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  • My Not So Short Story on GME


    Eastwood

     

      

    On 1/25/2021 at 10:18 AM, Storm the Field said:

    GME at 9:10 $88.60

    9:50 $144.42

    10:10 $88.09

    What in the hell was that all about?

     

    On 1/25/2021 at 10:38 AM, Eastwood said:

    I'll post a recap of everything when the dust settles on this. It's been an interesting ride and it has caused me some concerns over contagion in the broader market.

    I'm not a financial advisor. This is not financial advise. I don't work in finance. I do not have a degree in finance. Actually, I have a BA and I'm bad at math past Cal I. I won't apologize for the length because this post is me spiking the football and other than banter about the moves GME makes in the future, this is the last time I ever dig into the fundamentals of the GME trade.

    What we saw today was covering either due to what is called a gamma squeeze or a short squeeze. Maybe a mix of both. We won't really know until later, possibly at the end of close Wednesday when brokerages like TD update their short interest. A gamma squeeze occurs as the price moves up, crossing the thresholds of strike prices of calls that will soon be expiring. Market Makers use the Delta of an option to determine how many shares of a stock they should purchase in preparation of possibly covering the calls when they are exercised, either by the buyer of the call or upon expiring in the money. As the share price goes up, combined with the days getting closer to expiry, up goes the Delta, up goes the amount of shares the MMs buy. Last Friday, every call on the board for GME was in the money at expiry. I'll repeat: EVERY CALL ON THE BOARD WAS ITM AT EXPIRY. I don't know if that's ever happened in the history of the market. That means that if every call was exercised, 11.7 million shares would need to be transferred over to the new owners today and tomorrow. Now, as the Delta on a lot of the lower strikes were already at 1 and the shares already (hopefully for the call seller) purchased, it shouldn't be a big deal. However, the big pop happened ON Friday, not before. That caused a mad scramble in the after hours Friday, today, and possibly tomorrow for those who are gambling on the price decreasing further before they fill those calls. So, that's a gamma squeeze. Price creeps up, MMs who sell calls end up buying shares to cover, causing the price to climb higher, and then creating essentially a feedback loop spiking the price when combined with buying from retail or pops on positive news.

    What is happening, and may continue to happen, is the result of hedge funds and possibly Bank of America rampantly shorting GME over the course of a year hoping that it goes zero and they then get to pocket everything and give nothing back. The short float on December 31st was 140% and the institutional ownership was 117%. But how is such a thing possible? They borrowed shares to either 1.) sell, never intending to buy them back and return them because they were hell bent on bankrupting GME, or 2.) lent out those already borrowed shares that they never intended to give back anyway to collect the premium, creating a borrowed share of a borrowed share. They would also buy dips incrementally, amassing large positions, sell calls and buy puts with a quick expiry, then dump all of the shares they accumulated at once while simultaneously shorting to tank the price and pocket the premiums on the options they bought and sold. Then, when that wasn't enough, they sold naked shorts. They sold shares they didn't even have or even exist. They injected "synthetic shares" into the market. Synthetic, fugazi, fogazi. It's a wazi, it's a woozi. They're fairy dust. They don't exist. They're not fucking real.

    ispWN9.gif

    But the people and institutional investors they sold them to bought the right to own the shares. And those banks and hedge funds are obligated to deliver them. But now there aren't enough shares to go around. There's an infinite demand for shares, but a finite supply. In a total share recall event, the lenders of the shorted shares could recall every share on borrow and still be 21 MILLION shares short of demand. The banks and hedge funds that created that SHOULD be on the hook. It SHOULD be illegal. Think of how depressed the price was because of it. Think of the loss of market cap, which led to lowered credit ratings, which led to higher interest rates and less borrowing power, and the layoffs and store closures that followed. Awful. The price should go to infinity because the demand the banks and hedge funds created will become infinity.

    Boomers can bitch and moan about RH and college kids dumping their stimmy into GME all they want, but the reality is that a bunch of boomer bankers and hedge funds created a situation that should be legally, economically, and financially impossible. Boomers want to call what retail investors are doing "market manipulation." However, anyone who dug into the situation enough saw the writing on the wall. Honest to goodness due diligence combined with simple supply/demand economics combined with paying attention to the new market trend of retail investors told anyone interested all they needed to know.

    This was me back in September:

    Quote

    I know for the bulk of you guys in here that it is too much of a leap of faith to go long on GME, but there is profit to be made on it in the last quarter, being console launch and holiday season. Especially if it hits $10 and the Robinhood millionaires show up. Even more so if another round of direct stimulus is announced.

    The price hadn't even hit $10, yet, when I said that. The house of cards had already been built. A fan had been placed in front of it. And everyone told me that I was crazy for thinking the house of cards would fall over. It wasn't a secret. It was in plain fucking sight. And we are finding out it is everywhere. Wall Street and old guys in banking and finance can harumph all they want about how a bunch of dumb wage earners are gaming their system to make a buck, but I think the reality is that the curtain has started getting pulled back on Old Man Oz. Take me, for example. I've given a detailed breakdown and have proof in this very thread that I had produced this investment thesis MONTHS before it was mainstream and materialized. I gave my credentials above. Want to know how long I've been actively investing? Since March. Same as all the Robinhood punks. All it takes for a large chunk of the population to be competent in anything is 1. Time 2. Education/training, and 3. Financial resources. In March, there was the perfect storm of 1. COVID lockdowns, 2. The internet and educational resources on the various trading platforms, and 3. Stimulus - The ultimate Other People's Money. Millions of $3k hedge funds popped up all over the nation and had the time, education, and money to be just dangerous enough. I traded in a paper account on Think Or Swim for 30 days and was then off to the races. I developed a momentum trading strategy where I combined candlestick patterns, moving average patterns, the RSI, and the Elliot Wave. Not only that, I also voraciously consumed anything I could get my hands on about market history, valuations, and trends. I bought and sold stocks, bought options, and sold covered calls and generated a 10% return over the course of about a month. Then I stumbled on GME, halted all active trading, liquidated any outstanding options, sat on my KO, XOM, and PFE (which was my worst trade) shares and positioned myself into GME. My return is now over 1000%. Either I'm some kind of wonder boy who picked all this up quickly because I'm a high functioning autistic person...

    SparklingOfficialAtlasmoth-max-1mb.gif

    Or maybe this shit just ain't as hard as Wall Street wants us to think it is. And maybe Wall Street was so habitually comfortable with how little people knew about their industry in the past that they didn't even bother concealing their moves because they didn't think retail investors would know how to play the other side. Well, the secret's out. This new batch of retail investors spent the last decade learning how to min/max various economic systems in video games. They are accustomed to dumping hours of time learning how to maximize returns on digital assets. They went from watching hours of YouTube videos on how to mine diamonds and make a Fortune 3 pick axe in Minecraft to watching hours of how to turn a couple grand into 5 figures. In some cases, 6 or 7 figures.

    As I stated earlier, I sold half of my position in GME today, but I still firmly believe in the trade I executed. I am now concerned about two things, one being specific to GME. I think the invisible hand of the free market is about to get absolutely doomfisted by either the government or big banks. I think a lot of institutions out there are shook. When GME hit $150 and other short squeezes were popping, a huge market sell-off occurred. I think funds were liquidating to cover their losses because margin calls were going out. In GME alone today, short sellers lost $1.6 billion according to Business Insider. Melvin Capital, supposedly the biggest short seller of GME out there, is down a whopping 30% for 2021, so far. They manage billions. We learned in 2008 that these banks and funds actually interweave into a structural support for the entire financial system. If a multi-billion dollar part of that support structure fails, it increases the strain on the others, and then another fails, and then we have a cascade failure. I think GME and the big shorts come together and negotiate a share purchase of newly issued shares under the condition that they are immediately transferred to the rightful owners to get the short float below 100%. This is actually extremely bullish for GME. They erase their remaining debt, buy out of all of their bad leases, and increase their cash long enough for the turn around. That's why I only sold half of my position. I'm long GME. In Ryan Cohen I trust. But I also think the government steps in and does something to try to fix the rest of the market. As history has shown us, this doesn't mean punishing the banks who created the situation in the first place. No, they're going to increase the regulations on the retail investors. That could also have grave, unintended consequences when retail cashes out all at once.

    So, I feel really good about today, but there may be grave consequences in future. I'll end with the cringiest thing possible: be a retail trader who uses a scene from The Big Short in one of his posts.

     

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    There are still entities with short position who are stuck on the other side of the trade. Their loss potential are , in theory , unlimited. 
     
    if it was contained to 1 fund and they go insolvent*, fine. But if it spreads to more institutions, the entire market will need to be sold off. 
     
    *margin policies are supposed to contain risk to the account holder, but if account goes bust and the escalating losses are transferred over to the broker, then what?  
     
    at some point, some authority needs to make unprecedented, artificial measures to stop it. They force the company to make a gigantic stock offering to trigger a deflation in price? Even more gigantic class settlement   at some agreed price ? I.e. “yes you won the game and you BK’ed all these funds, will you accept xxx$ to walk away”
    I think a move could be that all institutions, banks, and hedge funds that sold naked shorts and created synthetic shares should pay GME the fair market value (today's price, in other words) for the amount the naked shorted or created. This takes infinite loss off the board and still leaves the float in short squeeze territory long enough for retail to plan an exit. Lest we forget, short squeezes start becoming a thing under various conditions above 30% or so, even more so when it crosses the 50% threshold and institutional ownership is high. The float would still be 100%.

    GME can't budge here. Cramer wants to blame GME for not speaking up or issuing shares, but why would they? This wasn't their mess. Now they have a metric ton of customer good will. Their public image has been completely saved. Imagine the amount of buying in store and online GME is about to experience. If they interject now, they sour all of that.
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    CNN story about a guy making 35k/year has run up his RH balance to 1m.  https://www.cnn.com/videos/business/2021/01/29/trader-millionaire-gamestop-stock-orig.cnn

    I get the idea that some of these investors see this as a social movement against large investors. But I hope guys like him do not find themselves seeing >90% of their balance high fading away.  This guy could sell off 15% of his GME holdings and pocket 5x annual salary, before taxes. Hell, if he sold 50%, he could propel himself and his family years ahead in terms of financial health.

    He hints that he sees more profits ahead. Possibly true so don't sell 100%. Lock in some profits and keep going.

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    1 hour ago, Nice Guy Eddie said:

    CNN story about a guy making 35k/year has run up his RH balance to 1m.  https://www.cnn.com/videos/business/2021/01/29/trader-millionaire-gamestop-stock-orig.cnn

    I get the idea that some of these investors see this as a social movement against large investors. But I hope guys like him do not find themselves seeing >90% of their balance high fading away.  This guy could sell off 15% of his GME holdings and pocket 5x annual salary, before taxes. Hell, if he sold 50%, he could propel himself and his family years ahead in terms of financial health.

    He hints that he sees more profits ahead. Possibly true so don't sell 100%. Lock in some profits and keep going.

    You’re hoping that a guy barely meeting working class threshold throwing almost 2 months of pre-tax income into a single speculative play ... should make a reasonable financial decision. 
     

    i think it’s unlikely -_-

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    55 minutes ago, 52-80 said:

    You’re hoping that a guy barely meeting working class threshold throwing almost 2 months of pre-tax income into a single speculative play ... should make a reasonable financial decision. 
     

    i think it’s unlikely -_-

    Haha. Good point.

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    4 hours ago, 52-80 said:

    But if it spreads to more institutions, the entire market will need to be sold off. 

    I think you're being a little dramatic. A lot of people might lose money. A lot of people are making money. A lot of corrections that were waiting to be made are being made. I don't think this is some scenario where everything is rotten to the core and our entire economy is propped up by shitty hedge-fund short positions.

    At least - I hope not.

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    14 minutes ago, ztejas said:

    I think you're being a little dramatic. A lot of people might lose money. A lot of people are making money. A lot of corrections that were waiting to be made are being made. I don't think this is some scenario where everything is rotten to the core and our entire economy is propped up by shitty hedge-fund short positions.

    At least - I hope not.

    I gathered he was hinting at large pension funds and the savings and retirement funds for everyday folks who will pay (by virtue of their portfolio values going down). 

    To which I say boo-hoo. You take the good and the outsized gainz; you take the bad and the implied risk. 

    Dozens of black swan or black swan-like events that hurt investments over the past 200 years out front shoulda told ya.

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    2 hours ago, Nice Guy Eddie said:

    CNN story about a guy making 35k/year has run up his RH balance to 1m.  https://www.cnn.com/videos/business/2021/01/29/trader-millionaire-gamestop-stock-orig.cnn

    I get the idea that some of these investors see this as a social movement against large investors. But I hope guys like him do not find themselves seeing >90% of their balance high fading away.  This guy could sell off 15% of his GME holdings and pocket 5x annual salary, before taxes. Hell, if he sold 50%, he could propel himself and his family years ahead in terms of financial health.

    He hints that he sees more profits ahead. Possibly true so don't sell 100%. Lock in some profits and keep going.

    Someone school me on this because I have never actually used a trading platform - could he instantly dump all of his shares for $1M using Robinhood? Are there sell limits he would run into? Say the stock starts to correct back - because it will - I'd imagine he'd run into difficulty trying to dump all of it in the middle of a free fall and could get fucked out of most of that profit, right?

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    5 minutes ago, DonkeyCigars said:

    I gathered he was hinting at large pension funds and the savings and retirement funds for everyday folks who will pay (by virtue of their portfolio values going down). 

    Okay but how much of that capital is tied to hedge fund principal? I know I made the point back that a lot of mutual funds that were holding millions of shares of GME are raking it in right now. 

    Like you said - if your retirement fund is based off of a stake in a hedge fund then sucks to suck. That shit is super volatile by nature and will always carry risk with it.

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    1 minute ago, ztejas said:

    Okay but how much of that capital is tied to hedge fund principal? I know I made the point back that a lot of mutual funds that were holding millions of shares of GME are raking it in right now. 

    Like you said - if your retirement fund is based off of a stake in a hedge fund then sucks to suck. That shit is super volatile by nature and will always carry risk with it.

    I don’t have this answer for you, but I think if you are making that argument, it’s because there is enough hazard that everyday folks with teachers pensions or firefighter pensions or HF retirements, who have no idea what GameStop is or who think a Stonk is a new dance by green haired youth, will be punished.

    Again I’m not making that argument and not even sure he was, it just seemed like it from what I could gather, because I actually agree with your initial statement.

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    11 minutes ago, ztejas said:

    Someone school me on this because I have never actually used a trading platform - could he instantly dump all of his shares for $1M using Robinhood? Are there sell limits he would run into? Say the stock starts to correct back - because it will - I'd imagine he'd run into difficulty trying to dump all of it in the middle of a free fall and could get fucked out of most of that profit, right?

    Millions of GME shares are traded every day. I don't think he would have trouble selling a few thousand shares.

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    28 minutes ago, ztejas said:

    Okay but how much of that capital is tied to hedge fund principal? 

    The short obligation doesn’t go away if 1 or 2 funds go tits up.  It just gets transferred to the prime broker and up the chain. 
     

    There are ~50M shares short.  If the stock goes up 500 more points (not unfathomable, it already did 50–>550 in a week), that’s a further $25B of loss, stacked on top of the $20B already incurred.  
     

    That money has to come from somewhere — explanation for the big drop in Dow and Nasdaq this week, and companies like Apple despite smashing their earnings. 
     

    That amount is insignificant to the total stock market if you simply ripped it out cleanly. But becomes more significant in terms of the cascading effect the concentrated sell-off triggers


    The other fallout from this episode is that it exposed the structural weakness in the system. The fact that people realize they can’t buy and sell equities as “freely” as they thought will erode trust. Tightening up the clearing and settlement process; maybe legislation requiring higher reserves and risk requirements; will end up creating more cost and friction for retail participation in the market. Less money flowing into equities. 
     

    Anyway, rockets go up. Choo choo
     

     

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    Institutional money long GME. 
     

    These are based on periodic filings, so not all of it is current. 
     

    But yeah, of course the big boys are in on the action. 
     

    image.thumb.jpeg.83e60427061178c7c5b14642185946ef.jpeg

     

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    1 hour ago, XYZ said:

    Millions of GME shares are traded every day. I don't think he would have trouble selling a few thousand shares.

    I guess it was more of a Robinhood Q. Seems like they are a little... sketchier... when it comes to stuff like this.

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    I guess it was more of a Robinhood Q. Seems like they are a little... sketchier... when it comes to stuff like this.

    I think they are fine with selling. Buying is the issue with them
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    22 minutes ago, Updawg said:


    I think they are fine with selling. Buying is the issue with them

    Haven't they come under fire during this whole ordeal for selling people's orders on dips? 

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    3 hours ago, 52-80 said:

    You’re hoping that a guy barely meeting working class threshold throwing almost 2 months of pre-tax income into a single speculative play ... should make a reasonable financial decision. 
     

    i think it’s unlikely -_-

    So only upper middle class or rich white collar folks are allowed to take calculated risks with their own money without judgment from surly 1%ers? This is a shitty classist take imo. You know nothing about the guy or what other assets he and his wife may or may not have so you can't really say what kind of risk a $4500 play on GME that paid off bigly for him was to begin with. Did he get an inheritance like millions of Americans and put it in the stock market or real estate? Was he making money trading options first? Has he already sold off other positions and kept some in cash? We can't say from that clip but my guess (as a fellow "working class" schmuck) is that he's probably played it safe with a chunk of his investments already but isn't going to go on CNN and tell the r/wsb crowd that he's cashed out x percent of GME or say anything that doesn't fit the rocketship meme. 

    But maybe I'm just personalizing it because I was so close to pulling the trigger on chunk of GME back in September and left it in my paper trading thinkorswim to follow short term, b/c if I'd made a $3500 investment that day in my live account, I'd have enough in my brokerage account that would make me sell most of it. I'm not gambling that opportunity to pay off my mortgage or a safety net for my family. tldr Don't assume you know anything about that guy just because he makes $35000/yr.

     

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    55 minutes ago, ztejas said:

    Haven't they come under fire during this whole ordeal for selling people's orders on dips? 

    those people probably got margin called, and those were were their biggest holdings.  bad timing, but thats the risk with overextending...

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    I think a move could be that all institutions, banks, and hedge funds that sold naked shorts and created synthetic shares should pay GME the fair market value (today's price, in other words) for the amount the naked shorted or created. This takes infinite loss off the board and still leaves the float in short squeeze territory long enough for retail to plan an exit. Lest we forget, short squeezes start becoming a thing under various conditions above 30% or so, even more so when it crosses the 50% threshold and institutional ownership is high. The float would still be 100%.

    GME can't budge here. Cramer wants to blame GME for not speaking up or issuing shares, but why would they? This wasn't their mess. Now they have a metric ton of customer good will. Their public image has been completely saved. Imagine the amount of buying in store and online GME is about to experience. If they interject now, they sour all of that.

    Truth. If GME helps bail out the hedges, they will incur the wrath of millions of Redditors
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    12 minutes ago, 52-80 said:

    those people probably got margin called, and those were were their biggest holdings.  bad timing, but thats the risk with overextending...

    Makes sense. Thanks. So selling shares that were paid for in cash shouldn't be an issue.

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    32 minutes ago, Gourmand said:

    So only upper middle class or rich white collar folks are allowed to take calculated risks with their own money without judgment from surly 1%ers? This is a shitty classist take imo. You know nothing about the guy or what other assets he and his wife may or may not have so you can't really say what kind of risk a $4500 play on GME that paid off bigly for him was to begin with. Did he get an inheritance like millions of Americans and put it in the stock market or real estate? Was he making money trading options first? Has he already sold off other positions and kept some in cash? We can't say from that clip but my guess (as a fellow "working class" schmuck) is that he's probably played it safe with a chunk of his investments already but isn't going to go on CNN and tell the r/wsb crowd that he's cashed out x percent of GME or say anything that doesn't fit the rocketship meme. 

    But maybe I'm just personalizing it because I was so close to pulling the trigger on chunk of GME back in September and left it in my paper trading thinkorswim to follow short term, b/c if I'd made a $3500 investment that day in my live account, I'd have enough in my brokerage account that would make me sell most of it. I'm not gambling that opportunity to pay off my mortgage or a safety net for my family. tldr Don't assume you know anything about that guy just because he makes $35000/yr.

     

    I think his point was that this guy has more than likely never made a present value 6 figure decision in his life - let alone a 7 figure one - so the chances that he fucks it up are a bit higher. Whether he fucks it up or not is kind of irrelevant.

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    57 minutes ago, Gourmand said:

    So only upper middle class or rich white collar folks are allowed to take calculated risks with their own money without judgment from surly 1%ers? This is a shitty classist take imo. You know nothing about the guy or what other assets he and his wife may or may not have so you can't really say what kind of risk a $4500 play on GME that paid off bigly for him was to begin with. Did he get an inheritance like millions of Americans and put it in the stock market or real estate? Was he making money trading options first? Has he already sold off other positions and kept some in cash? We can't say from that clip but my guess (as a fellow "working class" schmuck) is that he's probably played it safe with a chunk of his investments already but isn't going to go on CNN and tell the r/wsb crowd that he's cashed out x percent of GME or say anything that doesn't fit the rocketship meme.

     

    You are correct that we don't know anything substantial about the guy.  All we know is the sensationalistic portraiture that the media loves to promote - poor working man strikes a million overnight. 

    I think everyone should be allowed participation in the market.  But given all the information we're presented with, it is a very poor risk that he's taken.  On a % sense, it's a  concentrated position for anybody, but on effective % sense, it's much higher at his income level due having less surplus income.

    If I was his financial advisor, I'd have a motivation for wanting to help him improve his earnings, and I wouldn't have advised doing that.  Anyway I'm not his advisor, and I'm not 1%er.

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    7 hours ago, Nice Guy Eddie said:

    CNN story about a guy making 35k/year has run up his RH balance to 1m.  https://www.cnn.com/videos/business/2021/01/29/trader-millionaire-gamestop-stock-orig.cnn

    I get the idea that some of these investors see this as a social movement against large investors. But I hope guys like him do not find themselves seeing >90% of their balance high fading away.  This guy could sell off 15% of his GME holdings and pocket 5x annual salary, before taxes. Hell, if he sold 50%, he could propel himself and his family years ahead in terms of financial health.

    He hints that he sees more profits ahead. Possibly true so don't sell 100%. Lock in some profits and keep going.

    Let’s pretend you bet $100 on a 10 team CFB parlay and you hit the first 9 games.  Google tells me that pays 720-1 if you hit all ten.  Your last game of the day is the PAC12 nightcap.  Oregon -10.5 vs. UW.  You took UW and the points.  You now have $72k riding on this game.  Probably not a bad idea to call your bookie and put some cash on Oregon covering.

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    Certain hedge funds got exposed and they paid for it. 

    Yeah some retail traders will be left holding the bag but plenty of retail traders made lots of money and are freerolling at this point. Welcome to the year 2021. 

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    2 hours ago, 936horn said:

    What happens when GameStop offers more shares to the market?

    My basic understanding (so probably wrong) is this. plz correct me as required.

    GameStop makes a ton of cash as the shorts get covered by purchasing of the new stock at the current price. 

    Price goes up as buys happen if that's what the short holders do. But not the exponential increase expected with a real short squeeze because supply is not limited. Then stock drops as people take their tendies and go home.

     

    again, that's my playdough understanding. poke holes in it!

     

     

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    1 hour ago, cam4mav said:

    hmmmmmmmm

     

     

    moving to this thread for visibilty/focus of convo. This whole thing going forward is betting / gambling that there are still huge amounts of shorts that must buy stock back to cover and this thing goes to the moon. 
    That's the idea but if almost half of the shorts that were believed to be out there already got covered friday/thursday and the price remained flat.... there goes a lot of the fuel in that rocket. 

     

    2 hours ago, 936horn said:

    What happens when GameStop offers more shares to the market?

    Watched this guy earlier today. I don't know anything about him. He addresses that question at 58:50 in this video. 

     

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    instagram meme page

    https://www.instagram.com/holdtheline__/

     

    Spoiler

    https://www.instagram.com/p/CKufRMCgAsf/

    hold the line chants at ski resort lift

    https://www.instagram.com/p/CKuUAK7ArGq/

    Lord Of The Rings big ass battle memed

    https://www.instagram.com/p/CKr7NMnA7Bj/

    The bought a fucking digital billboard in Time Square

    https://www.instagram.com/p/CKr8Q3FAzz_/

    Plane flying Greg Davis Sucks banner [SUCK MY NUTS ROBINHOOD] over their HQ building

    https://www.instagram.com/p/CKppuGEA8dc/

    nice sing song "Soon may the Tendieman come.... To send our rocket into the sun"

    https://www.instagram.com/p/CKpdetyAYma/

     

     

     

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    45 minutes ago, cam4mav said:

    My basic understanding (so probably wrong) is this. plz correct me as required.

    GameStop makes a ton of cash as the shorts get covered by purchasing of the new stock at the current price. 

    Price goes up as buys happen if that's what the short holders do. But not the exponential increase expected with a real short squeeze because supply is not limited. Then stock drops as people take their tendies and go home.

     

    again, that's my playdough understanding. poke holes in it!

     

     

    It's all speculative, right? You may be right. I'm not sure the share price would continue to go up if they issued more shares. I guess it depends on how many shareholders continue to stick this thing out. And how many shares GME offers. 

    I am pretty confident that it will come crashing down at some point. Unless the market has really decided that GME is worth $25 billion.

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    Again coming back to how all this is based on short #'s.... Video in spoilers from an angry ny macbook repairman that does finance videos. He's on team diamond hands, his other videos are very clear about that. However this is an interesting counterview from an un verified reddit hedgefund manager. take it for what it's worth. which might be nothing. might be true AF. no idea.

     

    Spoiler

     

     

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    4 minutes ago, ztejas said:

    Unless the market has really decided that GME is worth $25 billion.

    Only thing I'm sure of is that the market has shown that it's all made up numbers that people play with. Like dungeons and dragons. With fortunes. 

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    4 hours ago, cam4mav said:

    Again coming back to how all this is based on short #'s.... Video in spoilers from an angry ny macbook repairman that does finance videos. He's on team diamond hands, his other videos are very clear about that. However this is an interesting counterview from an un verified reddit hedgefund manager. take it for what it's worth. which might be nothing. might be true AF. no idea.

     

      Hide contents

     

     

    Video is private

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    Video is private
    Weird he must have de listed it.

    Yup he did. Haven't watched this next upload yet but the description sounds like some shady shit was going on and got caught. Can't copy paste on mobile but will do so and spoiler tag later





    Sent from my SM-G973U using Tapatalk

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    On 1/30/2021 at 3:30 PM, 52-80 said:

    If I was his financial advisor, I'd have a motivation for wanting to help him improve his earnings, and I wouldn't have advised doing that.  Anyway I'm not his advisor, and I'm not 1%er.

    His “adviser” is someone on reddit going by the name shitTy_drAwerZ619201

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    9 hours ago, cam4mav said:

    My basic understanding (so probably wrong) is this. plz correct me as required.

    GameStop makes a ton of cash as the shorts get covered by purchasing of the new stock at the current price. 

    Price goes up as buys happen if that's what the short holders do. But not the exponential increase expected with a real short squeeze because supply is not limited. Then stock drops as people take their tendies and go home.

     

    again, that's my playdough understanding. poke holes in it!

     

     

    most of the time the price goes down when new shares are issued.  simple supply v demand.  rarely, as in maybe .1% of the time, the new issues are set at a price close enough to the previous close that it sends the market price a little higher.  why?  b/c people are expecting new shares at a price at least 10% lower but get spooked when the price isn't that low.  other than that rare situation the price always goes down.

    • Hook 'Em 1
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    11 hours ago, cam4mav said:

    My basic understanding (so probably wrong) is this. plz correct me as required.

    GameStop makes a ton of cash as the shorts get covered by purchasing of the new stock at the current price. 

    Price goes up as buys happen if that's what the short holders do. But not the exponential increase expected with a real short squeeze because supply is not limited. Then stock drops as people take their tendies and go home.

     

    again, that's my playdough understanding. poke holes in it!

     

     

    I don’t know this firsthand but from what I’ve seen on Reddit, GameStop is only authorized to issue $100MM worth of shares right now. They’d have to vote and make a public filing to be able to issue more, but I’m sure if they did that then the stock price would tank on news of the filing. 

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    9 minutes ago, Burt Macklin said:

    I don’t know this firsthand but from what I’ve seen on Reddit, GameStop is only authorized to issue $100MM worth of shares right now. They’d have to vote and make a public filing to be able to issue more, but I’m sure if they did that then the stock price would tank on news of the filing. 

    that is correct - they filed to issue up to 100M worth

    https://www.sec.gov/Archives/edgar/data/1326380/000119312520312805/d67321d424b5.htm

     

    Jefferies will provide written confirmation to us before the open on the New York Stock Exchange on the day following each day on which our shares of common stock are sold under the Sales Agreement. Each confirmation will include the number of shares sold on that day, the aggregate gross proceeds of such sales and the proceeds to us.

    Edited by 52-80
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    2 hours ago, gsoda3 said:

    most of the time the price goes down when new shares are issued.  simple supply v demand.  rarely, as in maybe .1% of the time, the new issues are set at a price close enough to the previous close that it sends the market price a little higher.  why?  b/c people are expecting new shares at a price at least 10% lower but get spooked when the price isn't that low.  other than that rare situation the price always goes down.

    This was my instinct answer but I wasn't aware enough of the frequency to make a claim one way or the other. 

    Is this mainly due to the fact that sellers have to then compete with the company meaning sell prices would need to be lower than the new issue price? On top of the new issues being below the mkt price to begin with. That was my line of thinking. 

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    1 hour ago, cam4mav said:

    twitter land is not happy with this update from these guys. 

    There were, at one point, 62 million shares shorted.

    The total shares outstanding is approximately 69.5 million.

    17 million or so of the shares are held by mutual funds.

    And then there are all the open short calls.

    This may not make it to the Moon, but it's going to hang out in orbit for a while.

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    This is data through the 15th on failure to deliver shorts.... so not telling right now but interesting to see anyways.

    The next report will be very interesting to see what actually happened during this period.

     

    Spoiler

     

     

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