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Gaming the system: How GameStop stock surged
- tyleo 6y agoThis has also been a big topic on r/wallstreetbets where users have organized around squeezing the shorts today. I’ve been following with mild interest.
- x3n0ph3n3 6y agoThe Ars article is woefully deficient in not even mentioning r/wallstreetbets.
- gamegoblin 6y agoAnother missing piece of information is that Michael Burry, famous for being the first one to short the housing market before the crash, also took a long position on GME relatively early. The announcement of his long position single-handedly caused the price to raise a non-trivial amount. IIRC his firm currently owns around 4% of GameStop.
- Melting_Harps 6y ago> This has also been a big topic on r/wallstreetbets where users have organized around squeezing the shorts today. I’ve been following with mild interest. Maybe I've been in Bitcoin for too long, but 2.5 to 44 is cause for this much attention? I guess I'm immune to that level of volatility these days. I mean I get the amount of security's fraud and agencies like the SEC just waiting to justify their inflated salaries and budgets... but with the level of fraud in the stock market and banks this is likely what they would focus on as it they probably don't have massive lobbiysists in Washington paying for them to shape legislation to match their grift. I've seen several Gamestops shut down and have going out of business sales for current inventory with long lines, I'm sure that would add to their liquidity situation in the short term if it was done at scale for recovering investments on outdated/old merchanidise. And given that people are less than prudent with their finances and stimulus checks/uncemployment and with so many people with nothing but time on their hands this growth due to lockdowns and massive unemployment isn't actually a realistic turn around after the initial crash in March? Wallstreetbets is always good for a laugh, and not always a healthy one; the place reminds you why a guy like Trump could be elected and gives actual credence to how the following adage holds true: Repeat a lie often enough and it becomes the truth. Those guys are like the epitome of of the 'grater fool' business model for the low hanging fruit on the Internet that after spending a few minutes there you just start to feel bad for what the state of Humanity is. Tendies and cuck jokes aside, it's actually really telling what some people 'with money' are like when they're given a slight amount of Pseudonymity and are in great enough numbers. Kind of makes Jordan Belfort's stories (Wolf of Wallstreet) all the more poignant.
- ocbyc 6y agoIs BTC still in the mid 30k? 2.5->44 is much better return than 3.5k -> 42k. I guess I've been trading GME too long for btc's volatility to phase me.
- Melting_Harps 6y agoYes, but I've been in it since 2011. Your humble brag doesn't apply to me. My point being that this doesn't warrant the attention its getting when you see the bigger picture of outright fraud, and agencies should look into bank fraud and money laundering and stock manipulation of things like large pharmaceutical corps that have made billions from a litany of scams along the years, Moderna administration in CA already had to be halted due to patient complications. How many Corps have made out like bandits from bailouts and crushing the competition with perpetual lock downs and doing shady trade deals with politicians? I'm so over this, that the paper wealth pales in comparison to the asset inflation we're all seeing with no real benefit other than more billionaire wealth accumulation. PS: I don't trade, I'm accumulating in order to exit this insane system.
- echelon 6y ago> Your humble brag doesn't apply to me. That wasn't a humble brag, it was a counter to your less than charitable characterization of GME stock behavior. If anything, you're bragging.
- skinnymuch 6y agoYour Bitcoin stance doesn’t make much sense. It’s over long periods of time. This GME is over a short period of time. You appear to be bragging hard. Whether or not you intended that. The other person isn’t.
- Melting_Harps 6y ago> If anything, you're bragging. > You appear to be bragging hard. I'm saying their are far more corrupt things that are being sanctioned (ignored) by the regulators in the stock/securities market but you people hyper focus on the low hanging fruit (gamestop) while the public purse/currency is being fleeced by Trillions by corporations with every bailout/stimulus package and you think you're smarter than everyone else and I'm the one bragging? Despite your 'profit' being denominated in ever worthless fiat. In the time that I wrote that Black Rock, the creators of the fucking Aladdin prediction computer/system that likely kicked this entire surveillance/data mining business model into high gear, got into Bitcoin and declared their intentions to create a futures model to the SEC. I guess I excepted more from tech people by this time when it comes to what Bitcoin really is, but then the adage of Humans (fools) and their folly holds true, I suppose.
- bpodgursky 6y agoThere's really no way to understand GameStop stock without looking at reddit: r/wallstreetbets. It's a meme stock, and a huuuuuuge amount of money is being dumped into it for... basically entertainment value. Roulette.
- 3001 6y agoAnd I pretty sure most these are tech money. Amazed at the amount of enthusiasm at team blind.
- perl4ever 6y agoI'm pretty sure most of it is stimulus checks or spare change from shit jobs and nothing much to spend extra money on other than gambling on Robinhood. People on WSB think 29 = "boomer", gives you the flavor.
- 3001 6y agoPeople still don't get this. BLM protests, Capitol riots and now GameStop short squeeze. Social Media orchestrated historical events works and will continue to in the future. Dismissing or betting against them is asking for pain.
- H8crilA 6y agoAt least in terms of the capital markets we know this isn't really unique to our times. The roaring 20s bubble was in part attributable to the invention of radio and the ticker tape - those things are mass media as well. The scale may be unique, let's take account after it's over :)
- syntaxing 6y agoOne of those weird Keysian effect that blows my mind. Everyone is just gambling at this rate which is historically terrible for the economy in the long term.
- georgeecollins 6y agoMost people don't realize this but GameStop was actually very bad for console game developers. Games were often resold, with each time no revenue going to the developer. I worked on a popular Xbox / PS3 game that was resold like 7-9 times on average. Our marketing people figured that GameStop made a lot more money on the game than the developer. Why is that bad? Big console games started to need to be really long, because if you could finish them in a week you would lose a ton of sales to retail. That's why you started to see games where you had to wander around, grind, play through a level backwards, chase achievements. It also caused an emphasis on in game purchases (in console games) and online play. It just got a lot harder to make a short single player game on console. A lot of those problems go away as console games are sold in a digital store.
- proverbialbunny 6y agoIs that why games have gotten shorter? I'm from the NES - PS1 era of gaming where games would regularly take 60+ hours to play through. FFVII is still one of my all time favorites and is a good example of that. I think the first real fast game I played through was Metal Gear Solid. I'd rent, then buy if I liked it back then, and I played through all of Metal Gear Solid in something like 2 or 3 days. It was the first game I enjoyed that I did not buy, because I beat it while renting it.
- deleted 6y ago[deleted]
- TylerE 6y agoWe're obviously remembering different NES games. The NES games I remember could generally be beaten in no more than an hour, if you knew how to actually do it without dying 1000 times. A good warpless speedrun time on Super Mario Brothers is about 19 minutes. If warps are allowed, it's under 5. Legend of Zelda? 27 minutes Ninja Gaiden? 12 minutes
- proverbialbunny 6y agoIt's a bit absurd going off of speed runs is a way to accurately identify a game's normal play length. I think all the games I had were 60+ hours, but I just liked JRPGs more than most genres. FFVIII was picked not only because it was one of my favorites (FF1 too, SMB3, ...), because the remake today has turned it into 3 games, and even then those 3 games seem long by today's standards.
- TYPE_FASTER 6y agoI find myself wanting a modern brick and mortar version of RadioShack. I buy electronics at Best Buy, Staples (they will price match Amazon if the model number matches exactly), and more recently GameStop...I guess the closest approximation for what I'm looking for these days is a local MicroCenter.
- linuxftw 6y agoMicroCenter is great if you live/work near one.
- toast0 6y agoIf you're a publicly traded company, and the stock price jumps like this; how long does it take to sell more shares and try to capture some of the craziness? Hertz was able to sell $29 million of stock during bankruptcy before the SEC asked them to stop. As Gamestop isn't bankrupt, it seems like fair game to make an offering while the price is high.
- 3001 6y agoThen they bail out the shorts who have been driving done the price for ages. GameStop also file some form for a shelf offering for 100M with the SEC recently. Note the 100M is dollar amount, so you want to sell when you know the stock is at peak, you will get the 100M but less stock unit.
- Melting_Harps 6y ago> Then they bail out the shorts who have been driving done the price for ages. GameStop also file some form for a shelf offering for 100M with the SEC recently. Note the 100M is dollar amount, so you want to sell when you know the stock is at peak, you will get the 100M but less stock unit. Can I be honest: its exactly this kind of BS that puts me off so much about the legacy Market systems; these systems create fake paper wealth that is intertwined with so many convoluted jargon, and twists and turns to give things the veneer of it being a Capitalist undertaking but all it really is central bank enabled gambling frenzy that requires bail outs when it all blows up. How is this desirable, let alone sustainable, to those of you that I sincerely believe can see the obvious grift unfolding before your eyes for what it is?
- toast0 6y agoEverybody hates shorts, but if you can sell for $40ish today vs $5 6 months ago and $20 last week, and you need/would like some cash, and you have a shelf offering ready to go, why not sell today? If the price goes up to $80ish next week, then maybe issue some more shares to sell at that price too.
- 3001 6y ago
- impulser_ 6y agoShort squeezes. You got to love them. Welcome to the biggest casino in the world.
- randomopining 6y agoGameStop is useless lol. They literally sell stuff that's already/going to be completely digitally sold in a decade.
- TheHypnotist 6y agoFundamentals and normal financial logic should be entirely disregarded when discussing this stock. This pure WSB.
- randomopining 6y agoYeah so it's confirmed to be basically 99% a pump and dump meme stock?
- FishbowlPrime 6y agoNo it’s not. WSB is orchestrating a short squeeze. The aim is to make a transfer of wealth from shorts like Melvin Capital to WSB. This whole charade is due to the stupidity of short sellers who shorted more Gamestop shares than there are publicly traded. Check out the Overstock story from last year or VW from 2008. This will be exactly like that.
- vga805 6y agoWill it? Wouldn't all the WSB holders need to continue to hold? I imagine they'd end up selling with a bit of a peak, I can't imagine everyone holding and really pulling off a full squeeze. Then again, this community is new to me.
- asdff 6y agoGameStop is in the digital game sales business, you know. It's not the same copy it was in 2007 when you picked up Halo 3 used.
- randomopining 6y ago
- chad_strategic 6y agor/wallstreetbets bets is doing what men and woman in suits and pant suits on Wall Street have been doing for years.
- person_of_color 6y agoExactly. How do you think RenTec made money?
- chad_strategic 6y agoI don't know?
- forks34 6y agoIs the idea that someone is smarter than you really that outrageous? If RenTec would be cheating we’d know by now.
- temp0826 6y agoFirst guess with only reading the title: they got Battletoads in stock?!
- FishbowlPrime 6y agoHere are a few pointers from a WSB member with a position in $GME 1. Short sellers have been running the stock into the ground over the past years and have been stupid enough to get to roughly 130% short interest as percentage of available float. 2. There are no more shares available for them to borrow and sell short, WSB has jumped into this trade following Ryan Cohen (your dog must know him), buying as many shares as possible, decreasing the float even further and pushing the price up. 3. Ryan Cohen owns about 13% of the company. He founded chewy.com and is an e-commerce wizard who wants to turn GameStop around from a brick-and-mortar shop to a digital / e-commerce player. He joined the board last week together with two other former Chewy execs (COO and CMO). FYI GameStop digital sales are 300% yoy and the company has recently posted a profit for the first time in many quarters. Shorts pretend like Chewy never happened, Ryan has nothing to do with GameStop and digital sales are nonexistent. 4. This short squeeze is inevitable. There are no other moves short sellers can do. They are trapped and check-mate is near. It will be similar to VW in 2008 and more aggressive than Overstock last year.
- patleeman 6y agoI too have a position and its been such a crazy ride. I started following it around $15 for just the sheer curiosity. Its funny, I went through all the bear arguments at first, but as I kept reading and digging in deeper, the bull thesis became apparant. RC signing on really sealed the deal for me and $GME is now my largest position.
- voisin 6y agoI followed GME maybe 6-7 years ago pretty closely and I recall it having crazy short interest vs float then as well. Am I wrong on that, or is there some reason why the short interest is no longer sustainable? I would think lower prevailing interest rates would help sustain the shorts.
- patleeman 6y agoI think its the combination of the extremely high number of short shares (71M) vs shares outstanding (69M), the stock hitting an all time low in March ($2.57), poor public sentiment ("its the next blockbuster"), and then the addition of Ryan Cohen (a "Rockstar" entrepreneur) all making for a really epic turn around underdog story.
- floren 6y ago> "GameStop’s most valuable asset is their database of tens of millions of PowerUp Rewards members that no other competitor has the ability to replicate. GameStop will be able to leverage this data to become a fierce e-commerce competitor over time and has many unexplored avenues to monetize the data." Yeah, fuck selling products to customers, you've got a bunch of consumer data you can monetize.
- colpabar 6y agoThe silver lining that I pretend to see is maybe now that consumer data "e-commerce" is so common, we'll get some sort of government interaction. Taxes, new laws, something worse, who knows. But _hopefully_ now that it's so prevalent, the general public will become more aware and take it into account when voting.
- thaumasiotes 6y ago> Yeah, fuck selling products to customers, you've got a bunch of consumer data you can monetize. I mean, the quote is accurate. GameStop is a middleman in a market where it is completely trivial for producers to sell directly to consumers. That's not a good position to be in, and there's absolutely nothing stopping anyone in the world -- even you! -- from setting up as a competitor and doing a fundamentally just-as-good job. Their business selling products to customers is thoroughly obsolete; it relies on the customers having computers (to run the games) but no internet access (to buy the games). So it isn't surprising that their business selling products to customers isn't really considered an asset of theirs, and that strategy discussions look for something they can do better than a random guy on the street.
- floren 6y agoI would say the major thing separating GameStop from me, the random guy on the street, is that GameStop has a large network of brick-and-mortar stores conveniently located throughout the nation, plus existing relationships with publishers. Throwing all that away because you have email addresses for a bunch of known gamers and will therefore... do... Internet... something... seems like a losing proposition.
- kregasaurusrex 6y agoHaving watched the January 15th option chain before last week's monthly opex, you could see a significant number of deep ITM puts both being traded and showing as open interest for lots of different strike prices. It's likely this created a short squeeze on Wednesday which caused these put sellers to take a loss, buy the underlying stock, or roll their contracts to a later date. Most of this price action occured on Wednesday, where there weren't volatile swings in either direction on Thursday or Friday.
- mlthoughts2018 6y agoThere’s so much survivor bias in this. For most investors, missing 10x growth of whatever small portfolio weight you would put on Gamestop is totally meaningless, ignorable blip. Something is always jumping up, everyone is always telling just-so stories after the fact. Anyone who would put enough portfolio weight on a single stock, whether Tesla or Gamestop or whatever, that mere 10x price appreciation would amount to something significant is failing to diversify and carrying huge huge single name risk. There’s nothing to see here. Put money in a broad basket of stocks and go do something else.
- marvin 6y agoThis is a comforting and sensible stance, which is useful for most people and most situations. But you can't rule out the possibility that a few people, who happen to be positioned exactly right at a particular point in time, correctly assess the risk of a certain bet as being much lower than the rest of the market thinks. Gamestop is a good example of this, as was Tesla at multiple points in its history. As was put options on major stock indexes in early February of 2020. And so on. It's very comforting to assess market events as truly random and any success as luck. It's possible to come up with definitions that lead to this conclusion. Personally, I'm fairly certain that this is wrong. But the distinctions are practically by definition so subtle that they seem random to anything but detailed, correctly-informed scrutiny. I'm not saying that you could build a long-term successful career out of this, where you make likely-successful trades every day. But I do claim that you could fruitfully dedicate part of a long-term portfolio -- say 10% -- to make speculative bets on the very occasional situations where you happen to be positioned to see something that isn't yet obvious to others.
- mlthoughts2018 6y ago> “ But you can't rule out the possibility that a few people, who happen to be positioned exactly right at a particular point in time, correctly assess the risk of a certain bet as being much lower than the rest of the market thinks.” No, you very much can rule that out. It’s nothing more than “a broken clock is right twice a day.” Lots of people are making lottery like bets on specific stocks, with a just-so story about why they’ve correctly valued it. By random chance, some small subset actually pay off and people falsely mistake the just-so narrative for investor prowess or foresight.
- robodale 6y agoI rode it to the bottom and sold. Bad timing for me I guess. Luckily only 2% of my holdings.