I wrote this earlier to try and explain this whole thing to some friends, and also posted in another thread, but I figured hey why not make it a whole post. First, full disclosure I have money invested already (so there’s a bit of a conflict of interest technically), I’m not a financial expert by any means (and this is not investing advice™), and I definitely missed some stuff, but I figure it might be useful as an explanation for everybody here since I haven’t actually seen anything actually go into the details too much.
With stocks you can do something called shorting, which is where where you think that a stock is going to go down, and what you do then is borrow shares from a broker for their current price, sell them, and at a specified date you buy the same amount of shares up and give them back to the broker, and you keep the difference. If the stock goes down, you make money, if it goes up however you can eat it big, because there’s technically no limit to how high a stock can rise. This is where the magic comes in.
Right now $GME, our beautiful GameStop, has a short interest of over 100%, which means its being shorted for more shares than are available for sale. This is because GameStop is yknow GameStop and it went down to $5 over the summer, and a couple Wall Street firms shorted them a bunch back then. Since the stock is going up so much, they’re gonna get absolutely screwed when the shorts come in, which should be happening sometime on Monday and Tuesday of next week.
The last piece of the puzzle is a bunch of nerds on WSB refusing to sell their stock to the firms so that they can cover their shorts (give the stock broker the shares that were shorted), which creates a positive feedback loop of spiking the stock price. Remember, those firms have to cover those shorts, their assets can literally be seized otherwise, and if nobody wants to sell, then they have to offer more money. It’s like offering to pay somebody on the street more and more money for the shirt on their back until you finally offer them $1000 and they give it to you. This situation is called an “infinite short squeeze,” and as long as people keep holding it should keep going up, and lord knows they’re going to keep holding.
What you might need to on your end, if you’re interested in this modern day robin-hood tale, is buy some $GME for as low as you can, preferably on opening on money or a dip otherwise, and hold on to it for as long as possible while the price rises. WSB seems to think it could go as high as $1000, take it with a grain of salt, but also keep that in mind when you’re deciding the price you want to sell at. I’d recommend holding for as long as possible as it goes up, since it’s usually better to sell too late after the peak than too early and completely miss it, but you know your situation better than I do.
There are a few possible pitfalls in all of this. GameStop could issue more stock and ruin the short squeeze, people might sell too early before it can reach a number that’s truly crazy, and probably some pmore that I don’t remember, but even so it’s still looking pretty good for it.
In conclusion, money is fake anyway, Marx day traded so don’t feel bad, don’t gamble more than you can afford (because it is gambling lol), and don’t say I didn’t warn you. If you have any more questions I’m afraid you’re probably going to actually go to WSB and check out their DD (due diligence) threads, but be ready to deal with a looooot of ableism. It’s probably too late in the game to make millions of dollars like some people on WSB, but definitely still time to put a good dent in some debt you might have and maybe have a bit left over for some mutual aid, who knows. Happy gambling. 💎🤲🚀🚀🚀
e: $GAM -> GME I am a fool
That’s really just the stock market in general :stonks-down: e: Also again disclaimer spend at your own risk, I got this from a subreddit where everybody calls each other the r word all the time
Swear this reads like those scams where you have to be one of the first few in at the beginning to actually profit off of this while everyone else is dumping money into their pockets.
Most stock market actions outside of buying and selling are just gambling lol
Yes in 2008 for a short time due to the same effect Volkswagen was the wealthiest company in the world.
Marx traded so don't feel bad
He also appears to have cheated on Jenny with the housekeeper.
Just because he was right about capitalism, and the tendency of the rate of profit to fall, doesn't mean everything he did was okay.
The average WSB member is a total choad, though this is fucking funny, ngl.
Fuck it, I'll log back into robinhood to go in on this.
Still so much hot money and speculation, makes me think the recession isn't over yet
Remember that it's okay to dip out early fam. Don't risk it if you've already gained.
Just bought in, having a blast. Is there any specific company that bought these shorts or are we just fucking over the whole banking industry? I like to know who im scamming
I believe the heads under the guillotine currently are Citron Research, who has basically just been doing market manipulation for years, and Melvin Capital which is a hedge fund. The ideal victims if you ask me.
I'm so pissed rn tried to get my live-in boomers to help me set up an account or at least buy GME themselves and they gave me the "You know, the stock market isn't a game, this is real money we are dealing with here" FFS we already would have doubled if we just got in friday and it was obvious this was happening.
Boomers are so cute when they think investing is anything other than astrology for lizard people. Sorry you couldn’t get in, but hey maybe we’ll all get disappeared by the SEC, and who will be laughing then?
My Dad basically only believes in investing if you leave it for 30 years
I was pretty sure GAM was not gamestop. Gamestop is GME. Is there a reason we should buy GAM?
It totally is GME it’s just three am and I forgot the code, thanks for checking
I’ve lurked some here and there, but the first time I actually bought into anything they were backing was last Thursday, so not really lol. Options are spook, still a little too yolo for my tastes, I just stumbled on the subreddit at the right time to buy in and hey it’s been working so far.
Halted: https://www.cnbc.com/2021/01/25/gamestop-shares-jump-another-40percent-shake-off-analyst-downgrade-as-epic-short-squeeze-continues.html
Apparently Blackberry ($BB) and AMC ($AMC) are targets now.
https://www.theverge.com/2021/1/22/22244900/game-stop-stock-halted-trading-volatility
Right now it is, at $80 - I bought in at $95 before it went up to $150. Short's coming due Friday.