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Gamestop - what the hell is going on ?


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So apparently this company with absolutely nothing special about it (that I can see) is being pumped to high heaven by some hype generated by some people on reddit or something. Interestingly this has been going on in crypto land for ages with so called "pump groups" who get together to bid up and then dump something in a coordinated manner. Not seen it before in the traditional stocks space though - anyone any insight into what going on ?.

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My 16 year old, over lunch today, apropos of nothing, mentioned that her mate's dad had just bought Game stop shares, on questioning £1,000 worth.  A reasonably significant sum for the family.  At lea

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18 minutes ago, goldbug9999 said:

So apparently this company with absolutely nothing special about it (that I can see) is being pumped to high heaven by some hype generated by some people on reddit or something. Interestingly this has been going on in crypto land for ages with so called "pump groups" who get together to bid up and then dump something in a coordinated manner. Not seen it before in the traditional stocks space though - anyone any insight into what going on ?.

I will leave the tale of Gamestop to others (it is referenced in the BIG THREAD above), but surely the ramping and de-ramping, pumping and dumping, en masse is endemic on the likes of the LSE and ADVFN forums and, I believe, Twitter?

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It's worth having some shares that people aren't looking at - at some point you'll be on board the pump before the crowd arrives. Lockdown and bored people make for a racy market.

Just don't be the one being impaled on a spike.

In the 1920s gangs would buy up the stock, ramp it up and sell to the masses, and move on to the next one.

I don't know if one could get to the source of the GME pump, and identify the Twitter posters at the start of it, so you might be able to ride on the coattails of the next pump.

To be honest, nothing beats good old fashioned research, and finding your own ideas rather than trying to chase rainbows.

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I don't think it works that well on AIM so much because some stocks and their brokers start issuing new shares or have a load to dump on the market as soon as they get a whiff of interest, even with gangs.

Edited by 201p
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This is the GME chart. As far as I know Gamestop is like the Game shop in the UK which has gone through different hands. The bricks and mortar business is largely a dinosaur model - everyone buys digital games. Anyway I don't see any fundamentals that I already know about unless they are getting into crypto or selling space trips to Mars instore.

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Even without following these gangs, you might see it appear on a stock screen, if you filter search for new highs, and speculate with a small amount to see if the move continues.

So this is where it all started - maybe I'll take a look, see if I can chase a rainbow.

https://www.reddit.com/r/wallstreetbets/

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He who sells what isn't his'n, Must buy it back or go to prison.

Daniel Drew

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Alright I don't think such a situation will happen again (quickly anyway).

So this fund puts out a tweet to tell the world they are betting that the GME stock will go down.

So a bunch of traders with a bit of money behind them, take the other side of the trade, causing a short squeeze. When you bet that a stock goes down, you borrow the stock and you will have to return it later. If some one buys up the stock, then they are going to have problems finding the stock in the market to return back.

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The fund had their ego bruised because they must have felt at the time they could do anything - one of the things you do not do, is tell everybody what you are doing.  Or at least not to call people suckers. 

The same thing happened when Gordon Brown sold the UK gold - he told everyone first, and this drove the price down! Also the same thing happened when the UK tried to hold the ERM exchange rate. Soros took the other side of the trade, and broke the bank of England.

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Anyway the best time to be shorting surely is when the market is falling - this is when liquidity is low, and other traders trying to beat you at this game won't have the firepower to take the other side like now. They'd be too busy sorting out their own house.

Edited by 201p
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https://www.cnet.com/personal-finance/why-reddit-made-gamestop-and-blackberry-stock-suddenly-jump/

Blackberry stock also worked on. So you could have a strategy of buying the most shorted stocks of doomed companies and hope the reddit crowd come over. This is the magic formula - you need a push (short sellers assuming a sure bet, needing to buy) and pull factor (new buyers from social media) to create a short squeeze. It is not always enough just to ramp a stock. You need the push side too.

On second thoughts, I wouldn't do it, that bus may never arrive.

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Edited by 201p
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https://markets.businessinsider.com/news/stocks/citron-andrew-left-gamestop-fight-angry-mob-investors-harass-family-2021-1-1029995012

I see, Citron research is about finding dud stocks and shorting them - i.e Lemons. That is their whole modus of operandi.

in a tug-of-war battle between a new class of retail investors that have flooded the stock market since the start of the COVID-19 pandemic last March.

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Uh there are some newer posters on there, that have me a little worried. I don't think GME is going to go much higher but some people are buying here, and they could get impaled on the spike. These are ruthless traders (long and short) that are here today, gone tomorrow. They are not in it for the long term!

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Edited by 201p
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It's a moral crusade but when i went on Reddit and asked them why they weren't looking at heavily shorted crypto stocks I got my comment deleted by a bot.

Because they are on a moral crusade against Wall St, however anything crypto against the FED printing is verboten. Does not compute. Given the heavily censored and oddly curated nature of Reddit, it would not surprise me if it's just a handful of people controlling this and ramping the market. All the autistic Millenials swallow the moral crusade line and buy in with 110% conviction. But IMO it isn't 100% kosher because of the censorious nature of Reddit.

It's a perfect ramp. Almost religious in fervour and with no target or end game. Of course, the end game will be when the people who control the sub-reddit decide it is time. Then they will position the next ramp prominently on the sub-reddit and delete all others. I am just observing the GME ramp (tempted to have a little spread bet on it), I will likely go in to the next ramp, assuming the Wall St interests in the SEC have not shut down the subreddit by then. I am already in IDEX, MARA, RIOT and GNUS partly because they are heavily shorted. And this was the case before this debacle. 

Fundamentally, people who go short in a market backstopped by a central bank who have increased money supply by 33% in a single year are fucking idiots, IMHO. Sure, if there is an obvious dog with bankruptcy stamped on its forehead then short it. But the amount of shorts all over the market is ridiculous.

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Its really all quite bizarre because as noted they are just AN-other retailer whos lunch is getting eaten by amazon.

For those asking "why not cypto" well they were - in 2017 was seeing random alts pump, a different one every month.

Edited by goldbug9999
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37 minutes ago, goldbug9999 said:

Its really all quite bizarre because as noted they are just AN-other retailer whos lunch is getting eaten by amazon.

For those asking "why not cypto" well they were - in 2017 was seeing random alts pump, a different one every month.

Maybe so. But I had a post auto deleted today. It's just a bit weird and completely inconsistent with them being economic freedom fighters IMO.

Wall St bad then FED bad also.

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I didn't know what the story was behind the move until I read around. It'll be interesting, but I've seen it before on a smaller scale. Unlike Tesla*, I can't see anything fundamentally supporting the price. The traders will go, and the hot stock will become cold again as fast as it became hot. 

Someone will pull the plug, and walk off with the swag, and the punters will be left holding the bag.

Will GME see $20? Probably not because new investors will hold on much longer in the hope another pump will come along.

*this might not age well :)

Edited by 201p
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2 hours ago, 201p said:

https://www.cnet.com/personal-finance/why-reddit-made-gamestop-and-blackberry-stock-suddenly-jump/

Blackberry stock also worked on. So you could have a strategy of buying the most shorted stocks of doomed companies and hope the reddit crowd come over. This is the magic formula - you need a push (short sellers assuming a sure bet, needing to buy) and pull factor (new buyers from social media) to create a short squeeze. It is not always enough just to ramp a stock. You need the push side too.

On second thoughts, I wouldn't do it, that bus may never arrive.

Untitled.thumb.gif.c5f633b73a3399a0d3af40883f09fae3.gif

Within this Gamestop dance there's going to be large numbers of the Reddit cohort which are going to get trashed, when this thing starts returning to fair value a lot of people will lose their shirts. There'll be some who however have made life changing amounts

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1 minute ago, Talking Monkey said:

Within this Gamestop dance there's going to be large numbers of the Reddit cohort which are going to get trashed, when this thing starts returning to fair value a lot of people will lose their shirts. There'll be some who however have made life changing amounts

Yep, it's bitcoin but bitcoin hasn't ever had the real downside yet.

The real question is when do you walk away and can you do it without regret of the extra you left on the table. 

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1 minute ago, eek said:

Yep, it's bitcoin but bitcoin hasn't ever had the real downside yet.

The real question is when do you walk away and can you do it without regret of the extra you left on the table. 

I suppose you need a pre determined phased exit strategy and a real acknowledgement that the situation is pure speculation hence pay no attention to extra left on the table, take the winnings and be happy you got out with winnings

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Hmm I wonder if this was such an obvious trade for Wall Street, that everyone was short GME.

He says he went long on Tesla. Uh oh.  This could be a problem if all the other Wall Street pros followed the same way. If they are hurting on GME, they are going to have to sell their winners soon. That includes most probable - Tesla, Amazon, Apple and the rest!!

This could have a knock on effect on the rest of the market if this GME fallout (which will come) creates a liquidity squeeze.

We have an excuse for the market to fall heavily - it might not come to pass of course. But watch this space.

Edited by 201p
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