Were people in the financial services worried about retail investors when Melvin was shorting GME into the ground at $5 a share? Intentional manipulation to quickly bankrupt a company. How about with the 2000s derivatives bubble?
The only thing they are worried about is that they are getting the shitty other side of the game they made for the first time.
Some people with in a group who hold a view does not mean the entire group holds that view.
In this game, I believe retail investors feel like they are winning now but ultimately many will lose money when the price comes down. In my view the price is not sustainable....
obviously its not sustainable, we are entering a short squeeze. But capping at $4 a share shouldn't have been either, I think $60-$80 is a really reasonable assessment, it will spike, and rightly so, as the too greedy naked short sellers get screwed over and forced to cover their positions
On GME, I have read r/WSB and the most of the posts/comments are emotional in terms of reasoning. When I’ve lost money investing it has been because I made decisions based on emotions. Often I wanted something to be true and I wasn’t able to face up to reality.
I believe short selling has a place in the market if done correctly. Don’t get me wrong, I’m against market manipulation. the buying or selling of shares by rational parties allows for true price/value discovery. My fear for WSB retail investors is that they are not rational and eventually the price of GME will come crashing down to a more realistic level in line with its future prospects and cash flow/earnings yield.
Under all the WSB bravado, I believe there is greed in that they all want to make big bucks. In that sense they are no different to the hedge funds. It’s really many small greedy fish vs a few large greedy fish....who will win? .... I’d rather avoid this fight and play a game where I’m more confident of winning.
They they don’t give a single fuck about retail investors.
(Outside of PR initiatives of course)
Yeah, I agree. I should have worded it more like that.
After that, if people hang around, sure they'll likely lose money if they bought at the top, but until those big positions close, there's money to be made.
The main takeaway from this incident is that margin-call-constrained short selling is even more dangerous than previously understood.
Yea, it does seem largely priced in, but perhaps not completely. If share price is $60 in 1 year, the ROI on that contract would be 9% -- so slightly better than what you'd reasonably expect an index fund to return. A $60 share price is higher than GME's all-time high prior this fiasco.
It is not a trade I would make.
The irony here is that you believe the market is a mockery which most of the time it isnt but at times it can be irrational. This is clearly one of those times....as an investment professional.....I look at this and see the irrationality of the price which is not underpinned by cash flow or a fair valuation close to the price...which is called fundamental investing and not trading like what is happening here.