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There is nothing positive in it. 90% of those redditors (maybe 99%) will loose a lot of money. Sure some Wall Street hedge funds are loosing a ton of money, b

There is nothing positive in it. 90% of those redditors (maybe 99%) will loose a lot of money. Sure some Wall Street hedge funds are loosing a ton of money, but most of this money is just going to other hedge funds, that were on the other side of the trade. The stock will go back to around 10$ when this is all over (soon) - and only a few redditors will be able to actually realize their gains. That being said, I like this situation. It's a gentle reminder that the stock market is a risky and (way too) complex thing.

aiur 6y ago
So you shorted it?
ryandward 6y ago
If I'm not mistaken, that's kind of the point. People are willing to throw money away to punish Wall Street.
- TheAlchemist 6y ago
  Yeah, that seems to be the case. I'm not sure they realize, that they are throwing money away - I'm pretty sure they do not. But it may well kill some hedge funds and even cause some market ripples. But in the end, it will be it - throwing money away. And once the dust settle, and they find themselves with big losses, I bet they will blame ... Wall Street. Just to be clear - there is already plenty to blame on Wall Street, no need blame them for something they didn't do.
MrStonedOne 6y ago
>90% of those redditors (maybe 99%) will loose a lot of money. Hatred and spite for "traditional" (and patronizing) investor opinions like this is what is driving WSB.
- SpicyLemonZest 6y ago
  I mean, maybe, but I'm not sure where you're going with this. If WSB members find it patronizing to be told "this is a bad trade and you'll almost surely lose money", and spitefully resolve to make the trade more and more in response, that seems like a problem with WSB and not with the investor opinions.
- TheAlchemist 6y ago
  It's just a fact, sorry if it sounded patronizing. Also - this things happen periodically in the market (check the short squeeze on Volkswagen) Yes - there is a short squeeze, but those redditors gains are only on paper. The stock may even go to 10,000$ from here - nobody knows. But at some point, those short sellers will cover or go bankrupt and the stock will be back to its 'fundamental' price - whatever it is, but certainly not 330$ that we see right now.
  - jjeaff 6y ago
    Considering all the shorts that need covering, I'd say there is a lot of room for the retail investors to sell and take profit as the shorts close out their positions.
dsauerbrun 6y ago
> 90% of those redditors (maybe 99%) will loose a lot of money. I really don't think that's the case. I would agree with you on this point in most cases but this is a very unique situation in which everyone will make money once the people on the short end capitulate. I suppose it comes down to the question of whether people can stomach the ups and downs up until that capitulation. I think once you screen for all the spam and memes on WSB the explanations are very simple to understand. As someone who does not invest in individual stocks(I have done so maybe 3 times in my life, the rest is in index funds), I was able to understand the situation quite clearly. You don't even need to wager a large amount to make a large amount. The way it was explained makes sense that you could be up 10,000%, so invest $100 and you could end up with $10,000. This allows even small frys to put a little in and let the mechanics of the market do its job and at the worst case you lose money you wouldn't have minded to lose anyways. At this point, if anyone is thinking about getting in, i would proceed with caution. The stock has already blown up quite a bit so you probably wont be getting those big 10,000% paydays. I am not a financial analyst blah blah blah please dont sue me
- SpicyLemonZest 6y ago
  The fundamental issue is that, to realize those 10,000% gains, you have to sell to some greater fool for a 10,000% inflated price. And there's a good chance that greater fool will be another retail investor just like you. (Leveraged trades which don't require a 10,000% price gain are possible, but what "leverage" means is that you can lose more than your initial $100 investment.) It's a different story if the stock is legitimately undervalued, of course. But there's no coherent argument to be made that GME's current price - up 110% since yesterday! - is rational or sustainable. And indeed, if you look on WSB today, you see a lot of people explaining that you'll ruin the bubble if you don't keep buying lots of GME.
  - jaxwerk 6y ago
    If the play here were a simple pump and dump, that would all be accurate. Your ability to sell at 10,000% relies on there being a greater fool and that greater fool that ends up holding the bag could often be just a regular person investing unwisely. The social media hype here is about this being a short squeeze. Large institutional investors have taken short positions and will likely be compelled to purchase to purchase shares at whatever price when margin calls come in on Friday. The current share price does not reflect the potential to profit off Gamestop as a company, it reflects the potential to profit off of the institutions that have taken incredibly risky short positions. Here, the greater fool is already committed to buying your shares, and the timeline for that purchase is known with enough certainty to make this a fairly low-risk play.

aiur 6y ago

So you shorted it?

ryandward 6y ago

If I'm not mistaken, that's kind of the point. People are willing to throw money away to punish Wall Street.

TheAlchemist 6y ago
Yeah, that seems to be the case. I'm not sure they realize, that they are throwing money away - I'm pretty sure they do not. But it may well kill some hedge funds and even cause some market ripples. But in the end, it will be it - throwing money away. And once the dust settle, and they find themselves with big losses, I bet they will blame ... Wall Street. Just to be clear - there is already plenty to blame on Wall Street, no need blame them for something they didn't do.

MrStonedOne 6y ago

>90% of those redditors (maybe 99%) will loose a lot of money. Hatred and spite for "traditional" (and patronizing) investor opinions like this is what is driving WSB.

SpicyLemonZest 6y ago
I mean, maybe, but I'm not sure where you're going with this. If WSB members find it patronizing to be told "this is a bad trade and you'll almost surely lose money", and spitefully resolve to make the trade more and more in response, that seems like a problem with WSB and not with the investor opinions.
TheAlchemist 6y ago
It's just a fact, sorry if it sounded patronizing. Also - this things happen periodically in the market (check the short squeeze on Volkswagen) Yes - there is a short squeeze, but those redditors gains are only on paper. The stock may even go to 10,000$ from here - nobody knows. But at some point, those short sellers will cover or go bankrupt and the stock will be back to its 'fundamental' price - whatever it is, but certainly not 330$ that we see right now.
- jjeaff 6y ago
  Considering all the shorts that need covering, I'd say there is a lot of room for the retail investors to sell and take profit as the shorts close out their positions.

dsauerbrun 6y ago

> 90% of those redditors (maybe 99%) will loose a lot of money. I really don't think that's the case. I would agree with you on this point in most cases but this is a very unique situation in which everyone will make money once the people on the short end capitulate. I suppose it comes down to the question of whether people can stomach the ups and downs up until that capitulation. I think once you screen for all the spam and memes on WSB the explanations are very simple to understand. As someone who does not invest in individual stocks(I have done so maybe 3 times in my life, the rest is in index funds), I was able to understand the situation quite clearly. You don't even need to wager a large amount to make a large amount. The way it was explained makes sense that you could be up 10,000%, so invest $100 and you could end up with $10,000. This allows even small frys to put a little in and let the mechanics of the market do its job and at the worst case you lose money you wouldn't have minded to lose anyways. At this point, if anyone is thinking about getting in, i would proceed with caution. The stock has already blown up quite a bit so you probably wont be getting those big 10,000% paydays. I am not a financial analyst blah blah blah please dont sue me

SpicyLemonZest 6y ago
The fundamental issue is that, to realize those 10,000% gains, you have to sell to some greater fool for a 10,000% inflated price. And there's a good chance that greater fool will be another retail investor just like you. (Leveraged trades which don't require a 10,000% price gain are possible, but what "leverage" means is that you can lose more than your initial $100 investment.) It's a different story if the stock is legitimately undervalued, of course. But there's no coherent argument to be made that GME's current price - up 110% since yesterday! - is rational or sustainable. And indeed, if you look on WSB today, you see a lot of people explaining that you'll ruin the bubble if you don't keep buying lots of GME.
- jaxwerk 6y ago
  If the play here were a simple pump and dump, that would all be accurate. Your ability to sell at 10,000% relies on there being a greater fool and that greater fool that ends up holding the bag could often be just a regular person investing unwisely. The social media hype here is about this being a short squeeze. Large institutional investors have taken short positions and will likely be compelled to purchase to purchase shares at whatever price when margin calls come in on Friday. The current share price does not reflect the potential to profit off Gamestop as a company, it reflects the potential to profit off of the institutions that have taken incredibly risky short positions. Here, the greater fool is already committed to buying your shares, and the timeline for that purchase is known with enough certainty to make this a fairly low-risk play.