GameStop was one of the companies that loads of hedge funds (companies who do these bets) had bet on to lose a lot of value. The fact of the matter is there’s still a lot we don’t know about what happened with GameStop and probably never will. It’s also not clear what will come of it; not much has happened on the legislative or regulatory front yet.
More than four million people are in it, usually discussing stocks and shares and where they’re going to invest money. In translating much of the mood of the GameStop saga — which you can brush up on here — Dumb Money succeeds. It was genuinely wild to see the declining mall retailer’s stock price shoot up seemingly out of nowhere — and even weirder to find out it was because a bunch of guys on Reddit willed it so. It was fun to watch the hand-wringing among Wall Street titans and talking heads on CNBC, wagging their fingers that this was all very irresponsible. Not to mention that this all happened as the country entered into year two of the Covid-19 pandemic, when the existential question of each day was when will everything stop sucking, if ever.
Indeed, it appears the people betting against the company have a point. Whatever you think about short selling (and there are people out there who think it’s always bad), GameStop isn’t a thriving business. And for many investors, including some of GameStop’s most devoted, the meme has become quite separated from the retailer itself. The best way to support GameStop isn’t really to buy GameStop’s stock, it’s to buy something from GameStop, which many people still aren’t. GameStop’s meme status has likely bought the company some time for a potential turnaround, but it hasn’t been a silver bullet. GameStop investors are in awe when their holdings go up (on paper), but Roaring Kitty’s followers proclaim to be “diamond hands,” meaning they don’t sell.
“Reddit is like the definition of confirmation bias,” Matt Kimbro, from PR company NowADays Media, told me. And far from being a failing, bricks-and-mortar gaming company, it is well placed to move into the digital space, where even a small part of the market would make it hugely valuable. “Market participants should be careful to avoid such activity,” the statement added.
F Acquired Free Record Shop Norway AS (“Free Record Shop”), a Norway-based record store retailer operating 49 stores. GameStop converted 1000 gbp to pln exchange rate these record stores into video game stores. A Acquired a majority interest in Gamesworld Group Limited (“Gamesworld”), an Ireland-based video game retailer operating 10 stores expanding GameStop’s operations into Ireland.
Jan. 11, 2021: GameStop appoints 3 new directors to its board, including co-founder of e-commerce giant Chewy
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- The short squeeze had worked (although some short sellers are thought to still have yet to unwind their positions, presumably because they are hoping the price will fall and their losses will be reduced).
- The U.S. Securities and Exchange Commission on Jan. 29 issued a statement saying it is “closely monitoring and evaluating the extreme price volatility of certain stocks’ trading prices over the past several days.”
- What’s going on with GameStop’s stock doesn’t make sense to a lot of people.
- After seeing Dumb Money, I reached out to a managing director at a major hedge fund I’ve talked to off and on for years to get his read on whether GameStop really changed anything.
His fund probably pays a little more attention to retail and Reddit than they did in the past — they tend to do better in stocks with high retail activity. In his mind, Goliath is still very much winning, and David is maybe a bit delusional. GameStop’s tumultuous stock market journey demonstrates the the power that co-ordinating via social media can have and it may cause short-sellers to think again about betting against a company they think is in decline. At the same time, champions of the 99% are cheering louder from the sidelines, saying the moves mean that hedge funds, Wall Street and the 1% are finally getting their comeuppance. Many people on the WallStreetBets Reddit forum realised if together they drove up the price, the hedge funds would have to try to buy back shares, to cut their losses, raising the price still further. The now-legendary r/wallstreetbets page was started in 2012, according to a Wall Street Journal interview with one of the founders.
MORE: Is it too late to join the bull market? Experts weigh in.
If your bet was wrong and the price actually rises instead of falling, you’d lose money. It hits a very real sentiment that the rich and powerful have endless advantages that make it impossible for ordinary people to get ahead. Shares of the movie theater chain AMC, another pandemic-era meme stock, vaulted more than 10% on Monday morning. However, critics from within the financial services industry might be wise to look at their own houses before calling for a crackdown on the new wave of social media sages. They’re ways that investors can make a big profit with relatively small payments up front, if the stock moves in the right way.
The Beach Bum Who Beat Wall Street and Made Millions on GameStop
Over these two years, GameStop has been changing its strategy. The arrival of Cohen as a shareholder seemed to herald a bet on e-commerce, but the company had logistical problems aggravated by supply chain bottlenecks and posted a disastrous Christmas quarter to close the 2021 fiscal year. After that fiasco, the chain has put the nearly 4,400 stores it still has open — including nearly 3,000 in the United States what is sdlc understand the software development life cycle — back at the center of its business.
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Gill also posted screenshots of his GameStop portfolio on r/wallstreetbets as far back as 2019. Gill and other members of the forum also cited the bullish GameStop stance of Michael Burry, the legendary trader who was portrayed by Christian Bale in the 2015 film “The Big Short,” as fuel for their investment choices. Attal was the former chief marketing officer at Chewy, and oversaw its rapid expansion from three people to more than 10,000 employees. Grube was the formerly the chief financial officer at Chewy, among other executive roles in the e-commerce space. Still, the company reported an operating loss of $63 million in the third quarter. GameStop shares plunged nearly 20% the next day, closing on Dec. 9 at $13.66 a share.
Murphy still gets emotional when talking about GameStop and hopes someday it will bring about change. “These big moments like GameStop and Occupy Wall Street, they will keep coming,” she said. She feels tied to the GameStop community (though she now frequents the message boards 15 stock market investing news websites that you must read less) and is sure the company has plans, though she’s not sure what they are. And hey, maybe the Mother of All Short Squeezes (MOASS) that some of GameStop’s most diehard fans are still holding out for will pan out.
Left of Citron Research made the announcement in a YouTube video, saying Citron Capital let go of the majority of their bets that GameStop stock would fall and took a “100%” loss in doing so. “We are excited to bring our customer-obsessed mindset and technology experience to GameStop and its strategic assets,” Cohen said in a statement at the time. If you’re sure the company will lose value, you’d make a profit when you buy them back and the price has fallen. They borrow shares in the company and sell them, with a promise to buy them back at a later date.
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