5 ms·

GameStop and AMC plunge more than 30% as Reddit short-squeeze begins to fade

17 points by woliveirajr 6y ago

nabla9 6y ago
The companies that initially shorted GameStop and were burned by WSB closed their shorts and withdrawn several days ago. Those hedge funds that came after and took WSB into account are going to make incredible profits. It's still unclear to me how much retail investors in WSB have to do with this. There are reports that there buys and sells from retail investors match more or less. It might be just Wall Street sharks going after each other.
- Mountain_Skies 6y ago
  What a crazy way to run the investment portion of an economy.
strikelaserclaw 6y ago
i have no idea what is going on in reality with GME, all i know is that the attention span of the general public is way shorter than hedge funds on wallstreet.
- deleted 6y ago
  [deleted]
- Rapzid 6y ago
  63% of American's live paycheck to paycheck. I'm not sure what the makeup is of the millions that jumped in on GME. But when the bills come due and if you made a little money are you going to hold all your shares? And of course, then you see it plummeting...
valuearb 6y ago
And Robinhood has opened up GME buying to 30 shares per account. Looks like their restrictions weren’t that significant in the grand scheme after all. You know what was significant? Options expirations day was Friday. GME has lost virtually all its momentum since then.
- libertine 6y ago
  >Looks like their restrictions weren’t that significant in the grand scheme after all. It's precisely the opposite: it looks like their restrictions made a huge impact in the grand scheme. Basically this dip was caused by their restrictions simply because they cut most of the demand that was driving prices. It wouldn't make any impact if the supply side followed the demand loss, but it doesn't work like that. Even if people held, the ones that were still selling drove the prices down. Any restriction on demand is a bottle neck. Don't forget that this movement wasn't drove by few large players getting huge positions, it was basically done by tiny players with small positions but at volume - and Robinhood was the bulk of the volume.
  - valuearb 6y ago
    Robinhood is now allowing 100 share purchases. GME continues to suck air. And last weeks trading reports showed retail investors were net sellers of GME after Monday.
    - libertine 6y ago
      >Robinhood is now allowing 100 share purchases. GME continues to suck air. This doesn't take from the fact that Robinhood restrictions had a major impact, which is what I said. I never said this stock would be indefinitely high, or that it would go to the moon, or anything like that. The wave would crash eventually after the hype was over. Still, Robinhood restrictions removed a massive amount of demand from the market, and that has consequences - namely on stock price, momentum of the market, hype, everything. The market went sideways when Elon Musk smoked a joint on a popular podcast, so how come the most popular app for retail investors imposing demand restrictions, to buy a stock bound to a popular movement, wouldn't have any impact on it? >And last weeks trading reports showed retail investors were net sellers of GME after Monday. Like I said, the supply with restricted demand drove prices down - people were selling, and after restrictions they could only sell. Some were planned, some were panic, some were automatic.
      - valuearb 6y ago
imtringued 6y ago
It's probably over. However, if it's really over that would imply that there are lots of hedgefunds that had massive gains. Short selling from $300 to $95 is quite the profit. Is there any evidence of hedge funds raking in massive profits?
- villasv 6y ago
  There's evidence of funds hedging against the squeeze actually happening, as seen by the millions in contracts aiming at 800. The short vs free float ratio is still said to be above 100% so shorting even more now is probably not a good idea.
- mox1 6y ago
  I havent seen any mention of large profits yet, and they probably aren't going to talk about it. One of the themes of this whole thing is that while there has been a consistent amount of "short interest" as the stock has risen, some smart people think that this is new shorts. The theory being the original shorts (the $15 and less gang, probably Melvin) are all out / covered. The short interest is from new shorts. So its entirely possible this was short squeezed, its just that smart people realized where it was going to land and took a new short position. Personally, I believe in the next few weeks here, it will land around $50-$150, which is in the range of the fundamental value "bull case" for the stock. Well see.
  - Rapzid 6y ago
    I've never seen anyone make a bull case for Gamestop though. Not even for the stock over 15-20 outside of this recent madness. I think the bottom is likely well under 50.
    - ohiovr 6y ago
      Maybe there needs to be new cdrom games for Gamestop to flourish.
    - mox1 6y ago
      So prior to all this recent mania, the core WallStreeBets forum had a pretty convincing bullish case. That has been thoroughly lost. I won't repeat it here, but it involves the founder of chewy.com buying 12% of the company, getting 3 board seats,(already happened) and transforming it into more of an e-commerce play (hopefully happens). Think along the lines of Best Buy at its low vs. today and a pretty darn good e-commerce guy on the board (and perhaps ceo soon).

17 points by woliveirajr 6y ago

The companies that initially shorted GameStop and were burned by WSB closed their shorts and withdrawn several days ago. Those hedge funds that came after and took WSB into account are going to make incredible profits. It's still unclear to me how much retail investors in WSB have to do with this. There are reports that there buys and sells from retail investors match more or less. It might be just Wall Street sharks going after each other.

Mountain_Skies 6y ago
What a crazy way to run the investment portion of an economy.

strikelaserclaw 6y ago

i have no idea what is going on in reality with GME, all i know is that the attention span of the general public is way shorter than hedge funds on wallstreet.

deleted 6y ago
[deleted]
Rapzid 6y ago
63% of American's live paycheck to paycheck. I'm not sure what the makeup is of the millions that jumped in on GME. But when the bills come due and if you made a little money are you going to hold all your shares? And of course, then you see it plummeting...

valuearb 6y ago

And Robinhood has opened up GME buying to 30 shares per account. Looks like their restrictions weren’t that significant in the grand scheme after all. You know what was significant? Options expirations day was Friday. GME has lost virtually all its momentum since then.

libertine 6y ago
>Looks like their restrictions weren’t that significant in the grand scheme after all. It's precisely the opposite: it looks like their restrictions made a huge impact in the grand scheme. Basically this dip was caused by their restrictions simply because they cut most of the demand that was driving prices. It wouldn't make any impact if the supply side followed the demand loss, but it doesn't work like that. Even if people held, the ones that were still selling drove the prices down. Any restriction on demand is a bottle neck. Don't forget that this movement wasn't drove by few large players getting huge positions, it was basically done by tiny players with small positions but at volume - and Robinhood was the bulk of the volume.
- valuearb 6y ago
  Robinhood is now allowing 100 share purchases. GME continues to suck air. And last weeks trading reports showed retail investors were net sellers of GME after Monday.
  - libertine 6y ago
    >Robinhood is now allowing 100 share purchases. GME continues to suck air. This doesn't take from the fact that Robinhood restrictions had a major impact, which is what I said. I never said this stock would be indefinitely high, or that it would go to the moon, or anything like that. The wave would crash eventually after the hype was over. Still, Robinhood restrictions removed a massive amount of demand from the market, and that has consequences - namely on stock price, momentum of the market, hype, everything. The market went sideways when Elon Musk smoked a joint on a popular podcast, so how come the most popular app for retail investors imposing demand restrictions, to buy a stock bound to a popular movement, wouldn't have any impact on it? >And last weeks trading reports showed retail investors were net sellers of GME after Monday. Like I said, the supply with restricted demand drove prices down - people were selling, and after restrictions they could only sell. Some were planned, some were panic, some were automatic.
    - valuearb 6y ago

imtringued 6y ago

It's probably over. However, if it's really over that would imply that there are lots of hedgefunds that had massive gains. Short selling from $300 to $95 is quite the profit. Is there any evidence of hedge funds raking in massive profits?

villasv 6y ago
There's evidence of funds hedging against the squeeze actually happening, as seen by the millions in contracts aiming at 800. The short vs free float ratio is still said to be above 100% so shorting even more now is probably not a good idea.
mox1 6y ago
I havent seen any mention of large profits yet, and they probably aren't going to talk about it. One of the themes of this whole thing is that while there has been a consistent amount of "short interest" as the stock has risen, some smart people think that this is new shorts. The theory being the original shorts (the $15 and less gang, probably Melvin) are all out / covered. The short interest is from new shorts. So its entirely possible this was short squeezed, its just that smart people realized where it was going to land and took a new short position. Personally, I believe in the next few weeks here, it will land around $50-$150, which is in the range of the fundamental value "bull case" for the stock. Well see.
- Rapzid 6y ago
  I've never seen anyone make a bull case for Gamestop though. Not even for the stock over 15-20 outside of this recent madness. I think the bottom is likely well under 50.
  - ohiovr 6y ago
    Maybe there needs to be new cdrom games for Gamestop to flourish.
  - mox1 6y ago
    So prior to all this recent mania, the core WallStreeBets forum had a pretty convincing bullish case. That has been thoroughly lost. I won't repeat it here, but it involves the founder of chewy.com buying 12% of the company, getting 3 board seats,(already happened) and transforming it into more of an e-commerce play (hopefully happens). Think along the lines of Best Buy at its low vs. today and a pretty darn good e-commerce guy on the board (and perhaps ceo soon).