Within one night, Gamestop had leaped over 70%, and closed up 51%. So these are not normal things to happen for stocks. It has been a massive transfer of money from mostly professional investors to self-described retards. It feels like one of the few times that the little guy triumphed. I’ve been pretty fascinated by this, though I’m not invested.
I had not taken it seriously before, but it apparently happened because of a short squeeze. Gamestop was one of the most heavily shorted stocks before with 138% of its shares shorted. Wallstreetbets (wsb) smelt blood in the air and decided to push short sellers out by buying and raising the price of shares. Short sellers were forced to cover and had no choice but to buy shares, which were in very limited supply. Have not seen this before on such a scale and reason, and I wonder if this can be called mass market manipulation.
Both sides were trying to manipulate the stock, and it so happened that wsb was bigger and won tonight. Andrew Left of the short seller research firm Citron, who posted negative research on it, won’t be commenting any further and has fled. He has most likely lost his shirt and more.
I still find it hard to imagine Gamestop turning around by being an online player, and making a profit in the video game market. I buy games, and I know there is no need for an intermediary like Gamestop. Sony and Microsoft sell games directly through their respective Playstation and Xbox consoles. I cannot think of a reason why any gamer would choose to buy through Gamestop. The used game market is also headed towards extinction. Individuals can’t buy or sell digital games to each other. Its why Gamestop has been in decline for years and years. A new board and CEO is really unlikely to change that.
Still, a lot of people made a big money tonight. Salute to those who have ridden the Gamestop train. I have been and will continue to watch for the stocks being touted at the reddit forum. I might just throw some fun money into the next trending stock there. They have a pretty good hit rate e.g. Tesla, Palantir, Nio and now Gamestop.
Blackberry looks like the next hit, but I’m staying out of that one for personal reasons. My father was crushed by that many years ago, and I don’t want to have anything to do with BB.
I would not get into Gamestop at this point either. Pretty sure the stock will start crashing once I buy in.
Have a good weekend folks! Had planned to have another article here today, but then the drama last night happened. I’ll post that article tomorrow.