly own shares of various managed products. I don't personally trade, at all.


Is there any basic primer, for what the hell is going on? I only very basically know what a short even is.

Redditors are relentlessly bidding up dormant retail/mall stocks that hedge funds have bet against. It's kind of revolt against Wall Street power (though there's obviously a mercenary element).

 

[GopherJake]

Seems to me it's a Ponzi scheme and the hedge funds will just wait out the inevitable collapse, since there's (presumably) no "there" there. TS, your thoughts? Honest question.

 

[MplsGopher]

Redditors are relentlessly bidding up dormant retail/mall stocks that hedge funds have bet against. It's kind of revolt against Wall Street power (though there's obviously a mercenary element).

I see. Thanks

 

[MplsGopher]

Seems to me it's a Ponzi scheme and the hedge funds will just wait out the inevitable collapse, since there's (presumably) no "there" there. TS, your thoughts? Honest question.

I feel like even if the Redditors "won", the funds would just go to the government and say "they cheated, we want to be bailed out" and they would get it.

 

[MplsGopher]

More stupid questions:

why are "shorts" legal? Why are they an allowed "thing".

What is the list of allowed "things", and who decides which things are allowed?


If I recall correctly, the crisis of 2008 was due to a new type of investment that someone conjured out of thin air, and it wasn't not allowed, so there was nothing to stop it from crashing the system. Something like that.

Why not just make the law/rules say that you're only allowed to buy a stock and sell a stock, and nothing else?

 

[TruthSeeker]

Seems to me it's a Ponzi scheme and the hedge funds will just wait out the inevitable collapse, since there's (presumably) no "there" there. TS, your thoughts? Honest question.

At some point you would think the short sellers will win. The price can't stay high forever. The company can't support these prices. So the price will crater.

The question is, at what point is it safe to short the stock? You don't want the mob to ruin you. But the mob can only inflate the stock so high.

Someone will make a lot of money shorting it at some point.

 

[TruthSeeker]

More stupid questions:

why are "shorts" legal? Why are they an allowed "thing".

What is the list of allowed "things", and who decides which things are allowed?


If I recall correctly, the crisis of 2008 was due to a new type of investment that someone conjured out of thin air, and it wasn't not allowed, so there was nothing to stop it from crashing the system. Something like that.

Why not just make the law/rules say that you're only allowed to buy a stock and sell a stock, and nothing else?

Shorts are good. They help put a check on over-inflated stocks. They help prevent balloons.

But they're very risky. Your upside is limited and your downside is theoretically unlimited.

 

[MplsGopher]

Shorts are good. They help put a check on over-inflated stocks. They help prevent balloons.

But they're very risky. Your upside is limited and your downside is theoretically unlimited.

So if they're good and needed, do you see it as a "bad" thing that these short positions are being blown up on purpose? Were these shorts "good"? I don't think there was any kind of Gamestop bubble coming, before this all started, so why did they short them in the first place?

 

[saintpaulguy]

The market does not work well without them. That said, it's like the new guy at the craps table betting don't come in the middle of a hot roll where everybody else is betting pass.

 

[GopherJake]

At some point you would think the short sellers will win. The price can't stay high forever. The company can't support these prices. So the price will crater.

The question is, at what point is it safe to short the stock? You don't want the mob to ruin you. But the mob can only inflate the stock so high.

Someone will make a lot of money shorting it at some point.

Ok, so if I'm a hedge fund - or anyone - who shorted these things, I just hang on until the inevitable drop (assuming that's feasible). Or are some of these guys (hopefully not S2 ) overleveraged?

Sorry, these are probably things I can look up, but it's not my area, so I thought I would cut to the chase here. I have barely read anything about this and should....but is there any reason to believe it won't ultimately drop and whoever played the last bet will lose his ass and all the shorters will be just fine?

 

[John Galt]

This is a prime example why you should never short if you don’t also have call options to protect yourself.

 

[TruthSeeker]

Ok, so if I'm a hedge fund - or anyone - who shorted these things, I just hang on until the inevitable drop (assuming that's feasible). Or are some of these guys (hopefully not S2 ) overleveraged?

Sorry, these are probably things I can look up, but it's not my area, so I thought I would cut to the chase here. I have barely read anything about this and should....but is there any reason to believe it won't ultimately drop and whoever played the last bet will lose his ass and all the shorters will be just fine?

The greater fool.

 

[John Galt]

I’d also never recommend shorting a stock if the %of float is above 20%. Too many people leaning one way already and any buying can lead to wild price increases.