Anyone holding GME shares?

[KneesUp]

I've just seen this story on the BBC about Gamestop - it's shares were massively shorted (traders betting on them falling in value) but that hasn't happened and now there seems not enought actual shares available for shorters to exit their positions. Meaning they have to buy, but those holding the shares don't have to sell, so the price is going up further and further. It's apparently over 100% shorted meaning some shares will have to be bought more than once - so no-one really seems to know where the price will peak, or what the endgame will be. I think that's right - it's how I understand it anyway. It seems to being pitted as an era-defining moment where David gets one over on Goliath.


It's a battle between Wall Street pros and upstart investors using social media platforms like Reddit. And at the moment, the upstarts have the upper hand.
At the centre of the tussle is a US video games bricks and mortar retailer called Gamestop, arguably something of a relic in a world moving online.
Shares in the business rocketed again on Wednesday, up 116% at the start of trading in New York. That's on top of a 92% jump on Tuesday, and takes gains in the last week well above 300%.

https://www.bbc.co.uk/news/business-55817918

A good time to buy shares was last week, but looking on reddit, people are still buying them and still holding them and still maintaining that any price that is under $1000 is a bargain. Just wondered if anyone had any thoughts (or shares they want to sell me cheap!)

 

[Once a Wheeler]

Remember one of the often-cited tests for a bubble about to burst and wipe out its participants: 'This time it's different.'
It isn't.

 

[KneesUp]

Remember one of the often-cited tests for a bubble about to burst and wipe out its participants: 'This time it's different.'
It isn't.

True - but if you can jump just before the ship explodes ... :-)

Big if.

I'm enjoying watching.

 

[Eziemnaik]

Itz LOLZ
There are voices to stop trading for 30 days
I hope before that WSB can take out some more victims

 

[Eziemnaik]

When Ickan was long on Herbalife (watch the doc) it is all legal
When common folk do it it is not

 

[slowmotion]

It was quite fun seeing the hedgies whining about how it wasn't fair being beaten at their own scam by a bunch of bedroom amateurs.

 

[slowmotion]

Here's someone talking sense about it......

U.S. Senator Elizabeth Warren, long critical of Wall Street, called on regulators to take action.

“For years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price,” Warren said on Twitter.

“It’s long past time for the SEC and other financial regulators to wake up and do their jobs.”

 

[Eziemnaik]

Breaking News:
- wall street, disgusted with outside trading taking place shuts down communication platform
- SEC is pleading with redditers to stop, as it may cause Hedge Fund CEOs to have to sell their yachts and helicopters to cover losses
- White House is looking at prohibition of trading for unprofessionals with worth less than 10 000000$

 

[slowmotion]

Blimey! Somebody rocked the boat.

 

[Once a Wheeler]

True - but if you can jump just before the ship explodes ... :-) Big if. I'm enjoying watching.

From today's edition of Shares magazine, talking about the US market:

Echoes of the South Sea Bubble of the 1720s are hard to ignore. Put simply, speculation in assets such as penny stocks and SPACs [Special Purpose Acquisition Companies] has reached levels rarely seen in the past and only seen in the final stages of a stock market bubble, where higher prices are sustained not by fundamentals but by faith that a ‘greater fool’ will pay an even higher price.​

If, as often happens, the UK follows the US, you may have a gala performance to watch.

 

[Eziemnaik]

Higher prices haven't been sustained by fundamentals since at least 2008

 

[KneesUp]

It'll be interesting to see what the regulatory authorities will do - it very much seems to me like they shouldn't let any stock get over 100% shorted.

When VW was (briefly) the most expensive company in the world because of a short-squeeze on it's stock, it was by best estimates, 80% shorted. GME is, by best estimates, 130 to 140% shorted.

I think a big difference was VW stock was largely held by one family so if they weren't selling, the price kept rising. Obviously GME is held by many people, but the feeling from reading forums is that - generally - people are holding because they can see that it will just keep rising because the shorts have to cover, and if the go bankrupt, the central bank will have to take over and so on - it could end up with a bailout like in 2008 except this time the money will go to small bedroom investors, not the big corporates. That would make me smile.

 

[nickyboy]

Availability of Option trades allow the Reddit/Wall Street Bets retail investors to leverage their positions and compete with the Hedge Funds. They've won on Gamestop as Funds are having to exit their short positions and take huge losses in the process. However, fundamentally on Gamestop, there are a bunch of new retail holders in at a price waaaay beyond any logical valuation. That'll eventually unravel as Gamestop can't pay divis at a rate to support the share price. People will get bored when there is no more price action due to shorters having closed their positions and they will move on. Price will tank

However, this has shown what committed retail investors can do. There are the beginnings of something similar on ASX (Australia's main Stock Exchange) where Reddit investors are starting to up their option trades on heavily shorted stocks. For sure, I expect that Hedge Funds will be uber cautious about taking extreme short positions, at least for now

 

[BrumJim]

I think a big difference was VW stock was largely held by one family so if they weren't selling, the price kept rising. Obviously GME is held by many people, but the feeling from reading forums is that - generally - people are holding because they can see that it will just keep rising because the shorts have to cover, and if the go bankrupt, the central bank will have to take over and so on - it could end up with a bailout like in 2008 except this time the money will go to small bedroom investors, not the big corporates. That would make me smile.

I will be really, really annoyed if there is a bailout. No excuse this time.

 

[BrumJim]

However, this has shown what committed retail investors can do. There are the beginnings of something similar on ASX (Australia's main Stock Exchange) where Reddit investors are starting to up their option trades on heavily shorted stocks. For sure, I expect that Hedge Funds will be uber cautious about taking extreme short positions, at least for now

Hoping that money doesn't talk, and the regulatory authorities conclude that it is up to Hedge Funds to manage their risks, not a requirement for laws, regulation or mandatory restrictions.