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Just because he's still in doesn't mean that it's actually worth $300 on the fundamentals. I could definitely see the argument that $20 was undervalued, but it'
by ggggtez 6y ago
Just because he's still in doesn't mean that it's actually worth $300 on the fundamentals. I could definitely see the argument that $20 was undervalued, but it's plain to see that the short-squeeze is now part of the calculation of value.
There is no way that GameStop has an actual fundamental value of $300 per share. That price is clearly inflated, and in a few weeks will decrease, probably to somewhere above $20, but not that much higher. The market will eventually correct, but $300 is an over-correction for sure.
- jzoch 6y agoTrying to figure out the "fundamental" value of anything is a fools errand. Im not saying GME wont drop eventually but there is no value on fundamentals of everything. Look at all the short-sellers of TSLA who made the same mistake. These companies are valued on what the market decides and we all know "The market is irrational".
- shyn3 6y agoWsb can remain irrational longer than the market can remain solvent. That was a comment by a poster which I find funny.
- jdminhbg 6y agoThis is a common aphorism, attributed sometimes to Keynes: https://quoteinvestigator.com/2011/08/09/remain-solvent/ https://quoteinvestigator.com/2011/08/09/remain-solvent/
- deleted 6y ago[deleted]
- markrages 6y agoIt is a funny spin on that aphorism.
- girvo 6y agoRight but the WSB one is inverted.
- rualca 6y agoI'm not sure you understood the web saying. Its meaning has nothing to do with Keynes' quote. It's instead a clever play on words that refers to the recurrent accusation (and subsequent meme) that WSB are a bunch of autists/retards who don't have any idea of what they are doing and thus are doing it entirely wrong, and the defiant reply from the WSB crowd where they state they are ready and able to continue doing it for far longer than what hedge funds, who are throwing rivers of cash at the problem, are able to withstand no matter the cost.
- somerandomness 6y agoI believe the term is “retarded”
- Rapzid 6y agoUntil Monday when the bills are due and their wives(let's be honest, this crazy train is the T train) discover their bank accounts are empty.
- fakedang 6y agoBut what about the wives' boyfriends' accounts?
- stretchcat 6y agoTwitter commentators have assured me these men are all incels, so that won't be a problem.
- dang 6y agoCould you please stop posting flamebait to HN? We've asked you before. Also, comments like the last bit of https://news.ycombinator.com/item?id=25873304 https://news.ycombinator.com/item?id=25873304 are bannable offences on HN for obvious reasons. Please don't do anything like that again. If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and sticking to the rules when posting here, we'd be grateful. You've also posted good comments, so that should be doable.
- stretchcat 6y agoBlow it out your ass, dang.
- rubinelli 6y agoFunny, but it suggests the market hasn't learned anything from 2008.
- northern-lights 6y agoNot quite accurate. It's - WSB can remain retarded longer than you can remain solvent.
- tinyhouse 6y agoYou're taking a couple of exceptions and deduct that fundamentals don't matter. That's like taking two people who smoke and reached 90 without cancer and assume cancer studies are fools errand.
- PartiallyTyped 6y agoAMD in 2015. NVDIA same period. Literally all the positions of Citron that Andrew Left missed the mark with over an order of magnitude difference. Many tech companies.
- tinyhouse 6y agoHere's a quote from your guy DFV: "Well as a longer-term investor I have the benefit of heavily discounting daily moves. I care much more about the longer-term charts, and these have been fairly constructive for months now. Even today, after the typical quarterly sell-off, the longer-term chart still looks decent so there’s been nothing to panic over. Let’s see what the price does over the next few weeks. Of course charts are only a minor part of the equation in my opinion. The fundamentals are much more important in a situation like this."
- PartiallyTyped 6y agoSimply saying 'fundamentals' allows one to nullify things they don't understand, like owning the rights to one of the biggest duopolies (x86 that without one becomes a monopoly). The issue with tech, much like math, is that it often takes a while to figure out all the potential, case in point GPGPUs and Deep Learning revolution. The tech, the ideas, the internal code/models, the people (Jim Keller in AMD, and TSLA) are all catalysts that can't be quantified in the same way as traditional 'fundamentals' are treated.
- tinyhouse 6y agoI don't argue with that. It's called growth opportunities. But don't you think that a business losing customers quarter after quarter is a bad sign? Or that having a debt bigger than it can afford? etc. Let me say this, you cannot ignore the fundamentals until you can... (e.g., GME)
- brokencode 6y agoIn the long run, the market gets more rational. In the short term, anything can happen. Humans are emotional and make mistakes, but most investors at least attempt to make sound investments, and that’s what drives the market at the end of the day. If GameStop the company continues its failing trajectory, then GameStop the stock will eventually follow.
- ggggtez 6y agoTo be honest, this is kind of the problem I have to stock investing as a whole. It sounds great to "invest on the fundamentals", but there doesn't appear to be a way for the average person to even comprehend what "the fundamentals" even are. But there has to be at least one fundamental: If the company goes bankrupt, the stock is worth nothing. Gamestop is most certainly going to go bankrupt eventually. Their business model doesn't work for today's market. No one is going to convince me that GameStop has a way to avoid that eventuality.
- Quekid5 6y ago> "fundamentals" You're right to call this out. It means absolutely nothing. These massive hedge funds (etc.) throw around billions of dollars on a whim and suddenly they're worried about "fundamentals"? C'mon.
- tootie 6y agoYou can literally just look at the P/E ratio and the yield on google finance. 50 years ago that was all you needed to know.
- pishpash 6y ago"Gamestop" is a string of letters. Unless it has a pile of unrestructurable liabilities, what's forcing it to become bankrupt vs. being a startup?
- adolph 6y agoProbably its directors, who would probably be part of a startup if it was in their nature. As a director of GameStop they likely have other fine competencies suitable for running a large reseller org.
- tartoran 6y agoIt’s its management. Gamestop wasnt able to catch up with the times and a pile of money won’t help them. The model isn’t vaible anymore and if they pivot into something else they may as well change the name as it would be irrelevant. A start up experiences most progress when they’re small and nimble. I assume Gamestop as a corp has accumulated a lot of cruft and that would hold them back.
- billylindeman 6y agoAny stock that does not pay dividends _has no fundamentals_. It's just supply / demand.
- jbverschoor 6y agoIf nobody sells, any seller can charge ANY price they want. 1 trillion per share. When more is shorted than exists, you’re in a let good place to know that there’s no such thing as the last biggest fool.
- adolph 6y agoIf nobody buys, does the trillion dollar seller make a sound?
- jjeaff 6y agoOnly if insolvency makes a sound. If the shorts don't have the trillion dollars to buy that stock to pay back the debt by the deadline then they are sol.
- ericd 6y agoWhat deadline exists for shorts, assuming these aren't puts?
- jbverschoor 6y agoToday was the monthly option expiration day. But of course not all options expire at the same time
- joncrane 6y agoShorting doesn't only mean short stock. You can be short call options, and if they are in the money, the holder of the contract can exercise his or her option, which forces the seller of the contract to provide shares at whatever price. For every long call option contract, there is a counterparty who is subject to unlimited upside price risk, just as a traditional stock shorter. The difference is the contract has an end date. I would argue that options account for more of the pressure/volatility of these recent stock prices than the shares themselves.
- franklampard 6y agowhat is the fundamentals for the short positionsv
- runawaybottle 6y agoThe incredible due diligence of ‘I think no one is going to buy cds anymore yo’.
- troupe 6y agoA short position when the stock is at $350 is probably more of the idea that the fundamentals point to a much lower price in the future.
- bluedevil2k 6y agoYou can check option pricing for the market-expected price in the future. The July options are pointing to an expected $40-$50 price point.
- blackrock 6y agoWhat is TSLA’s fundamental value? The price is bonkers.
- eurasiantiger 6y agoMore bonkers than Amazon?
- UncleMeat 6y agoYes. Amazon dominates a market and is making outrageous revenue and income. Tesla doesn't compare.
- adolph 6y agoWhich market? https://en.m.wikipedia.org/wiki/List_of_largest_retail_companies https://en.m.wikipedia.org/wiki/List_of_largest_retail_compa...
- jjeaff 6y agoCheck the operational format column. Notice that amazon, being number 4 overall, is literally the only one on that list that says "e-commerce". The greatest generation is dying off and the boomers are retiring. If no one seriously challenges amazon, there is going to be a lot of growth in e-commerce.
- adolph 6y agoHmm, what’s wrong with growth in e-commerce? I tend to like it myself but maybe I’m missing something.
- throwaway-571 6y agoApparently retails traders were only 1/3rd of the transactions, and the stock went up on the aftermarket on thursday, so I don't think retail traders are driving this price _anymore_. https://www.bloomberg.com/opinion/articles/2021-01-29/reddit-traders-on-robinhood-are-on-both-sides-of-gamestop https://www.bloomberg.com/opinion/articles/2021-01-29/reddit...
- pishpash 6y agoRetail traders with directionality can drive the market even with small volume, because non-directional volume will amplify them.
- runawaybottle 6y agoThe correct way to phrase this question in wsb parlance is ‘How did his wife’s boyfriend feel about all of this?’.