What? Sure there is a lot of chaos in WSB but they really were onto something with GME and literally squeezed some institutional investors into bankruptcy.

Sure, they are mostly smoke but their mere interest in something doesn’t disqualify it.

So 'superstonk' was created after all that. It was basically the crazies from WSB after the WSB mods wanted to tone down the conspiracy theories.

Prior to the GME squeeze, the talk on WallStreeBets was basically "GME is sound fundamentally, its got +revenue AND its shorted to hell, conditions are right for upward movement".

It wasn't about sticking it to anyone, screwing hedge funds, etc, it was like "we think short sellers are perhaps screwing up here, we suggest you buy some GME".

They weren't on to something with GME, their enthusiasm was its cause.

This is plainly wrong. Their enthusiasm did not create short interest in GameStop, they simply took advantage of it.

Sure, but it was self-fulfilling. It wasn't a brilliant analysis, it was a demonstration that a large group of loosely coordinated individual investors can move markets by collective action.

What exactly were they “onto” with GME? It isn’t exactly news that an investor with a short position will blow out if the stock increases in value by 10x or 100x.

“It isn’t exactly news that…” interesting that you say this considering it literally was news for weeks. Short squeezes are rare events.

Fact of the matter is WSB was right about GameStop when other investors were not. It may seem obvious now but was certainly not at the time.

You've misread my comment. Of course it was news, but it didn't reveal anything spectacular about the structure of the financial markets, at least certainly not something WSB predicted ahead of time (as other commenters note, Superstonk only arose after the GameStop situation to concentrate financial conspiracy theories to that sub alone).

Something like 140% of outstanding GME shares were shorted. They figured that out and then exploited it.

* are exploiting it

It's still going

GameStop as a business hasn't made any profit in 4 years while their revenues consistently decline. It is a dying unprofitable business, worth the scrap assets that can be salvaged on the balance sheet, not it's current market cap of $7.8 BILLION. Anyone buying or holding $GME is being swindled, a la FTX and crypto scams, by people interested in making big $$ betting against a $200m business being worth $7.8 BILLION.

I'll bet you've never even had one look at their balance sheet or income statement, are just winging it from Reddit comments when it comes to financial evaluation, and that should tell anyone rational, including yourself hopefully, whether you're with the smart money on this position... If not, enjoy the new QAnon.

r/wsb completed it's transformation into r/the_donald of dumb finance echo chamber by the advent of GME. Truly, they will both be case studies of the anti-wisdom of crowds when it comes to current digital interfaces with a sprinkle of bot propaganda.

I think it will be a case study in late-empire corruption and the failure of propaganda.

There's a reason the "buy" (not sell) button was turned off for a day on $GME alone. That's market manipulation. There's a reason it no charges were filed. The SEC openly admits it's corrupt. There are talking heads on the finance channels who openly admit the markets are rigged.

You're right, FTX was a scam. And SBF openly admitted fraudulent actions. So he's in jail, right? Oh, sorry, no -- he's a "distinguished" guest speaking on a New York Times panel.

It's all a scam. All of it. The difference with $GME is that, in this case, they got caught. Hedge funds naked shorted the stock and got caught. At some point they will need to cover and won't be able to. Here's some reading:

https://archive.org/details/superstonk-dd-mega-back-up/mode/...

You are mad because you think this stock is overvalued?? Well, guess what: The entire market is overvalued! It's all bullshit. P/E ratios are off the charts when we're facing a deep economic downturn. No one should be in the market -- at all. If there's one stock to hold, it's this and for three reasons: they naked shorted; they got caught; and they're fucked.

The reason the buy button was turned off is because when you buy a stock on any brokerage, you don't immediately own it, the shares still have to go through the clearinghouse. The brokerage needs to post collateral at the clearinghouse while they wait for the shares to deliver. The demand for GME was unprecedented, the clearinghouse raised their collateral requirements, and Robinhood didn't have the money to post collateral, even after raising a billion dollars overnight. It's very simple. There was an entire Congressional inquiry into this, which you can read into instead of spreading baseless conspiracy theories on HN.

Correct. Imagine, this guy is wasting hundreds of hours on this “hobby” reading r/superstonk, but still hasn’t even heard of the DTCC which every single trade of his is going through. Information diets really matter.

P/E ratios for the SP500 are 18, while Developed is 12 and Emerging are 11. That’s a 5.6%, 8%, and 9% real return, for an expected nominal yield of ~12%, 15%, 16%. Looks like good P/E ratios to me, and you’re out here acknowledging you’re buying unprofitable garbage co meme stocks. Don’t say you weren’t warned.

The current S&P500 10-year P/E Ratio is 29.3

So many people desperate to help me sell my position! Wow. Thanks.

"their mere interest in something doesn’t disqualify it" - It certainly raises suspicions though. It really feels like certain groups have gotten good at turning particular news events or ideas into memes and sharing them as widely as possible in order to push a narrative that manipulates the markets. Which is probably why this story is now on the front page of HN. We certainly saw this with crypto and now it feels to me at least like those same tactics are being applied more and more to the larger stock market.

I agree with this point. It isn’t the case that WSB interest disqualifies the viability of financial information… but it also doesn’t make it more credible.

The point I disagree with (and I think the original post is making) is just because an unpopular group (WSB) is interested in something, doesn’t discredit it.

> The point I disagree with (and I think the original post is making) is just because an unpopular group (WSB) is interested in something, doesn’t discredit it.

If that groups has consistently been wrong about everything for two years, then it absolutely does. It's like Jim Cramer: If he states something, there is at least a 90% chance that the opposite will happen.

They’re at 60% of the float locked up with DRS now. Once they get to 100% then the true measure of whether they were right or wrong can be ascertained.

> there is at least a 90% chance that the opposite will happen.

That'd be cool. You could make a lot of money. Unfortunately he's probably closer to 50%.

WSB ignored or laughed at roaring kitty until he showed actual large gains, and then they jumped on. They never proactively got anything right as far as I know.

Man, you just dredged up a painful memory

I was there watching him get shat upon, and thought "Man, maybe this guy's on to something.. ah, screw it, it's not worth the risk"

He was consistently posting about GME for a long time, slowly losing his life's savings to its mediocre performance in the process and getting laughed at by everyone. Before GME took off, he'd actually stopped posting to WSB for the most part since he'd get jeered about it so much, haha.

That's bizarre logic. I'm a fan of Superstonk (WSB is long over). There's another couple years to go to see the track record. We'll see.

>I'm a fan of Superstonk

Out of curiosity, why is that? Would you care to prove the profits you've made from following GME?

Not a finance expert so apologies if any of this is wrong but from my understanding there’s a new strategy now. The theory, is that stock brokers are taking advantage of a mechanism which allows them to create and trade hundreds of thousands of ghost shares in GME that don’t really exist which, if true, means they can never lose and the casino is rigged. Superstonkers are direct registering their shares which means stock brokers don’t have any ability to trade them. The theory, is that once they direct register all the available shares it will expose the number of fake shares the brokers have created causing the mother of all short squeezes as people start calling in their positions but there are no real shares available for the brokers to purchase and fulfil their positions. The superstonkers think this will be enough to crash the entire market and expose the traders to fraud as there will be no legitimate reason that will hold up in court for the vast quantity of these imaginary shares - they believe the quantity will vastly outweigh the acceptable number that could be created for the purposes of the mechanism. The percentage of the shares that have been registered so far is around 60% and growing. Whether the Superstonkers are right or wrong about the outcome won’t be able to be determined until they reach 100% or maybe close to it if the brokers start panicking beforehand and a short starts.

I don’t have any shares but it is really fun to watch as an outsider.

> The percentage of the shares that have been registered so far is around 60% and growing.

I actually did a cursory search, and the actual number appears to be 23.4% as of the most recent filing.

I don't think this is true, it was already at 30% in July at the end of Q2 according to this:

https://www.thestreet.com/memestocks/gme/gamestop-stock-71-3...

According to this (have no idea how accurate it is) it's estimating 58.46% locked up:

https://gme.crazyawesomecompany.com

I think the new numbers get released in a few days time so will be interesting to see where it's at.

What happens if GME issues additional shares?

I don't think this is possible? You can do a stock split but existing shareholders automatically get an increased amount of stocks so they don't lose any value. GME actually did this in the summer so every shareholder got 4 stocks for every one they previously had.

If you could just issue additional shares willy nilly without adjusting the shares of existing shareholders everyone would take their money out of your company and no-one would put any into it because you'd have devalued the original shareholders investments overnight and subsequently you'd no longer be trusted. You would be bankrupting your company.

A public company can absolutely issue new shares, it's not the typical way companies raise money but it happens all the time. GameStop itself did it during the craze to capitalize on the increase share price did they not?

No idea why you think it would bankrupt the company, it changes nothing. The new shares is balanced by the new money on the balance sheet.

Ok so did some reading and you are correct, new shares can be issued but GameStop did a share split, not a dilution.

Share dilution: more shares added, existing shareholders percentage of company decreases, investments are devalued.

Share split: more shares added, existing shareholders percentage of company remains the same, value of investment remains the same.

As far as I'm aware, share dilution is a lot less common than share split precisely because shareholders are essentially losing money. If GameStop had done a share dilution everyone who invested previously would have lost 75% of their value. That kind of thing absolutely could lead a company going bankrupt because it would not be looked kindly on, both by existing or prospective investors.

Excerpt from https://valueofstocks.com/2022/06/18/share-dilution-vs-stock... :

> Of course, investor sentiment can be negative if a company dilutes shares for this reason alone. Issuing new shares is often seen as a less risky way to raise capital because the company does not have to pay back the money it raises.

> However, there are some risks associated with share dilution, as it signals that the company could destroy shareholder value, and it leads to poor investor sentiment towards the company.

> Issuing shares can also be a warning signal for shareholders, because it may signal that the company can’t raise capital by borrowing or issuing bonds.

> What are the risks of share dilution?

> The most obvious risk of share dilution is that it can hurt stock prices. When a company dilutes its shares, the value of each existing share is reduced. This most of the time leads to a decline in the stock price, which is proportionate to the reduced value of each share.

> It can also make it harder for the company to raise capital in the future, by issuing shares because shareholders take dilution as a serious risk.

> It makes it more difficult to raise money because potential investors will see that the company has already diluted its shares and they'll be less likely to invest. Another risk is that dilution can increase the volatility of the stock.

> The lower stock price can also lead to more volatile swings in the stock price. This can be a problem for investors who are looking for stability.

They issued for over $1B worth of shares in 2021: https://news.gamestop.com/news-releases/news-release-details...

According to Google their market cap is currently 7.78B but I don't know what it was when they issued them so it's hard to say how big of a proportion it was at the time. The stock price did go up when they did it too, against all odds.

There are issues with issuing shares as described in the link you shared, I don't want to minimize that. And you're right about diluting existing shareholders.

My point was more that many companies do it and the money the company raises by doing so gets added on the balance sheet, which can be used to fund profitable ventures, or to burn. The main differentiator is whether they are raising money because they believe they can make more money out of it (ie Shopify) or because they have to in order to avoid bankruptcy (ie Hertz).

Ahhh I had no idea about GME doing this in 2021. I also didn't know Shopify and Hertz had both performed share dilutions. I thought they were pretty rare but they must have happen more than I realised. Thank you for informing me.

    > I don't think this is possible?

Companies issue new shares all the time. As far as dilution goes, I'm speaking less about per share price and more to the plan to register all of these physical shares. It reminds me of the math problem about going halfway to the doorway with every step, and trying to decide how many steps it will take to finally cross the threshold. It can't ever happen.

Normally it wouldn't hit 100% but this isn't remotely a normal case. Further, each percentage point more DRSed, causes huge problems for these hedge funds who naked shorted.

The thing they’ve got going for them is, so long as more shares don’t get added like you say, the closer they get to the goal the more likely people will be to join in. If they’re at 60% now like they say they are (find out for sure in a few days) I think things are going to start snowballing, either this quarter or next when they presumably cross the 66% or 75% marks. People will jump on the bandwagon just for the fun of it to “stick it to the man”.

Has it ever occurred to you that this is a scam perpetrated by people who don't want to be left holding the bag?

Have you looked at how the underlying financials look for GME?

Yes it has absolutely occurred to me that it could possibly be scam. As I said in my original comments, I have no shares and I am watching as an outside observer. As this is unprecedented, no one can say with 100% certainty who is right or wrong unless they succeed in their mission of locking up the float. It is quite possible that both sides are right - that there is both rampant fraud and an unviable company. Only time will tell.

Why do I need to show profits after six months? Would you say that of AAPL? I'm convinced that the hedge funds didn't close their shorts. Like legions of others, I've directly registered my shares and am willing to wait.