Wall St are looking like they will be the losers.

Citadel must be loving their Robinhood order flow right now.

'The system' and 'Wall St' don't just play the surface game here. Cool, nice, you short squeezed a hedge fund. It's awesome but ... you bet WSBers still involuntarily shoveled money to Wall St one way or another because every single step of the game is rigged asswards and back.

https://www.zerohedge.com/markets/first-casualty-big-short-s...

WSB is a public subreddit. Traders, pms, hedge fund guys all participate and win often bigger because they have more to play with. They pump and dump and ride the emoji rockets like everyone else.

There are only the winners, which include the $60k/yr nurse, the $600k/yr FAANG principal, and the $6M/yr Senior PM who timed their call options right.

And the losers which include the same but timed it wrong.

The engineers and finance folks who lost will have a bad week. The lower-middle income earners will have a bad year.

On the other hand, the multi-billionaires who are loaning one another billions of dollars to batten down their GME shorts....that seems somewhat manipulative to me.

These hyper-rich guys babble on about efficient markets but they work together to corner the market on particular securities. And they don't do it in public on the internet. They use the full weight of their reputations and relationships.

And 4Chan a) isn't dumb, but they like doing dumb shit and b) they love brigading. Pool's closed etc.

But what's interesting is how the institutional outrage is merely fuelling the brigading.

The institutional investors crying in the media only confirms WSB's beliefs that they've found a weak spot in the institutions, so they're going to stick it in harder.

I admire their attitude, but not enough to put my money in to what feels like an giant troll.

Personally, I'm buying in the money puts expiring in 2023. No way Gamestop is doing better now, or has a better future now, than it did five or ten years, yet their stock's at an all time high? These hijinks may continue for some time, but I doubt it'll last years, price will settle and I'll hopefully make a modest profit.

This is said as someone who has made high six figures from yolo trades because I thought it would be funnier to lose the money than put it in a savings account.

A bit of luck, a bit of smarts. Build it and they will come?

They have repeatedly resorted to market manipulation to drive the price down and cut their losses, but people are not selling, there do not exist enough shares for them to close their position. They screwed up royally, they doubled down, from 128% shorted stock to 140% shorted stock, then they resorted to blatant market manipulation, using the media and painting a false narrative.

Everyone who is short has to pay the vig every day, so that hasn’t changed.

I'm sure there was some bull case for the company, and it might have had a snowball's chance in hell around $14 or even $20/share. But at $60+ ? What on God's good earth is supposed to make the company worth that much?

Counterpoint:

"Most analysts" are hum-drum Wall Street hacks who cover dozens of companies and don't really have a clue about how the lion's share of them are run. I remember a few years back there was one analyst who kept talking about how NAND keeps getting cheaper and that's hurting memory suppliers...but the analyst's metrics didn't normalize for advancements in NAND speed nor the maturing of capital investments, so the analyst was basically looking at totally expected price declines over time and interpreting it as for some kind of static commodity while claiming it as a bear thesis.

A few of them are really clever and knowledgeable. The rest are chumps.

It's extremely difficult to judge GME based on regular metrics because their long-term outlook is a function of strategy and their short-term survival is a function of COVID. Sure, the company sells stuff that you can buy online, and sure, they sell it at malls and other places where nobody goes these days, but its stock was over-shorted and this was going to happen sooner or later anyway.

Maybe my numbers are off, so correct me if I'm wrong....At today's closing price, GME, which has $6B/yr revenue, is worth a sixth of BBY, which has 43B/yr revenue.

GME sells consoles and consumer electronics in addition to games, so I'd put BBY on the short list of comps for sure. But if you think the product mix is so different as to make them incomparable, that's ok. Pick a better metric and explain why GME was accurately priced at $260mm market cap when the company does billions in revenue.

Then, go back and explain why AMD was worth $2/share in 2014.

Then, go to every other heavily shorted name and wave your hands around looking for reasons to justify obviously overshorted valuations.

If enough people want GameStop to succeed then it will. Ironically it’s the same thesis that wealthy SV investors go by when they decide to invest in a startup. Except the word invest is usually misleading. Most of the time they’re just looking for a vehicle to inject capital and influence, and the people and product are interchangeable parts used to achieve a a profitable outcome.

The sentiment story is that if enough people want to pay $150 a share for approximately $0/yr in earnings, they will. What this glosses over is the reason for the sentiment, the question: "why do people want to pay this?"

Traditional stories analysts tell would have people pay $150/share because they expect $8-$15/yr. This story is that people will pay $150/share because people want a way to say 'fuck wall street' and 'fuck analysts' and have unreasonable expectations of becoming wealthy. The former sentiment is sustainable in a way that the latter story kinda isn't.

More like – if enough people want GameStop to succeed then it has a slightly better chance of succeeding than if they didn't.

Chances are that it is still a bubble that will eventually pop, like most others before it.

$AMD was at $0.15, AMD was the only company besides Intel that actually had x86-64 patents. Intel would have never let AMD fail because they would be a monopoly and that is worse than leading a duopoly.

Notice the bean counter Intel ceo, the yields getting worse over time, the performance not improving besides a 1-2% year over year and Intel getting complacent, repeatedly to screwing over the customer with requirement of buying a new motherboard with every new release.

AMD was a steal for anyone in the know.

Counter argument 2:

Any price target posted by Citron was wrong.

Counter argument 3:

Why would any analyst give a proper price target when they can screw you over?

Counterpoint 1: AMD was a chipmaker with skilled engineers on staff and a growth story where they could seize market share with better technology. Gamestop is a retailer with retail clerks on staff and a story where increasing competition from PC and console app stores slowly eats away at their market share. Exact same thing, right?

Counterpoint 2: Saying the price target is wrong is one thing, and may in many circumstances be eminently defensible. Saying the correct price is $50-$150 is another.

Counterpoint 3: This exemplifies the thinking going on here. "I don't understand the stock market and think someone is screwing us over. Let's define our own alternate reality, and gang up on them for revenge! Revolution!" Last time we saw that show was January 6. For a few people, who get out at the right time, this will be a much more successful revolution, but on the whole, it succeeds only with a transient disruption, and harm the individual would-be revolutionaries the most.

Ouff.

> AMD was a chipmaker with skilled engineers on staff and a growth story where they could seize market share with better technology. Gamestop is a retailer with retail clerks on staff and a story where increasing competition from PC and console app stores slowly eats away at their market share. Exact same thing, right?

Do your due diligence this is just one, https://www.gmedd.com, there have been many others and they all converge to the same argument. GME is worth much more than the $10 PT given by analysts.

> Counterpoint 2: Saying the price target is wrong is one thing, and may in many circumstances be eminently defensible. Saying the correct price is $50-$150 is another.

Except citron was wrong in every single price target they have given by more often than not an order magnitude, except for 1. If you pay enough attention, you will see that many of the same 'pages' play both the bull and bear game, if only to come out and say they were correct.

> Counterpoint 3: This exemplifies the thinking going on here. "I don't understand the stock market and think someone is screwing us over. Let's define our own alternate reality, and gang up on them for revenge! Revolution!"

Had you done your due diligence and paid attention to the situation as it unfolded, you'd have seen that the market made sense, the stock was over shorted and in no way reflective of the actual price targets created by various models and analyses such as the one I linked above.

> Last time we saw that show was January 6. For a few people, who get out at the right time, this will be a much more successful revolution, but on the whole, it succeeds only with a transient disruption, and harm the individual would-be revolutionaries the most.

We saw that show in every single revolution. This only reinforces the belief that the average proletariat is getting screwed over and manipulated by the same class of people. Hint, it was the proletariat that paid for the greed, not the institutions, the hedge funds or the MMs. It is the proletariat that are stuck between a rock and a hard place, it is the proletariat that are getting manipulated into intra class wars.

The market is broken, at least retail investors are benefiting for once.

A share of AAPL now costs $139, a share of GOOG costs $1860. How would you compare the two companies based on that? How does the price of a single share relate to whether or not the company has positive or negative earnings?

Either stock is terrifying.

Which is exactly why Wall Street and financial media is denigrating it. They hate that they don't have the edge, or a monopoly on profits in this case.

right now though the chaos has nothing to do with the underlying value. now it's all about the squeeze. but that's never been part of the bull thesis

OK, I'll pay $300 for a stock that will be worth $169 in 4 years assuming that Ryan Cohen has 100% chance of using is legendary Ryan Cohen powers to seize digital game sale margins from all the walled gardens, because somebody on WSB bought a domain name and used orange and green highlights in a spiffy PDF.

Gamestop has the same problem that drove other retailers like suncoast, sam goody, strawberries, and many other ones out of business; you cannot survive the digitalization of your primary products.

Gamestop relies on console systems and videogames both new and used to make the core of its primary business. These are what draw people into their locations and to their web site, and allow add on sales like memberships, warranties, collectibles, and accessories to be sold. They generally go to malls, either interior or open.

The problem is the decrease in physical games over digital kills the primary reason to go into their stores, and also prevents middlemen from existing; there is no value add to getting a digital code from gamestop as opposed to steam, ps store, etc. It also murders the high value used game and console sales because now there is less product to trade in.

That just leaves them with collectibles, which they've always been low quality and too expensive, accessories, and a tiny assortment of physical games that now they barely even have stock of. They "advertise" the top 100 games or so in their store, yet don't have stock of many of them ,and their used games are barely a shelf of them.

The problem with being an internet retailer is amazon already does what they do better; it's an uphill battle where they have no real value add. Even Amazon seems to have less and less new physical games, and they have an infinite amount of chinese sellers dramatically lowering the price of game accessories.

I don't see any way to be bullish on them because of their actual business.

edit: its not just them. There's a regional game store chain where I live, and they suffer the exact same problems. They are desperately trying to carry anything and everything geek related just to fill the store with inventory; records, collectible card games, comics, manga, crt tvs, used movies, anime accessories, model kits, etc. They actually are losing the game store focus, as used product even in the retro market is dead now...very few retro systems and games.

Granted, dogfood is waaaay different than selling digital games outside a walled garden. No one can lock you out of your dogfood.

The reality of wealth building is that short term it’s always 0 sum game, long term it’s a way to get rich.

That means that there is in some ways infinite demand... every single share currently owned HAS to be bought by a short seller at some point, in order to return it to the borrowed actual owner... so as long as all the current owners hold fast, they can sell their shares for as high as they can go.

It doesn't even matter if the company itself is worthless, the demand is there.

You are right about the zero sum in this case, though... it just might be the short sellers who are left holding the bag.