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It’s fun to actually delve deeper than the headlines on this one. The main driver of this trade on WSB is a user “deepfuckingvalues”. As of September 2019 they
by zaroth 6y ago
It’s fun to actually delve deeper than the headlines on this one.
The main driver of this trade on WSB is a user “deepfuckingvalues”. As of September 2019 they were posting GME holdings of 1,000 Jan 21 calls at $8, a position they built up since June 2019. [1]
The user then posted monthly updates ever since.
By May 2020 they had 2,500 call option contracts and had a net loss of $10k. By August 2020 they had lost $60k on $145k. Then it all started turning around.
They were an activist investor that actively rallied the Board to do buybacks and pushed overall interest in a GME turnaround.
As usual, by the time the mass media picks up on something it looks to the outside world like something that just magically happened like a rocketship taking off in just the last week.
In reality this was over a year in the making by a devoted user of WSB who gained a following over many months of persistence in the face of mounting losses. It was in fact the perfect WSB story. Initially every comment is begging them to sell, and then mocking their losses, and then reveling in their pain... and still they held and posted YOLO month after month.
As of their last update on the 26th their account value is $23mm.
[1] - https://www.reddit.com/u/DeepFuckingValue/ https://www.reddit.com/u/DeepFuckingValue/
- conanbatt 6y agoHe might be at 50 million profit by now
- onion2k 6y agoHe hasn't made a penny in profit until he sells.
- zaroth 6y agoHe had to at least exercise those Jan 15th 2021 calls at $8, but he rolled it all back into a combination of shares and April calls.
- conanbatt 6y agoAnd we-work investors don't have any losses until they sell either.
- onion2k 6y agoThat is exactly right. Profit (or loss) is what's left after a transaction is complete.
- the__alchemist 6y agoThis is tricky to quantify, and more subtle than you imply. Some questions to consider: If you hold a stock, then sell it at a profit, then buy another with that money, have you made a profit? What if you place the money into a bank account instead? An index fund? Buy a house? A Roth IRA? Where's the 'profit' line? In a case where you buy a stock, sell after a specific duration, and don't include any other info in your model, the simple description of profit-taking at close holds. When the model broadens, this becomes trickier to categorize.
- nrmitchi 6y ago> They were an activist investor that actively rallied the Board to do buybacks I think you might be getting DFV and Michael Burry confused here.
- zaroth 6y agoYou’re probably right. I thought I saw something in the comment history about him mailing the Board and being on the calls, but now I can’t find it.
- LeonM 6y agoDFV is an interesting one. As far as I can tell from the comments on Reddit, most people are holding because DFV is holding. So, I expect, that soon as he sells it is likely that the price will collapse. That said, the volume that DFV holds is not very big (I read around .2%), so it will likely go unnoticed. As long as DFV doesn't post that he's out, the rocket keeps going up. I don't doubt that DFV's investment is real, but he might already be out without anyone knowing. edit: typo
- himlion 6y agoEven though it's life changing money, he doesn't appear like a guy who exits a trade before the peak.
- jerry80 6y agoDFV also has a YouTube channel called RoaringKitty [1]. It's pretty entertaining. [1] - https://www.youtube.com/c/RoaringKitty/videos https://www.youtube.com/c/RoaringKitty/videos