The GameStop....swizzle?

[Rummy]

Not really a hustle, not really a swindle. More of a swizzle?

Has anybody been seeing this slightly peculiar but interesting news abiut GameStop stock in the US? It seems some subreddit /r/wallstreetbets decided as a collective to buy a bad/failing stock for the lulz - and its now skyrocketing the value on the market. I've just started reading about it and it seems quite curious - baffling traditional econonists/models a bit too apparently.

One irony in this too ofc is its fucking major traders and hedge funds etc who might have tried to play futures on GameStop with a projection of the price falling and tanking even more - prior to this just happening.

https://www.google.com/amp/s/amp.theguardian.com/commentisfree/2021/jan/28/anarchy-in-jokes-and-trolling-the-gamestop-fiasco-is-4chan-think-in-action

[Will]

I’m part of the group and have had my eye on this for a little while. Invested a little a few weeks and cashed out 1/3 of my position yesterday to 4x my original investment.

It’s been a really interesting one to follow, and some of the analysis people have done on it is quite astonishingly detailed and well thought out. It’s really only hit the mainstream in the last couple of days and that is when this sort of thing starts to get scary and a LOT of money can be lost by people who don’t know what they’re doing.

Are you thinking of putting some money into it @Rummy? I think it still has some room to grow but it will definitely fall a long way in the not too distant future.

[Rummy]

8 minutes ago, Will said:

I’m part of the group and have had my eye on this for a little while. Invested a little a few weeks and cashed out 1/3 of my position yesterday to 4x my original investment.

It’s been a really interesting one to follow, and some of the analysis people have done on it is quite astonishingly detailed and well thought out. It’s really only hit the mainstream in the last couple of days and that is when this sort of thing starts to get scary and a LOT of money can be lost by people who don’t know what they’re doing.

Are you thinking of putting some money into it @Rummy? I think it still has some room to grow but it will definitely fall a long way in the not too distant future.

Have you got any links to good analysis and stuff? I'm only just learning about it. I don't actually put money(plus not in the sitch atm) into the market and have no accounts etc. though I have considered it for when I'm at a certain financial point/threshold again depending how the wider economy is looking and what money will be worth. I like the occasionally follow stuff though or check hunches of things I think might move due to social situations/factors over market etc. but its literally just googling a stock and looking at its price over time then trying to place factors for peaks and troughs. Small fun for me lol.

The Guardian article above is a bit light for financials of it for folks who dont follow(especially shorts/futures)  just on this CNN one now that has a bit more that to it if anyones a bit confused;

https://edition.cnn.com/2021/01/27/investing/gamestop-reddit-stock/index.html

EDIT: to offer at least a speculative answer @Will I'd be about 80/20 for myself against jumping in now; part because I haven't personally been around or deep into it enough to form my own intuitions yet but I think with this exposure now it'll become a risky boom or bust and I'd likely end up jumping in right at the peak like an idiot -.-

[Will]

6 minutes ago, Rummy said:

Have you got any links to good analysis and stuff?

The best thing is to read through the subreddit, especially the longer due diligence posts from the last couple of weeks. The group has basically doubled in size over the past few days and the more recent stuff is basically just people screaming about it going to the moon.

The general summary I would say is:

1. Around the start of last year a WSB user identified gamestop as undervalued and worth putting a big bet on
2. Some big investment was put into gamestop by a group with proven e-commerce building and a plan to turn the company around
3. The stock jumped up
4. Hedge funds thought the new jump was hugely over-valued so began shorting the stock like crazy - really crazily, I think at one point almost 200% of the available stock was shorted
5. The investors realized the short positions were hugely risky and they would be forced to buy back at an inflated price
6. Reddit gets behind buying and holding the stock
7. Price starts to rise like crazy as shorts are covering and more regular people want to get in on this madness
8. Price goes even more crazy <- this is where we are right now
9. Price may go more crazy
10. Price will crash heavily

So really right now it’s all about how much more crazy you think it will go and whether you want to gamble on there being enough time to sell at a good profit. Personally there is no way I would get in now, but there is absolutely a chance you could double (or more!) your money.

[Rummy]

Ahh cool cheers. Yeah I've been a minor Reddit lurker but finally signed to an account to post last week(partly to for JRE sub but actually ended up doing it for qAnonCasualties - as with the Trump thread and the insurrection passed I'm also looking into psychosocial phenomena around Q and Cults and how, like this, the internet is catalysing and teansmogrifying classic collective social phenomena in new ways etcetc) - my current plan is basically see what various 'traditional' sources like media says and then I'm gonna jump into the sub. It's curious because in my recent redditing I saw their name popping up as a half-meme/half-joke in other reddits and now this pops up on the radar.

Do you have any of your own thoughts on the meta of it? That this couldn't have traditionally happened but can now due to the internet and such tech advancement also allowing greater accessibilty to the markets for more people etc?

 

Quote

Personally there is no way I would get in now, but there is absolutely a chance you could double (or more!) your money.

Pretty much my own feels! Potentially super huge returns - but at a super great risk!

[Will]

34 minutes ago, Rummy said:

EDIT: to offer at least a speculative answer @Will I'd be about 80/20 for myself against jumping in now

Yeah I think that’s sensible. If you have some spare money that you absolutely do not mind losing all of then you have a chance to make something with it. The risk/reward is just not there anymore though, a gamble like this I think you want to at least be able to 10x your money and that just isn’t there anymore. At least I don’t think it is, I could be totally wrong on that and it’s exactly why I’m still holding on to some.

11 minutes ago, Rummy said:

Do you have any of your own thoughts on the meta of it? That this couldn't have traditionally happened but can now due to the internet and such tech advancement also allowing greater accessibilty to the markets for more people etc?

Generally I think the whole thing is great, a bunch of internet nerds taking on huge hedge funds and destroying them is quite a joy to watch. Something like this could have happened at any point in the last decade but such a unique set of circumstances had to come together it was always unlikely. I doubt we’ll ever have something quite like this at this scale again. What does worry me is people coming in now and betting their life savings just before the price crashes, there will definitely be members of the general public burnt by this.

[Rummy]

Yeah - I don't touch the markets because you gotta be careful and again - ONLY go in with money you are 100% HAPPY TO LOSE. Playing beyond your means for the instant kicks and dopamine hits is only for the green.

Reading how stuff keeps reffering to the 'bubble' and when it'll burst and probs cos I'm posting here. I suddenly remember this very handy visual guide to the stock market as made by Nintendo;

 

[Helmsly]

I've been messing around on a trading app (with a practice account) to try and learn a little about investing since late 2019, to try and learn the a little about stock market and around this time last year I stumbled upon WallStreetBets. I stuck around because of how much that place makes me laugh with their posts and gifs, but I was also learning stuff from there too. it was surreal to see info on there was helpful with investing with the right stocks in between comments like:

It has been crazy to see it blown up this week, I never thought I'd be seeing Jim Cramer and the rest on CNBC talking about them, let along most of the internet right now.

There is a poster on there who has been working up to this and keeping everyone updated on his long Gamestop positions all year, who now currently sits at making 47 million dollars, probably a lot more if everyone holds their positions to Friday.

 

 

Edited January 28, 2021 by Helmsly

[Will]

5 minutes ago, Rummy said:

Yeah - I don't touch the markets because you gotta be careful and again - ONLY go in with money you are 100% HAPPY TO LOSE. Playing beyond your means for the instant kicks and dopamine hits is only for the green.

For gambles like this you’re right, but generally the stock market is the only place to have your long term savings. I hold the majority of my money there but in much more stable and valuable companies.

5 minutes ago, Helmsly said:

It has been crazy to see it blown up this week, I never thought I'd be seeing Jim Cramer and the rest on CNBC talking about them, let along most of the internet right now.

Totally mad, and funny how much they are trying to paint WSB as the villains while the funds do all they can to manipulate the market in the direction that works for them.

6 minutes ago, Helmsly said:

I've been messing around on a trading app (with a practice account) to try and learn a little about investing since late 2019

Not thought about putting any real money in yet?

[Rummy]

18 minutes ago, Will said:

For gambles like this you’re right, but generally the stock market is the only place to have your long term savings. I hold the majority of my money there but in much more stable and valuable companies.

Ah yeah that's what I'd be about in future when I'm back at a threshold - I agree theres much more increasing economic instability and things like pure cash/money is going to become a bit volatile imo(espesh with the covid and brexit knockons coming etc). Interesting in BTC a bit too - it seems to becoming the new gold of sorts(as it was no doubt intended, too).

I agree with the meta take - I love that its fucking up the big boys. There's too much wealth inequality as it is and its gaps are being exponentially grown due to these mechanisms. They haven't regulated themselves enough and now nature is taking its own course against it. Was just reading this one about some of the losses of the big bois(of which i expect we see a very small sliver of a picture - this is not a good look for them);

https://www.theguardian.com/business/2021/jan/27/gamestop-stocks-us-hedge-fund-pulls-out-after-heavy-losses

[Helmsly]

1 minute ago, Will said:

Totally mad, and funny how much they are trying to paint WSB as the villains while the funds do all they can to manipulate the market in the direction that works for them.

It concerns me how quickly that happened. I watched a man being interviewed on CNBC suggest that this was the work of "foreign powers". There is another claiming that this is hacking. The WSB discord was banned today, supposedly because of hateful and discriminatory behavior..which sure, but they only did that now, today, just as GME rockets?

1 minute ago, Will said:

Not thought about putting any real money in yet?

I was about ready to start towards the end of the year but we were moving home, which was extra tricky during covid so everything kept getting delayed like when the November lockdown kicked in. My mum is close to bedridden and I am a part carer for her, so there were a lot of issues getting transportation etc to move. Now we have moved and are settled, I can do it, but there is a whole other issue with the trading app that kicked in during this whole GME thing. You can skim through the comments here to see what I am talking about: Link

After what they pulled this week I now have zero confidence to invest with them.

[Nicktendo]

I heard about this a couple of weeks ago and didn’t bother jumping in as I’ve never invested before and setting everything up would’ve been a ballache. Have a few guys in a discord who have basically gone all in and it has been immense fun watching from the sidelines. Some of them are up tens of thousands of dollars.

Of course Wall Street is livid because the man on the street has beat them at their own game. This is bigger than Occupy Wall Street ever was. Expect very, very heavy regulation to come in after this. No shock that Biden will sign off on whatever bullshit they dream up to keep their false wealth. 

[Rummy]

Funny enough I was just reading an article about the reddit closure and how even that caused a panic to dip the price a bit lol;

https://www.google.com/amp/s/www.bbc.co.uk/news/amp/business-55837519

[Rummy]

5 minutes ago, Nicktendo said:

Of course Wall Street is livid because the man on the street has beat them at their own game. This is bigger than Occupy Wall Street ever was. Expect very, very heavy regulation to come in after this. No shock that Biden will sign off on whatever bullshit they dream up to keep their false wealth. 

It's hilarious. I can see them quietly shitting themselves already. Can it work though? The people have merely started doing what the big bois do - just open and plain and they don't like it that now everyone can play the game? I'm very curious to see how they push back - what is possibly illegal about a public forum giving investment advice and all people attending said public forum following said advice at the behest of their own free will? Expect legislation - and judicial challenges. Oh boy oh boy oh boy it could be so funny depending how  things go through any court - will the idea of upholding the rule of law and order mean ruling against the poorer people investing but not the richer man simply because the actions of the poorer man has poked holes in the frabric of the structure built by the rich man?

[Nicktendo]

[Will]

2 hours ago, Nicktendo said:

Some of them are up tens of thousands of dollars.

Hope they’re taking some profit on the way up, doesn’t mean anything if it’s just a paper gain.

2 hours ago, Nicktendo said:

Expect very, very heavy regulation to come in after this. No shock that Biden will sign off on whatever bullshit they dream up to keep their false wealth. 

I’m sure the Trump administration would have. Hopefully now it’s a bit more reasonable and they regulate the real problem of the naked short sellers rather than the people picking up a stock tip and running with it.

 

[Rummy]

Someone sent me a post of a guy who went into his local gamestop to spend some of his profits on a bunch of their clearance stock It'd actually be cool if everyone from WSB did it but then it inspired me a bit into some recursive thinkings(where i often end up :p).

In theory - could the everyman speculators of WSB make enough money from this fiasco - where the value of the share*total stock far exceeds any actual material worth of the company - its essentially now a siphon from hedge fund managers - money from outside.

Could these everyman speculators then use/take all their profits to altruistically do the same as the dude here and buy out the stock of their locals.

Or even better yet - could anybody or even a collection of some of the biggest profiters sit upon their gains and then....actually buy the company(or set up a carbon copy rival and buy the brand later)? How about the guy they used for the jump-off point - this Ryan Cohen or so? He a share and if his share now exceeds the actual total worth of the company and its assets could he cash out now and just...buy Gamestop afterwards???

 

(ofc many market regulations would probably restrict this but I'm curious to see its tests against this organic community sort of movement)

[Will]

17 minutes ago, Rummy said:

In theory - could the everyman speculators of WSB make enough money from this fiasco - where the value of the share*total stock far exceeds any actual material worth of the company - its essentially now a siphon from hedge fund managers - money from outside.

It’s already way past that point, people thought it was overvalued at $5 - it’s now well above $300.

17 minutes ago, Rummy said:

Or even better yet - could anybody or even a collection of some of the biggest profiters sit upon their gains and then....actually buy the company(or set up a carbon copy rival and buy the brand later)? How about the guy they used for the jump-off point - this Ryan Cohen or so? He a share and if his share now exceeds the actual total worth of the company and its assets could he cash out now and just...buy Gamestop afterwards???

They could if they are able to sell their shares at the top of all this and buy back in much lower. But not everyone, or even the majority, are going to sell at the top. If Cohen were to do it it’s basically shorting his own stock which will immediately tank the price, there is 0 chance of him selling out everything he holds at the top.

Right now it’s basically a pyramid scheme with a few massive buyers who will likely be forced to buy in later in the game. A lot of people are going to be left with shares they bought for hundreds of dollars worth less than 50. 

Edited January 28, 2021 by Will

[Rummy]

Well rather than the share to share idea - if Ryan could cash out now it would as you say destroy the company.

If they go into bankruptcy and he has a ton of private cash and can buy them as an entity but with change wouldn't he then own the company AND his change and be in profit? Ofc as this point the company is technically very worthless but then he invests the change and builds it up?

Again though its absolutely impossible for me to believe something like this would actually be doable because it would be kinda super broken(but then isnt capitalism anyway? how did phillip green do what he did etcetc.?) so there must be something already limiting that.

I agree with the pyramid nature(again why I said I'd be unlikely to jump) this is exponentially hurtling to its own doom and on top of that its now spreading into more and more of the public consciousness which will increase those exponents even more. The funny thing will be if somehow a radical rebellion of small 'losable' sums get invested by so many people who want to hold out on principle to stick it to the hedge funds - IF that threshold became a reality it would be quite amusing. As I see it at the moment whilst the price keeps going up the hedge funds have to buy more or cash out? Ofc some people will lose money too but could a very principled rebellion(ofc purely theoretical it wouldnt happen easily in reality) that insists on buying and holding out essentially knock quite a fresh bit off of hedge fund holdings who continue to hold on?

[Will]

3 minutes ago, Rummy said:

If they go into bankruptcy and he has a ton of private cash and can buy them as an entity but with change wouldn't he then own the company AND his change and be in profit? Ofc as this point the company is technically very worthless but then he invests the change and builds it up?

That’s basically what he was doing originally, none of this insane price rise was part of his plan. The stock price doesn’t really have any impact on the actual running of the company, it’s a reflection of it. Gamestop, I believe, still hold some of their own shares so can use these to finance themselves while the price is high.

6 minutes ago, Rummy said:

As I see it at the moment whilst the price keeps going up the hedge funds have to buy more or cash out?

It’s “the hedge funds need to buy more TO cash out” - and they are being called on to cash out their positions as the price goes up. So all the time it’s rising they are getting more and more screwed.

7 minutes ago, Rummy said:

Ofc some people will lose money too but could a very principled rebellion(ofc purely theoretical it wouldnt happen easily in reality) that insists on buying and holding out essentially knock quite a fresh bit off of hedge fund holdings who continue to hold on?

Yeah it’s definitely nice while they’re killing the funds, but people have no exit plan on this thing. It won’t go up forever and people need to take some profit. People are putting their life savings on this and stand to lose it all.

[Nicktendo]

GameStop, AMC, BlackBerry and Nokia stock can no longer be bought on the Robin Hood app.

The whole goddamn system is rigged.

You will take your anal COVID swab, you will give up your land and home for the greater good, you will accept the Great Reset.

You will own nothing and be happy!

Edited January 28, 2021 by Nicktendo

[Rummy]

5 hours ago, Will said:

It’s “the hedge funds need to buy more TO cash out” - and they are being called on to cash out their positions as the price goes up. So all the time it’s rising they are getting more and more screwed.

Ah yeah I had essentially been meaning this - without the stock they cannot get any cash/profit out BUT they owe people stock and not cash etc.

Had come to say about the RobinHood stuff - things are gonna fall back down now. It's been a remarkable episode though and as far as I can see it's not really illegal due to its organic nature. So funny seeing the Richards get shooketh tho. Anybody who knows more about the whole game got speculations on what we might see next following this? Regulation changes? Pursual of WSB/Reddit? Legal issues?

[Will]

7 hours ago, Rummy said:

Had come to say about the RobinHood stuff - things are gonna fall back down now. It's been a remarkable episode though and as far as I can see it's not really illegal due to its organic nature. So funny seeing the Richards get shooketh tho. Anybody who knows more about the whole game got speculations on what we might see next following this? Regulation changes? Pursual of WSB/Reddit? Legal issues?

As I see it there are a few key parts to this:

1. The Reddit crowd did absolutely noting wrong. Nobody is an insider (I assume) that brought information to manipulate the price. A group of people just got behind a stock and were right about it to the point they started making a lot of money.
2. What do you even do to legislate against something like this? Ban people talking to each other? Ban people from investing in the stock market?
3. The main cause of this is the short sellers and the fact they could short more than 100% of the company. All of these weird trading practices should be got rid off if they actually wanted to do something positive.
4. The actual manipulation was robin hood and the other trading platforms stopping people from buying stock. I hope everybody will boycott any platform that did this. I certainly wouldn’t put my money anywhere that the custodians are willing to totally fuck me over if my trades don’t work for them.
5. What will this do for wider market confidence? If my gains can be forcibly taken from me without repercussions do I really want to be involved at all?

I sold a bit more of my holding on the way down which ensured that I am now 7x on my original investment. I’ve kept a few shares just to see what happens to the end of the week. It still might go crazy so may as well stay in to the end.

Edited January 29, 2021 by Will

[Rummy]

Agree with you on all those points - that's what makes this all so delicious.

 

Sadly it looks like the corporate cunts have calculated that it'll be cheaper for them to break the law to recover their positions than to not try and mug off the WSBs. It's fucking outrageous and this WHOLE thing really needs to call a lot of shit to attention. I'm loving how now it's not even about profit(so i take back the bust coming when i thought) just about stubbornly sticking it to the man. A mate messsged asking if I got in but I said I never play the game and don't have cash but I'm tempted to rustle a little hustle and get me maybe £100 or a few more to chuck towards the cause. I want them to be embarrassed. I want their arguments on the global stage of hypocrtically fall apart(i am SO about the memes and commentart right now - and ill be bringing a mini-dump later :p) because that's exactly what they are - hypocritical and without merit. I want it exposed. Stay strong and HOLD my dear diamond handed friends!!

oo btw @Will or any other folks - when DO the hedge funds have to return 'all' that stock they borrowed? Is it close of play tomorrow and do we have any sources or is this speculation by folks? Hard to know where to find stuff atm in the fast moving sea of it all; even on the reddit.

[Helmsly]

The way this is gone is insane, its as if everyone is commenting on it. I actually saw Ted Cruz in agreement with AOC:

Dog and cats living together. Mass hysteria!

On a side note to what Robinhood did, I noticed the UK press only mentioned that broker in their stories about preventing its clients from buying. I understand why but considering they are not operating in the UK and trading212 which does and did the exact same thing yesterday its annoying that they've hardly gotten any heat over it. Edit - something might happen now:

 

 

Anyway, very interesting times we're living in, and here I was thinking things would get a little boring now that Trump is no longer in office,

Edited January 29, 2021 by Helmsly