[GameStop GME trading mega-thread]

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Re: [GameStop GME trading mega-thread]

Post by nisiprius »

health teacher wrote: Thu Dec 09, 2021 6:43 pm Bullish. Sales up 30% based on traditional business model.

Clearly, GME is investing in talent to potentially capitalize on the emerging Blockchain, NFT gaming market who some believe will be a new, massive economy. I think 2022 is going to be another monumental year for GameStop. I might be biased, but I'm not stupid or naive. It's difficult for people our age to comprehend the potential of a new technology similar to digital immigrants and web 2.0. History repeats itself. This time next year I think things will be more clear. Just a hunch.
What if the repeating history is 1999? The New Economy? Lucent, Dell, Cisco, Global Crossing, WorldCom, WebVan, Pets.com...
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Re: [GameStop GME trading mega-thread]

Post by decapod10 »

health teacher wrote: Thu Dec 09, 2021 6:43 pm
000 wrote: Thu Dec 09, 2021 5:51 pm Pure carnage. :shock: :twisted:
Bullish. Sales up 30% based on traditional business model.

Clearly, GME is investing in talent to potentially capitalize on the emerging Blockchain, NFT gaming market who some believe will be a new, massive economy. I think 2022 is going to be another monumental year for GameStop. I might be biased, but I'm not stupid or naive. It's difficult for people our age to comprehend the potential of a new technology similar to digital immigrants and web 2.0. History repeats itself. This time next year I think things will be more clear. Just a hunch.
As someone who has been basically living in the NFT space over the past few months and am generally bullish on NFT and Blockchain, I'm a bit skeptical that GameStop will be able to flourish in the area. I'm not sure how they would exactly use the technology to monetize it or what their plan might be. Certainly no one in the space is talking about GS or particularly excited about the prospects in that realm. But you never know I suppose. Honestly I'm not clear what their proposed plans are, maybe it will be something amazing, though again I remain doubtful.
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Re: [GameStop GME trading mega-thread]

Post by health teacher »

nisiprius wrote: Thu Dec 09, 2021 8:59 pm What if the repeating history is 1999? The New Economy? Lucent, Dell, Cisco, Global Crossing, WorldCom, WebVan, Pets.com...
I think that's likely. There's a 2.2T market that seems likely to funnel into a smaller group of big winners similar to 1999 at some point.

In an economic doomsday scenario, I think GME has a strong cash position and top level upper management to maneuver through a changing market whenever that may be.
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Re: [GameStop GME trading mega-thread]

Post by health teacher »

decapod10 wrote: Thu Dec 09, 2021 9:31 pm
Honestly I'm not clear what their proposed plans are, maybe it will be something amazing, though again I remain doubtful.
Me either, but I'm really looking forward to finding out. I'm not saying GME won't be a bust, but I doubt Ryan Cohen is planning to fail.
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Re: [GameStop GME trading mega-thread]

Post by Random Musings »

health teacher wrote: Thu Dec 09, 2021 9:50 pm
nisiprius wrote: Thu Dec 09, 2021 8:59 pm What if the repeating history is 1999? The New Economy? Lucent, Dell, Cisco, Global Crossing, WorldCom, WebVan, Pets.com...
I think that's likely. There's a 2.2T market that seems likely to funnel into a smaller group of big winners similar to 1999 at some point.

In an economic doomsday scenario, I think GME has a strong cash position and top level upper management to maneuver through a changing market whenever that may be.
How much cash per share does each shareholder own? I did a quick calc, around $22, it seems. So right now, you are paying $156 per share for $22 in cash, not much of a new business model yet, a floundering old business, poor earnings and "top level management".

Ignoring the cash burn to generate new positive cash flows, $134/choose your PE multiple = earnings per share. I'll choose 25, so a little under $5.50 a share. TLM better get their arses in gear; seems like a risky proposition and not sure how GME is going to generate a moat.

There are a lot of companies built on "hope", a few will get lucky and do well but most don't. It's a pretty big gamble.

RM
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Re: [GameStop GME trading mega-thread]

Post by health teacher »

Random Musings wrote: Thu Dec 09, 2021 11:46 pm
It's a pretty big gamble.
RM
Can we call it calculated risk? :D
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Re: [GameStop GME trading mega-thread]

Post by nisiprius »

health teacher wrote: Thu Dec 09, 2021 9:50 pm...In an economic doomsday scenario, I think GME has a strong cash position and top level upper management to maneuver through a changing market whenever that may be...
Have you dug into this deeply for yourself?

Without looking, can you tell me the color of the cover of the 2020 annual report, and from memory give me approximate dollar figures for GME's current assets, inventory, current liabilities, and quick ratio? Can you name more than one of GME's four executive officers?

Of course I can't. I've never read Graham and Dodd, I stare at a balance sheet and don't know anything to do but add up the totals and see if they match. I can't analyze a security. But I would expect someone who had a deep understanding of GME to be able to answer these questions.

Can you?
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Re: [GameStop GME trading mega-thread]

Post by health teacher »

nisiprius wrote: Fri Dec 10, 2021 8:47 am
health teacher wrote: Thu Dec 09, 2021 9:50 pm...In an economic doomsday scenario, I think GME has a strong cash position and top level upper management to maneuver through a changing market whenever that may be...
Have you dug into this deeply for yourself?

Without looking, can you tell me the color of the cover of the 2020 annual report, and from memory give me approximate dollar figures for GME's current assets, inventory, current liabilities, and quick ratio? Can you name more than one of GME's four executive officers?

Of course I can't. I've never read Graham and Dodd, I stare at a balance sheet and don't know anything to do but add up the totals and see if they match. I can't analyze a security. But I would expect someone who had a deep understanding of GME to be able to answer these questions.

Can you?
Annual report color: No

Current assets: 1.4 billion in cash, net sales from traditional business model were up 30% this quarter

Current liabilities: 46 million dollar covid related loan with French government. Also, 500 new custom care employees in Florida (probably for new launch), distribution center in Nevada and another in PA (technically liabilities, I suppose) store locations and workforce. Inventory is way up to front run supply chain issues, but I don't know exact data off the top of my head.

Quick ratio: I could quantatively crunch here, but I'd certainly have to look. To me, it seems like the simple brick and mortar business with increased e commerce is a sustainable business given the recent and sustained increase in net sales despite extremely limited new console inventory. This also doesn't account for growth in new markets

Executives: Ryan Cohen, Matt Furlong (edit to add)and Larry Cheng are important to me. Matt Finestone is also noteworthy although he isn't an executive officer.

This was without looking.
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Re: [GameStop GME trading mega-thread]

Post by 000 »

Another double digit drop. :shock:
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Re: [GameStop GME trading mega-thread]

Post by jarjarM »

000 wrote: Mon Dec 13, 2021 4:42 pm Another double digit drop. :shock:
So time for diamond hands to load up more :twisted:
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Re: [GameStop GME trading mega-thread]

Post by 000 »

jarjarM wrote: Mon Dec 13, 2021 5:00 pm
000 wrote: Mon Dec 13, 2021 4:42 pm Another double digit drop. :shock:
So time for diamond hands to load up more :twisted:
I don't think this is the bottom :P :twisted:
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Re: [GameStop GME trading mega-thread]

Post by Random Musings »

000 wrote: Mon Dec 13, 2021 5:08 pm
jarjarM wrote: Mon Dec 13, 2021 5:00 pm
000 wrote: Mon Dec 13, 2021 4:42 pm Another double digit drop. :shock:
So time for diamond hands to load up more :twisted:
I don't think this is the bottom :P :twisted:
The big meme stocks (and speculative issues) are at critical support (again), will see if they bounce off it. They may, but ultimately I think they will go far, far lower as in the aggregate. At a certain point, fundamentals do matter as you are buying cash flow streams. Kind of reminds me of 2000-2002. Once risk appetite abates, these types of equities get hammered first.

RM
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Re: [GameStop GME trading mega-thread]

Post by Independent George »

decapod10 wrote: Thu Dec 09, 2021 9:31 pm
health teacher wrote: Thu Dec 09, 2021 6:43 pm Clearly, GME is investing in talent to potentially capitalize on the emerging Blockchain, NFT gaming market who some believe will be a new, massive economy. I think 2022 is going to be another monumental year for GameStop. I might be biased, but I'm not stupid or naive. It's difficult for people our age to comprehend the potential of a new technology similar to digital immigrants and web 2.0. History repeats itself. This time next year I think things will be more clear. Just a hunch.
As someone who has been basically living in the NFT space over the past few months and am generally bullish on NFT and Blockchain, I'm a bit skeptical that GameStop will be able to flourish in the area. I'm not sure how they would exactly use the technology to monetize it or what their plan might be. Certainly no one in the space is talking about GS or particularly excited about the prospects in that realm. But you never know I suppose. Honestly I'm not clear what their proposed plans are, maybe it will be something amazing, though again I remain doubtful.
The best-case example I can think of is Amazon growing into its valuation not through selling books (its original iteration), but through AWS. Nobody had even conceived of AWS in 2000, but that's the core of its business today. It's entirely possible that GME takes its revenues from NFTs (or something else) in the future while more or less abandoning game sales outside of a few profitable stores. Except... while books are no longer Amazon's core business, (1) their retail business generates a ton of money, and (2) Amazon did, in fact, completely disrupt both bookselling and the publishing industry.

I can easily imagine Tesla as a major player in the energy industry even if they never exceed 5% of the automobile market. They've not only pretty much created the EV market, I have high hopes that they'll completely wreck the corrupt and outdated dealership model of car buying.

I see nothing to indicate that Gamestop can, or even plans to, do anything similar; in fact, they are the ones who are being slowly disrupted out of the retail market. Mostly, what I see from defenders is either a word salad of crypto buzzwords, or "Cohen is a Genius".
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Re: [GameStop GME trading mega-thread]

Post by 000 »

Bought today. 8-)

Unleash the bulls. :greedy
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Re: [GameStop GME trading mega-thread]

Post by 000 »

Got out over the last few days. It seems the bulls were not unleashed. :(
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Re: [GameStop GME trading mega-thread]

Post by vitaflo »

Independent George wrote: Mon Dec 13, 2021 10:05 pm
decapod10 wrote: Thu Dec 09, 2021 9:31 pm
health teacher wrote: Thu Dec 09, 2021 6:43 pm Clearly, GME is investing in talent to potentially capitalize on the emerging Blockchain, NFT gaming market who some believe will be a new, massive economy. I think 2022 is going to be another monumental year for GameStop. I might be biased, but I'm not stupid or naive. It's difficult for people our age to comprehend the potential of a new technology similar to digital immigrants and web 2.0. History repeats itself. This time next year I think things will be more clear. Just a hunch.
As someone who has been basically living in the NFT space over the past few months and am generally bullish on NFT and Blockchain, I'm a bit skeptical that GameStop will be able to flourish in the area. I'm not sure how they would exactly use the technology to monetize it or what their plan might be. Certainly no one in the space is talking about GS or particularly excited about the prospects in that realm. But you never know I suppose. Honestly I'm not clear what their proposed plans are, maybe it will be something amazing, though again I remain doubtful.
The best-case example I can think of is Amazon growing into its valuation not through selling books (its original iteration), but through AWS. Nobody had even conceived of AWS in 2000, but that's the core of its business today. It's entirely possible that GME takes its revenues from NFTs (or something else) in the future while more or less abandoning game sales outside of a few profitable stores. Except... while books are no longer Amazon's core business, (1) their retail business generates a ton of money, and (2) Amazon did, in fact, completely disrupt both bookselling and the publishing industry.
Of course before AWS was a thing Amazon stock lost 95% of its value during the dot-com bust and took a decade to recover. People aren't going to be talking about a GME pivot if that happens.
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Re: [GameStop GME trading mega-thread]

Post by CRC_Volunteer »

During the the dot-com bust:

1) Amazon was a 6 year old company.
2) AWS wasn’t even a twinkle in Bezos’ eye. AWS would not launch until 2006.
3) Amazon plunged it’s earnings back into the company. It was by design not to be profitable for several years.
and lastly
4) Bezos had a long range vision that he articulated to his shareholders.
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Re: [GameStop GME trading mega-thread]

Post by Hyperchicken »

GME Season 2?
Up 30% in aftermarket tonight.
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Re: [GameStop GME trading mega-thread]

Post by jason2459 »

Hyperchicken wrote: Thu Jan 06, 2022 7:48 pm GME Season 2?
Up 30% in aftermarket tonight.
They are jumping in on the NFT mania.
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Re: [GameStop GME trading mega-thread]

Post by drk »

Seeing this thread triggered my "oh, cool, IJR will be up tomorrow" instinct, but I see that GME got promoted to the Mid-Cap 400.
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Re: [GameStop GME trading mega-thread]

Post by 000 »

Hyperchicken wrote: Thu Jan 06, 2022 7:48 pm GME Season 2?
Up 30% in aftermarket tonight.
It must be because I bought today. :mrgreen:
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Re: [GameStop GME trading mega-thread]

Post by 000 »

Now the question is whether to buy more tomorrow if it's up. :?:
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Re: [GameStop GME trading mega-thread]

Post by Bryzzo2016 »

I'll continue to hodl. Can someone wake me up when it crosses $10k. Thank you.
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Re: [GameStop GME trading mega-thread]

Post by CRC_Volunteer »

GME is pinning their hopes on NFT and Crypto, so they have a 20 person team spearheading this. Yet, in their Q3 statement, they hired 200 executives, which is 10 management positions per employee in the new division. If they are for the retail side, again they are top heavy there too.

So what is their game plan? What do they want to be? After diluting the existing shareholder’s equity, it appears GME is taking their wad of cash, throwing it into the wind, and see where the dollars fall.
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Re: [GameStop GME trading mega-thread]

Post by Jags4186 »

So much for Gamestop NFTs.

Image
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Re: [GameStop GME trading mega-thread]

Post by 000 »

Green on Friday (I bought).

GME resuming its negative beta role? :greedy
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Re: [GameStop GME trading mega-thread]

Post by Bryzzo2016 »

Green on Friday (I bought).

GME resuming its negative beta role? :greedy
It's cheap insurance. A lot have been buying. Can't wait to see updated DRS numbers this quarter.
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Re: [GameStop GME trading mega-thread]

Post by lazynovice »

Bryzzo2016 wrote: Sat Jan 22, 2022 3:48 pm
Green on Friday (I bought).

GME resuming its negative beta role? :greedy
It's cheap insurance. A lot have been buying. Can't wait to see updated DRS numbers this quarter.
Why? DRS craze started in September? Price has dropped by 50% since beginning of September. DRS doesn’t seem to be doing anything good.
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Re: [GameStop GME trading mega-thread]

Post by nisiprius »

health teacher wrote: Fri Dec 10, 2021 9:12 am
nisiprius wrote: Fri Dec 10, 2021 8:47 am
health teacher wrote: Thu Dec 09, 2021 9:50 pm...In an economic doomsday scenario, I think GME has a strong cash position and top level upper management to maneuver through a changing market whenever that may be...
Have you dug into this deeply for yourself?

Without looking, can you tell me the color of the cover of the 2020 annual report, and from memory give me approximate dollar figures for GME's current assets, inventory, current liabilities, and quick ratio? Can you name more than one of GME's four executive officers?

Of course I can't. I've never read Graham and Dodd, I stare at a balance sheet and don't know anything to do but add up the totals and see if they match. I can't analyze a security. But I would expect someone who had a deep understanding of GME to be able to answer these questions.

Can you?
Annual report color: No

Current assets: 1.4 billion in cash, net sales from traditional business model were up 30% this quarter

Current liabilities: 46 million dollar covid related loan with French government. Also, 500 new custom care employees in Florida (probably for new launch), distribution center in Nevada and another in PA (technically liabilities, I suppose) store locations and workforce. Inventory is way up to front run supply chain issues, but I don't know exact data off the top of my head.

Quick ratio: I could quantatively crunch here, but I'd certainly have to look. To me, it seems like the simple brick and mortar business with increased e commerce is a sustainable business given the recent and sustained increase in net sales despite extremely limited new console inventory. This also doesn't account for growth in new markets

Executives: Ryan Cohen, Matt Furlong (edit to add)and Larry Cheng are important to me. Matt Finestone is also noteworthy although he isn't an executive officer.

This was without looking.
I'm impressed. :beer
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Re: [GameStop GME trading mega-thread]

Post by DarkMatter731 »

Is it just me or are GME investors delusional?

I'm not saying that fundamentals are always right but there's nothing that I'm looking at that can justify its current valuation.
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Re: [GameStop GME trading mega-thread]

Post by Booogle »

DarkMatter731 wrote: Sun Jan 23, 2022 1:50 am Is it just me or are GME investors delusional?

I'm not saying that fundamentals are always right but there's nothing that I'm looking at that can justify its current valuation.

You can say that about most of the American stock market.
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Re: [GameStop GME trading mega-thread]

Post by lazynovice »

DarkMatter731 wrote: Sun Jan 23, 2022 1:50 am Is it just me or are GME investors delusional?

I'm not saying that fundamentals are always right but there's nothing that I'm looking at that can justify its current valuation.
Yes. It is down to a group of investors who mostly believe they are going to benefit from what is called the MOASS, the mother of all short squeezes. They believe that the stock is heavily shorted, but that the shorts are hidden in derivatives and options. They believe that certain hedge funds are manipulating the price down and that if they can direct register the float, the MOASS will result in a share price in the tens of thousands.

There are some who just swing in and out if it for quick profits. But not too many value investors left.

But they are nowhere as delusional as the AMC investors.
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Re: [GameStop GME trading mega-thread]

Post by johnkidding »

I think it's both a value play and a short squeeze play.
Its valued at 1x revenue and similarly to Peleton now around $8B. People recently though Peleton was worth over $50B.
Also OpenSea is valued at $14B and is the leader in the nft marketplace arena... But it's really terrible experience with poor security.

The squeeze play is what happens when we DRS over 70% of the float and it's still shorted? It's officially at 20% (self reported) shorted today. There are so many people dedicated to this now that it will become a fulfilling prophecy. 5.2M as of Oct and we get new numbers soon. Predictions are that we are already past 15M out of ~30M public float.

Incredibly grateful to be a Boglehead for over a decade. Thank you everyone. I've saved so much money and now it's all in on GME for a few years.

Every once in a while I see a post asking for a counter argument to Bogleheads philosophy. I have found a few relating to ETF AP abuse, price discovery, centralized market makers, order flow, and more. Also whether or not your broker actually bought your shares or did and then are lending them out immediately to parties that then abusively naked short sell against your position.

Thank you Bogleheads for everything up to this point. I'm still a Boglehead but my target asset allocation is 100% GME. I'll be back to 80% VTSAX and 20% GME one day 😁
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Re: [GameStop GME trading mega-thread]

Post by 000 »

johnkidding wrote: Thu Jan 27, 2022 2:33 pm my target asset allocation is 100% GME.
I hope you are kidding. :shock:
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Re: [GameStop GME trading mega-thread]

Post by HomerJ »

johnkidding wrote: Thu Jan 27, 2022 2:33 pm I'm still a Boglehead but my target asset allocation is 100% GME.
Username checks out.
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Re: [GameStop GME trading mega-thread]

Post by firebirdparts »

DarkMatter731 wrote: Sun Jan 23, 2022 1:50 am Is it just me or are GME investors delusional?
It ain't just you, no. And I guess, looking at the price movement this year, the fun is also over, but it's not up to me, of course. I'm kind of amazed really that it's actually trading at $93 over a year later. Somebody is buying that, still, a year after the big squeeze. In fact, as I was looking for some illustrations for the paragraph below, I discovered that today is the one year anniversary of the day brokerages stopping people from buying.

There is a religion associated with this, yes, that teaches that the infinity squeeze is still on and there are still some shorts somewhere and it's all a big double secret probation. I don't know how this is going at WSB. They don't like having the same conversation over and over with no humor.

A lower level of delusion would be that GME will produce a profit someday. There's a chance. As long as there's life, there's hope. The focus has certainly been good for the company.

I guess my opinion is that long term, the stock market is a weighing machine.
Last edited by firebirdparts on Fri Jan 28, 2022 6:42 am, edited 1 time in total.
This time is the same
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Re: [GameStop GME trading mega-thread]

Post by Da5id »

firebirdparts wrote: Fri Jan 28, 2022 6:32 am
DarkMatter731 wrote: Sun Jan 23, 2022 1:50 am Is it just me or are GME investors delusional?
There is a religion associated with this, yes, that teaches that the infinity squeeze is still on and there are still some shorts somewhere and it's all a big double secret probation. I don't know how this is going at WSB. They don't like having the same conversation over and over with no humor.

A lower level of delusion would be that GME will produce a profit someday. There's a chance. As long as there's life, there's hope.
Beyond all that, selling at a loss feels to some like admitting an error, a failure of judgement. It is easier to rationalize why your decision to buy and hold GME was right.
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Re: [GameStop GME trading mega-thread]

Post by Gadget »

I don't think there is any short squeeze or MOAS incoming for GME. In fact, it likely still has a lot more downside risk. GMEs growth prospects are dim, but I don't think they are in any danger of going under as a company anymore for a long time.

But I do think that some day, hedge funds are going to mess with retail again and buy GME in massive quantities. And they're going to use the GME long term believers as cannon fodder, knowing that such a large percentage of GME holders will only buy and not sell.

Basically, my prediction is that GME round 3 will occur someday. I played in round 1. I avoided round 2. I don't think I will be able to predict when round 3 starts, so I'll likely miss it. But if it drops back to $40, which is where DFV bought in at round 2, I could see it go on a massive surge. Maybe I'd buy in at $40 in hopes of a round 3 gambling marathon. Who knows.
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Re: [GameStop GME trading mega-thread]

Post by hnd »

i too have decided 40 is my number. i'll buy a grand worth of shares and see if i get to buy a new ATV come fall or not.
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Re: [GameStop GME trading mega-thread]

Post by Gadget »

hnd wrote: Fri Jan 28, 2022 2:00 pm i too have decided 40 is my number. i'll buy a grand worth of shares and see if i get to buy a new ATV come fall or not.
This probably means too many people think like us and 45 or 50 will be the floor, and we'll never get in for round 3.
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Re: [GameStop GME trading mega-thread]

Post by hnd »

Gadget wrote: Fri Jan 28, 2022 2:16 pm
hnd wrote: Fri Jan 28, 2022 2:00 pm i too have decided 40 is my number. i'll buy a grand worth of shares and see if i get to buy a new ATV come fall or not.
This probably means too many people think like us and 45 or 50 will be the floor, and we'll never get in for round 3.
probably and I'm fine with that.
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Re: [GameStop GME trading mega-thread]

Post by moviegeek »

I would like to mention something else I don't see on this forum often (for obvious reasons): options trading and implied volatility.

People who regularly sell options as part of their investment strategy should give GME a look. Although down from the crazy highs of January 2021, the ImpVolatility has remained high throughout 2021 and early 2022.

The ImpVolatility makes selling covered calls or cash-secured puts a possible play.

I have most of my investment portfolio in Vanguard index funds. I have a separate portfolio for options trades and have used GME since March.
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jjg247
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Re: [GameStop GME trading mega-thread]

Post by jjg247 »

firebirdparts wrote: Fri Jan 28, 2022 6:32 am
DarkMatter731 wrote: Sun Jan 23, 2022 1:50 am Is it just me or are GME investors delusional?
It ain't just you, no. And I guess, looking at the price movement this year, the fun is also over, but it's not up to me, of course. I'm kind of amazed really that it's actually trading at $93 over a year later. Somebody is buying that, still, a year after the big squeeze. In fact, as I was looking for some illustrations for the paragraph below, I discovered that today is the one year anniversary of the day brokerages stopping people from buying.

There is a religion associated with this, yes, that teaches that the infinity squeeze is still on and there are still some shorts somewhere and it's all a big double secret probation. I don't know how this is going at WSB. They don't like having the same conversation over and over with no humor.

A lower level of delusion would be that GME will produce a profit someday. There's a chance. As long as there's life, there's hope. The focus has certainly been good for the company.

I guess my opinion is that long term, the stock market is a weighing machine.
Full disclosure, I do not typically invest in individual stocks but after reading about GME I invested last year.

The SEC issued a report that stated what occurred last January was not a squeeze at all, but was a result of retail buying pressure. GMEs most recent earnings report started to list the number of shares that have been Directly registered in the name of the stockholder and not with a broker. My understanding is that this effectively eliminates the ability of those shares being used to short the stock. If short positions are still open, things may come to a head in the next few months. As of October 2021 5million of the 30million float had been registered. The next quarter for GME closes this month and we should know how many more have been registered by March. Looking forward to that number in March.
Gaston
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Re: [GameStop GME trading mega-thread]

Post by Gaston »

If interested, the most recent Rick Ferri Bogleheads podcast from 28 January is all about the GameStop kerfuffle.

https://rickferri.com/podcast/episode-4 ... ick-ferri/
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lazynovice
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Re: [GameStop GME trading mega-thread]

Post by lazynovice »

jjg247 wrote: Sat Jan 29, 2022 11:21 am
firebirdparts wrote: Fri Jan 28, 2022 6:32 am
DarkMatter731 wrote: Sun Jan 23, 2022 1:50 am Is it just me or are GME investors delusional?
It ain't just you, no. And I guess, looking at the price movement this year, the fun is also over, but it's not up to me, of course. I'm kind of amazed really that it's actually trading at $93 over a year later. Somebody is buying that, still, a year after the big squeeze. In fact, as I was looking for some illustrations for the paragraph below, I discovered that today is the one year anniversary of the day brokerages stopping people from buying.

There is a religion associated with this, yes, that teaches that the infinity squeeze is still on and there are still some shorts somewhere and it's all a big double secret probation. I don't know how this is going at WSB. They don't like having the same conversation over and over with no humor.

A lower level of delusion would be that GME will produce a profit someday. There's a chance. As long as there's life, there's hope. The focus has certainly been good for the company.

I guess my opinion is that long term, the stock market is a weighing machine.
Full disclosure, I do not typically invest in individual stocks but after reading about GME I invested last year.

The SEC issued a report that stated what occurred last January was not a squeeze at all, but was a result of retail buying pressure. GMEs most recent earnings report started to list the number of shares that have been Directly registered in the name of the stockholder and not with a broker. My understanding is that this effectively eliminates the ability of those shares being used to short the stock. If short positions are still open, things may come to a head in the next few months. As of October 2021 5million of the 30million float had been registered. The next quarter for GME closes this month and we should know how many more have been registered by March. Looking forward to that number in March.
The SEC report said that the shorts closed their positions at high prices before the largest run up. The shorts lost a lot of money, but they closed. Whether it was a squeeze or not, they closed their positions.

Current short interest is about 15%. Way less than in January 2021.

https://www.marketbeat.com/stocks/NYSE/ ... -interest/

The public float is 60 million, not 30 million. Subtracting out institutional ownership ignores the fact that those institutions (mutual funds and ETFs managed by Blackrock, Vanguard, etc.) will gladly lend out shares for shorting.

https://www.marketwatch.com/investing/stock/gme

It isn’t shorted as much as it was last year and it didn’t technically squeeze then. Why would smaller short interest this year create a squeeze? I’d say all that is carrying price is the exact same retail interest as last year.
johnkidding
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Re: [GameStop GME trading mega-thread]

Post by johnkidding »

lazynovice wrote: Sat Jan 29, 2022 2:04 pm
The SEC report said that the shorts closed their positions at high prices before the largest run up. The shorts lost a lot of money, but they closed. Whether it was a squeeze or not, they closed their positions.
The SEC report said that the shorts covered their position, not closed. There is a BIG difference. The shorts have not closed and the squeeze has not squoze :-P

How is Melvin Capital down 6.8B this month if they closed their positions a year ago? :shock:
lazynovice
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Re: [GameStop GME trading mega-thread]

Post by lazynovice »

johnkidding wrote: Sat Jan 29, 2022 3:28 pm
lazynovice wrote: Sat Jan 29, 2022 2:04 pm
The SEC report said that the shorts closed their positions at high prices before the largest run up. The shorts lost a lot of money, but they closed. Whether it was a squeeze or not, they closed their positions.
The SEC report said that the shorts covered their position, not closed. There is a BIG difference. The shorts have not closed and the squeeze has not squoze :-P

How is Melvin Capital down 6.8B this month if they closed their positions a year ago? :shock:
You cover to close. There is no difference in the end result.

https://www.investopedia.com/ask/answer ... vering.asp#

“Conversely, short covering involves buying back a security to close out an open short position.”

“Contrary to a short squeeze, short covering involves purchasing a security to cover an open short position. To close out a short position, traders and investors purchase the same amount of shares in the security they sold short.”

https://www.investopedia.com/terms/s/shortcovering.asp

“Short covering refers to buying back borrowed securities in order to close out an open short position at a profit or loss. It requires purchasing the same security that was initially sold short, and handing back the shares initially borrowed for the short sale. This type of transaction is referred to as buy to cover.”

“Short covering is closing out a short position by buying back shares that were initially borrowed to sell short using buy to cover orders.”

“Short covering is necessary in order to close an open short position.”

The SEC said they bought shares to cover:

“Staff also observed discrete periods of sharp price increases during which accounts held by firms known to the staff to be covering short interest in GME were actively buying large volumes of GME shares, in some cases accounting for very significant portions of the net buying pressure during a period.”

Short interest in GME dropped pretty precipitously after January 2021. Seems incredibly straightforward. SEC says they got out, the short interest dropped. Cover to close.

Melvin Capital lost 6.8 billion in January 2021, not January 2022.

https://www.wsj.com/articles/melvin-plo ... 1643381321

“At the worst point in January 2021, Melvin Capital Management was losing more than $1 billion a day as individual investors on online forums such as Reddit banded together to push up prices
of stocks Melvin was betting against…..
The damage, though, was severe. Melvin’s loss that month was 54.5%, or roughly $6.8 billion, one of the swiftest and steepest declines for a hedge fund since the financial crisis of 2008.”

He lost the 6.8 million covering to close.

“By year-end, the fund was part way back. For the full year, Melvin was down 39.3%”

So he made money from February to December.

“This year has gotten off to a rocky start amid volatile markets. Hedge funds betting on fast-growing companies have suffered losses. Melvin lost about 17% in the first three weeks of the year, according to people familiar with the returns.”

Someone who was short GME would be up on that position. Not down. Unless the short position was so small, it didn’t matter.
Last edited by lazynovice on Sat Jan 29, 2022 4:10 pm, edited 2 times in total.
HoberMallow
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Re: [GameStop GME trading mega-thread]

Post by HoberMallow »

johnkidding wrote: Sat Jan 29, 2022 3:28 pm
lazynovice wrote: Sat Jan 29, 2022 2:04 pm
The SEC report said that the shorts closed their positions at high prices before the largest run up. The shorts lost a lot of money, but they closed. Whether it was a squeeze or not, they closed their positions.
The SEC report said that the shorts covered their position, not closed. There is a BIG difference. The shorts have not closed and the squeeze has not squoze :-P

How is Melvin Capital down 6.8B this month if they closed their positions a year ago? :shock:
GME is down 30%+ so far this year. If Melvin Capital is short, why would they be down?
evancox10
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Re: [GameStop GME trading mega-thread]

Post by evancox10 »

I’m 99.9% strictly an index investor, but when all this happened a year ago, I thought to myself “surely a year from now everyone will have moved on and the share price will be back down to Earth,” and I looked at how I could bet on this theory by buying long dated (1 year out) puts priced at or below $50 (when the stock was in the $200-$400 range). However, even these deep out of the money puts were too expensive due to the absurd volatility, so I didn’t go through with this strategy. This was lucky for me, as my underlying theory was completely wrong!

As Keynes said, “the markets can stay irrational longer than you can stay solvent.”
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jjg247
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Re: [GameStop GME trading mega-thread]

Post by jjg247 »

Many are speculating that Short hedge funds have started taking short positions that do not require reporting in the same fashion that typical short position would. Check out the ETF XRT. Some very interesting data about how much that ETF is being shorted. Most stocks in that basket will go green except one…

I frequently see this stock go +10 or -10% on no news and very small volume. On red days the media says retail has finally sold off. I see the buy sell ratio on fidelity at nearly 90% buy on most days. This is a flawed metric because 1 sale of 1000 shares would even out 1000 purchases of 1 share, but it does have a lot to say about the general feeling about the stock.

I suspect the float whether 30m or 60m will be DRSd and then anyone who is short is going to have an exceptionally bad day. I’ve bought my shares and am content sitting and watching the fireworks.
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