For those of you who haven't heard, Gamestop is a dying mall retail chain store that re-sells used CDs, games and game equipment. If you don't mind buying second-hand, you can go there to get your electronics fix. Gamestop has no web presence to speak of, and no real future. It is the 2020's version of Blockbuster Video.
A retail store like that should be seeing constantly falling stock prices. Instead, the stock is booming. Why? Well, apparently the nation's millennials have declared war on the corporate world. So far, it looks like the millennials are winning:
did some redditt research:
mellenials are pissed. they cant buy a house, because the boomers drove the prices up and wages didnt follow. they wont ever retire, ss and medicare are bankrupt. saving 10-20K is nothing--its a paltry sum in these days--not enuf for down payment on a condo. so.....they will buy they whole float (69 mil) of any stock with more shorts than longs (or a very high short %) and force the shorts to buy from them at their price (with their paltry $1-20K collective savings--chump change in this world until collectively used---genius, actually.). In march...when the market crashed....the redditt crowd mocked the boomers for having the fed save their asses. "boomers cant handle a bear market' --stocks never go down? "we'll teach you stocks never go down". the stock the millenials target will never go down (gamestop) until they get hedge funds to pay their price to unwind their shorts. its a war---millenials versus the establishment/boomers. $1000/share price target for starters. The millenials feel (correctly) they have nothing to lose, because the boomers have fooked valuations and rigged this market for decades at the millenials expense. Next stock on the queue for short crushing--->BB???
correct me where im wrong---this is the way i understand it. you need 5-10x cash reserves to short this potato and wait it out until capitulation.
If you like rooting for the underdog, this makes for a very entertaining show. Joe Biden, in office all of seven days, has just thrown down on the side of the big corporations, and expressly screwed the college graduate population. This is unlikely to go well for China Joe and his corporate puppet masters.
A friend of mine asked me what the deal was with GME, ELI5 style. I told him:
A big investor bet that a stock would go down, and they orchestrated giant sales in order to make it so.
It was so profitable that they sold more stock than was even available, which is super-greedy, but not unusual. But we found out.
When you sell a stock expecting it to go down, you are required to buy it back at some point. But because we found out, we bought all the stock there was to buy.
And now, they’re super pissed because we’re playing keep-away with the stock they HAVE to buy- and we’re using Reddit to warn each other about the shady bulk sales and scare tactics they’d normally use to get us to sell.
So as long as we stick together, they’re going to keep losing money, and the price they have to pay keeps going up.
There is no limit to how much money they can lose if we all agree not to sell. So now they’re going on TV and using words like “collusion”, and “fraud” to justify some legal intervention because we’re doing to them what they normally do to us.
TL;DR: We’re playing keep-away against the billionaires, and Reddit is allowing us to win.
Read the comments on the Zerohedge story. Gamestop is just the beginning. Corporate traders, if you have short positions in any company, you are about to get your face torn off.
UPDATE:
The corporate suits and brokerages have done a very, very stupid thing. The halted trading on GME and have begun to sell their users' positions without getting the users' permissions first. Now, sure, this is criminal theft, but that isn't the stupidest part of this scenario.
There are something like 4 million people in on this GME trade right now. They just seriously pissed off EVERYONE in that group of 4 million. What are the chances that at least one of those 4 million people is described by this Leverage quote from the San Lorenzo Job:
Nathan Ford: You know what I have? I have twenty-four year old genius with a smart phone and a problem with authority. You never really stood a chance.
This is going to get very ugly for the corporate suits. If they are lucky, they get jail time. If not, they get the mob.
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