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GameStop Investors Who Bet Big–and Lost Big

34 points by laurex 6y ago

kzrdude 6y ago
Obviously no easy answer, but isn't the GME stock still overvalued? Right now it's at $53.
- brianwawok 6y ago
  By the fundamentals yes. Are people betting the long game? Trend from digital to physical game is going to reverse and raise the used market again? I think that’s a big jump..
- asdff 6y ago
  It is. It was less than $10 6 months ago and in those 6 months there is nothing Gamestop did to increase the value of their company by nearly five fold, other than be the focal point of a massive pump and dump.
  - suprfsat 6y ago
    Gamestop was undervalued, and this was a market correction
    - Bud 6y ago
      I wouldn't bet your paycheck on that guess. Many did. Almost all of them lost.
  - jacoblambda 6y ago
    On a somewhat more pleasant note wrt the company, they've been picking up ex-Amazon(AWS specifically) leadership to try and transform the company for the modern digital gaming market. Whether this'll be successful or not we'll have to see but I think the company definitely has the potential to turn around and offer themselves as a decent digital storefront. https://www.datacenterdynamics.com/en/news/gamestop-hires-aws-exec-matt-francis-cto/ https://www.datacenterdynamics.com/en/news/gamestop-hires-aw...
    - asdff 6y ago
      I don't see why microsoft, playstation, or nintendo need the middleman of gamestop when they all each have their own digital storefronts directly under their own control. If you are gamestop, this is the line you have to tow and tell shareholders, because there isn't a viable route otherwise. that doesn't necessarily mean what they say they are working on is going to work, or that they even believe it will work for much longer than it takes for the C-level team to have one good quarter under their belt and find a new job before the thumbs they put in the dam can no longer keep it from bursting.
- tootahe45 6y ago
  Instead of admitting they got manipulated into a pump and dump, many will try to rationalize their loss saying things like "I'm not selling, MSM badly wants the stock to tank so the shorts get covered." (in a comment below). This is the disbelief phase.
  - k33n 6y ago
    I'm honored that you quoted me! I'm down like $800 with a 7 figure net worth. And I like the stock to boot! Why would I sell? Edit: I have plenty of karma to burn. Stay mad (though what has you people so worked up? I have no idea) Edit2 since I'm throttled: I think the idea that it's time for me to make a judgment one way or another on the effectiveness of the investment is a fallacy in itself. I don't invest that way. It would take at least a year for me to reach a point where I am ready to say whether any given investment was a bad or good one.
    - atleta 6y ago
      Are you sure you represent the average?
      - k33n 6y ago
        I would certainly hope I don't!
    - isoskeles 6y ago
      I believe the point stands regardless of your net worth. People come up with rationalizations to smooth over the ego-stinging admission that they were somebody else's greater fool. Your net worth relative to your loss may be yet another rationalization. Instead of, "I was wrong," it's, "Well, it's only $X anyway." But maybe time will prove you right. If you truly believe that, should you risk more of your money on $GME?
- Wowfunhappy 6y ago
  As a total investor layperson who doesn't own any stock†, I don't think so. The current price seems about right. • The pandemic is temporary and retail stores will re-open. • Gamestop isn't bankrupt and doesn't have mountains of debt. • There will be people who still want to buy physical games—whether for their resale value, or as collectibles, or because downloading 100GB on a slow internet connection sucks. • Gamestop should be able to leverage their brand to increase their online presence. I don't understand why they were so heavily shorted before, and I do think the redditors had a good investment case (early-on, before things went nuts). --- † I have some money in index funds, and some in an account managed by a professional broker. But nothing I personally selected.
  - mupuff1234 6y ago
    I think the short case is pretty obvious - basically a re-run of blockbuster. I do think they can adapt and survive as a business, but i doubt they have a future of growth or big profitability.
    - Wowfunhappy 6y ago
      > i doubt they have a future of growth or big profitability. Oh, I agree. But prior to the recent craze it seems as though many were treating them as a failed company. Gamestop isn't Blackberry, or JCPenny.
      - harambae 6y ago
        >Gamestop isn't Blackberry You'll never guess what other company WSB loves pumping
  - rhino369 6y ago
    It's twice its value in 2016 despite revenue falling significantly pre-covid and accumulating a lot of debt. Reddit investors may have had a good investment case at 4 dollars (basically assuming it won't go bankrupt). But it could right-size and enjoy modest growth in online sales and still not be worth what it is now.
- ratsmack 6y ago
  It is, but so is Tesla, Apple, Amazon and others. Value stocks are almost always driven by cult believers.
  - asdff 6y ago
    One of these is not like the other. I'd argue that AAPL and AMZN are far more fairly valued than TSLA, a stock that moves by two percentage points whenever Elon Musk tweets erratically, and somehow has a larger market cap than diversified automakers with multiple factories around the world versus a tent in Freemont.
    - ratsmack 6y ago
      The funny thing about "value" stocks is that they go up only if someone desires to buy them more then you want to hold them. In the case of "income" stocks, their value is intrinsic in their dividend yields. Buying "value" stocks of any company is just gambling in my view, unless they have a strong potential of returning dividends in the near term.
- Izkata 6y ago
  That assumes it wasn't undervalued before. I remember seeing one estimate from December-ish that it should have been around $60, though I don't remember how they came up with that.
  - suprfsat 6y ago
    They probably came up with that by buying at a price less than that
k33n 6y ago
There's no loss until the stock is sold. Personally, I'm holding mine and I'm only down a bit right now. I see no reason to sell. MSM badly wants the stock to tank so the shorts get covered. Won't happen.
- kbar13 6y ago
  look you're welcome to your opinion, but by looking at longevity of memes on the internet and all the facts from financial reports, the dream's dead.
  - k33n 6y ago
    So you're denying that there's still significant short interest on GME? You're certainly welcome to take that position if you'd like! Edit: And as for your comment below, there isn't enough downward momentum for the shorts to be covered as of now. Just opening a short position is quite dangerous, and mathematically, this is not over yet. That's a fact. I also don't gamble with money I can't afford to lose. GME could go to 0 and I wouldn't bat an eye. Edit again since I'm throttled: I think the idea that it's time for me to make a judgment one way or another on the effectiveness of the investment is a fallacy in itself. I don't invest that way. It would take at least a year for me to reach a point where I am ready to say whether any given investment was a bad or good one.
    - kbar13 6y ago
      i'm saying the momentum that drove tons of buy orders pushing the price up is gone. therefore there's no significant danger to short positions. look, i've been there before, lost significant money (down payment for a house in sf type money) making big YOLO bets... you gotta extricate yourself from the emotions and cut your losses at some point and move on.
      - k33n 6y ago
        Nah I'm set
- 6y ago
83457 6y ago
Related... https://www.youtube.com/watch?v=cJd3LO6u1vY https://www.youtube.com/watch?v=cJd3LO6u1vY
endisneigh 6y ago
It sucks because a lot of the loses in the FTA could've been avoided. The highest gain and lowest lost of the SPY respectively have been 16% and 20%. As a personal rule any stock I purchase basically has a stop loss of 20%. As for the gain, I automatically sell after a 50% gain. How much more could you want? edit: this is in the context of day trading
- jnsie 6y ago
  re: 50% gain, why not use a trailing stop loss at that point? If I'm trading/investing it's to make money so I want as much as I can get.
  - endisneigh 6y ago
    I agree in general but GME was highly volatile and execution is not guaranteed with a trailing stop loss, I think in general you're correct but I was talking about the anecdotes specifically in FTA.
- sxp 6y ago
  When engaging in options trading, startup investments, penny stocks, and other Black Swan strategies, you can be in a situation where you most all your money 90% of the time, but 10% of the investments have a 100x return. If you pursue this risky strategy, you need to be able to hold on in the face of volatility and sky-high gains. I wouldn't recommend this strategy to anyone who doesn't have Vulcan-level discipline over their emotions, but it is a valid investment strategy.
  - endisneigh 6y ago
    I agree, but from FTA someone took out a 12% loan and got in at $234. The price ended up closing around $360 a day or two later representing a 50% increase - considering the person took out a loan, seemed like a no brainer to me. ymmv
- rhino369 6y ago
  If everyone used stop losses, they wouldn't work for anyone. You need someone else to buy your share for you to sell. There has to be a bag holder.
vidanay 6y ago
A fool and his money...
downrightmike 6y ago
well, when the bad players write more illegal stock to bail themselves out and that's allowed, they are just pushing the problem down the road.
kbar13 6y ago
s/investors/speculators/ there's nothing wrong with gambling, but call it for what it is.
- lostphilosopher 6y ago
  > "... he took out a $20,000 personal loan and used it to purchase shares." > "... a personal loan with an 11.19% interest rate ..."
mrtksn 6y ago
DeepFuckingValue have not posted his position since 11 days and from what I understand when everyone was pumping the price he was gradually selling : https://www.reddit.com/user/DeepFuckingValue/ https://www.reddit.com/user/DeepFuckingValue/ Correct me if I am wrong but He is $13.8M on the green and not like green as if his shares gained value but He actually exited and can click one button to have the money in his personal bank account and live the rich life. But on r/wallstreetbets I kept seeing posts about how he lost millions and still holding and GME meme is still a thing. Is the show going on? Did I understand the situation terribly wrong?
- wayoutthere 6y ago
  He stopped posting because he was actively the target of an SEC investigation. If I recall his last message was something like “I’m gonna have to stop these updates for a while. Pretty sure you all know why.” He never claimed he wasn’t taking profits; he was drawing down his position every week with new slates of options once that week expired. Because that’s how you play options. That neophyte redditors who have been trading options for 6 months don’t understand what he’s doing is beside the point — which is why the general rule of thumb for retail investors is to avoid options trading entirely. There’s still a long tail on the GME drama only because a bunch of people who run /r/wsb are looking to milk the whole thing for what it’s worth. The whole game was already over by the time the mainstream press even mentioned Reddit.
  - mrtksn 6y ago
    Oh I don't blame him even a bit. I'm just confused by the folklore going on around this situation. I even had livid leftist friends calling me to tell me about the end of the capitalism and libertarian friends excited about sticking it to the establishment. That was not my impression but maybe I got it wrong and maybe they are right. Nevertheless I enjoyed the saga, I don't trade. It's too stressful for me when I have a skin in the game.
    - wayoutthere 6y ago
      The great irony is that the establishment ended up winning the whole thing. Your leftist friends may still be right though — 2021 has only just started!
neonate 6y ago
https://archive.is/6iyuz https://archive.is/6iyuz
hahahahe 6y ago
The same thing happened in March 2020. r/wsb was filled with people holding spy puts when VIX hit 80. They kept saying diamond hands as if the entire market is going to zero because of “quad witching” expiry. It’s a recurring theme.
robomartin 6y ago
I'll repost my comment on this from 15 days ago. Not well received at the time (in the middle of the frenzy). Not sure why...I always assumed that HN has an audience that is decent at math and analytical thinking. Here it is: What nobody is talking about yet are the thousands (tens of thousands? hundreds of thousands? millions?) of people who got hurt and will get hurt by this event. Sure, it's neat to see stories of people making from tens of thousands to millions of dollars due to the short squeeze. And yet it is easy to forget that those who played the game were buying GME all the way up to $500 one day, $420 the next day and $300-something the next. People also bought puts at different levels. All of this will come crashing down on top of them. It's a Ponzi scheme (or whatever the appropriate analogy might be). The people who, through hubris and ignorance, bought these stocks chasing them up the price scale to "Help our brothers who bought at $350 get positive" and other encouragement found on r/wallstreetbets are going to get shafted (if they haven't already). In other words, the institutional short sellers are not the only ones who lost money. The difference is, they KNOW they can win. Why? Because there is no way GME is worth $200, $300, $400, $500 or $1,000. At some point in the future gravity will do its thing and this stock will suffer a violent crash. And you can bet there will be short sellers there to profit from it. And you can bet a large number of people who are hoping to get rich quickly are going to lose unimaginable amounts of money. Today's addition to this 15-day old comment: We already know at least one fund made $700 million on this fiasco. For some strange reason the stock is holding around $50 these days. Here's a company that lost four billion dollars in the past four or five quarters with a stock that might not even be worth 1/10 of current levels. And people are still playing the game (or being played). As I said two weeks ago: Gravity will eventually do what gravity does. I don't know why people think they can magically violate the laws of physics.
- havelhovel 6y ago
  I think your comment was not well received because it compares the stock market to laws of physics and gravity, limits GME investor psychology to a) hubris or b) ignorance, describes a market exchange as a Ponzi scheme, proposes that millions of people may have been hurt by this event without defining what hurt means, and (now) expresses the view that anyone who is decent at mathematical or analytical thinking would automatically agree with you.
swagonomixxx 6y ago
I just love how this whole sequence of events is being touted as the "underdog sticking it to the man". What I see is a bunch of internet trolls getting together and trolling Wall Street. Is that a bad thing? It depends. If you're just dicking around and you put in an amount you can afford to lose, it's all fun and games. But when you convince newbies to trading and investing to put loads of their hard-earned money, on leverage, to a meme stock, it's not so fun and games anymore, is it? I'm all for teaching hedge funds a lesson by squeezing them, but it would've been nice if folks come out _mostly_ unharmed financially. Instead, you have lots of these r/WallStreetBets folks in the red on leveraged trades. Good luck making back that money as quickly as you lost it.
- Traster 6y ago
  One point to note is that the debt you'd get from buying GME on leverage is way better than the debt you incurred from that higher education you couldn't afford and didn't pay off.
- bmurphy1976 6y ago
  If 1/10th of the users on r/WSB would put $1000 fun money in and HODL while focusing all their energy on a select few stocks that would be a billion dollar war chest pointed right at the heart of wall street. Unfortunately, the mob couldn't hold it together. A bunch of them got caught up in it and decided to dump their life savings at the high water mark and Robinhood really took the wind out of the rally. Robinhood stopping trades seems to be the catalyst that popped the balloon. Now you have 10 million people on Reddit who can't get organized and some are really hurting, even though they should have known better. The swell was amazing, but it was a rogue wave. I'm sure it will happen again, but harnessing and controlling that energy is going to be like trying to control the ocean.
  - newacct583 6y ago
    This is wrong! "Holding" does nothing. The very nature of short trading (remember, the thing that was supposed to have been exploited?) means that even if YOU hold, and everyone else does, your brokerage can loan that share to someone else who will sell it (because they think it will go down, of course).
bitlax 6y ago
Anybody have a workaround for the paywall?
deleted 6y ago
[deleted]
Firebrand 6y ago
Scott Galloway met a lot of backlash on Twitter for his take on the GameStop debacle but I’m starting to think he’s right: https://twitter.com/profgalloway/status/1354532507723640835 https://twitter.com/profgalloway/status/1354532507723640835 There are a lot of frustrated men who spend most of their weekdays staring at a stock price go up and down and then post about it on Reddit instead of doing something productive. There’s no motivation to save money to buy a house with your significant other.
- isoskeles 6y ago
  There are simpler explanations that don't rely on the strange and sex-obsessed assumption that everyone who did something foolish is an incel. The impossibility of gaining a modest return on your savings without risking it in stocks is enough for me.
WheelsAtLarge 6y ago
I never got the "stick it to the hedge funds" attitude by buying the stock and ending up losing the money. It's looking more and more like other hedge funds got the money small investors put in the stock. There's got to be a better way to protest. What's interesting to me was that this seemed like the old pump and dump scheme that has been part of wall street fraudsters forever. It's a scheme where a group buys a low price stock, promote it to no end and then dump it as people go nuts buying it. Yet, few if any news services pointed that out. I hope we get some real answers as time passes. My suspicion is that it was just a pump and dump that got out of hand because it got picked up by the media.
- rich_sasha 6y ago
  Worse still, I saw some speculation as to what portion of WSB traffic was in fact bots. Regardless of what happened, next time it could be all bots doing the hyping. Cybercrime is already catching on to these ideas, there were reports of criminals breaking into corporate systems to steal financials, then trade off them (or sell to traders). This is all rife for abuse.
  - joshspankit 6y ago
    Definitely feel like it was bots saying “We’re going after silver now!”
  - WheelsAtLarge 6y ago
    >>Regardless of what happened, next time it could be all bots doing the hyping It's happening with political news. It's only a matter of time before it catches on in wall street.
badinsie 6y ago
nice try but it's far from over. they didn't close their positions.
gher-shyu3i 6y ago
Why do we call these practices "investments"? They're literally gambling.

34 points by laurex 6y ago

kzrdude 6y ago

Obviously no easy answer, but isn't the GME stock still overvalued? Right now it's at $53.

brianwawok 6y ago
By the fundamentals yes. Are people betting the long game? Trend from digital to physical game is going to reverse and raise the used market again? I think that’s a big jump..
asdff 6y ago
It is. It was less than $10 6 months ago and in those 6 months there is nothing Gamestop did to increase the value of their company by nearly five fold, other than be the focal point of a massive pump and dump.
- suprfsat 6y ago
  Gamestop was undervalued, and this was a market correction
  - Bud 6y ago
    I wouldn't bet your paycheck on that guess. Many did. Almost all of them lost.
- jacoblambda 6y ago
  On a somewhat more pleasant note wrt the company, they've been picking up ex-Amazon(AWS specifically) leadership to try and transform the company for the modern digital gaming market. Whether this'll be successful or not we'll have to see but I think the company definitely has the potential to turn around and offer themselves as a decent digital storefront. https://www.datacenterdynamics.com/en/news/gamestop-hires-aws-exec-matt-francis-cto/ https://www.datacenterdynamics.com/en/news/gamestop-hires-aw...
  - asdff 6y ago
    I don't see why microsoft, playstation, or nintendo need the middleman of gamestop when they all each have their own digital storefronts directly under their own control. If you are gamestop, this is the line you have to tow and tell shareholders, because there isn't a viable route otherwise. that doesn't necessarily mean what they say they are working on is going to work, or that they even believe it will work for much longer than it takes for the C-level team to have one good quarter under their belt and find a new job before the thumbs they put in the dam can no longer keep it from bursting.
tootahe45 6y ago
Instead of admitting they got manipulated into a pump and dump, many will try to rationalize their loss saying things like "I'm not selling, MSM badly wants the stock to tank so the shorts get covered." (in a comment below). This is the disbelief phase.
- k33n 6y ago
  I'm honored that you quoted me! I'm down like $800 with a 7 figure net worth. And I like the stock to boot! Why would I sell? Edit: I have plenty of karma to burn. Stay mad (though what has you people so worked up? I have no idea) Edit2 since I'm throttled: I think the idea that it's time for me to make a judgment one way or another on the effectiveness of the investment is a fallacy in itself. I don't invest that way. It would take at least a year for me to reach a point where I am ready to say whether any given investment was a bad or good one.
  - atleta 6y ago
    Are you sure you represent the average?
    - k33n 6y ago
      I would certainly hope I don't!
  - isoskeles 6y ago
    I believe the point stands regardless of your net worth. People come up with rationalizations to smooth over the ego-stinging admission that they were somebody else's greater fool. Your net worth relative to your loss may be yet another rationalization. Instead of, "I was wrong," it's, "Well, it's only $X anyway." But maybe time will prove you right. If you truly believe that, should you risk more of your money on $GME?
Wowfunhappy 6y ago
As a total investor layperson who doesn't own any stock†, I don't think so. The current price seems about right. • The pandemic is temporary and retail stores will re-open. • Gamestop isn't bankrupt and doesn't have mountains of debt. • There will be people who still want to buy physical games—whether for their resale value, or as collectibles, or because downloading 100GB on a slow internet connection sucks. • Gamestop should be able to leverage their brand to increase their online presence. I don't understand why they were so heavily shorted before, and I do think the redditors had a good investment case (early-on, before things went nuts). --- † I have some money in index funds, and some in an account managed by a professional broker. But nothing I personally selected.
- mupuff1234 6y ago
  I think the short case is pretty obvious - basically a re-run of blockbuster. I do think they can adapt and survive as a business, but i doubt they have a future of growth or big profitability.
  - Wowfunhappy 6y ago
    > i doubt they have a future of growth or big profitability. Oh, I agree. But prior to the recent craze it seems as though many were treating them as a failed company. Gamestop isn't Blackberry, or JCPenny.
    - harambae 6y ago
      >Gamestop isn't Blackberry You'll never guess what other company WSB loves pumping
- rhino369 6y ago
  It's twice its value in 2016 despite revenue falling significantly pre-covid and accumulating a lot of debt. Reddit investors may have had a good investment case at 4 dollars (basically assuming it won't go bankrupt). But it could right-size and enjoy modest growth in online sales and still not be worth what it is now.
ratsmack 6y ago
It is, but so is Tesla, Apple, Amazon and others. Value stocks are almost always driven by cult believers.
- asdff 6y ago
  One of these is not like the other. I'd argue that AAPL and AMZN are far more fairly valued than TSLA, a stock that moves by two percentage points whenever Elon Musk tweets erratically, and somehow has a larger market cap than diversified automakers with multiple factories around the world versus a tent in Freemont.
  - ratsmack 6y ago
    The funny thing about "value" stocks is that they go up only if someone desires to buy them more then you want to hold them. In the case of "income" stocks, their value is intrinsic in their dividend yields. Buying "value" stocks of any company is just gambling in my view, unless they have a strong potential of returning dividends in the near term.
Izkata 6y ago
That assumes it wasn't undervalued before. I remember seeing one estimate from December-ish that it should have been around $60, though I don't remember how they came up with that.
- suprfsat 6y ago
  They probably came up with that by buying at a price less than that

k33n 6y ago

There's no loss until the stock is sold. Personally, I'm holding mine and I'm only down a bit right now. I see no reason to sell. MSM badly wants the stock to tank so the shorts get covered. Won't happen.

kbar13 6y ago
look you're welcome to your opinion, but by looking at longevity of memes on the internet and all the facts from financial reports, the dream's dead.
- k33n 6y ago
  So you're denying that there's still significant short interest on GME? You're certainly welcome to take that position if you'd like! Edit: And as for your comment below, there isn't enough downward momentum for the shorts to be covered as of now. Just opening a short position is quite dangerous, and mathematically, this is not over yet. That's a fact. I also don't gamble with money I can't afford to lose. GME could go to 0 and I wouldn't bat an eye. Edit again since I'm throttled: I think the idea that it's time for me to make a judgment one way or another on the effectiveness of the investment is a fallacy in itself. I don't invest that way. It would take at least a year for me to reach a point where I am ready to say whether any given investment was a bad or good one.
  - kbar13 6y ago
    i'm saying the momentum that drove tons of buy orders pushing the price up is gone. therefore there's no significant danger to short positions. look, i've been there before, lost significant money (down payment for a house in sf type money) making big YOLO bets... you gotta extricate yourself from the emotions and cut your losses at some point and move on.
    - k33n 6y ago
      Nah I'm set
6y ago

83457 6y ago

Related... https://www.youtube.com/watch?v=cJd3LO6u1vY https://www.youtube.com/watch?v=cJd3LO6u1vY

endisneigh 6y ago

It sucks because a lot of the loses in the FTA could've been avoided. The highest gain and lowest lost of the SPY respectively have been 16% and 20%. As a personal rule any stock I purchase basically has a stop loss of 20%. As for the gain, I automatically sell after a 50% gain. How much more could you want? edit: this is in the context of day trading

jnsie 6y ago
re: 50% gain, why not use a trailing stop loss at that point? If I'm trading/investing it's to make money so I want as much as I can get.
- endisneigh 6y ago
  I agree in general but GME was highly volatile and execution is not guaranteed with a trailing stop loss, I think in general you're correct but I was talking about the anecdotes specifically in FTA.
sxp 6y ago
When engaging in options trading, startup investments, penny stocks, and other Black Swan strategies, you can be in a situation where you most all your money 90% of the time, but 10% of the investments have a 100x return. If you pursue this risky strategy, you need to be able to hold on in the face of volatility and sky-high gains. I wouldn't recommend this strategy to anyone who doesn't have Vulcan-level discipline over their emotions, but it is a valid investment strategy.
- endisneigh 6y ago
  I agree, but from FTA someone took out a 12% loan and got in at $234. The price ended up closing around $360 a day or two later representing a 50% increase - considering the person took out a loan, seemed like a no brainer to me. ymmv
rhino369 6y ago
If everyone used stop losses, they wouldn't work for anyone. You need someone else to buy your share for you to sell. There has to be a bag holder.

vidanay 6y ago

A fool and his money...

downrightmike 6y ago

well, when the bad players write more illegal stock to bail themselves out and that's allowed, they are just pushing the problem down the road.

kbar13 6y ago

s/investors/speculators/ there's nothing wrong with gambling, but call it for what it is.

lostphilosopher 6y ago
> "... he took out a $20,000 personal loan and used it to purchase shares." > "... a personal loan with an 11.19% interest rate ..."

mrtksn 6y ago

DeepFuckingValue have not posted his position since 11 days and from what I understand when everyone was pumping the price he was gradually selling : https://www.reddit.com/user/DeepFuckingValue/ https://www.reddit.com/user/DeepFuckingValue/ Correct me if I am wrong but He is $13.8M on the green and not like green as if his shares gained value but He actually exited and can click one button to have the money in his personal bank account and live the rich life. But on r/wallstreetbets I kept seeing posts about how he lost millions and still holding and GME meme is still a thing. Is the show going on? Did I understand the situation terribly wrong?

wayoutthere 6y ago
He stopped posting because he was actively the target of an SEC investigation. If I recall his last message was something like “I’m gonna have to stop these updates for a while. Pretty sure you all know why.” He never claimed he wasn’t taking profits; he was drawing down his position every week with new slates of options once that week expired. Because that’s how you play options. That neophyte redditors who have been trading options for 6 months don’t understand what he’s doing is beside the point — which is why the general rule of thumb for retail investors is to avoid options trading entirely. There’s still a long tail on the GME drama only because a bunch of people who run /r/wsb are looking to milk the whole thing for what it’s worth. The whole game was already over by the time the mainstream press even mentioned Reddit.
- mrtksn 6y ago
  Oh I don't blame him even a bit. I'm just confused by the folklore going on around this situation. I even had livid leftist friends calling me to tell me about the end of the capitalism and libertarian friends excited about sticking it to the establishment. That was not my impression but maybe I got it wrong and maybe they are right. Nevertheless I enjoyed the saga, I don't trade. It's too stressful for me when I have a skin in the game.
  - wayoutthere 6y ago
    The great irony is that the establishment ended up winning the whole thing. Your leftist friends may still be right though — 2021 has only just started!

neonate 6y ago

https://archive.is/6iyuz https://archive.is/6iyuz

hahahahe 6y ago

The same thing happened in March 2020. r/wsb was filled with people holding spy puts when VIX hit 80. They kept saying diamond hands as if the entire market is going to zero because of “quad witching” expiry. It’s a recurring theme.

robomartin 6y ago

I'll repost my comment on this from 15 days ago. Not well received at the time (in the middle of the frenzy). Not sure why...I always assumed that HN has an audience that is decent at math and analytical thinking. Here it is: What nobody is talking about yet are the thousands (tens of thousands? hundreds of thousands? millions?) of people who got hurt and will get hurt by this event. Sure, it's neat to see stories of people making from tens of thousands to millions of dollars due to the short squeeze. And yet it is easy to forget that those who played the game were buying GME all the way up to $500 one day, $420 the next day and $300-something the next. People also bought puts at different levels. All of this will come crashing down on top of them. It's a Ponzi scheme (or whatever the appropriate analogy might be). The people who, through hubris and ignorance, bought these stocks chasing them up the price scale to "Help our brothers who bought at $350 get positive" and other encouragement found on r/wallstreetbets are going to get shafted (if they haven't already). In other words, the institutional short sellers are not the only ones who lost money. The difference is, they KNOW they can win. Why? Because there is no way GME is worth $200, $300, $400, $500 or $1,000. At some point in the future gravity will do its thing and this stock will suffer a violent crash. And you can bet there will be short sellers there to profit from it. And you can bet a large number of people who are hoping to get rich quickly are going to lose unimaginable amounts of money. Today's addition to this 15-day old comment: We already know at least one fund made $700 million on this fiasco. For some strange reason the stock is holding around $50 these days. Here's a company that lost four billion dollars in the past four or five quarters with a stock that might not even be worth 1/10 of current levels. And people are still playing the game (or being played). As I said two weeks ago: Gravity will eventually do what gravity does. I don't know why people think they can magically violate the laws of physics.

havelhovel 6y ago
I think your comment was not well received because it compares the stock market to laws of physics and gravity, limits GME investor psychology to a) hubris or b) ignorance, describes a market exchange as a Ponzi scheme, proposes that millions of people may have been hurt by this event without defining what hurt means, and (now) expresses the view that anyone who is decent at mathematical or analytical thinking would automatically agree with you.

swagonomixxx 6y ago

I just love how this whole sequence of events is being touted as the "underdog sticking it to the man". What I see is a bunch of internet trolls getting together and trolling Wall Street. Is that a bad thing? It depends. If you're just dicking around and you put in an amount you can afford to lose, it's all fun and games. But when you convince newbies to trading and investing to put loads of their hard-earned money, on leverage, to a meme stock, it's not so fun and games anymore, is it? I'm all for teaching hedge funds a lesson by squeezing them, but it would've been nice if folks come out _mostly_ unharmed financially. Instead, you have lots of these r/WallStreetBets folks in the red on leveraged trades. Good luck making back that money as quickly as you lost it.

Traster 6y ago
One point to note is that the debt you'd get from buying GME on leverage is way better than the debt you incurred from that higher education you couldn't afford and didn't pay off.
bmurphy1976 6y ago
If 1/10th of the users on r/WSB would put $1000 fun money in and HODL while focusing all their energy on a select few stocks that would be a billion dollar war chest pointed right at the heart of wall street. Unfortunately, the mob couldn't hold it together. A bunch of them got caught up in it and decided to dump their life savings at the high water mark and Robinhood really took the wind out of the rally. Robinhood stopping trades seems to be the catalyst that popped the balloon. Now you have 10 million people on Reddit who can't get organized and some are really hurting, even though they should have known better. The swell was amazing, but it was a rogue wave. I'm sure it will happen again, but harnessing and controlling that energy is going to be like trying to control the ocean.
- newacct583 6y ago
  This is wrong! "Holding" does nothing. The very nature of short trading (remember, the thing that was supposed to have been exploited?) means that even if YOU hold, and everyone else does, your brokerage can loan that share to someone else who will sell it (because they think it will go down, of course).

bitlax 6y ago

Anybody have a workaround for the paywall?

deleted 6y ago

[deleted]

Firebrand 6y ago

Scott Galloway met a lot of backlash on Twitter for his take on the GameStop debacle but I’m starting to think he’s right: https://twitter.com/profgalloway/status/1354532507723640835 https://twitter.com/profgalloway/status/1354532507723640835 There are a lot of frustrated men who spend most of their weekdays staring at a stock price go up and down and then post about it on Reddit instead of doing something productive. There’s no motivation to save money to buy a house with your significant other.

isoskeles 6y ago
There are simpler explanations that don't rely on the strange and sex-obsessed assumption that everyone who did something foolish is an incel. The impossibility of gaining a modest return on your savings without risking it in stocks is enough for me.

WheelsAtLarge 6y ago

I never got the "stick it to the hedge funds" attitude by buying the stock and ending up losing the money. It's looking more and more like other hedge funds got the money small investors put in the stock. There's got to be a better way to protest. What's interesting to me was that this seemed like the old pump and dump scheme that has been part of wall street fraudsters forever. It's a scheme where a group buys a low price stock, promote it to no end and then dump it as people go nuts buying it. Yet, few if any news services pointed that out. I hope we get some real answers as time passes. My suspicion is that it was just a pump and dump that got out of hand because it got picked up by the media.

rich_sasha 6y ago
Worse still, I saw some speculation as to what portion of WSB traffic was in fact bots. Regardless of what happened, next time it could be all bots doing the hyping. Cybercrime is already catching on to these ideas, there were reports of criminals breaking into corporate systems to steal financials, then trade off them (or sell to traders). This is all rife for abuse.
- joshspankit 6y ago
  Definitely feel like it was bots saying “We’re going after silver now!”
- WheelsAtLarge 6y ago
  >>Regardless of what happened, next time it could be all bots doing the hyping It's happening with political news. It's only a matter of time before it catches on in wall street.

badinsie 6y ago

nice try but it's far from over. they didn't close their positions.

gher-shyu3i 6y ago

Why do we call these practices "investments"? They're literally gambling.