everybody on ilx complains about reddit

I am woefully ignorant of this whole world but in trying to understand this thing I came across and found this article useful:

https://www.vice.com/en/article/pkdvgy/send-this-to-anyone-who-wants-to-know-wtf-is-up-with-gamestop-stock

It doesn't really get into the potential downsides for anyone other than the obv deserving fat cats. But my admittedly tenuous take on it all is that whatever those downsides might be, they were likely to exist anyway, and the main change from what's happening is that the pool of those who are benefiting has been ever so slightly democratized

yeah, i'm aware that stocks represent investment in the company and not their day to day accounting. I'm also aware that gamestop is operating with a dying business model of brick and mortar sales for a consumer good that is predominantly acquired electronically and that amazon is eating their lunch with day-of delivery. Resale appears to be the only thing gamestop has going for it and next gen systems tend to wreck the resale market for the first year or two. that's why it was getting shorted in the first place!

to your point, gamestop is almost certainly going to need to raise capital to consolidate if it's gonna survive and restructure, which means further slashing of retail locations... which was gonna likely happen anyway but may need to be sped up in response to a market that has no trust in investing in a company that's become an international joke. obviously the stock is drastically overvalued at the moment by an exponential factor and the course correction is absolutely gonna happen. it's the confluence of those things that are gonna pull the rug out from under them.

maybe i'm wrong, perhaps the stock won't crater and even if it does it won't have reverberations to the day-to-day operations before end of year. i don't know that i'd bet on that.

It seems to me this whole thing is a glorified pump and dump of epic proportions. The notion that no one beyond those hedge funds are going to get hurt are very fairy tale-y.

yup

https://i.imgur.com/bKHlKlI.jpg

to your point, gamestop is almost certainly going to need to raise capital to consolidate if it's gonna survive and restructure, which means further slashing of retail locations...

again i think they have already been through the large part of this, they have been closely low performing locations for a long time.

their business isn't really bad right now, (this is approximate) but retail sales were only down 4.3 or something for 2020 which is pretty great considering and online sales were up 30 something points

plus at the beginning of a new console cycle the stock always used to go up before wall street decided retail was dead, but these are usually good years for GameStop

GameStop was in a better position than most large retail because private equity wasn't saddling them with debt and gutting them to start with IIRC.

your take was the one i was most interested in matt as you spent a lotta time around that company

am i wrong i thinking that new consoles throttle resale and that the paucity of the actual systems means less money to retailers than you might think? And do they have a meaningful foothold in the digital market? it seems to me like sony/microsoft/nintendo/steam's direct-to-consumer pipeline would make that an impossible marketplace to crack.

something i didn't know is that two of the hedge fund managers getting toasted right now are co-owners of the Charlotte Hornets, so MJ may have a problem on his hands because of gamestop for the first time since barkley shut up and jam

xpost

yeah that's the other maddening thing about it - is they essentially stripped these companies down to the copper wire in the walls and then use that narrative against other retail companies

down 63% today, holy shit

forks -- https://arstechnica.com/gaming/2020/10/microsoft-will-give-gamestop-a-share-of-xboxs-digital-revenues/

my ex-gf sold her .27 share when it got down to $225 but it executed at $2600

am i wrong i thinking that new consoles throttle resale and that the paucity of the actual systems means less money to retailers than you might think?

they don't make money on selling systems, but it drives store traffic and the attach rate (the other stuff people buy, 2nd controllers, games, accessories) is what's important

right, sell the razor make money on the blades, but given that the systems are generally unavailable and there's a pandemic i figured they weren't really seeing a pop in foot traffic on this generation.
brb reading your link

GameStop's real profit is in limited edition Funko Pops.

they literally are flooding the market at once with borrowed shares to hit every ask on the way down rapidly and make people panic sell. And since some brokers removed the ability to buy a share and only allow one to sell... tomorrow is a big expiration day for calls and they need to drive the price down to $115 and $60 if they can.

this is really quite good considering 2020

GameStop Reports 2020 Holiday Sales Results
GRAPEVINE, Texas, Jan. 11, 2021 (GLOBE NEWSWIRE) -- GameStop Corp. (NYSE: GME), today reported worldwide sales results for the nine-week holiday period ended January 2, 2021 reflecting a 4.8% increase in comparable store sales and a 309% increase in E-Commerce sales. Total sales declined 3.1% driven by an 11% decrease in the company’s store base due to its planned de-densification strategy, temporary store closures around the world due to government mandates and lower store traffic, particularly later in December, due to the significant impacts of COVID-19. The Company believes the industry-wide traffic decline during the Holiday period adversely impacted comparable sales for the nine-week period in the high single-digit to low double-digit percentage point range. In addition, significant worldwide supply chain constraints impacted the ability to distribute products to customers across all sales channels. However, the Company experienced unprecedented demand for recently launched gaming consoles, and while consumer demand far outpaced constrained supply in the nine-week period, the Company believes these products will drive sales well into 2021 as console availability from our suppliers improves later in the year.

that ars technica piece is all over the place but it certainly suggests that microsoft wants to see gamestop survive as their preferred retailer? interesting info and i was not aware, maybe they're healthier than i thought.

TBC, a couple of hedge funds already *did* lose massive amounts of money on this. One had to take emergency financing. Does it signal the dawning of a new era in which bands of rogue redditors are going to take out the financial elite? Obviously not. But it's still hilarious.

it would def be interesting if coordinated financial activism became a new tactic after this

yeah, i'm aware that stocks represent investment in the company and not their day to day accounting. I'm also aware that gamestop is operating with a dying business model of brick and mortar sales for a consumer good that is predominantly acquired electronically and that amazon is eating their lunch with day-of delivery. Resale appears to be the only thing gamestop has going for it and next gen systems tend to wreck the resale market for the first year or two. that's why it was getting shorted in the first place!

to your point, gamestop is almost certainly going to need to raise capital to consolidate if it's gonna survive and restructure, which means further slashing of retail locations... which was gonna likely happen anyway but may need to be sped up in response to a market that has no trust in investing in a company that's become an international joke. obviously the stock is drastically overvalued at the moment by an exponential factor and the course correction is absolutely gonna happen. it's the confluence of those things that are gonna pull the rug out from under them.

maybe i'm wrong, perhaps the stock won't crater and even if it does it won't have reverberations to the day-to-day operations before end of year. i don't know that i'd bet on that.

― the serious avant-garde universalist right now (forksclovetofu), Thursday, January 28, 2021 11:13 AM (twenty-three minutes ago) bookmarkflaglink

The scenario the guys you quoted are getting all hand-wringy about would require gamestop's stock to slingshot back way past a reasonable value and then stay there for a prolonged period of time. That's generally just not how most reasonably actively traded stocks function. And then, on top of that unlikely scenario, GME would have to need to do an equity raise right then, in that window of time, something that's even less likely to happen with debt financing so cheap right now. So no, nothing about this poses a realistic threat to the company or its employees, anyone arguing that is probably just mad.

plus I feel like this whole thing will just be seen as a mulligan basically and it probably just ends up back where it started

Inquiries into freezes should not be limited solely to Robinhood.

This is a serious matter. Committee investigators should examine any retail services freezing stock purchases in the course of potential investigations - especially those allowing sales, but freezing purchases.

— Alexandria Ocasio-Cortez (@AOC) January 28, 2021

i mean they even took american airlines off some brokers to buy since it is also heavily shorted and had decent earnings. It's insane.

Manipulation is also fucking with some of the worst people in the world

I own $amc $nok $nakd. I bought them with the understanding we live in a free market where people can buy and sell stocks fair and square and at their own risk. I will hold them till the death as a reminder that @RobinhoodApp founders must go to prison

— Dave Portnoy (@stoolpresidente) January 28, 2021

ah yes the famous intellectual who once said "stocks only go up"

bought two shares at $72 on Monday, hoping it hits like $500 so I can sell them and buy half a dozen items from my Discogs wish list of overpriced rare albums

lol or cry

What happened here (i.e., GMS)?

--It's about sex...
--Specifically, young men not having (enough) sex
--Sex leads to relationships, obligations and guardrails (don't get in fights, we need you. Don't gamble your paycheck, we need to save for a house)

— Scott Galloway (@profgalloway) January 27, 2021

in op eds it's always about Trump or not getting the sex you feel you're entitled to

there's a difference between those things?

what is GMS? Google Mobile Services?

presumably it's always both, but one is the subject of the piece and the other is neurosis of the author

lol at your dn hazel

it's really myopic and wrong to think that subreddit is just angry young incel men blowing their paychecks without any knowledge about how trading works.

end times

Fully agree. 👇 https://t.co/rW38zfLYGh

— Ted Cruz (@tedcruz) January 28, 2021

Yerac, I am on the side of the little guy screwing over wall street aa much as possible, but the idea that wall street was just going to let this happen is laughable.

wall street being very publicly exposed as bad actors here is a good thing

no one thought it would be easy? But this happens with a lot of stocks (short and gamma squeezes, funds manipulating prices) and no one usually cares beyond a day.

my ex-gf sold her .27 share when it got down to $225 but it executed at $2600

― Joe Biden Stan Account (milo z), Thursday, January 28, 2021 11:23 AM (forty-nine minutes ago)

what does this mean?

I assume the market manipulation is a constant, but now you've got a compelling media narrative (Reddit vs the Hedge Funds) and people are paying attention. I've had a brokerage account for 25 years and I've never seen a stock be made available to sell but not buy... how often does that happen?

never. unless it's about to be delisted or something.

i mean they would let this go too except the people who are shorting, i am pretty sure still had not covered as of yesterday or also reshorted. the short and borrow rate hadn't changed that much. and it's multiple stocks. And they refuse to put the diaper on and take their losses for bad decisions.

kind of a minor point here but i see a lot of people around the internet saying "the market is for gambling but they wont let us play" which is incorrect, the market is for charging fees, gambling is just something you do in order to charge fees

end times

― lag∞n, Thursday, January 28, 2021 12:05 PM (twelve minutes ago) bookmarkflaglink

We have truly entered the era of Biden bi-partisanship.

how often does that happen?

As often as it will need to.

Ted Cruz, like a lot of right-wing "intellectuals", is incredibly obsessed with AOC and has done this "See! We agree on something! We're not entirely monstrous!" move several times

And they refuse to put the diaper on and take their losses for bad decisions.

"They" got a government bailout when they cratered the entire economy ten years ago. Halting trading for a couple days to avoid losses seems pretty minor.

i know, i worked at the bank that bought the one bank that didn't get the bailout.

When I use the Robinhood app I think about the book Addiction by Design by Natasha Schull about casinos

hey, hey, two banks didn't get the bailout!

xp

So we are at the stage where people are realising they can’t beat the house?