weirdness happening in US company

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Forums › Finance and wealth management › weirdness happening in US company

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#2648244 5-Feb-2021 16:08

reddit thread gets fired up to make that company share keep going up so billionaire(?s) go broke

Whatever this was going to achieve - making a billionaire hedge trader go broke was never going to happen. Those operations have everything automated and make margin on any kind of volatility. This includes the volatility created by this reddit stampede.

wellygary

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#2648254 5-Feb-2021 16:42

Beccara:

Options trading would be the "simplest" but it's quite complex to learn from scratch and you will most likely blow up your first couple of accounts, please dont knee jerk into this and blow $0000's

Options=Leverage, Leverage can make or break you real quick.... and if it goes bigly bad you will actually loose your shirt + your house ... be very careful....

gzt

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#2649353 8-Feb-2021 10:24

An economist says Reddit driven activity was a small player in a price war between hedge funds:

https://washingtonmonthly.com/2021/02/03/gamestop-isnt-a-popular-uprising/

Also says significant volume traded in illegal naked shorts - selling down before owning. Says the activity required to drive the observed price movement both ways could only have originated from large players and Reddit was a side show at best, astroturf at worst.

BlinkyBill

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#2649360 8-Feb-2021 10:54

gzt: An economist says Reddit driven activity was a small player in a price war between hedge funds:

https://washingtonmonthly.com/2021/02/03/gamestop-isnt-a-popular-uprising/

Also says significant volume traded in illegal naked shorts - selling down before owning. Says the activity required to drive the observed price movement both ways could only have originated from large players and Reddit was a side show at best, astroturf at worst.

thanks for that. An interesting article.

The article certainly exposes the realities of the impotence of individual day-traders, and retail investors in general. Also that regulation of the hedge fund industry is essential. I feel sad for those who donated their money to the large fund managers.

sbiddle

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#2649372 8-Feb-2021 11:18

gzt: An economist says Reddit driven activity was a small player in a price war between hedge funds:

https://washingtonmonthly.com/2021/02/03/gamestop-isnt-a-popular-uprising/

Also says significant volume traded in illegal naked shorts - selling down before owning. Says the activity required to drive the observed price movement both ways could only have originated from large players and Reddit was a side show at best, astroturf at worst.

Whether that's true or not is really open to ones own views of what happened. There is data to show both ways.

What is really now clear is how market fundamentals mean very little - companies every day are pumped and dumped by people and many stocks and the market as a whole is being dictated by companies and influencers who peddle social media channels and websites solely focussing on the pump and dump and sucking in those with FOMO.

BlinkyBill

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#2649378 8-Feb-2021 11:24

sbiddle:

gzt: An economist says Reddit driven activity was a small player in a price war between hedge funds:

https://washingtonmonthly.com/2021/02/03/gamestop-isnt-a-popular-uprising/

Also says significant volume traded in illegal naked shorts - selling down before owning. Says the activity required to drive the observed price movement both ways could only have originated from large players and Reddit was a side show at best, astroturf at worst.

Whether that's true or not is really open to ones own views of what happened. There is data to show both ways.

...

What data shows it another way?

gzt

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#2649412 8-Feb-2021 12:28

Arguably, the present price data and the liquidity now available to GameStop. For instance buyers in before this whole thing and long term investors are still several hundred percent up. Ie; $18 > $63 over 30 days.

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BlinkyBill

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#2649415 8-Feb-2021 12:35

gzt: Arguably, the present price data and the liquidity now available to GameStop. For instance buyers in before this whole thing and long term investors are still several hundred percent up. Ie; $18 > $63 over 30 days.

Excuse my ignorance, but what does that show?

gzt

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#2649418 8-Feb-2021 12:42

Melvin Captial hedge fund closes it's short position in GameStop. Required additional US$2.8 billion in capital. Melvin denies rumours it has filed for bankruptcy:

https://www.cnbc.com/2021/01/27/hedge-fund-targeted-by-reddit-board-melvin-capital-closed-out-of-gamestop-short-position-tuesday.html

gzt

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#2649421 8-Feb-2021 12:49

BlinkyBill:
gzt: Arguably, the present price data and the liquidity now available to GameStop. For instance buyers in before this whole thing and long term investors are still several hundred percent up. Ie; $18 > $63 over 30 days.
Excuse my ignorance, but what does that show?

Apologies, this does not answer your question to sbiddle.

BlinkyBill

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#2649440 8-Feb-2021 13:02

Thanks gzt, no worries.

GME is still well overvalued. It is a business in trouble and this FY will likely lose, from memory, $1.6B, measured simply in terms of expenses over revenue. As games are increasingly delivered electronically, GME needs to change its strategy - they do have a plan but in the short term there will be difficulties. And even then there are difficulties ahead.

The pricing research I’ve seen is typically a pricing range of $8-$16.

I would suggest current pricing is a hangover from the recent market hysteria - in fact that is still going on. I think the liquidity is margin speculation, and not good investment strategy. I would suggest that as a long-term investment, GameStop is a very poor one. Unless you can buy on a realistic valuation and like the business strategy to stop them going under. I can’t see, for example, Berkshire Hathaway investing in GME.

gzt

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#2649448 8-Feb-2021 13:32

Indeed. It's easy to see why they are a target for the 'legitimate' side of short selling.

frankv

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#2650109 9-Feb-2021 11:21

Batman:

someone tell me how i can short shares? this is really good if another gamestop happens ... !

By the time you find out that another gamestop is happening, it will be too late. Remember that it's the last to buy in that lose.

Scott3

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#2662767 25-Feb-2021 19:59

GME spiking again.

Yesterday's Open was $44.70, Normal hours close was 91.71, and post-market trading close was 168.00.

Today (New York time) is going to be very interesting. While my trading platform shows a short interest of 3.80%, other sources are reporting short interest still in excess of 60%. Consensus seems to be that reporting of short interest is too delayed to actually be of use. Could well see a repeat of the VW 2008 infinite short squeeze, or we could see all the bag holders from the last spike take this opportunity to dump.

Will be interesting to see how robin hood and the other share platforms handle this situation, especally after Robinhoods appearence at the hearing just days ago.

Still have my for LOLs shares. But they are on Stake who's US partner drive wealth refused to process GME orders for last time round, and doesn't offer pre & post market trading. Don't have confidence I will be able to trade them if I want to. Might just stay up and watch.

eracode

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#2662798 25-Feb-2021 20:40

Very interesting - up towards $200 in after-hours trading. Someone is playing silly-buggers - based on conventional valuation methodology this company should be priced at around $25 (give or take). Maybe that methodology has gone out the window now.

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