If I'm understanding the situation, enough people organized to inflate the stock prices of shit companies, all legally, to spite hedge fund people who make money by betting that companies will fail. Sounds like something the occupy wallstreet 99%ers would have approved but somehow it's bad and is also Trump's fault lol.
It was pointed out in wsb, as well as many many other places including the public filings that there was more short interest in GameStop than shares in exit. I can get into that if you want but the bottom line is that shows fuckery.
This specific kind of fuckery has happened before (VW Porsche’08) and the basic model is easy to understand.
That model tells you that if there is a bit of good news for a heavily shorted stock, and the stock price goes up, everyone who shorted the stock will have to buy the stock (I can explain why, but go with me ).
Now because more stocks are need to be bought than exist... simple supply demand kicks in. The model says that as long as no one sells, the price will “skyrocket to the moon”.
Thing is if you have a theoretical %1,000+ gain it will be awfully tempting to realize that gain rather than hold out of solidarity to an obsolete business model notorious for mistreating employees and customers over the years. Don’t get me wrong, love seeing the institutional guys get a bit of humility and if GameStop can survive that’s preferable to Microsoft/Amazon/Sony/WalMart simply absorbing all the $ (though it seems inevitable most games will be bought online, right?).
I know Patrick Byrne and Elon Musk have had their battles and fun with these short sellers. It really exposes how much of “investing” is just gambling. Heck, a casino is way more transparent on odds and rules.
The idea here is that GameStop will develop a platform for reselling digitally purchased games for the Xbox and maybe ps. As long as there is a viable model, gme won’t go bankrupt.
If I'm understanding the situation, enough people organized to inflate the stock prices of shit companies, all legally, to spite hedge fund people who make money by betting that companies will fail. Sounds like something the occupy wallstreet 99%ers would have approved but somehow it's bad and is also Trump's fault lol.
No. That’s not exactly it.
It was pointed out in wsb, as well as many many other places including the public filings that there was more short interest in GameStop than shares in exit. I can get into that if you want but the bottom line is that shows fuckery.
This specific kind of fuckery has happened before (VW Porsche’08) and the basic model is easy to understand.
That model tells you that if there is a bit of good news for a heavily shorted stock, and the stock price goes up, everyone who shorted the stock will have to buy the stock (I can explain why, but go with me ).
Now because more stocks are need to be bought than exist... simple supply demand kicks in. The model says that as long as no one sells, the price will “skyrocket to the moon”.
This has nothing to do with any pumping.
Right.
Thing is if you have a theoretical %1,000+ gain it will be awfully tempting to realize that gain rather than hold out of solidarity to an obsolete business model notorious for mistreating employees and customers over the years. Don’t get me wrong, love seeing the institutional guys get a bit of humility and if GameStop can survive that’s preferable to Microsoft/Amazon/Sony/WalMart simply absorbing all the $ (though it seems inevitable most games will be bought online, right?).
I know Patrick Byrne and Elon Musk have had their battles and fun with these short sellers. It really exposes how much of “investing” is just gambling. Heck, a casino is way more transparent on odds and rules.
The idea here is that GameStop will develop a platform for reselling digitally purchased games for the Xbox and maybe ps. As long as there is a viable model, gme won’t go bankrupt.
The funny thing is gamestop stock and the actual company have become seperate entities with this as the company is still failing but stock is rising
Only benifit is it is some amazing advertising or if the owner cashed out