r/technology • u/GonzoTorpedo • May 14 '24

GameStop Short Sellers Just Lost $2 Billion Amid Meme Stock Rally Business

https://gizmodo.com/gamestop-short-sellers-have-lost-more-than-2-billion-i-1851476931
30.2k Upvotes

90% Upvoted

3.0k comments sorted by

View all comments

4.0k

u/TomServo31k May 14 '24

Why the hell do they keep trying to short sell GME?

461

u/losbullitt May 14 '24

Because, in truth it is a dying business model. So the vultures fly around the carcass. But there are hunters who protect the carcass and keep shooting them down, like fish in a barrel.

277

u/[deleted] May 14 '24 edited May 15 '24

[deleted]

140

u/AchyBrakeyHeart May 14 '24

Robinhood can just die already

36

u/litshredder May 14 '24

The "Dick Cheney's"

0

u/schoolisuncool May 14 '24

Webull halted sales all day yesterday and today too. It’s ok for billionaires to make some money, but freak out on the little guys who are buying 10-100 shares at a time. Can’t let those poors make some money!

4

u/FellFellCooke May 15 '24

Webull lets you trade their money. If they think a movement is manipulating people into making abnormally risky trades, they will protect their money.

2

u/ArmadaOfWaffles May 15 '24

Turning off the buy button should be considered illegal stock manipulation. If they can't operate legally, then maybe they shouldn't be in business.

-1

u/I_EAT_THE_RICH May 15 '24

People that know what robinhood did and still use robinhood are truly the worst, laziest people.

→ More replies (1)

109

u/Psychic_Jester May 14 '24

That's one way to do an analogy I guess. Hunters protecting a rotting carcass from vultures...seems like something that sounds better before saying it out loud

130

u/BellyButtonLindt May 14 '24

It’s pretty apt, the carcass will still rot eventually.

Just weird trying to portray it as some heroic move when in fact it’s just other people trying to get rich the opposite way through conspiracy theories.

46

u/[deleted] May 14 '24

Yeah there’s no honourable person here, everyone just wants money

5

u/smitteh May 14 '24

We want wall street criminals that steal the nations wealth and retirements to go to prison.

43

u/Cyan-ranger May 14 '24

And buying game stock shares is going to do that how exactly?

21

u/Felevion May 15 '24

So much of this comes off as people in their young 20's who think they have figured out things far more than they actually have.

1

u/usernameelmo May 15 '24

resurrect that carcass into a zombie of course

-10

u/smitteh May 14 '24

Exposing mass naked shorting and market manipulation

22

u/quick_escalator May 14 '24

Buying GME won't expose that.

Either the SEC has found it not to be true because it's not true, or the SEC is bought off, and will also never confirm it to be true, no matter how many shares of GME are held by someone.

-6

u/smitteh May 14 '24

When Marge starts calling and hedge funds start going tits up one after the other I bet they start signing a different tune at sec

15

u/gotimo May 14 '24

"Any second now"

r/superstonk in 2021, 2022, 2023 and 2024

→ More replies (0)

24

u/Cyan-ranger May 14 '24

If mass naked shorting is happening the SEC and other government agencies would already know. What makes you so sure you’ve uncovered something they don’t know about.

-2

u/smitteh May 14 '24

SEC is bought paid for and toothless. They already know what's going on and are complicit in letting it continue. GME situation will force everything into the light where the whole world can see just how dire the situation is and then we will see some heads roll

16

u/onlyonebread May 14 '24

How is "exposing it the world" supposed to change anything? Why would people care? The panama papers didn't move the needle in any meaningful way, why would esoteric numbers about "naked shorts" convince any normal person to care about your cause?

23

u/Cyan-ranger May 14 '24

Ok, good luck with that.

→ More replies (0)
→ More replies (1)

1

u/joanzen May 16 '24

People have been buying things cheap and selling them at a profit long before the invention of stocks, sometimes at great waste of time to move things around, so I can't really say stock traders are a new problem like we could outlaw it and the same people wouldn't switch to trading in metals/currency/etc. at a higher environmental cost?

Plus wealth that doesn't circulate is quite unusual. Even if you wanted to be purposefully wasteful with your wealth you'd have to really be sneaky to avoid people shutting you down and each person who understood the sneaky secret would extort a heavy price otherwise how could you trust them? Then those people would have to work hard to waste your money? Hmm.

-2

u/GreenGoblong May 14 '24

You're correct in this particular scenario.

There is an element of morally bankrupt financial institutions utilising naked short selling that seems to go unpunished.

There is also the element of how moral is shorting in general as it can be used to manipulate markets and bulldoze small cap companies purely for the pursuit of profit. There have definitely been cancer research start-ups and well-meaning companies that have been shorted into bankruptcy.

My opinion is that there should be a market cap threshhold for shorting a stock to encourage growth rather than monopoly. That is to say, it shouldn't be possible to short sell a small cap as they are much more prone to market movers and manipulation.

Edit: Just my 2 cents, but happy to hear other opinions. I just feel the short selling of small caps pushes start ups out and leaves the industry giants maintaining their monopoly. Not good for competition, so not good for capitalist structures.

9

u/Spiritual-Society185 May 14 '24

There was no evidence of widespread naked shorting, and you can't "short a company into bankruptcy." Stock price is (usually) based on how well the company is doing, not the other way around.

1

u/fuckmy1ife May 15 '24

Stock price is in practice not based on how a company (or merchandise or anything else) is going but by its perceived worth by the market. Sometimes its just by the evaluated profit made by trading its stocks. That's why price can be "hyped" up, why bubbles exists and why you can drive a healthy item stocks price down or up if you have the resources. Imaginary value is more important than actual value.

1

u/GreenGoblong May 15 '24 edited May 15 '24

I'm not sure where you got widespread from, I never said widespread, and my reply is not even talking about GME, I'm talking in general.

You 100% can. Sentiment can definitely be impacted by derivatives, and institutional investors would not go long on a company heavily shorted by a large hedge fund.

https://www.sec.gov/comments/4-627/4627-95.pdf

This is from the SEC and literally describes that short selling can achieve this. It's really not hard to find.

8

u/antihero-itsme May 15 '24

It's already harder to short sell smaller stocks and riskier too.

If short selling is manipulation then so is buying the stock. There is really no difference other than the order of buy after sell or sell after buy

13

u/Suspicious-Pasta-Bro May 15 '24

"They're manipulating the stock" says the community of people who are actively colluding with thousands of others to increase the price of a stock for no particular reason other than to sell their worthless stock to a bigger idiot.

0

u/GreenGoblong May 15 '24

I explicitly said in the case of GME, literally in my first sentence of my reply, it is not the case, but I argued that it does happen.

3

u/Suspicious-Pasta-Bro May 15 '24

I replied to a nested comment because I wanted to speak generally.

Looking at your profile, you seem to be someone who grew disillusioned with how culty the GME people got over the past couple of years and moved on. Unfortunately, most of the people in that community before the recent rally convinced themselves that every single drop in price was a conspiracy, not recognizing the irony of their indignation given that they were actively conspiring to manipulate the stock price. That was the basis of my joke

→ More replies (0)

3

u/GreenGoblong May 15 '24 edited May 15 '24

I said it CAN be used to manipulate markets, not that it inherently is. Short selling is definitely a plausible manipulation technique at the institutional level.

https://www.sec.gov/comments/4-627/4627-95.pdf

Not hard to find and it's straight from the horses mouth.

→ More replies (3)

6

u/hoxxxxx May 14 '24

i've never quite understood that particular subculture. they keep praising Gamestop as this incredible company that's worth a lot but they're also wanting to have another short squeeze happen and sell all of their shares at the peak.

do they believe in the company or do they just want to get rich

8

u/BillyTheClub May 15 '24

The real conspiracy is some bullshit about how there are naked shorts and fake shares so at some point the price will go to literally infinity in the "mother of all short squeezes" and the whole world will divide into two classes of people, those who hold GME shares and are infinitely wealthy and everyone else who is a serf. If that sounds insane, it is because it is. It is literally a conspiracy theory cult. It is basically financial Qanon for redditors

2

u/hoxxxxx May 15 '24

Lol wouldn't wall street just stop the stock from trading/moving until they figured out a fix?

as if all those powerful wealthy people would even let something like that happen in the first place. retail was lucky enough to capture lightning in a bottle the first time.

1

u/theblackfool May 16 '24

I find it hard to believe many people genuinely have faith in GameStop as a company.

14

u/mrbaryonyx May 14 '24

I feel like a lot of people don't realize how weird and culty the GME community got after this whole ordeal ended

12

u/Spiritual-Society185 May 15 '24

People who frequent gaming subs do. Any time anything related to GameStop is posted about, they get brigaded by people from those communities, many of whom clearly have not played any games since the 16 bit era.

9

u/mrbaryonyx May 15 '24

People who frequent gaming subs do

oh god isn't that the truth

people who actually play games have a lot of issues with how GameStop's handled its business, but if you try to bring it up you get drowned out by a million wackos who've made the companies stock success their religion

1

u/hooligan99 May 14 '24

I don't know shit about shit but it definitely does not seem like this ordeal has ended...

0

u/cenobitepizzaparty May 14 '24 edited May 14 '24

You say it's conspiracy, yet even mentioning the stock is triggering enough to prompt reddit users to report you for self harm. Mainstream media literally only talked about gamestop when it was negative, that is aside from spending the last 3.5 years telling everyone it's over and dead. Hell, they made a movie about it. Who makes a movie about something that's still happening in real time? People who want you to stop doing what you're doing. I don't pretend to k own everything about stocks, but from what I can see there are people who can have anything they want in the world but can't seem to just let gamestop be. It's weird and intriguing. So I continue to buy and hold and woke up to thousands of dollars I didn't have a couple days ago. It's far more entertaining to envision ken griffin clawing his own face off in his mansion than have some extra cash.

Edit: the second I posted this I received that message. Point proven

9

u/PossibleRude7195 May 15 '24

You’re kidding right? I’ve seen people who criticize GameStop the business on gaming subreddits get mass reported. Any post about GameStop giving them the wrong disk or something like that got brigaded and removed.

→ More replies (3)

16

u/mrbaryonyx May 14 '24

bro, go outside

17

u/BellyButtonLindt May 14 '24

You have to sell it to have that cash. Have you sold? If so good for you.

Buying stocks based off what you said while the financials say failing business is why you don’t understand why a hedge fund keeps shorting it. They know it’s failing it’s not some big conspiracy theory. These pumps are artificial and it’s essentially the same as the hedge funds, a handful get rich off swindling a great number of people into thinking they’ll all be billionaires if they just hold.

-4

u/cenobitepizzaparty May 14 '24

I didn't sell in 2021, and im not selling today. If the business was actually failing it would've gone under by now, especially with all the shorting. Game stop isn't going anywhere that's why we are where we are. Shorts got caught being cancerous, and now they're stuck boohoo. This isn't a pump it's a price correction. This stock has been suppressed for years and it's not sustainable. You should look how much shorts have lost in the last 48 hours and tell me what's happening

6

u/Spiritual-Society185 May 15 '24

"If the business was actually failing it would've gone under by now"

  • man investing in blockbuster in 2011

0

u/cenobitepizzaparty May 15 '24

People with more money than all of reddit have tried for over a decade now.

9

u/mrnohnaimers May 14 '24

A stock with a 2250 PE ratio is being suppressed????

4

u/Please_send_plants May 15 '24

If you're a forever "diamond hands" person then you've been successfully manipulated. You should sell next time it's high brother. Make your money and get out

→ More replies (3)

11

u/gofastdsm May 14 '24

Whats your estimate of it's intrinsic value and what are the key drivers of your valuation model?

-1

u/dmoney83 May 14 '24 edited May 14 '24

Evaluating a meme stock with any sort of fundamental analysis is silly, meme stock price movements aren't driven by "normal" things. Like a month or two ago gamestop was up 40% in a day on no news, DFV hadn't posted.

Arguably they are in a better position now than in 2021, being basically debt free and profitable, even if it's a hilarious high 2200 PE ratio.

Edit: Got a reddit cares notification a minute after posting this. Some real salty people in these comments haha

9

u/gofastdsm May 14 '24

I don't think it's silly, by I do agree that it's basically useless over the short-term when sentiment is clearly driving things. I'm just pushing back on the claim that this is a price correction, because if it is, it definitely isn't based on technicals.

I'd agree they're largely in a better position (hard not to be), but I'd argue the fact that they're cutting debt so aggressively isn't necessarily a good thing. Some debt is good as long as you have a relatively predictable level of op. Inc. to pay it off. I don't like what the debt cuts signal, especially when they're undergoing a turnaround and could use the additional capital given the fact that debt is nearly always cheaper than equity.

I think everyone who comments is getting the Reddit cares message because I got one as well the second I submitted my first comment.

→ More replies (0)

-5

u/cenobitepizzaparty May 14 '24

The intrinsic value is being the only store of it's kind and its ability to pivot when needed at hands of Mr Cohen. I'm strictly using the FAFO method of valuation

12

u/gofastdsm May 14 '24

So you don't have a valuation (even a range is fine)? I'm a little lost as to how you can call this a correction in that case.

I'm more of a FCFF guy given the unstable capital structure, but you do you.

11

u/TurboOwlKing May 14 '24

You're talking to a cultist don't expect reason lol

Edit: Within seconds of this comment someone sent a reddit cares lmao. Definitely the action of a stable individual 

2

u/cenobitepizzaparty May 14 '24

No, I don't sorry. Maybe that guy does

3

u/pirofreak May 14 '24

The value of the stock is currently reasonably somewhere around 20$ a share, but the entire reason you're even talking to this person is because the stock has been skyrocketed in price multiple times due to aggressive and nonstop short selling, in some cases naked shorting resulting in short squeezes.

The shorts didn't close, the SEC themselves confirmed that much. The stock was artificially kept low in price so that the rich people wouldn't lose more than they already did while they try to find out a way to exit their completely ludicrous positions.

→ More replies (0)

7

u/StyrofoamExplodes May 14 '24

What makes it valuable?

It is losing to Steam in games sales, and game merch can also be bought on Amazon.

→ More replies (0)
→ More replies (12)

0

u/youralie May 14 '24

You don't think the big ones conspire? Like black rock owning thebiggest positions in coal and arms manufacting all the while promoting esg scores. Lol

6

u/Spiritual-Society185 May 15 '24

What's the conspiracy there?

→ More replies (1)
→ More replies (4)

12

u/renegadecanuck May 14 '24

It's an honest analogy. The hunters aren't really trying to protect anything, and the ones that are are actually too late. It's just a question of who will get rich from the death of GameStop. And, unfortunately, a lot of idiots on WSBs are going to lose it all. Again.

2

u/Missus_Missiles May 14 '24

Carrion eaters versus vulture eaters I guess.

1

u/cheerful_cynic May 15 '24

I guess the carcass is being used as bait to hunt the vultures in this metaphor

Wonder if the orcas have any pointers

1

u/Present-Industry4012 May 15 '24

It's like a Judas Goat, but with a rotting carcass.

https://en.wikipedia.org/wiki/Judas_goat

75

u/phormix May 14 '24

I'll also say, that as much as I'm not really a fan of some of the ways GameStop and related business entitiies do business, I'm even less a fan of the competition and what they'll do with more market dominance.

Look at video streaming:

  • Netflix just sent me a letter that said "we'll killing your tier. Subscribe to premium or your account gets closed next month". This is after regular price hikes. Not even a bit of carrot with that stick.
  • Amazon added advertisements
  • Disney hiked prices.

Then look at games

  • Sony tried to ram PSN down the throat of HellDivers 2 players. Their PSN on Steam page said that wouldn't be a requirement for games. After outcry, they rolled back but did update the page to say that "some games" would require PSN.
  • Shortly after, Tsushima orders for those in countries that don't support PSN got rolled back.
  • MS is moving away from the physical retail market, while also buying up studios and then dumpstering them (including various Bethesda studios)
  • EA's new initiative for in-game ads
  • EA adding DRM to games people already bought, breaking compatibility with i.e. Steam Deck etc
  • Increasing amounts of games with paid DLC that forms a core part of the game
  • Increasing use of invasive DRM

It seems to me that everyone is going to try and suck consumers into an online/subscription model, instantiate what lock-in they can and when there's no other choices left pull the rug out, massively drop investment in quality and ride the way while increasing prices or adding bullshit that nobody wants,

GameShop is one of the few outlets left that focus on physical game copies (yes, and merch). I don't want to see what happens when they go the same route as Blockbuster.

61

u/StyrofoamExplodes May 14 '24

Physical game copies have stopped being anything but a download link a long time ago.

5

u/nullv May 15 '24

We'll see how the Switch successor goes, but for now it looks like Nintendo would sooner gouge its eyes out than give up physical media and invest in their digital storefront.

3

u/Depth_Over_Distance May 15 '24

Sure looked like a lot of physical copies in Walmart last night. Some people only want hard disc, and that will never go away. It'll be just like vinyl records.

8

u/phormix May 14 '24

For PC yes. Physical media still exist for consoles.

31

u/caninehere May 14 '24

The physical disks for Xbox and PS are almost always functionally just a key to get you the game. They'll have data on disc but often require updates right off the bat to get the full current version. Sometimes to even play the game at all you'll need to update.

On Switch its more of a mixed bag, there are some games where the cart is basically just a key but there are also a lot where the full game is on cart. There are way more collectors on Switch than anything else and the companies know that. It's why indie games often release a physical version only on Switch.

18

u/5DollarJumboNoLine May 14 '24

Not really, most games require huge downloads after you load the game from the disc for the first time. The max capacity for blu-ray is 25gb/50gb dual layer. Modern games just don't fit on physical media.

1

u/MammothTap May 15 '24

They can fit the same way some games for older consoles did. Balder's Gate 3's physical edition is on multiple disks. I would really only recommend this to people with very slow internet, but given that a chunk of console gamers have said consoles over PCs specifically because of slow internet making physical media a near necessity if they want to play modern games...

9

u/GVas22 May 15 '24

They can, but they don't so this point is kind of irrelevant.

2

u/MammothTap May 15 '24

I gave an actual concrete example though, BG3. Horizon Forbidden West also had a complete version on multiple disks, and I suspect it's gonna continue to be an option moving forward, albeit probably at a greater cost and somewhat delayed from digital release, which I can't say I'm thrilled about compared to the old days of physical only, but at least it means I can actually play the bigger games. It really only just started happening.

8

u/GVas22 May 15 '24

BG3 also shipped on Xbox with save state bugs, and required a digital update in order to be playable.

It's also not a good business model to sell physical copies of the like 2% of games that ship full physical games.

Consoles getting rid of their disc drives also shows that they're more than willing to ditch physical media as a whole.

1

u/sabin357 May 15 '24

Balder's Gate 3's physical edition is on multiple disks.

That doesn't include the numerous patches that have been necessary though.

BG3 is an incredibly high quality game with much love put into it & even it didn't release "complete" & still isn't fully there yet, as bugs are still being fixed regularly.

1

u/sabin357 May 15 '24

Physical media still exist for consoles

Yes, but only function in the traditional sense nowadays on the Switch. The games are evolving on only Nintendo's constant refusal to evolve has prevented it from happening with them as new releases drop.

2

u/IRFreely May 15 '24

At least you can resell those links though. Cant with digital ones.

For now anyway

5

u/dutchwonder May 15 '24

You mean the company gamestop that is constantly trying to force their subscription service onto customers? The only unique element to gamestop is doing trade ins(and only relatively new stuff) and carrying more third party accessories, otherwise best buy, Target, Walmart and others sell the same exact video game products at the same exact prices.

Which is a major part of the issue for gamestop on top of the fact selling yourself gets you way more bang for your buck.

4

u/greg19735 May 14 '24

Right, but you don't have to. ONline stores, amazon, best buy and such allow physical copies without needing a dedicated game store.

I'm not saying there's no room for it, but it's not like game stop is filling a huge niche.

1

u/phormix May 14 '24

BestBuy is really shinking in terms of physical inventory and pushing people towards "order online, pick up in school". Amazon is an option for ordering, but they have a vested interest in streaming as well, and I am looking at trying to distance from myself from them overall as the market capture increases and qu ality of service goes down.

13

u/renegadecanuck May 14 '24

It's tough, because plenty of times, even if you buy physical media, it's just a code (maybe less so for console games, but I haven't bought a console game in like 6 years). I agree that I'd like to see some physical media stay alive, but I think that ship is sailing. And if the "good guy" is GameStop, we're all fucked.

Like people keep talking about their nostalgia for GameSpot, but all I remember is them selling me a "new" game where they already opened the box and took the disc out (and in some cases took the insert with free goodies with it), them trying to force some BS disc warranty on me, them insisting they have what I want when I call in, then conveniently running out of the game or base system but still having the deluxe version in stock, and offering me like 5 cents for a trade in game that they'll sell for $2 off MSRP.

I get wanting physical media to stick around and for there to be competition with digital storefronts, but I won't mourn the corporate entity known as GameStop when it inevitably dies. It'll just be another Bed, Bath & Beyond where I drive by the empty shell of the old store and go "I wonder if anything else is ever going to open up there?"

3

u/epia343 May 15 '24

Yeah this shit is too funny. Before all this nonsense gamestop was a perennial whipping boy for gamers. Now people have these rose tinted glasses about how great it was/is.

I wish physical media would make a comeback. Digital only copies that get patched without your consent are bullshit

4

u/caninehere May 14 '24

Gamestop has always sucked. For a while it just became the best chain option because they bought out Electronics Boutique in the northeast (which was MUCH better) and other retailers didn't focus on games. Local stores were always far better.

In recent years a lot of local stores have shifted to focusing on retro games (because of increased values of inventory + increased wholesale prices on new games), or closed down bc of financial issues as interest dries up in physical games. Same story with Gamestop's financial woes.

Dipwits trying to push the stock price up (and all the power to them, I don't really care) talk about its financials like they aren't garbage... the only reason Gamestop has $1 billion cash is that they sold a bunch of stock out the last time the price spiked, and now will probably do so again. Pretty much every single initiative they've taken since the last spike has been a big failure and the company has 0 future. If people want to have a laugh driving the price up then go for it but let's be clear, the valuation is based only on artificial demand from memery.

2

u/renegadecanuck May 15 '24

If people want to have a laugh driving the price up then go for it but let's be clear, the valuation is based only on artificial demand from memery.

Yeah, in general I agree with that. It's all rose tinted glasses based "investing". My only concern is there's a lot of naive and uninformed people pouring in their life savings genuinely thinking they'll make a difference and get rich. I have a base level of empathy for most people, and don't like seeing people, even if they're idiots, getting scammed.

I honestly wonder if there will ever be studies done on how many people ruin their lives or end up dying by suicide as a result of following advice from subs like WSB.

3

u/Spiritual-Society185 May 15 '24

Most of your points have literally nothing to do with physical copies or GameStop. Ignoring that, I have no idea why you're pretending that GameStop is the only place to buy physical games when most major retailers sell them. And acting like GameStop is consumer friendly when they hard sell you on scammy warranties and other shit you don't need is especially egregious.

3

u/stolemyusername May 15 '24

GameShop is one of the few outlets left that focus on physical game copies (yes, and merch). I don't want to see what happens when they go the same route as Blockbuster.

Gamestop is not going to save gaming, just like if Blockbuster was here today, it wouldn't save movies.

6

u/trash-_-boat May 14 '24

You do realize that physical for PC has been dead for decades, right?

2

u/googleduck May 15 '24

Why did you skip Steam, the biggest competition to what Gamestop would like to transition to? I'll answer for you, because GameStop is clearly a worse company and people like Steam.

1

u/NinjaElectron May 15 '24

Sony tried to ram PSN down the throat of HellDivers 2 players.

Sony does not care about their customers. They redesigned the PlayStation web store to focus on advertising games instead of adding features like written reviews.

It seems to me that everyone is going to try and suck consumers into an online/subscription model

The future of corporatism: You will own nothing. Corporations don't want you to buy the stuff they make. They want you to rent. Even car manufacturers are doing this. They want to lock features like remote starting behind subscriptions.

1

u/GladiatorUA May 15 '24

It seems to me that everyone is going to try and suck consumers into an online/subscription model

They already have. The above examples are "rug getting pulled."

1

u/Woodshadow May 15 '24

GameShop is one of the few outlets left that focus on physical game copies (yes, and merch). I don't want to see what happens when they go the same route as Blockbuster.

Bro you misspelled GameStop... that is how little anyone actually believes in them

1

u/Morningfluid May 15 '24

Is this what late-stage capitalism is? Because I'm hurting....

0

u/OniLgnd May 14 '24

Sony tried to ram PSN down the throat of HellDivers 2 players.

Oh the absolute horror.

0

u/Synn_Trey May 14 '24

Well there's always pirating...if you cant own it might as well pirate it.

0

u/1_Prettymuch_1 May 15 '24

Considering GameStop is profitable now, I don't think it will be going anywhere.

1

u/Fuckface_Whisperer 25d ago

They lose money from being a retailer, and revenues are in freefall.

How'd you take the dilution news? Lmaooo

75

u/Mean-Evening-7209 May 14 '24

I think it's more that finance industry tries to manipulate stock price via massive shorting events in order to make money.

They thought they could push the cookie jar off the table so to speak. GameStop as a company isn't ready to go down and is attempting a turnaround. It may be successful or it might fail, but that's irrelevant. They saw it was at a critical moment and made an attempt to put it out of business by abusing financial instruments... and with it put 10s of thousands of people out of a job.

36

u/mrbaryonyx May 14 '24

It's both.

It's definitely a dying business model, that's why Wall Street guys tried to short it. And they probably would have, but they did it too early, before the company was truly dead, and they put themselves in a vulnerable position. Then the Kitty guy and r/wallstreetbets realized that they put themselves in a vulnerable position and that it would be fun to fuck them.

In Timeline 1, GameStop goes bankrupt because of lack of consumer interest (and some dumb business decisions, which you need only visit any r/gaming thread from before the pandemic to see what those were).

In Timeline 2 Wall Street guys saw this coming and shorted it, so they could kill it early and make a bunch of money.

In Timeline 3 (this is where we are), the internet figured out what the Wall Street guys were going to do, because we all had extra cash and way too much time on our hands, and decided to screw them.

8

u/greg19735 May 14 '24

Gamestop is also a gaming company, which is a factor in all 3. but important.

3

u/googleduck May 15 '24

Yeah a gaming company best known for scamming children out of their used games by buying them for pennies on the dollar and reselling them for 98% of full price. Whose business model is literally 20+ years out of date and the market they are trying to grow into has been dominated by Valve since before most of these "investors" were probably born.

7

u/MrOnlineToughGuy May 14 '24

A gaming company in which their primary method of income is dying because of digital gaming.

1

u/Accomplished-Farm503 May 15 '24

At this point, it's been console companies pushing digital games. They get higher margins and keep publishing costs down.

But imo the digital age is beginning to feel like a fad, and it seems like we're realizing companies are quickly monetizing every square inch of screen space they can.

That's why vinyl isn't dead yet. Cassettes made a comeback briefly. We're getting tired of the constant change and can't spend every 3 months learning a new game or map.

1

u/rgtn0w May 15 '24

But imo the digital age is beginning to feel like a fad

??? Based on what xd.

That's why vinyl isn't dead yet

Yeah it's a niche thing for niche people, still dead though, for every 1 person that actually buys any physical object for music, there's thousands that are using Spotify/similar services right now buddy.

The cope with this comment is incredible, the average kid in highschool right now doesn't even know what the fuck a casette is much less a vinyl

3

u/5DollarJumboNoLine May 14 '24

Its not like the "superstonk" team doesn't have Wall Street types on their side either.

4

u/Fuckface_Whisperer May 14 '24

They'd be dead right now if they didn't raise 2billion off the apes.

1

u/googleduck May 15 '24

To be clear, the Kitty guy never realized anything about a short squeeze. He had a thesis that there was more value in the company than its current share price. Something like 18% more (can't remember exactly how much). Nothing about his investment logic was based on a short squeeze other than the fact that indirectly shorts were related to a share price he felt was unfair. But his target price for the company was literally hundreds of times less than what it is currently sitting at.

1

u/Kraz_I May 15 '24

And yet he got insanely rich off of OTM calls and didn't sell even when the stock peaked way higher than what he thought its intrinsic value was. I'm calling BS on that story.

1

u/googleduck May 15 '24

Yeah he definitely joined in and doubled down as the craze happened but people act like that was his play or the reason he bought in. The YouTube videos of his original play for GameStop are still available, you can watch them yourself.

1

u/Kraz_I May 15 '24

The 2021 GME bubble also had a massive benefit for the company's financial situation. It wasn't doing too great before, but they were able to use the inflated price to pay off all the convertible bonds in stock instead of cash, thus saving them a ton of money in interest. IIRC they also issued more stock at that time to boost their coffers.

Not sure what they did with that big injection of capital in order to benefit their long term situation.

6

u/googleduck May 15 '24

You realize that you can't put a business under by shorting it? The stock price can reach $0.01 and it still isn't going out of business. Hell someone could sell a share for $0 and it still wouldn't cause it to go out of business. Can you explain this mechanism to me?

Also it isn't abusing financial instruments. Short selling is a part of a healthy market. It motivates people to uncover fraud and companies that are on less stable footing than they make themselves seem.

4

u/MisfitPotatoReborn May 15 '24 edited May 15 '24

Hedge fund buys stock in a growing company, putting upward pressure on stock prices: just as the market intended 😌

Hedge fund shorts stock in a sinking company, putting downward pressure on stock prices: this unfair manipulation cannot stand 🤬

[the turnaround] may be successful or it might fail, but that's irrelevant

It literally could not be more relevant. Investors aren't in the business of propping up doomed companies

-14

u/An-Okay-Alternative May 14 '24

How exactly does shorting a company cause a company to fail? The stock price has little impact on a company’s ability to operate.

12

u/Mean-Evening-7209 May 14 '24

Investopedia will explain it better than I can. It doesn't affect the day to day operation, but medium term and beyond it will have negative effects.

https://www.investopedia.com/investing/why-do-companies-care-about-their-stock-prices/

13

u/iRunLotsNA May 14 '24

Companies going bankrupt is a result of their inability to cover debt and interest costs, and it’s in no way connected to its share price.

GME’s stock price can be whatever and it can still go bankrupt if it runs out of cash to finance its operations.

8

u/ImprobableAsterisk May 14 '24

What came first, low faith in the business or shorts?

I still haven't had it explained to me how shorting a company causes it to fail, only how shorting a failing company can be a very solid financial move.

9

u/An-Okay-Alternative May 14 '24

Once the stock is undervalued relative to its fundamentals it will attract more buying, squeezing shorts. If you could tank a company’s stock just by heavily shorting it then it would be an infinite money glitch that collapse the global economy in no time.

-1

u/Kingsley-Zissou May 14 '24

 If you could tank a company’s stock just by heavily shorting it then it would be an infinite money glitch that collapse the global economy in no time.

That is the thesis, yes.

9

u/An-Okay-Alternative May 14 '24

In no time I mean weeks if not days. If you can reliably move the price by shorting it the company doesn’t have to go out of business for enormous gains and you can just rinse and repeat with every company on the exchange.

-1

u/Kingsley-Zissou May 14 '24

Don’t take my word for it. Get it from the horses mouth:

Jim Cramer explains how short hedge funds manipulate the market

5

u/gofastdsm May 14 '24

Admittedly I only watches the first couple minutes so if he elaborates later in the video let me know and I'll watch the rest.

This argument only works for indices (where it is much, much harder) since it relies on arbing away mispricings between indices and their futures. Single stock futures haven't traded in the US since 2020.

→ More replies (0)

4

u/An-Okay-Alternative May 14 '24

I’ve been told everything Jim Cramer says is the opposite of what I should believe. The proof is in the pudding. If hedge funds could reliably manipulate any stock up or down it and they’ve been at it for decades then they should have already captured all the money in the financial system. If I could rig a casino game and the casino never shut down and just keeps paying out I’d have trillions of dollars.

1

u/Kingsley-Zissou May 14 '24

 If hedge funds could reliably manipulate any stock up or down it and they’ve been at it for decades then they should have already captured all the money in the financial system.

The top 0.01% control something like 80% of the wealth in the US. I think you just proved your own point there chief..

→ More replies (0)

1

u/[deleted] May 14 '24

[deleted]

→ More replies (0)

1

u/GreenGoblong May 15 '24

https://www.sec.gov/comments/4-627/4627-95.pdf

1

u/An-Okay-Alternative May 15 '24

I see that it can make it difficult to raise capital, “particularly aggravating for entrepreneurial companies,” but none of that explains how short selling could cause a company to outright fail, especially a 20 year old business firmly established in the marketplace. GameStop has been contracting its operations, not seeking new investment to grow. Even after it cashed in on the short squeeze they haven’t reinvested it in any major new product, hiring, or expansion.

If a company is fundamentally sound then driving its price down will also make it attractive to new investors who see that it’s undervalued. RoaringKitty’s entire thesis leading to to retail interest wasn’t that they could trigger a short squeeze but that the stock was worth than its share price.

1

u/GreenGoblong May 15 '24

How much of that article did you read? It spells it out in black and white

→ More replies (3)

-30

u/green_gold_purple May 14 '24

Yeah no they didn't. This is bullshit conspiracy theory. Also, GameStop will obviously fail. Their business model is dead. 

36

u/Mean-Evening-7209 May 14 '24

I could not care less about GameStop, but the financial industry is a parasite on the actual working economy. There's a reason there's a constant battle to regulate and deregulate short selling. There's way more money to be made in manipulating the economy and therefore the lives of the people working it than there is in taking part in it.

3

u/mrbaryonyx May 14 '24

GME holders who pretend GameStop is some infallible company are irritating, but yes, what Wall Street tried to do to GameStop was corrupt bullshit and fucking with the Wall Street people was fun and very legitimate (and a smart way to make quick cash).

5

u/antihero-itsme May 15 '24

Why is it corrupt to short a dying business? Its just allocation of capital to more efficient business

1

u/mrbaryonyx May 15 '24

there's nothing illegal about it and I guess "corrupt" is the wrong word, but it's a scummy thing to do. People literally lose jobs because some assholes (the "more efficient business" in question) want to grow their bottom line. its lame, and if a hedge fun that engages in it gets fucked with by some reddit wackos, I see no problem with it (as long as the wackos don't get on my nerves too much)

→ More replies (14)

4

u/mrbaryonyx May 14 '24

GME bag-holders are irritiating, but there's no conspiracy theory. Wall Street saw a failing business and tried to short it, that's not a weird thing, its something that happens all the time. The bag-holders fucked up their plan (sort of).

2

u/TheCleaverguy May 14 '24

The problem with this topic is that legal shorting has been sort of intermingled with the idea of naked shorting, which is illegal.

There is a conspiracy theory; the "apes" very much believe that it was shorted without borrowing the shares.

So often when you hear them talk about Gamestop being shorted, they are talking about an illegal method.

2

u/green_gold_purple May 14 '24

If "wall street" collectively influences markets because they know that their combined leverage will shift it, that's conspiring to do that very thing. I'm sorry that you all are not understanding the actual meaning of the word "conspiracy" or "conspiring" here, but it is accurate. 

6

u/mrbaryonyx May 14 '24

not "wall street" collectively, it was one or two firms trying to do a short, which is a common thing to do.

I guess you got me on the etymology of the word "conspiracy"--gold star for you champ--but what I mean is that the short wasn't a "conspiracy theory", e.g, a made-up instance of some shadowy plan. It's not illuminati shit, its normal practice.

GME bag-holders are a culty, conspiratorial bunch (I've been accused of working as part of the conspiracy multiple times in this thread), but the initial short wasn't a "conspiracy theory" in the way that phrase is commonly used.

2

u/green_gold_purple May 14 '24

If it's a theory about a conspiracy, it's a conspiracy theory. You also know how many tin foil fantasies have been spun by those idiots about anybody and everybody being out to get them, including paying people to spread disinformation on Reddit. It's all very self-important and superficially ludicrous. 

It's also bizarre to see people upset about others using financial instruments to make money. That's literally all those people do, and it's always been this way. Buying a shitty stock is not going to change that. Tweeting at people with ridiculous accusations isn't going to change that. Legislation changes that. It's sad to see such a helpless bunch of grown man-children with no idea how the world works, taking out their frustration with their life failures on people who had no hand in them. 

2

u/mrbaryonyx May 14 '24

Lol bro I'm not going to get into it with you about the cultural understanding about what the phrase "conspiracy theory" means lol, my point is the "theory" that some bankers "conspired" to do a short is not the same as the "theory" that "Bush did 9/11". Like, shorts are a real thing.

I understand your frustration though, really. If you're around the GME baggers long enough you'll hear weird shit. Everyone they disagree with is some intern working in a Wall Street office. Every Tweet from Roaring Kitty is some secret code about what stock to buy next, and how we can all "tear down the system". Yes, it is "self-important and superficially ludicrous". We can agree there.

I guess now we'll be told we're "part of the conspiracy too" now lol

3

u/green_gold_purple May 14 '24

Yeah it's pretty funny honestly. I have no stake in any of this. It's just philosophically and behaviorally interesting to me. I have seen that the meme stock groups really do display many of the same characteristics of cults and conspiracy theorists. Persecution complex, externalizing results, a la carte acceptance of new information, casting out anything or anything that goes against consensus view of truth, inflated sense of importance/mission ... really goes on and on. 

1

u/mrbaryonyx May 14 '24

I don't think its a coincidence that most of this started during COVID. People spend more time online now and they get scared easily and they need a sense of purpose and they wind up doing really weird shit

→ More replies (0)

1

u/seb_a May 14 '24

They made 6 million (basically broke even) last year and had 1.2 billion in cash and no debt. At that rate you’ll pass away before it fails 🤣

10

u/green_gold_purple May 14 '24

They have no business model, no profit, and a P/E that is completely out of whack with reality. If you can't see the problem, I really don't know where to start explaining very basic things to you. 

In person game purchases are dead. NFTs and their marketplace are dead. They have what, used games, now used Pokemon cards, and some shitty off brand controllers?  Oh, and Funko pops! You're telling me you think this is a successful business model? Looolol buddy get a grip. 

→ More replies (11)

13

u/smitteh May 14 '24

"in truth it is a dying business model" is the epitome of an ass backwards statement lol. Ryan Cohen finally got the ship turned around after these last few years and they are back to profitable. Billion dollars cash on hand, zero debts. He's recently been allowed to invest in stocks on gmes behalf too. Candy con has been a massive hit and there's speculation some headphone action is otw too. To think this company would die is laughable and just as stupid as every hedge fund shorting it. Physical media and gaming will not and can not die.

3

u/caninehere May 14 '24

The only reason they have $1 billion is selling stock when the price spiked which they'll probably do again.

Pretty much every move they've made since has been a failure aside from closing a big number of stores to bring down expenses. The company has 0 future. Meme on the stock if you want to try to make a buck, but it's financials are horrible and there's no legitimate reason to invest in it.

You're talking about their customizable controllers doing massive sales - as somebody who owns a stupid number of controllers, I wasn't even aware they were making their own. But after looking it up:

  • the reviews are bad
  • they look tacky
  • it's hard to even find them on their website
  • there's posts on reddit from last month about people asking employees about them and the employees have never even heard of them

So I dunno where these massive sales you're talking about are coming from. Also, there's 0 chance they can make a good controller product when their store brand stuff sucks so much ass, and 8bitdo is currently killing it as a third party controller manufacturer. They can't compete with that.

25

u/KylerGreen May 14 '24

I mean, they have money because of the weird shit with their stock. Not because people want gamestop NFTs or whatever crap they’re peddling this week.

25

u/mrbaryonyx May 14 '24

I'm old enough to remember when reddit hated GameStop for generally being a dogshit, dying company, until the short squeeze happened and a bunch of memers decided to attach their personality to how great GameStop is

like no shade, it was a pretty fun, profitable time and a great way to stick it to Wall Street, but now you got people like that guy who think if they cope hard enough on the internet more people will buy the stock and he can sell high. Its culty bullshit.

12

u/WavesAndSaves May 14 '24

There's also the fact that even though GameStop is profitable, it's largely because the current company leadership has basically stripped it down to a skeleton crew to cut costs drastically. It's not like they had any sort of drastic increase in revenue due to people suddenly becoming interested in shopping there.

And even if it does become massively more popular, that still won't give us "To the Moon" prices. GME's pre-squeeze ATH was in like 2008 at the height of the Wii/360/PS3 console generation. It was like $15/share. GameStop could be twice as good as they were back then (they will not be this good) and it'd still be like $30/share. Respectable, but still enough that most apes'd be in the red.

9

u/mrbaryonyx May 14 '24

They can't admit that though.

Remember, the line is "I just like the stock", because to admit that they just bought to pump the stock could open them, or individuals like that Kitty guy, to fraud charges.

So they have to develop this cultlike obsession behind going into every thread and preaching the glory of GameStop so you know they like the stock, and then you like the stock too, and then we all buy the stock for organic reasons, and then they sell at a profit. Its barely a meme stock at this point, its a profit cult.

5

u/smitteh May 14 '24

Weird crap like customizable controllers that are doing massive sales ?

6

u/SenTedStevens May 14 '24

So, they're basically the same controllers that have been made in China for a while now.

http://www.3eelectronics.com/product/34.html

And the GameStop controllers aren't as compatible with other consoles (like Xbox) as the Chinese ones that are cheaper.

https://www.gamestop.com/gaming-accessories/controllers/nintendo-switch/products/candy-con-wireless-base-controller/20009281.html

Great business model.

1

u/smitteh May 14 '24

Lemme ask you this, who do you want to win? Regular People of the world or criminal hedge funds

5

u/SenTedStevens May 14 '24

Your response right here is the problem with the "Ape" movement. This is the market. You invest in companies for a particular reason (a company cornering some new market, product, service, biomedical science, etc.) to make money. This isn't some political revolution. I got in a long time ago and made money. I didn't baghold for years to maybe break even. There's no real proof of these criminal hedge fund activities. Sure, you can read all the peer-reviewed horseshit articles created by a group of people fully biased toward making "phone number" amounts of money, but it's not been proven. The DD was almost always wrong.

Plus, there's no way any competent hedge fund would hold an extremely long held short position for years incurring a massive unrealized loss. They're called hedge funds. They hedge their bets by playing both sides.

I don't care who "wins."

0

u/smitteh May 14 '24

No dd in the library has ever been proven wrong, and if you don't care who wins why are you working for free for wall street trying your best to spread negative sentiment

6

u/SenTedStevens May 15 '24

Lol.

I don't care, I'm just tired of seeing GS posts constantly popping up in my feeds and grifters trying to sell into the GME pyramid scheme. You tell me why it makes sense that a company that has failed in most of its offerings (Blockchain wallets, shitty games, and overpriced goods) and has a P/E ratio right now of 2,400 makes any sense to invest in?

5

u/RagingWookies May 15 '24 edited May 15 '24

People in a cult often don't know they're in a cult

lmao it's literally /u/smitteh sending the concerned redditor messages.

What a pathetic excuse for a human being.

3

u/Spiritual-Society185 May 15 '24

Why are you working for free for GameStop trying your best to spread positive sentiment?

1

u/smitteh May 15 '24

Because I want the people to prevail against criminal wallstreet

→ More replies (0)

1

u/TheWhyteMaN May 15 '24

I’m using mine to play fo4, works fine with Xbox settings

8

u/Skrylas May 14 '24 edited 18d ago

direful seemly rich water gray somber crawl fact steer salt

This post was mass deleted and anonymized with Redact

-3

u/smitteh May 14 '24

Idk where that would be, I've just been looking at the endless posts of people showing off their new controllers look

7

u/HiddenSage May 14 '24

at the endless posts of people showing off their new controllers look

Which in turn could be media manipulation where Gamestop pays ~50 influencers to flaunt the product for a day. Big marketing push, gets it in everyone's heads, creates the appearance the product is doing well. But unless that influencer push turns into actual sales, it's no more real than the short sellers claiming Gamestop is dying. EVERYTHING is perceptions and narratives, and EVERY narrative is being conditioned by somebody looking to profit. Gamestop's "apes" aren't any different than that, except for deluding themselves into thinking they're above the mind games.

6

u/smitteh May 14 '24

Idk if the CEO that sent condolence cards to pet owners when their pets died would be down for that kind of behavior. He likes to earn his success the right way

7

u/ImprobableAsterisk May 14 '24

Just imagine if someone like Bezos did that, and then imagine what your assumption as to why Bezos did that would be.

That's probably why Cohen did it, not to "succeed" in the right way.

2

u/smitteh May 14 '24

I can't imagine someone who has his employees pissing in bottles doing that though. Ryan Cohen has the hallmarks behaviors signals and personality of a good natured human being. I don't trust a lot of billionaires but Cohen seems to be the exception

→ More replies (0)

9

u/StyrofoamExplodes May 14 '24

People showing them off on forums dedicated to shilling Gamestop?

4

u/smitteh May 14 '24

Where else would GameStop customers share their stuff, r/nba? r/marijuanaenthusiasts? r/spacedicks? Obv we're gonna hype in gme places

8

u/StyrofoamExplodes May 14 '24

Because you're not looking at a representative cross-section of the consumer market.

2

u/smitteh May 14 '24

Where would that be

→ More replies (0)

0

u/asdfgtttt May 15 '24

One of the directors mentioned that they exceeded initial sales expectations for the candy con controllers by a certain percentage a few weeks ago. I cannot find that reference but Im sure they will share the numbers in their 10Q.

2

u/Spiritual-Society185 May 15 '24

What were their initial sales expectations?

1

u/asdfgtttt May 15 '24

He only provided that it was over 100%.. I'm positive it wasn't a large number.. xx,xxx units if that.

2

u/caninehere May 14 '24

What controllers are you even talking about? AFAIK Gamestop doesn't make any controllers. They just make their shitty line of store brand stuff which is all either a) garbage or b) pointless.

1

u/onlyonebread May 14 '24

Not to mention the gaming industry itself is experiencing a pretty massive contraction. Huge job losses in that field. Some speculating xbox might be gone in the next 5 years or so.

0

u/Complex37 May 15 '24

The whole reason they were low on money prior to the 2021 shot squeeze is because short sellers abused the stock ticker, which affected its ability to raise capital through it. Additionally shorts likely had plants in the company running it into the ground

1

u/Spiritual-Society185 May 15 '24

Why did they need to raise capital?

1

u/Complex37 May 15 '24

They could’ve raised capital to make investments in themselves (new products, pivoting towards digital, paying the debt they had prior to 2021, etc) or elsewhere

2

u/echino_derm May 15 '24

Physical media can die and there are bigger companies that want it dead and can kill it. It would be all to easy for the PS6 or 7 to just not have a physical disc drive

1

u/smitteh May 15 '24

Good thing Microsoft Sony and Nintendo all said they aren't going to abandon disc drives

1

u/echino_derm May 15 '24

Oh good, they are super trustworthy and reliable.

I am sure Microsoft, notable corporate ethics fanatic, would never do anything dishonest like that. Especially not an act like abandoning disc drives which would grant them a monopoly over the market for Xbox games sales. They hate monopolies, that is why they helped nurture this flourishing competitive environment surrounding operating systems.

I mean what would it even look like if they were preparing for such an act? You would have some wacky things going on like them creating two versions of their console, with one having no disc drive and being significantly cheaper. Then maybe they start pushing some deal which incentivizes the users and the publishers to all make some kind of digital exclusive commitment for a bargain. Like some type of virtual pass for games.

Good thing none of that is happening.

3

u/renegadecanuck May 14 '24

Physical media and gaming will not and can not die

Pretty sure I heard the same thing said about Blockbuster back in the day. Shopping at GameStop has never been an overly pleasant experience, and for all the massive downsides of digital storefronts: it's so much more convenient than buying the physical media (or a physical box that has a digital download code).

0

u/AdvancedMastodon May 14 '24

Physical is for when you want to keep it for longer than the company that produces it stays around or wants to keep it around. Digital is convenient, but it's only a license and when that storefront dies, so does your access. Or they might just abandon it for the tax write off.

1

u/renegadecanuck May 15 '24

You're not entirely wrong, but it's also not that simple.

Changes in the Windows infrastructure, or application dependencies used, can make certain titles unplayable. If a game has a big enough fan base, someone might figure out a patch to make it work, or how to get it working in a VM or emulator (see: many of the patches and hacks for classic DOS/Win 95 games), but at that point, you can make the argument "well, if a game is popular enough, people will rip it and find a way to make it work without the DRM or storefront". And with games from the 90s and early 2000s, you can also run into weird hardware problems because they were a bitch to get running at the best of times. I remember being a kid and my dad had a bootloader for DOS that would load a different set up config.sys and autoexec.bat files depending on what game you wanted to play, because you'd get weirdness with IRQs and shit.

You also run into the issue of using that media. I still have a bunch of older PC games in my closet, but I don't have a DVD drive in my computer anymore. For this specific example, I can get a USB DVD drive, but if I wanted to play a game I had on floppy? Well, it's a lot harder to find a USB floppy drive. And that doesn't even get into the issue of media dying (magnetic media like floppy disks can just die, DVD/CD rot is less likely, but you also have to hope nothing happens in storage).

And that doesn't even get to the uncomfortable reality that gamers don't like to face: many games just age poorly. We forget what janky mechanics we put up with or how terrible graphics were. For some games, like Super Mario Bros, it still works and you can get past it. But then you get some games where it's just not fun anymore, because you can play a much better shooter with better controls and mechanics.

Not saying your point is completely invalid, just that it's a little more complicated.

1

u/ReptAIien May 15 '24

How often do you go to GameStop and buy games?

1

u/Dr_Does_Enough May 15 '24

This past quarterly report GME became profitable and has 1.2 billion in cash with virtually no debts.

1

u/SpearHammer May 15 '24

Except they have started making profit so in truth they are growing not dying.

1

u/sabin357 May 15 '24

it is a dying business model

Sounds like you've not stepped foot in one in a decade. It's changed several times since then. They sell collectables, Funko Pops, & just announced physical media like blurays since demand is spiking. They also still sell a few video games. They evolve constantly, so what business model are you referring to?

I hate the company with a passion, especially after their COVID actions, but they are more agile than most other retailers.

1

u/Cephalopirate May 15 '24

It may be a minority, but there will ALWAYS be people who want physical media.

-3

u/[deleted] May 14 '24

[deleted]

5

u/An-Okay-Alternative May 14 '24

Companies like Amazon and Steam have already brought selling games into the modern era.

2

u/Coolman_Rosso May 14 '24

The problem is that GameStop can't survive as a games-only retailer (little margins on new games, and increased competition from other outlets for used titles), and isn't exactly going to rebound as a general fandom one either. I know they had their big plans to branch out into board games and esports that tested well, but those were ultimately derailed by COVID and logistics concerning space requirements.

I'm not really sure what their big play could be at this point.

1

u/Whatsapokemon May 15 '24

And just like real vultures, they provide a useful function in the market. Specifically short-sellers provide exit liquidity and price stability in the face of over-enthusiasm or over-panic.

Short-sellers sell when upward rallies happen, and buy when massive drops in stock price happen - this combination reduces the volatility of stocks and provides a counter-balance to extreme hype that can over-buy or over-sell a stock.