What Could Possibly Go Wrong?

Mischief Is Important More Money Than Brains 63 Comments

The “Meme Stock”.

GameStop is a struggling, kind of boring, mid-size retailer stuck in a legacy business — selling physical video games. But it’s also pretty much the only company anyone on Wall Street is talking about right now after its stock rose 160% in a matter of hours on Monday morning to an all-time high of $159. (By day’s end, GameStop’s price had been cut by more than half, but that still left it up more than 300% this year and almost 3,000% from its 52-week low. And it was up another 15% at Tuesday’s open.)
 
It isn’t GameStop’s precipitous rise, impressive as that’s been, that has everyone fascinated. Instead, it’s what fueling that rise: concentrated buying by thousands upon thousands of small individual investors who are using sites like Reddit and Robinhood to drive up what are now being called “meme stocks.” GameStop is the best-known of these meme stocks, simply because its gains have become so outrageous. But it was preceded last year by Hertz and Kodak, which, despite having struggling businesses, saw their stock prices soar when they became Reddit darlings. And now stocks like AMC, Nokia, and Blackberry (which is, yes, still in business) have also caught Redditors’ fancy.

I got nothin.

Tim Pool: Wall Street In PANIC MODE

CNN: Blame Trump!

More in the comments.

Update: The tech overlords are clamping down.

Of course he did: Michael Burry’s CRAZY Win on Gamestop

63 Replies to “What Could Possibly Go Wrong?”

    1. Add in bored people confined to home due to Wuhan rules and little knowledge.
      ==========================
      As my grandfather observed in Alberta, before the 1929 crash, his cab driver was giving stock tips, so Grandpa predicted a market crash and cashed out of everything. Grandpa had three degrees from Cdn and American Universities and was a pharmacist initially, but was drawn to Western Canada circa 1909, becoming involved in real estate development, which he did carefully with good research. His former portfolio includes buildings that are heritage-designated properties in Calgary, surviving the 2013 Calgary flood . His office was in the building kitty-corner to the BAY, as per Calgary phone books.

      Grandpa helped a lot of people in Alberta and relatives, but also left Alberta, mostly financially, when Aberhart decided to print “funny money”, moving later to California during it’s growth spurt and becoming naturalized.

      https://en.wikipedia.org/wiki/William_Aberhart#:~:text=William%20Aberhart%20(December%2030%2C%201878,to%20his%20death%20in%201943).

      Trudeau and Biden and all western countries are printing “funny money” at a faster and faster pace. I am not sure what to do next, as I am getting older, but the taxi driver and Wuhan “home alone” folks might have something in common: irrational exuberance.

      Grandpa, I need your advice.

      1. This was more than that, there is far more intrinsic value in Gamestop than it’s price reflected. Some fairly savvy people noticed this, and given the way hedge funds often do manipulate the market to their own ends, it was a chance to make a lot of money. They have taken $3B out of the hides of some guys who should know better, but got lazy.

        What is interesting is now that the unanointed got in the game, Wall street is screaming for a regulatory fix. They are entitled to their 2 and 20. I applauded all day as i watched it, including one of the Bobby Axelrod types who went bust. No jet for you, lol.

  2. Massive short squeeze – much like volkswagon a few years ago. In this case over 150% of the float was short. So when the market moved against the shorts, they have to buy back higher to cover. But thats alot of shares being chased, and the Reddit boys dont seem inclined to sell I doubt anyone actually thinks this is worth more than 20 bucks. Could hit a thousand bucks.
    Some pretty big margin calls coming.

  3. Early shorts are getting out with stocks from new shorts. It’s like reverse hot potato, the last one with the short wins.

  5. No, no, no. What’s going on is large hedge funds short sell declining companies all the time and make a lot of money, and the perception by individual “day trader” type investors is that they’re doing so illegally or at best quasi-legally, because they have massive amounts of money to play with and can cut the necessary collaborators in on the scam.

    The redditors have banded together, picked some stocks that were being aggressively and predatorially[1] shorted by hedge fund bros, and are creating a rush on the stock in a kind of pump and dump. Yes, they make a bit of money on this (a friend of mine who is still at BlackBerry after 17 years is dumping his previously worthless stock options as fast as he can) but more importantly they savage the hedge funds who have to cover the margin calls when the stocks skyrocket. Some of these hedge funds have lost billions in days and the exchanges and regulators are panicking. It’s considered payback for these fund managers having driven businesses into insolvency by playing games with their stock for decades now.

    Pumping a worthless company may be retarded, but as one redditor put it, “we can stay retarded longer than [the hedge funds] can stay solvent”.

    [1] It’s a word now, so shut up

    2. One thing many fail to realize is that to cover the shorts, the hedge funds have to buy back GME stock. So the hedge funds themselves are pumping the money into these stocks, and it’s going to the redditors who are selling it back. In short, the money is going from hedge funds to guys on reddit.

  7. my Heart Bleeds for those poor, put upon hedge fund managers.

    Tell me when they have to sell the G5.

    1. Little retail investors (like these Reddit guys) might lose 100% of their investment in any stock.
      Short-sellers can lose several hundred percent (theoretically infinite) on any one of their shorts. Hard to feel sorry for them.

  8. The stim cheques gave the redditors the ability to pull this one off. Mischievous little scamps.

    GME is at $347.51 (on Jan 6 it was $19.50) The US regulator is now saying that they are going to stop trading on GME for up to a month. Biden is apparently monitoring the issue. (LOL). The wallstreet bets Discord channel is unbelievable right now.

    Now, the lefties are are attempting to link reddit to the alt-right which is hilarious. OMG acthual Nazis are buying GME. Reddit purged their wrong-thinkers ages ago. We’ve gone full circle on gamergate. It will be interesting to see if they deplatform reddit.

    It is important to note that when people start doing something on-line that the elites don’t like, the iron boot immediately comes down while the boot owners scream “racism” and “fun bad”.

    My two thoughts are:
    1. Well there goes any hope for more stimulus cash.
    2. Isn’t this how market bubbles pop? I’m still holding some tulip bulbs.

  9. And GameStop has what kind of EARNINGS to justify that kind of a runup…?

    I’m sure the Game will Stop, once everyone realizes that day trader insanity is not INVESTING; rather it is NAKED CASINO money hoping for snakes eyes.

    Of course only put the kind of money you can AFFORD TO LOSE on the table.

    Prosit!!

    Hans Rupprecht, Commander in Chief
    1st Saint Nicolaas Army
    Army Group “True North

    1. I would laugh even harder if all this gamestop furor caused the reddit army to run down to their local gameshop and…well shop. Suddenly they get a bump in revenue for a quarter to sustain their stock price.

      However, this isn’t about fundamentals, it’s about a group of memelords taking it to a short selling hedge fund.

    2. GameStop doesn’t NEED earnings to justify the runup. The hedge funds were short selling GameStop at over 140% of their total shares. So the WallStreetBets people started buying the stock, causing the run. Now all the hedge funds that were shorting the stock are being forced to buy the stock at the massively inflated prices to cover their short calls. Hedge funds lose billions, and the WallStreetBets traders profit hugely. No need for GameStop to earn anything, the WallStreetBets are cleaning up by outsmarting the hedge funds.

    3. It was at 3, had had a net asset value of 20 on liquidation. It wasn’t worth 3, it isn’t worth 340, it was worth 20. at 3, going to 20 is an almost 700% return, given the short position, and some guys who understood it, they coyuld run a short squeeze. The hedge funds were running 10X margin since money is free, limited market float, I just wish i had been on Reddit, could have call optioned it up a piece at a time, boom, baby.

  10. Any bets on how soon congress will act on this?
    Or the asterisk signs another executive order?

    1. I watched that today, the media are such gate keepers, the Social Capital guy was having none of it, he destroyed the CNBC guy.

    2. Well, that’s a good question. There are rules around short sales in the US and it seems pretty clear they either weren’t being followed or didn’t work. I keep hearing the regulators are going to be tougher under Biden. Maybe this would be a good place for them to start.

      Background: Some stocks are considered “easy to borrow” by your broker. These tend to be big, liquid names where they figure there should be no problem covering your short. Other stocks, you and your broker are supposed to identify what shares you’re borrowing against so that you’ll be able to cover your short. There are actually fields in the financial information interchange specs do to with this, sometimes called “locates”, but in my experience they’re as much abused as used.

  12. Connecting the dots . . .
    Investors buy up Gamestop stock raising its price so short sellers take losses in stocks they have to replace.
    It’s an uprising of people sick of stock manipulation by big money interests.
    Last year Elon Musk was whining about short sellers knocking down the price of Tesla – he even pretended he had a buyer at $420 to try to prop up the price but that turned out to be fiction.
    Since then Tesla has cranked up to over $800 and it has split 5 for 1 so the real share price is about $4000.
    The other day Musk cryptically tweeted out “Game stonk”.
    Is it possible that Tesla stock is really high because Musk managed to encourage many small investors to buy Tesla, there by raising the price and killing the short sellers, forcing them to buy Tesla to cover their shorts, which had the effect of raising the price?

    2. Its fairly easy to understand: As well as buying a stock and waiting for it to go up in value, then selling it to make a profit, you can decide that some stock is going to lose value. So you sell some of that stock – without actually owning any to sell. Stock goes down in price, you buy some, and deliver the certificates that you sold. You get to keep the price difference (profit).

      Now, if you got it wrong, and the price goes up, at some point you still have to deliver the certificates, so you have to go out and buy some. It costs you more than you sold them for – you made a loss.

      What happened here was that the Reddit guys noticed that there were more outstanding shorted sales than there were in the trading market. So they started buying up the shares to force the price up. There are trigger points where those shorting the stock are forced to “cover” — to deliver what they sold. They have to go and buy some stock. But there is very little available, so what there is skyrockets in price as they fight with each other trying to buy. The skyrocketing price triggers yet more of the short sellers covers, and yet more people are chasing the very limited stock, so the price jumps again.

      Rinse, repeat …

      Reddit guys slowly sell their stock, at hugely inflated prices.

      Stock market guys get pissed, because it should be them screwing the little guy, not the other way around.

      2. This is beautiful.

        So what would the “regulatory fix” be?

        I just can’t see the Feds banning “individual buyers who are driving up prices”. The different ways people valuate stock price is what differentiates investor strategy. The supposed fix seems to be “let the Feds determine a fair price”???? That will never happen.

        1. The fix will be to clamp down on small investor platforms in some way.

          Shorts *are* useful – if a stock is overvalued then the longer its overvalued the worse the crash when that bubble pops. So all you’re doing is moving that prick back in time closer to the present.

          But its also subject to exploitation by a small group of collaborators with a decent amount of funding behind them.

          Or, as the elites are finding out – a large group of people with barely any money.

          That’s the thing with the march of technology, things that once were really expensive (and so the province only of those with significant resources, like governments) are now in the reach of the average retard.

          Anyone can just go out and buy a GPS guided drone. Almost anyone can (theoretically) make chemical weapons, explosives, firearms, in their own home.

          And now we see that the average Joe can reach the levers of financial power. Sure, one dude can’t exert much force on them. But a million? They can obliterate nations.

  14. Of course all the Redditors that invested in Gamestop are Nazis and Trumpers now.
    Nevermind that Reddit kicked Trump supporters off the platform and banned The Donald more than year ago. Now they are Nazis. Now the non-Trump supported are Nazis too. Reddit can join the ranks of the Nazis they have been hounding and banning for the past 4 years. Oh the irony. If this keep up, everybody will end up a Nazi. Then what?

    1. AOC’s head will explode once she realizes her party supports and protects Wall Street hedge funds.

  15. Tim Pool started his reporting career during the occupy movement. He has a big beef with wall street, but his analysis of this is entertaining and I believe clear-headed.

    The regulator’s boot will slam down hard and quickly. They have to, the next round of stim cheques is in the mail.

    I wonder about his one statement about the movement of this kind of energy from politics, now to the inequity of wall street. It will be interesting to see if it comes true.

  17. Sayyy … wasn’t Mittens Romney’s Bain Capital operating as a Hedge Fund?

    https://www.foxbusiness.com/politics/romneys-utah-senate-bid-team-includes-hedge-fund-allies

    That Paul Joseph Watson piece which included the multi-millionaire kick boxer who claimed all the Hedge Fund operators he met were bloody c()nts made me spit out my afternoon coffee … thanks Dirtman. All I could think was … please God … I hope Mittens is taking a haircut, err scalping today! No wonder Romney seethes loathing toward everything Trump did. Romney HATES the little people (who don’t wear the undergarments of his one true god) … and hence HATES everything ever proposed by PDJT (the greatest PEOPLES POTUS since Teddy Roosevelt). Romney is an unmitigated c()nt. He’s probably signing on to Chuck Schumer’s Climate Emergency” today

    Please God … I really hope a rag tag bunch of Redditers is crushing Romney today. Because as Christ once said; the first shall be last and the last shall be first, because many are called but few are chosen. I really hope Romney’s short bets get called … and he gets his just deserts.

    Don’t get me wrong, I’m not a Marxist. I don’t want to Eat the Rich as Tim Pool starts to discuss. No, I simply prefer people who CREATE wealth … not STEAL it via the Wall Street tactics. Say what you want about Trump … but he BUILDS things, and CREATES wealth. The Wall Street vultures just pick the bones of the defeated.

    1. Amen, Trump was just way out in front of this, he recognized that most people feel disenfranchised and for good reason. He did politics, this same attitude is doing the street. This is just another version of the proles rising up, I wonder if the “establishment” have enough fingers to plug the holes, because something else will be next, and given that most of these reddit guys wouldn’t be Trumpers, where to look for support? Not enough government employees to form an entire constituency. I think if the regulatory boot comes down on these guys, they will be thinking maybe Trump was on to something……Congress might want to think about a higher fence, just sayin.

    1. Reddit and some others like it may end up being the ultimate victims of this episode. I see they are quickly shutting down these chat groups under the false-pretense of hosting “hate-speech.”

  22. So yesterday it hit a high of 247 and closed at 148. There was one player who got in at 50k and his position was estimated at 40 mil at 247. Gamestop went up 199 points today and closed at 347. Holy crud on a cracker.

    2. Gamestop, a company with a chain or brick-and-mortar stores that sell and rent video games (think Blockbuster Video), has a market capitalization of $40-Billion (US dollars), as of Thursday morning. What could possibly go wrong? LOL.

      I’m just happy that, in it’s eventual downfall, it’s going to take a bunch of hedge-fund fat-cats along with it.

  23. No worries – they are already talking they may need to bail out the hedge funds to “save” the financial system. So here we sit near 12 year highs fueled by fed policy and with an anemic locked down economy and no one could for see trouble. Those dammed retail investors. After they were bailed out in 1987,2000, 2008 and march 2020. And you were saved by a 600 billion spending spree in Canada – because they got your back. Meanwhile the banks tell you to keep saving for that compound interest power while Freeland looks for ways to get you to spend(a tax on savings maybe ?) . 3 months is long term. It’s risky even to hold a few days. Glad I sold BB yesterday and switched to Hix (tsx 60 inverse) even though I missed some and maybe more on BB . Not so glad about Barrick , but I still think Gold is decent defense. For the moment I think cash is king . Not advice ,but I think you must protect yourself the best way you can. Clearly no one knows what is going to happen , but government policy and interference is likely the greatest danger.

  24. If you are in the market put a sell on your stocks with a very high ask price.

    If a security has a sell order on it, the brokerage houses can’t lend it to short sellers, to drive the price down.

  25. “You can’t stop the signal Mal”

    it will really suck for old Bidet and his junta when they realize what it means to govern without consent. Yes, this phenomenon too is a part of that.

  27. This is clearly not “the little guy” vs. Goliath. Everything is very well-managed. Not sure what it is but something is going on.

  28. Does anyone else find it interesting that another Melvin short is Evotec? That is a drug company which specialises in (among other things) RNAi tech?

    1. There are big shorts in every category of publicly-listed companies, from marijuana to silver mining to second-hand video game retailers.

      1. Yes, of course, but it seems interesting that a mob is going after a company that is invested in shorting RNAi when everyone is betting the farm on vaccines. Likely no link though.

  29. “We Have Some Bad News For Gamestop Shorts”
    https://www.zerohedge.com/markets/we-have-some-bad-news-gamestop-shorts
    The shorts still aren’t being covered, running over 130% of issued shares. Wall Street is running a reverse Ponzi scheme where the last ones investing short win big.

    My view:
    Someone in DC will land a big donation. The regulators will issue a stop trade order. Behind the scenes the price will plummet as the hedge funds take a profit. When trading resumes share prices will be $20 and falling. Four years from now it will be discovered that an accounting glitch generated 30% more shares than actually existed.

    1. Wall Street are no friends of ANYBODY but themselves. They’re not liberal, they’re not conservative, they’re not Democrat, they’re not Republican; they’re barely even American. They’re pure 100% globalist mercenaries who’ll screw anyone & everyone in their way to making gobs of money.

      Anything that brings them pain is worth a smirk on your face and a middle finger to them.

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