[GameStop GME trading mega-thread]

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
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firebirdparts
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Re: Theory on how GameStop is holding its price

Post by firebirdparts »

dukeblue219 wrote: Tue Nov 16, 2021 9:25 pm
Triple digit golfer wrote: Tue Nov 16, 2021 9:16 pm A guy I work with says it's going to $10 million per share and is dead serious about it.
Some of the louder voices on Reddit are (or were) convinced the Gamestop short squeeze would break the stock market itself and possibly destroy the US dollar when the share price went to infinity.
I think that breakage more or less did already happen. "Other people" are on the hook for that, and what they learned is that brokers can refuse to trade it anytime they want. There's a limit to what you can force.

I could be wrong, and of course if I am, I don't care. I don't have a dog in this fight at all. There are several articles out there on the major halts and what goes on in the clearing company.
This time is the same
randomguy
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Re: Theory on how GameStop is holding its price

Post by randomguy »

firebirdparts wrote: Wed Nov 17, 2021 10:31 am
dukeblue219 wrote: Tue Nov 16, 2021 9:25 pm
Triple digit golfer wrote: Tue Nov 16, 2021 9:16 pm A guy I work with says it's going to $10 million per share and is dead serious about it.
Some of the louder voices on Reddit are (or were) convinced the Gamestop short squeeze would break the stock market itself and possibly destroy the US dollar when the share price went to infinity.
I think that breakage more or less did already happen. "Other people" are on the hook for that, and what they learned is that brokers can refuse to trade it anytime they want. There's a limit to what you can force.

I could be wrong, and of course if I am, I don't care. I don't have a dog in this fight at all. There are several articles out there on the major halts and what goes on in the clearing company.
Weren't all the halts done by Robinhood and not the market?

Maybe betting on the Chewie guy catching lightening in the bottle again is a good bet. Maybe the market for gaming NFT's is bigger than I think (well anything above 0 is bigger than I think;)). But this feels like a stock where a bunch of people have bought and held but at some point they will all head to the exits (i.e. they want to buy the next Meme stock) and we crash back. Good luck guessing when that will happen...
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firebirdparts
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Re: Theory on how GameStop is holding its price

Post by firebirdparts »

randomguy wrote: Wed Nov 17, 2021 10:50 am Weren't all the halts done by Robinhood and not the market?
I think just about everybody except Fidelity halted it one day.

But it doesn't really matter. The key thing is that it's actually trading at $200 a share now. Somebody is buying those shares.
This time is the same
Impatience
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Re: Theory on how GameStop is holding its price

Post by Impatience »

The theory that an asset is worth its discounted future cash flows is only true if the market participants believe it to be true. If many of the market participants don’t know, don’t trust, or don’t care about the theory… then an asset can be worth any amount. It’s literally a meme, and memes are serious business.
inbox788
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Re: Theory on how GameStop is holding its price

Post by inbox788 »

It's not just GME, it's all the meme stocks and now TSLA and RIVN. Especially RIVN.

Systemically, reforms at brokerages and rule changes for short sellers is compounding the problems. Many short hedge funds have been washed out or sidelined leading to this irrational exuberance.

https://www.bloombergquint.com/markets/ ... r-gamestop

Sustained inflation could support HTZ and CAR if daily rental prices remain above $100/day.
https://www.msn.com/en-us/travel/news/h ... ar-AAQDeiq

Oh, and GME will be coming out cryptopopcorn soon. Wait, it's already out...
https://www.coinbase.com/price/popcorn
Price of flavored popcorn is going to go thru the roof in the metaverse. Get your NFT flavor before it's gone.
Last edited by inbox788 on Wed Nov 17, 2021 12:16 pm, edited 1 time in total.
sureshoe
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Re: Theory on how GameStop is holding its price

Post by sureshoe »

Carguy85 wrote: Tue Nov 16, 2021 9:32 pm
Triple digit golfer wrote: Tue Nov 16, 2021 9:28 pm
dukeblue219 wrote: Tue Nov 16, 2021 9:25 pm
Triple digit golfer wrote: Tue Nov 16, 2021 9:16 pm A guy I work with says it's going to $10 million per share and is dead serious about it.
Some of the louder voices on Reddit are (or were) convinced the Gamestop short squeeze would break the stock market itself and possibly destroy the US dollar when the share price went to infinity. The Fed was going to be forced to print hundreds of trillions of dollars to pay off the GME HODLers and bail out the system.

Theyre all detached from reality if you ask me.
That's what this guy says. Totally detached. He owns like three shares. He says he doesn't buy more because he'd rather spend that money now. He will be happy with $30 million after the squeeze.
:shock: The guy I know said merely $10k a share...I guess he is being much more realistic??....relatively speaking :D and yes, he’s serious as a heart attack about it as well
There is an old saying, "you can't reason someone out of a belief they haven't been reasoned into."

While I know people with some moderately wacky political opinions, I don't see how anyone with any money to invest could believe GameStop is going to go to $1000/share... that would give them a comparable market cap to Target, lol.
sureshoe
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Re: Theory on how GameStop is holding its price

Post by sureshoe »

Bryzzo2016 wrote: Tue Nov 16, 2021 10:14 pm
These guys are nuts. And just plain idiots.
Hey! I take that personally :-)

I'm a dumb idiot, not a plain one. I also turned a small profit on GME during the January run-up and then bought back in during Feb. I think it's a great story and I'm bullish on Ryan Cohen. I also think Steve Cohen, Vlad and Ken Griffin should be in jail.

Everyone said GME in the hundreds was impossible when it was at $10 bucks and it hit $483 so far. Would have been $1000's then if Robinhood didn't cheat. Now GME is sitting on a billion in cash... if the crypto dividend comes to pass that $10k number could happen. Crazier things have.
I don't want to turn this into GME good / bad debate, but despite them having cash (but capitalizing on the share bounce), they are continuing to burn money (albeit less). They are closing stores to save cash, so it's fine to cost cut, but I would think they're going to put a damper on their sales.

Transparently, I'm not familiar with their online/tech stuff, so maybe that's the magic sauce.
sureshoe
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Re: Theory on how GameStop is holding its price

Post by sureshoe »

firebirdparts wrote: Wed Nov 17, 2021 11:52 am
randomguy wrote: Wed Nov 17, 2021 10:50 am Weren't all the halts done by Robinhood and not the market?
I think just about everybody except Fidelity halted it one day.

But it doesn't really matter. The key thing is that it's actually trading at $200 a share now. Somebody is buying those shares.
Exactly. This is not a short squeeze (or alpha squeeze). Someone is propping this up.
inbox788
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Re: Theory on how GameStop is holding its price

Post by inbox788 »

Triple digit golfer wrote: Wed Nov 17, 2021 4:20 amI was more referring to people who put all their savings in it. An insignificant amount, who cares?
A million or 10 million insignificant amounts start to add up. It's like lottery tickets. It's not just those using their paychecks or life savings, but all the insignificant amounts that add up to big jackpots.
fwellimort
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Re: Theory on how GameStop is holding its price

Post by fwellimort »

sureshoe wrote: Wed Nov 17, 2021 12:25 pm Exactly. This is not a short squeeze (or alpha squeeze). Someone is propping this up.
Probably institutions. Lots of retail is consistently buying options (calls/puts).
Free money for institutions to take advantage of all that buying craze. Along with market makers enjoying the spreads.
greenback
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Re: Theory on how GameStop is holding its price

Post by greenback »

Carguy85 wrote: Tue Nov 16, 2021 6:59 pm I know of a person in particular who has most everything (retirement and all) invested in GameStop and some in gold/silver. Nothing in savings. Maybe some cash in jars out back? I almost sorta feel sorry for them for when the cards fall.
I know someone like this as well. The theory is that GME is undervalued by as much as 5x due to them entering into the DeFi and NFT space.
You shouldn’t retire until your money starts making more money than you made in your best year.
inbox788
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Re: Theory on how GameStop is holding its price

Post by inbox788 »

dukeblue219 wrote: Tue Nov 16, 2021 9:25 pm
Triple digit golfer wrote: Tue Nov 16, 2021 9:16 pm A guy I work with says it's going to $10 million per share and is dead serious about it.
Some of the louder voices on Reddit are (or were) convinced the Gamestop short squeeze would break the stock market itself and possibly destroy the US dollar when the share price went to infinity. The Fed was going to be forced to print hundreds of trillions of dollars to pay off the GME HODLers and bail out the system.

Theyre all detached from reality if you ask me.
I was concerned there might be some practical problems, like Y2k. Does the order system allow that many digits when the typical stock has 5 or 6, including decimal point? Then I thought of Berkshire A shares and did a simple test and it does let me buy billions, so at least 9 to 10 digits, so $10M share orders is clearly possible unless you're dealing with lots of shares. If you have a more than a thousand of them, you might have to sell them in smaller lots.

There was another practical problem that my account didn't have enough to buy one share, but I realize I can now buy fractional shares, so I can now be a proud owner of a fractional share of Berkshire A stock. How do I get together with all the other fractional share owners and decide how were's going to use our vote?

Anyway, reality is constantly being redefined and transformed. Imagine Tchaikovsky listening to Spotify. No, not listening to Tchaikovsky on Spotify. The actual composer. BTW, I totally underestimated Spatial Audio. So much potential that's just beginning.
Independent George
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Re: Theory on how GameStop is holding its price

Post by Independent George »

I posted this on the GME thread - one of the things the SEC found was that one reason the GME went "to the moon" was that short-sellers pretty much disappeared, and prices couldn't come down.

It wouldn't surprise me if this continues today - who's going to take a risk on shorting GME? The institutional investors are openly monitoring WSB and buying order flow from brokers; by and large they know which meme stocks are trending. If there is no downwards pressure on GME, then the price will stay high right up until people holding it need money.

Personally, I've never understood the emotional hold Gamestock had on people. Besides the fact that its core business is dying, I'm a gamer who bought & sold from Gamestop when I was younger; I hated Gamestop. It was a terrible business that always left a bad taste in my mouth, and stopped going there because it just wasn't worth it to me.
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Re: Theory on how GameStop is holding its price

Post by Bryzzo2016 »

While I know people with some moderately wacky political opinions, I don't see how anyone with any money to invest could believe GameStop is going to go to $1000/share... that would give them a comparable market cap to Target, lol.
TSLA would like a word.
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Re: Theory on how GameStop is holding its price

Post by dukeblue219 »

Bryzzo2016 wrote: Wed Nov 17, 2021 8:23 pm
While I know people with some moderately wacky political opinions, I don't see how anyone with any money to invest could believe GameStop is going to go to $1000/share... that would give them a comparable market cap to Target, lol.
TSLA would like a word.
Tesla has a viable business model, growing market share, and something of a competitive moat at the moment.

Gamestop is a dead business with a roaring stock.

Both are ridiculously valued but one is just nonsense.
OptimalFI
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Re: Theory on how GameStop is holding its price

Post by OptimalFI »

One natural seller of the meme stocks is the companies themselves, via secondary offerings. If I remember right, AMC did at least one, and raised enough money to save itself...so in a sense diamond-handed apes on Reddit saved AMC! Matt Levine at Bloomberg View had a few pieces on this.

I think Hertz also started an at-the-market secondary offering while it was bankrupt until the SEC politely asked it to stop.
https://www.cnbc.com/2020/06/17/hertz-h ... eview.html


I wonder how many of the other meme stocks used the opportunity to raise capital...
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Re: Theory on how GameStop is holding its price

Post by JBTX »

Theory on how holding price ? How does Bitcoin hold its price? The expectation that it is going to continue to go up. They don’t even care about fundamentals and valuations. That’s for fuddy duddies and losers. It doesn’t matter to them. Just that it has gone up and thus is believed to continue to go up. It’s a new digital paradigm and the rules have changed. Or so they believe.
gtrplayer
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Re: Theory on how GameStop is holding its price

Post by gtrplayer »

JBTX wrote: Wed Nov 17, 2021 9:14 pm Theory on how holding price ? How does Bitcoin hold its price? The expectation that it is going to continue to go up. They don’t even care about fundamentals and valuations. That’s for fuddy duddies and losers. It doesn’t matter to them. Just that it has gone up and thus is believed to continue to go up. It’s a new digital paradigm and the rules have changed. Or so they believe.
It’s the greater fool theory, but are we really to believe a lot of other stocks aren’t like this? If a stock doesn’t pay dividends or do buybacks, what intrinsic value does it really have? Why do fundamentals matter when all we have is a piece of paper saying one share?
000
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Re: Theory on how GameStop is holding its price

Post by 000 »

JBTX wrote: Wed Nov 17, 2021 9:14 pm Theory on how holding price ? How does Bitcoin hold its price? The expectation that it is going to continue to go up. They don’t even care about fundamentals and valuations. That’s for fuddy duddies and losers. It doesn’t matter to them. Just that it has gone up and thus is believed to continue to go up. It’s a new digital paradigm and the rules have changed. Or so they believe.
Started by Bogleheads, honestly.
sureshoe
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Re: Theory on how GameStop is holding its price

Post by sureshoe »

Bryzzo2016 wrote: Wed Nov 17, 2021 8:23 pm
While I know people with some moderately wacky political opinions, I don't see how anyone with any money to invest could believe GameStop is going to go to $1000/share... that would give them a comparable market cap to Target, lol.
TSLA would like a word.
Ha, I get you, but I actually understand (although may disagree) TSLA's valuation.

TSLA has tons more revenue and is profitable. But more importantly, there are people who believe 5-10 years from now that TSLA will have lead a global revolution in how we travel and generate power. Again, may not agree - but the logic makes sense to me.

GME... at best they close their unprofitable stores, streamline, and offer some digital content. But they're a latecomer to all the areas I believe they're looking at.
sureshoe
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Re: Theory on how GameStop is holding its price

Post by sureshoe »

gtrplayer wrote: Wed Nov 17, 2021 10:28 pm
JBTX wrote: Wed Nov 17, 2021 9:14 pm Theory on how holding price ? How does Bitcoin hold its price? The expectation that it is going to continue to go up. They don’t even care about fundamentals and valuations. That’s for fuddy duddies and losers. It doesn’t matter to them. Just that it has gone up and thus is believed to continue to go up. It’s a new digital paradigm and the rules have changed. Or so they believe.
It’s the greater fool theory, but are we really to believe a lot of other stocks aren’t like this? If a stock doesn’t pay dividends or do buybacks, what intrinsic value does it really have? Why do fundamentals matter when all we have is a piece of paper saying one share?
I get you - and there always has been (and will be) a level of speculation in the market. Think about the .Com era. Wild speculation and valuation, but it didn't hold. However, for every couple big losers, there was a big winner. Ebay, Amzn, etc.

I'd be interested in seeing how often a stock sees 20x increase in value over 12 months and sustains some reasonable floor. Not sure a good way to get that - but that's really the question for me.
sureshoe
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Re: Theory on how GameStop is holding its price

Post by sureshoe »

inbox788 wrote: Wed Nov 17, 2021 12:53 pm
dukeblue219 wrote: Tue Nov 16, 2021 9:25 pm
Triple digit golfer wrote: Tue Nov 16, 2021 9:16 pm A guy I work with says it's going to $10 million per share and is dead serious about it.
Some of the louder voices on Reddit are (or were) convinced the Gamestop short squeeze would break the stock market itself and possibly destroy the US dollar when the share price went to infinity. The Fed was going to be forced to print hundreds of trillions of dollars to pay off the GME HODLers and bail out the system.

Theyre all detached from reality if you ask me.
I was concerned there might be some practical problems, like Y2k. Does the order system allow that many digits when the typical stock has 5 or 6, including decimal point? Then I thought of Berkshire A shares and did a simple test and it does let me buy billions, so at least 9 to 10 digits, so $10M share orders is clearly possible unless you're dealing with lots of shares. If you have a more than a thousand of them, you might have to sell them in smaller lots.
In case 1 (breaking the US dollar), this is simply people not understanding the money system (or government). At some point, someone is going to clamp down and say "stop". Which, right or wrong, somewhat happened. There is a structural problem in that the specific situation shouldn't be allowed to happen.

In case 2 (breaking computer systems), this is people not understanding how computer systems work or are support. The same hysteria happened all through Y2K. Systems usually don't just completely fall over, die, and everything stops. Think about the Flash Crash - if that can't "break" the stock market, then GME certainly isn't.
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CRC_Volunteer
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Re: Theory on how GameStop is holding its price

Post by CRC_Volunteer »

My (unsubstantiated) thought process is that those who bought at the start of this madness, will sell their stocks once 1 year has passed and STCG become LTCG. This should take care of the artificial price support.
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JBTX
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Re: Theory on how GameStop is holding its price

Post by JBTX »

gtrplayer wrote: Wed Nov 17, 2021 10:28 pm
JBTX wrote: Wed Nov 17, 2021 9:14 pm Theory on how holding price ? How does Bitcoin hold its price? The expectation that it is going to continue to go up. They don’t even care about fundamentals and valuations. That’s for fuddy duddies and losers. It doesn’t matter to them. Just that it has gone up and thus is believed to continue to go up. It’s a new digital paradigm and the rules have changed. Or so they believe.
It’s the greater fool theory, but are we really to believe a lot of other stocks aren’t like this? If a stock doesn’t pay dividends or do buybacks, what intrinsic value does it really have? Why do fundamentals matter when all we have is a piece of paper saying one share?
If a stock has earnings and assets, it has value whether it pays out dividends or not.
fwellimort
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Re: Theory on how GameStop is holding its price

Post by fwellimort »

How does dog e coin hold its price?
How does <anything that sounds completely insane> hold its price?

Someone is willing to buy at these levels.
There's nothing stopping bubbles to last until the end of the investment.

We have an auction driven market.
If next year enough people want to purchase Gamestop shares at $230, then the price is $230.

The concept of 'market cap', etc. is all to rationalize this world we live in.
Companies can trade far below intrinsic price and investors may see no benefits.
Companies can trade far above intrinsic price and stay there quite forever (even in the long run).

However, the reason concepts like 'market cap' is used is that long term, the overall market has followed the growth of the companies.
(Note: I am talking about the overall market long term. Not individual stocks.)
Does that have to be the case? Absolutely not. Look at the Chinese market.
Don't think too much.

Market does what market does. :D
gtrplayer
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Re: Theory on how GameStop is holding its price

Post by gtrplayer »

JBTX wrote: Thu Nov 18, 2021 12:03 pm
gtrplayer wrote: Wed Nov 17, 2021 10:28 pm
JBTX wrote: Wed Nov 17, 2021 9:14 pm Theory on how holding price ? How does Bitcoin hold its price? The expectation that it is going to continue to go up. They don’t even care about fundamentals and valuations. That’s for fuddy duddies and losers. It doesn’t matter to them. Just that it has gone up and thus is believed to continue to go up. It’s a new digital paradigm and the rules have changed. Or so they believe.
It’s the greater fool theory, but are we really to believe a lot of other stocks aren’t like this? If a stock doesn’t pay dividends or do buybacks, what intrinsic value does it really have? Why do fundamentals matter when all we have is a piece of paper saying one share?
If a stock has earnings and assets, it has value whether it pays out dividends or not.
In theory, it does. But if the company does nothing to return those earnings or assets to the investor, they wouldn’t have an impact on the price. I can’t use my share to go to GameStop and ask for my portion of their earnings. Investors must believe the company will eventually return something to the shareholders or it’s no different than trading baseball cards.

Maybe some investors believe that GameStop will one day be able to return value to the shareholders. I suspect most are holding just because the price keeps going up. The original investment thesis did rely on the fundamentals but that went out the door when the prospect of a short squeeze appeared. Since then I don’t think fundamentals have played any part.
Independent George
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Re: Theory on how GameStop is holding its price

Post by Independent George »

gtrplayer wrote: Thu Nov 18, 2021 12:17 pm
JBTX wrote: Thu Nov 18, 2021 12:03 pm If a stock has earnings and assets, it has value whether it pays out dividends or not.
In theory, it does. But if the company does nothing to return those earnings or assets to the investor, they wouldn’t have an impact on the price. I can’t use my share to go to GameStop and ask for my portion of their earnings. Investors must believe the company will eventually return something to the shareholders or it’s no different than trading baseball cards.

Maybe some investors believe that GameStop will one day be able to return value to the shareholders. I suspect most are holding just because the price keeps going up. The original investment thesis did rely on the fundamentals but that went out the door when the prospect of a short squeeze appeared. Since then I don’t think fundamentals have played any part.
The original value case for GME was that it was trading for less than its NAV, which was seen as unreasonable; if you liquidated all of its assets and paid off its creditors, you'd more to distribute to shareholders than the price of the stock. The case for it being below NAV is the belief that its business model was unsustainable, and even if profitable today, that won't last, so continued operation is just throwing good money after bad.

The price went to the moon because the short squeeze went viral, and small retail investors piled money into it long after the squeeze was over. The effect was large enough that nobody is willing to short the stock anymore. If there's no downward pressure on stock prices, then there's nowhere for the stock to go regardless of the fundamentals.

My personal opinion is that Gamestop is going to go the way of Blockbuster. I don't see them being the 'Netflix of gaming' because Sony, Microsoft, and Valve are already the Netflix of gaming, while Amazon, Google, and Nvidia are trying to join them. But I don't own any individual stocks, so I really don't care. As long as people are buying up the stock, the price will remain high right up until the company folds.
gtrplayer
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Re: Theory on how GameStop is holding its price

Post by gtrplayer »

Independent George wrote: Thu Nov 18, 2021 12:34 pm
gtrplayer wrote: Thu Nov 18, 2021 12:17 pm
JBTX wrote: Thu Nov 18, 2021 12:03 pm If a stock has earnings and assets, it has value whether it pays out dividends or not.
In theory, it does. But if the company does nothing to return those earnings or assets to the investor, they wouldn’t have an impact on the price. I can’t use my share to go to GameStop and ask for my portion of their earnings. Investors must believe the company will eventually return something to the shareholders or it’s no different than trading baseball cards.

Maybe some investors believe that GameStop will one day be able to return value to the shareholders. I suspect most are holding just because the price keeps going up. The original investment thesis did rely on the fundamentals but that went out the door when the prospect of a short squeeze appeared. Since then I don’t think fundamentals have played any part.
The original value case for GME was that it was trading for less than its NAV, which was seen as unreasonable; if you liquidated all of its assets and paid off its creditors, you'd more to distribute to shareholders than the price of the stock. The case for it being below NAV is the belief that its business model was unsustainable, and even if profitable today, that won't last, so continued operation is just throwing good money after bad.

The price went to the moon because the short squeeze went viral, and small retail investors piled money into it long after the squeeze was over. The effect was large enough that nobody is willing to short the stock anymore. If there's no downward pressure on stock prices, then there's nowhere for the stock to go regardless of the fundamentals.

My personal opinion is that Gamestop is going to go the way of Blockbuster. I don't see them being the 'Netflix of gaming' because Sony, Microsoft, and Valve are already the Netflix of gaming, while Amazon, Google, and Nvidia are trying to join them. But I don't own any individual stocks, so I really don't care. As long as people are buying up the stock, the price will remain high right up until the company folds.
True, the one fundamental that will give the stock intrinsic value, or lack thereof, would be the company folding.
Independent George
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Re: Theory on how GameStop is holding its price

Post by Independent George »

In theory, as long as a company is profitable and can sustain itself with revenue, it's creating value and should keep going; the stock price really doesn't matter to anyone except the people who are trading it. GME could shrink until it operated exactly one profitable store, and people could still trade that for 100x its NAV.
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Re: Theory on how GameStop is holding its price

Post by Greentree »

Independent George wrote: Thu Nov 18, 2021 12:52 pm In theory, as long as a company is profitable and can sustain itself with revenue, it's creating value and should keep going; the stock price really doesn't matter to anyone except the people who are trading it. GME could shrink until it operated exactly one profitable store, and people could still trade that for 100x its NAV.
Which theory? Certainly not "The Intelligent Investor."
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vitaflo
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Re: Theory on how GameStop is holding its price

Post by vitaflo »

sureshoe wrote: Thu Nov 18, 2021 7:37 am I get you - and there always has been (and will be) a level of speculation in the market. Think about the .Com era. Wild speculation and valuation, but it didn't hold. However, for every couple big losers, there was a big winner. Ebay, Amzn, etc.

I'd be interested in seeing how often a stock sees 20x increase in value over 12 months and sustains some reasonable floor. Not sure a good way to get that - but that's really the question for me.
Amazon lost 95% of it's value during the .com bust before it became a "big winner". Ebay also lost about 80%. Long term success doesn't mean you can't have extreme short term losses.
texasfight
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Re: Theory on how GameStop is holding its price

Post by texasfight »

Very simple and this applies to lots of market segments since the post election meltup.

Take a look at IWC microcap.

The bubble popped back in March, but JPM is put killing the people who said "hyperbolas either continue or collapse, they don't flatten out."

Well that is exactly what happened. You overpay for puts, dealers prop the underlying and slow bleed you.

Options market dwarfs everything.
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Re: Theory on how GameStop is holding its price

Post by sureshoe »

vitaflo wrote: Thu Nov 18, 2021 1:36 pm
sureshoe wrote: Thu Nov 18, 2021 7:37 am I get you - and there always has been (and will be) a level of speculation in the market. Think about the .Com era. Wild speculation and valuation, but it didn't hold. However, for every couple big losers, there was a big winner. Ebay, Amzn, etc.

I'd be interested in seeing how often a stock sees 20x increase in value over 12 months and sustains some reasonable floor. Not sure a good way to get that - but that's really the question for me.
Amazon lost 95% of it's value during the .com bust before it became a "big winner". Ebay also lost about 80%. Long term success doesn't mean you can't have extreme short term losses.
But really what you're talking about is the general industry multiple that was applied to all .com companies. Prior to the bust, they all enjoyed a ridiculous multiplier, after it people started expecting a company to make money.

With GME, I can't figure out the multiple unless we're saying "Meme stocks have a 50x multiple". :) Maybe
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Re: Theory on how GameStop is holding its price

Post by make_a_better_world »

I read an interesting comment from one of the Redditors a while back- it was something along the lines of we can decide which companies we buy stock in based on if we like the company and not just numbers. They decided they like Gamestop, AMC theaters, and Tesla.

I expect we will see similar moral investing principles on a bigger scale from institutions and government. Companies that favor climate change policy or progressive policies will be favored for example. It's in the new infrastructure bill with ESG (environmental, social and governance) objectives.
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Re: Theory on how GameStop is holding its price

Post by lazynovice »

There are a few people on the GME/Superstonk/GME Jungle subs but most have not just a bad grasp on financial markets but are out of touch with reality.

The SEC report said the shorts covered in January but some read the report to say they didn’t and some just want Gensler to go to jail. The judge threw out the suit against RobinHood and Citadel this morning so now the judge is a criminal. Brokerages say they don’t lend out the shares in cash accounts and the apes claim the DTCC lends them out. The public documents say the shorts are 12% of the float and they say that the data is fake or that shorts are hidden in the options. They think GME will issue an NFT dividend that will flush out the hidden shorts. The direct registration mess has jammed up brokerage call centers for two months. They demanded access to IEX from Fidelity to trade in a “lit” pool only to find that there isn’t enough volume for trades to execute. Every time the GameStop Twitter or Ryan Cohen Twitter accounts tweet, they spend days looking for clues in the messages even the time of the Tweet. This week they are on to buying options. Anyone who points out flaws in the theories or that the theories aren’t panning out, is called a shill, accused of working for the hedge funds and downvoted. They believe they are superior to the AMC investors who are usually about two to three weeks behind them on crazy theories.

An alternate sub GME meltdown has been formed to mock them.

It is about as close to a doomsday cult as I can describe. That is what is propping up the price and who knows how long that can last?
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vitaflo
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Re: Theory on how GameStop is holding its price

Post by vitaflo »

sureshoe wrote: Thu Nov 18, 2021 2:04 pm
vitaflo wrote: Thu Nov 18, 2021 1:36 pm
sureshoe wrote: Thu Nov 18, 2021 7:37 am I get you - and there always has been (and will be) a level of speculation in the market. Think about the .Com era. Wild speculation and valuation, but it didn't hold. However, for every couple big losers, there was a big winner. Ebay, Amzn, etc.

I'd be interested in seeing how often a stock sees 20x increase in value over 12 months and sustains some reasonable floor. Not sure a good way to get that - but that's really the question for me.
Amazon lost 95% of it's value during the .com bust before it became a "big winner". Ebay also lost about 80%. Long term success doesn't mean you can't have extreme short term losses.
But really what you're talking about is the general industry multiple that was applied to all .com companies. Prior to the bust, they all enjoyed a ridiculous multiplier, after it people started expecting a company to make money.

With GME, I can't figure out the multiple unless we're saying "Meme stocks have a 50x multiple". :) Maybe
I think what you're seeing in the EV industry (Tesla, Rivian, Lucid) is looking like a "ridiculous multiplier" that applies to them all. Feels very .com like.
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Re: Theory on how GameStop is holding its price

Post by acompton5 »

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health teacher
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Re: Theory on how GameStop is holding its price

Post by health teacher »

I think GameStop is trying to become the nft marketplace for gaming. I anticipate some sort of nft dividend will given to shareholders at some point in the next year. It might involve a crypto token.

From my understanding, staking equal amounts of the crypto token and another popular L1 crypto will allow hodlers to become liquidity providers and earn fees similar to current market makers. I don't think this is specific to GameStop, but there are strong rumors GameStop is going to be this particular crypto companies first premium partner. An announcement is expected sometime this quarter from the company. It's a far reaching, fascinating situation, short squeeze or not.

The narrative being pushed by certain hedge fund and MSM is that the redditors are "conspiracy theorist", but there are obviously major shenanigans going on with the stock and I believe GameStop has alot more potential than 99% of people can even comprehend. This is certainly not financial advice.
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Re: Theory on how GameStop is holding its price

Post by JBTX »

gtrplayer wrote: Thu Nov 18, 2021 12:17 pm
JBTX wrote: Thu Nov 18, 2021 12:03 pm
gtrplayer wrote: Wed Nov 17, 2021 10:28 pm
JBTX wrote: Wed Nov 17, 2021 9:14 pm Theory on how holding price ? How does Bitcoin hold its price? The expectation that it is going to continue to go up. They don’t even care about fundamentals and valuations. That’s for fuddy duddies and losers. It doesn’t matter to them. Just that it has gone up and thus is believed to continue to go up. It’s a new digital paradigm and the rules have changed. Or so they believe.
It’s the greater fool theory, but are we really to believe a lot of other stocks aren’t like this? If a stock doesn’t pay dividends or do buybacks, what intrinsic value does it really have? Why do fundamentals matter when all we have is a piece of paper saying one share?
If a stock has earnings and assets, it has value whether it pays out dividends or not.
In theory, it does. But if the company does nothing to return those earnings or assets to the investor, they wouldn’t have an impact on the price. I can’t use my share to go to GameStop and ask for my portion of their earnings. Investors must believe the company will eventually return something to the shareholders or it’s no different than trading baseball cards.

Maybe some investors believe that GameStop will one day be able to return value to the shareholders. I suspect most are holding just because the price keeps going up. The original investment thesis did rely on the fundamentals but that went out the door when the prospect of a short squeeze appeared. Since then I don’t think fundamentals have played any part.
If a company is profitable, and does not pay out dividends, it will reinvest and grow. As it grows it's value increases and you can sell it for more. If you are an owner of a profitable business you have value. A company does not have to annually divest a small portion of itself to be worth something. Comparing such a company to something like Game Stop is apples and oranges.
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Re: Theory on how GameStop is holding its price

Post by firebirdparts »

JBTX wrote: Thu Nov 18, 2021 10:05 pm
Comparing such a company to something like Game Stop is apples and oranges.
Bingo

Some people have no sense of propriety.

If you can’t talk openly about greater fools in this thread, something is horribly wrong.
This time is the same
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Re: Theory on how GameStop is holding its price

Post by firebirdparts »

I will say, if you want to avoid interesting threads being thrown off the rails onto a series of boring platitudes, never type the word “dividend”. If you’re a fundamentalist, you have to find other ways to ask that particular question.
This time is the same
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Re: Theory on how GameStop is holding its price

Post by sureshoe »

health teacher wrote: Thu Nov 18, 2021 9:47 pm I think GameStop is trying to become the nft marketplace for gaming. I anticipate some sort of nft dividend will given to shareholders at some point in the next year. It might involve a crypto token.

From my understanding, staking equal amounts of the crypto token and another popular L1 crypto will allow hodlers to become liquidity providers and earn fees similar to current market makers. I don't think this is specific to GameStop, but there are strong rumors GameStop is going to be this particular crypto companies first premium partner. An announcement is expected sometime this quarter from the company. It's a far reaching, fascinating situation, short squeeze or not.

The narrative being pushed by certain hedge fund and MSM is that the redditors are "conspiracy theorist", but there are obviously major shenanigans going on with the stock and I believe GameStop has alot more potential than 99% of people can even comprehend. This is certainly not financial advice.
I only heard of NFTs a couple days ago, and find it interesting. My knowledge is limited, but I wonder how that works for gaming - I own the original software? Or, they enable selling copies of games in return for the original author getting a cut on the NFT chain (I think this is part of the tech).

This would at least make sense for an outlandish valuation. Whether you believe it or not, there are people thinking Tesla is going to be the leader on revolutionizing the way people consume energy and travel. I might not agree with the valuation of such a thought, but I understand. Same here - if someone thinks GME is going to explode as some type of crypto marketplace, I can buy that (even if I think it's a moonshot)

Short of the crazies, I probably believe some small amount of their "conspiracy theories". Whenever there is money (particularly lots of it buried in arcane rules, ledgers, etc), somebody is going to find a way to scheme and cheat.
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Re: Theory on how GameStop is holding its price

Post by randomguy »

health teacher wrote: Thu Nov 18, 2021 9:47 pm I think GameStop is trying to become the nft marketplace for gaming. I anticipate some sort of nft dividend will given to shareholders at some point in the next year. It might involve a crypto token.

From my understanding, staking equal amounts of the crypto token and another popular L1 crypto will allow hodlers to become liquidity providers and earn fees similar to current market makers. I don't think this is specific to GameStop, but there are strong rumors GameStop is going to be this particular crypto companies first premium partner. An announcement is expected sometime this quarter from the company. It's a far reaching, fascinating situation, short squeeze or not.

The narrative being pushed by certain hedge fund and MSM is that the redditors are "conspiracy theorist", but there are obviously major shenanigans going on with the stock and I believe GameStop has alot more potential than 99% of people can even comprehend. This is certainly not financial advice.
I think 99% of the population can't comprehend how anyone is buying enough NFTs to make any sense.... And if gaming NFTs for some reason become super hot, why gamestop will be big winner versus Valve or Epic.... Personally it feels like a fad like blue mountain greeting cards but I have been wrong before....
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Re: Theory on how GameStop is holding its price

Post by arcticpineapplecorp. »

this might have something to do with it:

spoiler alert:

Psycho Dad Shred's Son's Video Games

there's some language in this video so be forewarned. (it also could likely be staged, but still...

that video has 43 million views so i'd say people can relate.

i know a 42 year old man who could be the star in this video (as the kid, not the dad).
It's hard to accept the truth when the lies were exactly what you wanted to hear. Investing is simple, but not easy. Buy, hold & rebalance low cost index funds & manage taxable events. Asking Portfolio Questions | Wiki
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Re: Theory on how GameStop is holding its price

Post by vanbogle59 »

sureshoe wrote: Fri Nov 19, 2021 8:01 am Short of the crazies, I probably believe some small amount of their "conspiracy theories". Whenever there is money (particularly lots of it buried in arcane rules, ledgers, etc), somebody is going to find a way to scheme and cheat.
In this dimension, the difference between a conspiracy theorist and Adam Smith is:
Smith thinks EVERYONE would be trying to scheme and cheat
The conspiracy theorist thinks it's just the tribe he doesn't belong to, and they all coordinate their efforts from the basement of a pizza joint or a cave in Switzerland.
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Re: Theory on how GameStop is holding its price

Post by Independent George »

vanbogle59 wrote: Fri Nov 19, 2021 8:39 am In this dimension, the difference between a conspiracy theorist and Adam Smith is:
Smith thinks EVERYONE would be trying to scheme and cheat
The conspiracy theorist thinks it's just the tribe he doesn't belong to, and they all coordinate their efforts from the basement of a pizza joint or a cave in Switzerland.
The SEC report showed that (a) the hedge funds that were short had covered and closed their positions, and (b) there were also hedge funds with long positions who made a ton of money (c) nobody was shorting once those initial positions closed at a loss, thereby eliminating all downwards pressure on the stock price. The crazies are the ones who believed that because Melvin went short, every other hedge fund in existence must also have gone short. This never made any sense to me.
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Re: Theory on how GameStop is holding its price

Post by sureshoe »

vanbogle59 wrote: Fri Nov 19, 2021 8:39 am
sureshoe wrote: Fri Nov 19, 2021 8:01 am Short of the crazies, I probably believe some small amount of their "conspiracy theories". Whenever there is money (particularly lots of it buried in arcane rules, ledgers, etc), somebody is going to find a way to scheme and cheat.
In this dimension, the difference between a conspiracy theorist and Adam Smith is:
Smith thinks EVERYONE would be trying to scheme and cheat
The conspiracy theorist thinks it's just the tribe he doesn't belong to, and they all coordinate their efforts from the basement of a pizza joint or a cave in Switzerland.
Thank you for the Adam Smith reference, I haven't heard, but I like.

And now, I'm probably just quibbling on what a conspiracy is or is not. Do I think a bunch of people in a Swiss Pizza Joint are secretly meeting and controlling the stock market? No.

Do I believe some powerful hedge funds called brokerages (Robinhood) to pressure them to stop trading and/or manipulate trades to take pressure off their losses? Yeah, I believe that more than likely happened even though I don't have evidence. But that happens all the time I guess > the public hears a story and forms a narrative, but whether the facts support it or not doesn't matter, because nobody follows up on the facts.

But, this probably falls into your statement of "thinking everyone cheats is not a conspiracy theory". It just shows distrust of humanity :)
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Re: Theory on how GameStop is holding its price

Post by vanbogle59 »

sureshoe wrote: Fri Nov 19, 2021 2:23 pm
vanbogle59 wrote: Fri Nov 19, 2021 8:39 am
sureshoe wrote: Fri Nov 19, 2021 8:01 am Short of the crazies, I probably believe some small amount of their "conspiracy theories". Whenever there is money (particularly lots of it buried in arcane rules, ledgers, etc), somebody is going to find a way to scheme and cheat.
In this dimension, the difference between a conspiracy theorist and Adam Smith is:
Smith thinks EVERYONE would be trying to scheme and cheat
The conspiracy theorist thinks it's just the tribe he doesn't belong to, and they all coordinate their efforts from the basement of a pizza joint or a cave in Switzerland.
Thank you for the Adam Smith reference, I haven't heard, but I like.

And now, I'm probably just quibbling on what a conspiracy is or is not. Do I think a bunch of people in a Swiss Pizza Joint are secretly meeting and controlling the stock market? No.

Do I believe some powerful hedge funds called brokerages (Robinhood) to pressure them to stop trading and/or manipulate trades to take pressure off their losses? Yeah, I believe that more than likely happened even though I don't have evidence. But that happens all the time I guess > the public hears a story and forms a narrative, but whether the facts support it or not doesn't matter, because nobody follows up on the facts.

But, this probably falls into your statement of "thinking everyone cheats is not a conspiracy theory". It just shows distrust of humanity :)
I took some liberties. This is from Mr. Smith: "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices"
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Re: Theory on how GameStop is holding its price

Post by lazynovice »

sureshoe wrote: Fri Nov 19, 2021 2:23 pm
vanbogle59 wrote: Fri Nov 19, 2021 8:39 am
sureshoe wrote: Fri Nov 19, 2021 8:01 am Short of the crazies, I probably believe some small amount of their "conspiracy theories". Whenever there is money (particularly lots of it buried in arcane rules, ledgers, etc), somebody is going to find a way to scheme and cheat.
In this dimension, the difference between a conspiracy theorist and Adam Smith is:
Smith thinks EVERYONE would be trying to scheme and cheat
The conspiracy theorist thinks it's just the tribe he doesn't belong to, and they all coordinate their efforts from the basement of a pizza joint or a cave in Switzerland.
Thank you for the Adam Smith reference, I haven't heard, but I like.

And now, I'm probably just quibbling on what a conspiracy is or is not. Do I think a bunch of people in a Swiss Pizza Joint are secretly meeting and controlling the stock market? No.

Do I believe some powerful hedge funds called brokerages (Robinhood) to pressure them to stop trading and/or manipulate trades to take pressure off their losses? Yeah, I believe that more than likely happened even though I don't have evidence. But that happens all the time I guess > the public hears a story and forms a narrative, but whether the facts support it or not doesn't matter, because nobody follows up on the facts.

But, this probably falls into your statement of "thinking everyone cheats is not a conspiracy theory". It just shows distrust of humanity :)
A lawsuit alleging what you allege was thrown out yesterday for lack of evidence. The SEC found no evidence of collusion.
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Re: Theory on how GameStop is holding its price

Post by Independent George »

sureshoe wrote: Fri Nov 19, 2021 2:23 pm Thank you for the Adam Smith reference, I haven't heard, but I like.

And now, I'm probably just quibbling on what a conspiracy is or is not. Do I think a bunch of people in a Swiss Pizza Joint are secretly meeting and controlling the stock market? No.

Do I believe some powerful hedge funds called brokerages (Robinhood) to pressure them to stop trading and/or manipulate trades to take pressure off their losses? Yeah, I believe that more than likely happened even though I don't have evidence. But that happens all the time I guess > the public hears a story and forms a narrative, but whether the facts support it or not doesn't matter, because nobody follows up on the facts.

But, this probably falls into your statement of "thinking everyone cheats is not a conspiracy theory". It just shows distrust of humanity :)
There's no need to 'believe' anything; here's the SEC report that cites the actual evidence on what happened. In short:

1. No, the hedge funds did not pressure Robin Hood to halt trading.
2. The hedge funds that shorted GME capitulated early and ate their losses.
3. Part of the reason the price went as high as it did was because nobody was willing to short the stock once it went viral.
4. Other hedge funds joined the fray, went long on GME, and made bank.
5. Trading was halted because clearinghouses increased the deposit requirements due to the extraordinarily high trading volumes.
6. It is completely normal to increase deposit requirements when volume increases; in fact, the clearinghouses let it go on longer than usual.

Seriously, read the whole thing. There's a lot less jargon than usual.
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