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My Not So Short Story on GME

Eastwood

By Eastwood
in Business and Markets

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Eastwood
Eastwood

I'm not a financial advisor. This is not financial advise. I don't work in finance. I do not have a degree in finance. Actually, I have a BA and I'm bad at math past Cal I. I won't apologize for the l

Captainant
Captainant

Turns out, dumping trillions of dollars of liquidity into a stagnant market leads to stupid shit happening. Who knew!

52-80
52-80

You’re hoping that a guy barely meeting working class threshold throwing almost 2 months of pre-tax income into a single speculative play ... should make a reasonable financial decision.    i t

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Bone3421

Bone3421 716

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It's going to 1k...then????

The hedges even said last time if it didnt get pulled it was going into the thousands

Is the 100k reddit throws around possible...I wouldn't count on it

Is 10k in play...I think possibly

But my 1st price point is 1k

The squeeze hasn't squoze...

Lol are not just dropped 50$ while typing

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Bone3421

Bone3421 716

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This is why I said $1k/share is a pipe dream. The cult-like holders of this stock are going to miss out on massive profits because of the diamond hands mantra. 
 
Take some money off the table dudes!
Nah 1k is in play...that was some fuckery for sure...volume doesnt justify the drop but it's already back up like eastwood said a decent chunk
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Eastwood

Eastwood 4394

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This is why I said $1k/share is a pipe dream. The cult-like holders of this stock are going to miss out on massive profits because of the diamond hands mantra. 
 
Take some money off the table dudes!
I'll be honest, on the long run ups like last week I start to get the FOMO itch and get a little bummed that I'm out, then something like this happens and I get reminded just how much stress I'm saving myself from.

I'm not a fan of Jim Cramer for all the obvious reasons, but he was right when he said that people need to take profit here. You did it. You were a part of something they will write about for centuries in finance classes. You also made some money along the way. 99% of people will not nail the top. Make money.
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RGBIII

RGBIII 22838

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32 minutes ago, Hank_Hill said:

This thing just is not going to be allowed to blow to 1k. Whether by big money or regulation. Plan accordingly and take profits on the way up. 

Fuckery will abound but some things will be inevitable

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52-80

52-80 19142

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This isn't a retail vs hedge fund battle, its a proxy war being fought using options.

We don't have access to the full order book to reconstruct it piece by piece, but 3rd party data provider shows some detail, such as at ~1hr before that big price drop, an order came in for 4000 put options at 250 strike.  that's ~$4M order.  the market maker(s) who facilitates these transactions would have held a large inventory of shares that they bought to hedge all the volume/oi on the left side of the graph.  they would have sold off some of these shares to hedge the new 250-strike put order.

 

that would've sent the price down.  couldve happened around the time the 200P were also transacted (again i dont have minute by minute record)

 

everything on this page expires friday, so by tomorrow a lot of the pressure exerted on market maker(s) will be gone.  but $300 is still a battleground.  if the price can get up and over that level, it would sprint the price upwards.

 

(this assumes a naive gamma exposure, without having done the actual math)

 

1002657176_ScreenShot2021-03-10at10_24_35PM.thumb.png.73df41a92718dd9267cf35270c61bab9.png

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Bone3421

Bone3421 716

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It is absolutely bonkers that the price dropped 150$ and it still finished up 7%....this shit is going to go crazy(relative to gme, this shit is already crazy)

I'm scared, nervous, excited, optimistically pessimistic...or am I pessimistically optimistic

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Bone3421

Bone3421 716

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Still some time left...but if it finishes in the green again isnt that like 10 days are something in a row

No idea what tomorrow will bring...might fight over EOW options or they all might just wait for next week when monthly,weekly,quarterly shit all ends on the 19th....

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Bone3421

Bone3421 716

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This week will be interesting...the new tactic of sell all at once to drop price 15-20% seems to work quite well

If Cohen is going to take over as CEO at some point Gamestop would need to recall their shares for a vote and all the shorts and supposedly naked options would need to start covering.

Hopefully can get the gamma squeeze back on track beforehand

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52-80

52-80 19142

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theres a chance that GME wasnt able to issue large amount of new shares (i.e. fund raise) due to being so close to earnings report, and them holding "material information" about the company and issuing a dilution is sort of a no-no.

it's possible that after the ER, they could issue a bunch of new shares, which may kill the short-squeeze narrative.

otoh, its very likely they would make some bombshell announcements such as cohen as new ceo, unveil big partnerships and grand plan for future, and that would stoke the enthusiasm for the stock, and retail would just gobble up the new shares -- dilution and squeeze narrative be damned.

 

wild days out there

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Bone3421

Bone3421 716

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I dont know much about it or if its good/bad....but the new rage is that gme has a super high negative beta and negative betas are supposedly pretty rare....

Layman terms is gme acts inversely to the market as a whole...market goes down gme goes up...

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Eastwood

Eastwood 4394

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I dont know much about it or if its good/bad....but the new rage is that gme has a super high negative beta and negative betas are supposedly pretty rare....

Layman terms is gme acts inversely to the market as a whole...market goes down gme goes up...
Might be because when GME goes up, those on the wrong side of it have to liquidate other positions. We saw that when the first rocket launched and the big boys threw the private abort switch. I am absolutely convinced we saw the market shudder under the weight of the possibility of $1k per share and a broad sell-off occurred that afternoon. That evening, the various brokers announced the restrictions around GME.
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Bone3421

Bone3421 716

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Agreed...I'm just wondering how it plays into now...are we going to get this thing to blow or are we screwed until market notices the planned pivot and becomes the defacto Amazon of video game industry

Been hoping it blows so I can sell then put nice chunk back in for the future when it settles down back around 50$

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Burt Macklin

Burt Macklin 19019

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52 minutes ago, Eastwood said:

Might be because when GME goes up, those on the wrong side of it have to liquidate other positions. We saw that when the first rocket launched and the big boys threw the private abort switch. I am absolutely convinced we saw the market shudder under the weight of the possibility of $1k per share and a broad sell-off occurred that afternoon. That evening, the various brokers announced the restrictions around GME.

Yeah, this is what I noticed too. 

2 hours ago, Bone3421 said:

I dont know much about it or if its good/bad....but the new rage is that gme has a super high negative beta and negative betas are supposedly pretty rare....

Layman terms is gme acts inversely to the market as a whole...market goes down gme goes up...

Like Eastwood said, GME squeezing forced liquidation and general fear so it affects the entire market. It’s done it twice now. Whenever GME starts to squeeze, VIX rises right with it, but since GME has been squeezing for weeks now, the market doesn’t seem to hinge on it nearly as much lately. I’m sure if GME start squeezing over 500 or something, the market will start to get scared again. However, I don’t think the overall market going up will have any impact on GME. 

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Dr.J

Dr.J 31

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Forget wallstreebets, if you want to drink from the firehose go to r/gme. Those guys will have you planning how to spend your billions by the time you’re done with your morning coffee


Sent from my iPhone using Tapatalk

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Bone3421

Bone3421 716

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I'm holding some shares still but I'm glad I sold for some profit back at like 220$ after fall from 300$....but this thing needs to start heading back up

I feel like the fact it hasn't tumbled back down to 40$ is telling...but who knows what the fuck will happen

Sent from my moto g play (2021) using Tapatalk

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The Royal We

The Royal We 3067

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This thing has become Qanon for stonkers.  Execs are going to recall all the shares to vote and force the shorts to cover!  GME has super high Beta and that's why it opposite the market!  GME mentioned shorts in their latest filing, to the moon!  Do your research bro!!!!1!!!1

I don't think anybody really knows shit here, other than the powers that be do fucky things when the stock goes on a run and that this whole "battle" has been large HF vs large HF duking it out in the options market since late January.  Those large funds will make most of the money and the diamond hands small guy who is waiting for 1k to take profits on his 10-15 shares is going to get bubkis. 

I'm glad you took some profits @Bone3421  If this thing goes back below $50 I think I'll take a bite and go long on the turnaround being successful.

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Eastwood

Eastwood 4394

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I don't think anybody really knows shit here, other than the powers that be do fucky things when the stock goes on a run and that this whole "battle" has been large HF vs large HF duking it out in the options market since late January.  Those large funds will make most of the money and the diamond hands small guy who is waiting for 1k to take profits on his 10-15 shares is going to get bubkis. 
I'm glad you took some profits [mention=1923]Bone3421[/mention]  If this thing goes back below $50 I think I'll take a bite and go long on the turnaround being successful.


The funds who wanted to fight it out got it all done in January. We saw the winners and losers there. Now, what we have going on is hedge funds maximizing what is known as "copperative surplus." Cooperative surplus is when two parties who are in a position to compete actually cooperate to maximize the total amount of profit available. Say there is $100 to split. If they compete against each other, they get $35 each and the remaining $30 is lost to other parties. If they cooperate, they get $45 each and $10 is lost to other parties. The total cooperative surplus realized was $20 split between the two.

If they continue to fight like the others in January, that allows retail to pick off profits at the fringes of the trade. That's what I did and that's what a lot of you did. This group of hedges now are probably cooperating to rein in the lost surplus. This will continue until GameStop releases more shares. Which they will. I'm buying the dip when the offer comes out and holding long.

I bought 1 share just before close on Monday for old time's sake. Keeping the rest of my powder dry for the real dip.
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SquishMitten

SquishMitten 10403

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What is the basis for people talking about execs recalling shares and forcing shorts to cover? What does that actually entail, and how often do companies actually do that? The way people talk about it, they make it sound like a no-brainer. But there's got to be some sort of risk involved, right? Or is it just a lot of hoops to jump through without a lot of benefit in the end?

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Eastwood

Eastwood 4394

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What is the basis for people talking about execs recalling shares and forcing shorts to cover? What does that actually entail, and how often do companies actually do that? The way people talk about it, they make it sound like a no-brainer. But there's got to be some sort of risk involved, right? Or is it just a lot of hoops to jump through without a lot of benefit in the end?
It's my understanding that they can only recall shares for legitimate reasons, such as a shareholder vote on firing the current CEO before the end of his contract and appointing a new one. That's what the hype was around Ryan Cohen. This current line of speculation was originally fired up around Sherman being tossed and Cohen being installed.

The path of least resistance to burn shorts, albeit temporarily, would have been issuing a one time dividend. They had the cash on hand to do it. Anyone short GME is responsible for paying the dividend to the holder of the shorted share. This would have possibly caused the institutional shorts with shallower pockets to close out, which could have caused a chain reaction of closing until you hit the funds with deep enough pockets to ride it out.
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Bone3421

Bone3421 716

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This thing has become Qanon for stonkers.  Execs are going to recall all the shares to vote and force the shorts to cover!  GME has super high Beta and that's why it opposite the market!  GME mentioned shorts in their latest filing, to the moon!  Do your research bro!!!!1!!!1
I don't think anybody really knows shit here, other than the powers that be do fucky things when the stock goes on a run and that this whole "battle" has been large HF vs large HF duking it out in the options market since late January.  Those large funds will make most of the money and the diamond hands small guy who is waiting for 1k to take profits on his 10-15 shares is going to get bubkis. 
I'm glad you took some profits [mention=1923]Bone3421[/mention]  If this thing goes back below $50 I think I'll take a bite and go long on the turnaround being successful.
For sure...it's absolutely bonkers and I agree about the info...no idea what's real or not

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Angry Gorilla

Angry Gorilla 1766

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On 3/17/2021 at 3:11 PM, Bone3421 said:

planned pivot and becomes the defacto Amazon of video game industry

I've seen this mentioned other places as well, and apologies if explained earlier in the thread, but how does GME become the Amazon of the video game industry?  If it wasn't for Reddit/short squeeze, how would GME be a fundamentally sound long investment?

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Bone3421

Bone3421 716

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I've seen this mentioned other places as well, and apologies if explained earlier in the thread, but how does GME become the Amazon of the video game industry?  If it wasn't for Reddit/short squeeze, how would GME be a fundamentally sound long investment?
Ryan Cohen came onboard in December,he was the ceo of chewy.com...made billions on pets...

Game industry>>>>>>>>>>>>>>> pet industry

With him gamestop is expected to pivot to more online sales and delivery (already delivering same day). They will discard the stores that are not needed and keep strategic ones as delivery hubs, which will lower overhead drastically. Plus they are now moving into pc parts and there is talk about adding computer repair/build stations

Could also potentially start a streaming service or just buyout steam....they already have the infrastructure and deals in place with all the big players in gaming.

That's the jist...
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Angry Gorilla

Angry Gorilla 1766

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Thanks for the explanation.

 

How do they battle the trend (I'm assuming, too lazy to look up numbers) to digital downloads vs physical games?  The consoles have captive customers, and in 10-15 years if the vast majority of games are digital that just leaves PC gamers as customers.  I guess if they can acquire Steam or create a better service and take over Steam's customers that could work,  but Valve (the owner of Steam) is worth ~10B (according to Forbes) and GME's market cap currently is $10B at the inflated short squeeze stock price. 

Getting into the PC hardware business is interesting, but seems like a lot of competition.  Also, the secondary market for games will likely dry up with the shift to all digital games.

Plus, aren't most if not all of the physical games already on Amazon, which also offers same day delivery in many areas?

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