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I'd argue that the last year or so of Tesla was the first major incarnation of this gamma squeeze + memes to burn short sellers but yeah GME is a while other le

I'd argue that the last year or so of Tesla was the first major incarnation of this gamma squeeze + memes to burn short sellers but yeah GME is a while other level.

ppod 6y ago
There is kind of a continuum between cases that are pure squeeze 'n memes and ones that are more based on non-linear long term value propositions. Three years ago, I think you could make a case for Tesla that it was either going to go bankrupt or grow many times over, but not stay in between. It may even be that bankruptcy was the more likely outcome. But if you gather enough support in the belief that a successful outcome is possible, then it can become self-fulfilling, especially if capital is one of the main obstacles. The company can use capital raised from the boom in the share price to lower debt and invest. In the extreme case this could be true of almost any company. Imagine if GME were just a shell and a brand. Then they raise money, get a great board, hire industry experts, and go... whatever.. compete with Steam, turn the physical stores into e-sports venues, pivot to game development, whatever. Use the money to get the expertise, and you already have the brand and attention, which is now worth a lot more. That is kind of what happened with Tesla to some extent, although they already had a great brand a genius owner.
slfnflctd 6y ago
It's not just Tesla, either. There are a number of stocks that are grossly overvalued right now when you look at fundamentals. Lots of people have been talking here & everywhere else for the better part of the past year about how the Fed is printing money and it's all going into a stock bubble. Oh yeah, and cryptocurrencies. This GME thing is just one little piece of an overall new zeitgeist. I'm not about to even try to predict the next crash/bubble-pop, though. I just don't have the stomach for this kind of market. When a change comes, it may not happen in a predictable way. I think there's at least a chance we could somewhat be in uncharted territory here.

I'd argue that the last year or so of Tesla was the first major incarnation of this gamma squeeze + memes to burn short sellers but yeah GME is a while other level.

ppod 6y ago

There is kind of a continuum between cases that are pure squeeze 'n memes and ones that are more based on non-linear long term value propositions. Three years ago, I think you could make a case for Tesla that it was either going to go bankrupt or grow many times over, but not stay in between. It may even be that bankruptcy was the more likely outcome. But if you gather enough support in the belief that a successful outcome is possible, then it can become self-fulfilling, especially if capital is one of the main obstacles. The company can use capital raised from the boom in the share price to lower debt and invest. In the extreme case this could be true of almost any company. Imagine if GME were just a shell and a brand. Then they raise money, get a great board, hire industry experts, and go... whatever.. compete with Steam, turn the physical stores into e-sports venues, pivot to game development, whatever. Use the money to get the expertise, and you already have the brand and attention, which is now worth a lot more. That is kind of what happened with Tesla to some extent, although they already had a great brand a genius owner.

slfnflctd 6y ago

It's not just Tesla, either. There are a number of stocks that are grossly overvalued right now when you look at fundamentals. Lots of people have been talking here & everywhere else for the better part of the past year about how the Fed is printing money and it's all going into a stock bubble. Oh yeah, and cryptocurrencies. This GME thing is just one little piece of an overall new zeitgeist. I'm not about to even try to predict the next crash/bubble-pop, though. I just don't have the stomach for this kind of market. When a change comes, it may not happen in a predictable way. I think there's at least a chance we could somewhat be in uncharted territory here.