This is correct. Plus many of the biggest holders of Gamestop stock are other hedge funds and wealthy individual investors, and they bought their shares at $5 a share, so they're making more money than anyone. The capitalists overall are not going to be losing money on this.
The biggest financial losers (outside a couple of hedge funds) are going to be laypeople and first-time investors who bought shares of GME at $200+ a share (or whatever), and aren't able to sell in time when the stock inevitably crashes. GME isn't really worth more than $20 a share (at most), as it is a failing company with an outdated business model, so the share price isn't going to stay overinflated forever. People started buying this share as a meme (and to fuck over the large number of hedge funds that were shorting it), and then other people started buying it because it was increasing in value quickly, prompting other people to do the same, causing the stock price to spike nonsensically (and many of the buyers are hedge funds, and they are much better at timing, such as buying on the dip, than laypeople are). Basically, this is a gold rush. Or perhaps, more accurately, a disorganized pyramid scheme.
Eventually, the price is going to be so high that people no longer want to pay the cost of a share (what price that will be is anyone's guess). At that point, people are going to start to sell, and this entire process will happen in reverse. Once a significant chunk of people sell, the price will start dropping, causing more people to sell before it crashes, ect. This process will continue until the share prices end up right around where they were before. The professionals are not going to be the ones losing money on the crash, as they trade quicker than laypeople and have no incentive to hold onto GME for memes or whatever. First-time investors and memers are going to be the ones holding the bag, as the shares they paid hundreds for are going to be worth a fraction of that.
Basically, if your a Chapo who has already made a significant amount of the Gamestop increase, I would cash out now (or soon, but the longer you wait, the greater the chance that you lose all your gains). Personally, I would definitely not be buying at the current price, as it is well beyond the level of risk I'm comfortable with (this is, essentially, gambling, though that doesn't mean the odds stay fixed). If you're doing this for a meme: BUY. If you want to keep any profit: SELL.
All this said, the whole situation is pretty funny, and does highlight the speculative nature of capitalism. We are seeing a stock market boom/bust cycle on the micro level of a single stock over a very short period of time. Rampant speculation causing a meteoric rise in value, followed by a collapse just as extreme (Gamestop's Black Tuesday is coming). However, this isn't really doing all that much to affect the capitalist class.
This is correct. Plus many of the biggest holders of Gamestop stock are other hedge funds and wealthy individual investors, and they bought their shares at $5 a share, so they're making more money than anyone. The capitalists overall are not going to be losing money on this.
The biggest financial losers (outside a couple of hedge funds) are going to be laypeople and first-time investors who bought shares of GME at $200+ a share (or whatever), and aren't able to sell in time when the stock inevitably crashes. GME isn't really worth more than $20 a share (at most), as it is a failing company with an outdated business model, so the share price isn't going to stay overinflated forever. People started buying this share as a meme (and to fuck over the large number of hedge funds that were shorting it), and then other people started buying it because it was increasing in value quickly, prompting other people to do the same, causing the stock price to spike nonsensically (and many of the buyers are hedge funds, and they are much better at timing, such as buying on the dip, than laypeople are). Basically, this is a gold rush. Or perhaps, more accurately, a disorganized pyramid scheme.
Eventually, the price is going to be so high that people no longer want to pay the cost of a share (what price that will be is anyone's guess). At that point, people are going to start to sell, and this entire process will happen in reverse. Once a significant chunk of people sell, the price will start dropping, causing more people to sell before it crashes, ect. This process will continue until the share prices end up right around where they were before. The professionals are not going to be the ones losing money on the crash, as they trade quicker than laypeople and have no incentive to hold onto GME for memes or whatever. First-time investors and memers are going to be the ones holding the bag, as the shares they paid hundreds for are going to be worth a fraction of that.
Basically, if your a Chapo who has already made a significant amount of the Gamestop increase, I would cash out now (or soon, but the longer you wait, the greater the chance that you lose all your gains). Personally, I would definitely not be buying at the current price, as it is well beyond the level of risk I'm comfortable with (this is, essentially, gambling, though that doesn't mean the odds stay fixed). If you're doing this for a meme: BUY. If you want to keep any profit: SELL.
All this said, the whole situation is pretty funny, and does highlight the speculative nature of capitalism. We are seeing a stock market boom/bust cycle on the micro level of a single stock over a very short period of time. Rampant speculation causing a meteoric rise in value, followed by a collapse just as extreme (Gamestop's Black Tuesday is coming). However, this isn't really doing all that much to affect the capitalist class.