Gamestop & AMC Mania

Hi Pynksters!

It’s been now a few crazy trading days with the Gamestop & AMC booms, and the novelty Reddit army short squeezing some big players in the market.

What do you guys make of this??.. some pretty serious new dynamics at play here

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A 21C spin on the old market adage of ‘buy the rumour; sell the news’.

Main thoughts / concerns are:

a) those that supported the ‘rumour-mongers’ are left holding a worthless stock and will get badly burnt, whilst the rumour-mongers themselves have profited very nicely thank you

b) calls for regulation (possibly fuelled should those losses in a) materialise) results in a knee-jerk reaction from the SEC (and other regulators) which affects all retail investors.

Ironically, now would seen the perfect time to short GameStop; I dare say a Reddit board already exists to promote that ‘strategy’! :roll_eyes:

SELL; SELL; SELL!!!

(Not financial advice; obvs… :smiley:)

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I read up on this briefly. Somehow it seems wrong to me, like it shouldn’t be allowed. It gives a false positive impression on the stocks involved. We don’t need more mayhem in the world!

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This call to action by WallStreetBets had a serious aim of blooding the nose of Hedge Funds, which notoriously would take short positions and then use media to rubbish the company they shorted making sure in the process that it was a bulletproof way to make money.

Well, the similar action was taken against them on this occasion - only media ( redditt ) were used to rally the retail investor to buy a piece of the stock and ensure that Hedge Funds will get a margin call they will be unlikely to forget.

This needs to be seen as an outpouring of resentment, pent up since at least 2008, against established financial players, and it worked beautifully: apparently losses as of today are up to 19 Billion.

This is a scary show of power of small investors harnessing their combined strength to be able to stand to a group of large players.

It is democratising influence of FinTech - none of this would happen without platforms like RobinHood.

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Yes! Exactly! Very well put!

And that is precisely what has been happening to GameStop. Aside from the general desire to sell digitized media instead of a physical product by console manufacturers, GameStop was initially one retailer the Pandemic in and of itself couldn’t stop the influx of customers. They were “outed” by the media several times because of the crowds they were drawing…because, fundamentally, their used game trade-in component itself is built to generate substantial consumer appeal …& substantial margins. That has been heavily suppressed lately. And along with the pandemic, video game sales are through the roof—that includes the recently launched consoles by MS & Sony, Nintendo’s Switch, Nvidia’s Shield TV & GPUs (all out of stock, except via private sellers at ~3x MSRP). Even legacy gaming…everything is just snatched right up! I’ve never encountered anything like it…

The Raspberry Pi Foundation sells an excellent emulation board with the release of the RPi4—I bought their 8Gb model, then started looking for a controller (& it is pretty accommodating piece of hardware), but everything up until very recently has been wiped since ~April 2020 through after Christmas.

So calling GameStop a worthless company…? I don’t know so much about that… Overpriced?—Yes! I don’t think Reddit users were duped into pumping the stock price though…Reddit users were throwing high bids at GameStop as though each
were a measure of just how much contempt they could show for this dichotomy of the wealthy very few & the vast majority that are just making it.

This new entrant, Reddit—their user base is not confined to the United States, the users tend to be educated, tech savvy, intelligent…and Reddit has forums populated by Professionals of all sorts; there are multiple legal/law boards; …definitely boards dedicated to finance! …And this signals a change of who is now facing an unpleasant amount of pressure because those on Reddit that have participated, …the average user’s age is late 20s & 30s. Those with something to lose so they refrain from protests on the Street…that’s just not going to happen with them. What will?—There will be a goal tossed around and well vetted for potential legal ramifications. If everything is copacetic, people will make it known…no one is required to participate; no one is required to even know the specific forum exists!

There is no organization; just individuals acting according to their own volition. In this case, someone didn’t get a solid read on public sentiment toward short selling GameStop into oblivion and they accepted a risk by investing…which means there is always the risk of loss, substantial loss. Individuals rallying for GameStop, making legal purchases on the retail market…they didn’t do anything wrong. The hedge fund that short sold made the worst read possible. But $Billionaire friends swooped in for the rescue. One of which is the owner of Robinhood; I don’t know the motivation for that…but if sentiment were capable of arcing to another Company’s ill-benefit, that would seem to be the right conditions.

And what makes this spectacle all the more wonderful, Sec. Yellen, in her financial disclosures, made $810,000 invested in hedge funds that were predatory short-selling GameStop. Joe Biden, ~2 weeks in, & he has to address the GameStop issue…& Whether Yellen advises him or not, that’s a gigantic flash point.

Which, honestly, doesn’t sit well with me. Because the United. States has been labeling people terrorists left & right…
–I’m an American in America
–I’m a Reddit user…I have been for over a decade now.
–I have an account with GameStop…I’ve had it for nearly two decades now. There’s one a within a mile of where I live…
I didn’t purchase GameStop stock, …but I would have at the moment of truth (I’ve been on hiatus from Reddit for a few weeks; I just heard about all this stuff…)

As for Yellen, I can’t post links…(?) But, it has been covered in the news… Well…, here is a ~descriptive link of sorts:

https:(slash, slash)www(dot)foxnews(dot)com/politics/yellen-robinhood-citadel-gamestop-speaking-fees

Anyhow…my apologies for the long post/rant… But there is indeed a lot pent up from 2008; and finTech leveling the playing field, having a democratizing effect, I think is generally a good thing. Capitalism, at face value, is about as pure of a democracy as one can get…there just always needs to be compromise—Capitalism, Democracy…we can’t ever expect perfection. Those compromises we make in limiting Capitalism, directing Democracy though, require a high level of attention. There must be a balance. And the current tilt in favor of Melvin…that’s not balancing. When Reddit users set out to do something & it has lots of attention, they’re unlikely to relent… It just has the makings in itself of market turmoil, even as ridiculous as that sounds…

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My only worry is that some totally unsophisticated people, caught up on the wave of stock growth, invested for quick profit, not realising that the point was not to make money but to get short squeeze (until pips squeak, as the saying goes) against Hedge Funds going.
Those who started it probably only invested money they can absolutely loose, but when I am reading about the late entrants to the bubble who use leveraged money (and especially when Robinhood et al paused/prevented stock buying) I am very worried they will get burned badly.

I am also seeing a lot of traffic about Doge coin and it’s value follows trajectory of GME. This for me is a red flag that some ruthless traders are hitching a ride on the GameStop story to talk currency up in classic Rump and Dump operation.

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