Diamond hands are being crushed
- Thread starter aTotal360
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I still have not had short ladders sufficiently explained to me or, if I have, I dont see how people can prove that's what's happening. I've had a buy order for GME @ $40 since yesterday because I think it could spike one more time but it looks like this almost over. I also wish I could find accurate information on the current short % because you know there are people out there shorting this still - I mean, besides a group of retail investors pumping it, who wouldn't short it right now? Overvalued by a factor of at least 5.
Cashed out Friday & Monday, was in really early though. Keeping exactly one share for posterity sake forever. Don’t normally ever invest in retail, and was playing with fire but it worked out. I do think $100 is a fair value for the next year, considering their revenue, but not sticking around.
Shorting is extremely risky. Buying puts is not risky (or at least doesn't risk anything beyond the purchase price of the puts). The price of existing puts went up when the stock price shot through the roof. So somebody that bought in at $40 and bought a put at say $15 were able to make money buy being long and being short at the same time because people were willing to pay more to bet that the price would drop below $15 when the stock was at $300 than they were when the stock was at $40. Just crazy dynamics, but that shows that yes, people have been dumping money into a short position as it's been rocketing up, both using puts and presumably traditional short selling.
GameStop is basically worthless. Nothing worse than a growth company that became really profitable and then goes into decline. Especially in retail. They have let the gaming opportunity get completely away from them. They have become a pawnshop that only sells gaming stuff. Their revenue and earnings have declined for 3 consecutive years and it could be argued that Covid helped more than it hurt.
The hedge funds had sound research for shorting the stock. They just got carried away with the volume and then get 17'd by WSB.
The hedge funds had sound research for shorting the stock. They just got carried away with the volume and then get 17'd by WSB.
I’m curious to see what the guy who owned chewy and is now major shareholder and board member will do. Can he turn GameStop into a video game version of chewy?
I agree. Their business model is trash since physical game discs/cartridges are being phased out. I think if they would Invest more in used games (takes less margin) they could keep afloat. The fact they try to buy used games for $12 and attempt to resell them for $48 is ********. If they would give people $25 for games, their foot traffic would increase. And that's what their brick and mortar needs badly.
I doubt it. They just have so much cash outlay to build the IT infrastructure and then the costs of closing all those retail locations. The best thing they hate going for them is console launches, but I don't think it is enough.
Not going out of business anytime soon, but the slow death.
"Short ladder attack" seems like a ******** term. At least the way WSB describes it. It might work in a low volume situation. But if there is a lot of volume then the ladder could never be descended.
How WSB describes it:
You want to sell your old Honda Civic. You think it's worth $5000 and put a sticker that says $5000 on it.
Your neighbor sees this and borrows his friend's Civic. He puts a $4000 sticker on it. The friend buys it from him.
Another neighbor borrows the same Civic and puts a $3000 sticker on it. The friend buys it from him.
You see that two Civics went for less than what you are asking. You decide to sell it to your neighbor for $2500.
How it would work in reality:
You want to sell your old Honda Civic. You think it's worth $5000 and put a sticker that says $5000 on it.
Your neighbor sees this and borrows his friend's Civic. He puts a $4000 sticker on it. Somebody else out there who really wants a Civic is willing to buy it for $4800 and buys it.
How WSB describes it:
You want to sell your old Honda Civic. You think it's worth $5000 and put a sticker that says $5000 on it.
Your neighbor sees this and borrows his friend's Civic. He puts a $4000 sticker on it. The friend buys it from him.
Another neighbor borrows the same Civic and puts a $3000 sticker on it. The friend buys it from him.
You see that two Civics went for less than what you are asking. You decide to sell it to your neighbor for $2500.
How it would work in reality:
You want to sell your old Honda Civic. You think it's worth $5000 and put a sticker that says $5000 on it.
Your neighbor sees this and borrows his friend's Civic. He puts a $4000 sticker on it. Somebody else out there who really wants a Civic is willing to buy it for $4800 and buys it.
I think GameStop has more going for it than people think. Retail is not dead, rather it has to transform to survive. Their online presence has certainly grown and their foray into selling PC gaming hardware could be lucrative. I like the company. I liked the stock until I recently sold it. I'll probably buy back in again in a month or two.
My understanding is that it’s two brokers trading back and forth while steadily lowering the price. It looks like a sharp drop in price with low volume as opposed to a mass sell off with high volume. Not sure if there’s any way it can be proven.
There is going to be a place for something like what GameStop is trying to be. The advantage that GameStop has is that it already has a big presence, it has a lot of retail locations, and it's basically already in the business except that it's going to have to shift to having it's revenue come from hardware rather than software. The disadvantage Gamestop has is that it has a lot of retail locations and it might in some ways be harder to shift from selling software to selling hardware than it would be to just jump into hardware from scratch (or alternatively, for somebody like Best Buy to take that market).
And I'm not clear on what role Gamestop can carve out for itself in the digital market. The different platforms have their own digital marketplaces, correct? I'm not sure what value Gamestop can bring there. If you have an XBOX, are you going to go to Gamestop's website where they sell digital downloads for XBOX, Playstation, and Nintendo (and I guess PC games?)? OR are you just going to go to the website for whatever console you have?
It’s hard to sell used games when everyone is slowly going digital.
Their best bet is to close the stores that are too close to each other, and pivot to being the go to place for PC Gaming parts and focus more on hardware and console sales. There’s some value in going to a brick and mortar to find the latest NVIDIA video cards or monitors without having to order online. The hardest part would be keeping that stuff in stock.
Used games could still be a part, but the retro game market is getting harder and harder to find stock.
GameStop isn’t dead yet, but it will be if they don’t evolve.
Their best bet is to close the stores that are too close to each other, and pivot to being the go to place for PC Gaming parts and focus more on hardware and console sales. There’s some value in going to a brick and mortar to find the latest NVIDIA video cards or monitors without having to order online. The hardest part would be keeping that stuff in stock.
Used games could still be a part, but the retro game market is getting harder and harder to find stock.
GameStop isn’t dead yet, but it will be if they don’t evolve.
Interesting podcast episodes on this whole WallStreetBets situation:
1/28: WallStreetBets Is Occupy Wall Street With Teeth
1/30: GameStop, Robinhood and the Failure of Un-Free Markets
2/1: Have the Hedge Funds Infiltrated Reddit’s WallStreetBets?
2/2: Is This the End of the Reddit Retail Investor Dream?
1/28: WallStreetBets Is Occupy Wall Street With Teeth
1/30: GameStop, Robinhood and the Failure of Un-Free Markets
2/1: Have the Hedge Funds Infiltrated Reddit’s WallStreetBets?
2/2: Is This the End of the Reddit Retail Investor Dream?
I just had to see where you get your podcasts.. I lol'd when I saw coindesk. Nobody will accuse you of being a poser. You are alright Wagstaff. My weird little crypto cousin.
I’ve been out of the video game market for a while but why don’t those that want to trade in games just to eBay and cut out the middle man?
If you weren't an idiot and sold when you had huge gains, then it is not the end of your retail investor dream.
And if you think your YOLO at $400/share has anything in common with DFV, you are getting what you deserve right now.
And if you think your YOLO at $400/share has anything in common with DFV, you are getting what you deserve right now.
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