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I can't help but facepalm that people are genuinely encouraging one another to buy a stock that is so obviously overvalued, and then hold it at that price as lo

I can't help but facepalm that people are genuinely encouraging one another to buy a stock that is so obviously overvalued, and then hold it at that price as long as possible... there are not many guarantees in trading, but that is a guarantee to lose money. and because it's under the guise of "sticking it to the man" people have become even less rational about their money. so when the stock eventually corrects to where it belongs for a dying retailer selling physical media in the digital age... I can only imagine the millions "surprised pikachu face" that will ensue

simonbarker87 6y ago
The vast majority know what they are doing here, I took a tiny fraction of my money and bought in - less than I would spend on a family meal out. I assume I lost it but it’s fun to have some skin in the game for the ride. Some people are putting silly amounts in but they know they’re not investing based on market fundamentals, they want in on the ride and they know they can loose it all. The issue here is the clear protections/options in place for hedge funds that they can use when they feel a squeeze but absolutely no protection for average joe investor when these guys try to short an otherwise viable business going through a rough patch. GameStop and Blackberry are in the middle of a turn around, shorting them and then telling the market they are failing is unethical and if they feel a bit of pain at the moment then good.
- Cd00d 6y ago
  I know GameStop brought in new leadership, but a turn around is a reach, in my opinion. To me, GameStop is the mall store (problem), that required me to pre-pay for product expected to be wildly popular (problem), offers me $2 for physical media (problem^2) so that when I go in they can offer me used for $58 instead of new for $60 (problem). The future of gaming is downloads and streaming. GameStop may be able to generate revenue for a while selling used last gen systems while the current new consoles launch, but there's nothing about their position or business model that has a strong future. Plus, I'd say their long history of horrible customer satisfaction mean they don't have the brand loyalty for a pivot/reboot. I don't think it's unethical to short that.
cactus2093 6y ago
> there are not many guarantees in trading, but that is a guarantee to lose money. What? This is not at all a guarantee. Even if there were a guarantee that it will come back down eventually (which seems highly likely but that's still not a guarantee), that doesn't mean it will go down today or tomorrow or next week. For all we know there is still lots of time for new investors to get in, make money, and then get out before the price crashes. The particular absurdity of your claim here is that if it were true, we could not possibly have ended up in this place. That's exactly how we got here, people who "knew better" knew that of course this stock was going down and shorted it. Then it went up a little and people shorted it even more and it went up even more, and on and on as this played out over the past few weeks.
- 2bitencryption 6y ago
  the "guarantee" I'm referring to comes from these two assumptions: - the price is overvalued and will correct - the prevailing sentiment on the wsb subreddit is "HOLD NO MATTER HOW HIGH IT GOES" (seriously, that's what they are saying) So, sure, maybe gamestop will magically become a company as valuable as its stock implies it is. But realistically no one would bet on this. So given that it is overvalued by everyone's definition of the term, and given that the hivemind has decided to "HOLD NO MATTER WHAT", it becomes obvious what will eventually happen - the hivemind will keep holding, since that's the meme, and memes drive stocks now - and Gamestop will correct. And that will be that.
- reducesuffering 6y ago
  > For all we know there is still lots of time for new investors to get in, make money, and then get out before the price crashes. Yes, that means an equivalent amount of people will be holding the huge loss, because they bought in when the previous person got out...
  - mrgreenfur 6y ago
    The short squeeze is to force the hedge funds to buy at a high price when they have to cover their short. This is the whole plan.

simonbarker87 6y ago

The vast majority know what they are doing here, I took a tiny fraction of my money and bought in - less than I would spend on a family meal out. I assume I lost it but it’s fun to have some skin in the game for the ride. Some people are putting silly amounts in but they know they’re not investing based on market fundamentals, they want in on the ride and they know they can loose it all. The issue here is the clear protections/options in place for hedge funds that they can use when they feel a squeeze but absolutely no protection for average joe investor when these guys try to short an otherwise viable business going through a rough patch. GameStop and Blackberry are in the middle of a turn around, shorting them and then telling the market they are failing is unethical and if they feel a bit of pain at the moment then good.

Cd00d 6y ago
I know GameStop brought in new leadership, but a turn around is a reach, in my opinion. To me, GameStop is the mall store (problem), that required me to pre-pay for product expected to be wildly popular (problem), offers me $2 for physical media (problem^2) so that when I go in they can offer me used for $58 instead of new for $60 (problem). The future of gaming is downloads and streaming. GameStop may be able to generate revenue for a while selling used last gen systems while the current new consoles launch, but there's nothing about their position or business model that has a strong future. Plus, I'd say their long history of horrible customer satisfaction mean they don't have the brand loyalty for a pivot/reboot. I don't think it's unethical to short that.

cactus2093 6y ago

> there are not many guarantees in trading, but that is a guarantee to lose money. What? This is not at all a guarantee. Even if there were a guarantee that it will come back down eventually (which seems highly likely but that's still not a guarantee), that doesn't mean it will go down today or tomorrow or next week. For all we know there is still lots of time for new investors to get in, make money, and then get out before the price crashes. The particular absurdity of your claim here is that if it were true, we could not possibly have ended up in this place. That's exactly how we got here, people who "knew better" knew that of course this stock was going down and shorted it. Then it went up a little and people shorted it even more and it went up even more, and on and on as this played out over the past few weeks.

2bitencryption 6y ago
the "guarantee" I'm referring to comes from these two assumptions: - the price is overvalued and will correct - the prevailing sentiment on the wsb subreddit is "HOLD NO MATTER HOW HIGH IT GOES" (seriously, that's what they are saying) So, sure, maybe gamestop will magically become a company as valuable as its stock implies it is. But realistically no one would bet on this. So given that it is overvalued by everyone's definition of the term, and given that the hivemind has decided to "HOLD NO MATTER WHAT", it becomes obvious what will eventually happen - the hivemind will keep holding, since that's the meme, and memes drive stocks now - and Gamestop will correct. And that will be that.
reducesuffering 6y ago
> For all we know there is still lots of time for new investors to get in, make money, and then get out before the price crashes. Yes, that means an equivalent amount of people will be holding the huge loss, because they bought in when the previous person got out...
- mrgreenfur 6y ago
  The short squeeze is to force the hedge funds to buy at a high price when they have to cover their short. This is the whole plan.