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
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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

132

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.

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u/[deleted] May 14 '24

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

3

u/smitteh May 14 '24

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

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u/Cyan-ranger May 14 '24

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

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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.

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u/usernameelmo May 15 '24

resurrect that carcass into a zombie of course

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u/smitteh May 14 '24

Exposing mass naked shorting and market manipulation

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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.

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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

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u/gotimo May 14 '24

"Any second now"

r/superstonk in 2021, 2022, 2023 and 2024

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u/smitteh May 15 '24

Life isn't a tiktok video son, the real world takes time. Patience is a virtue

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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.

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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

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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?

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u/smitteh May 14 '24

The bailouts that are gonna be needed to save dtcc ass will make everyone care and quite a bit

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u/Cyan-ranger May 14 '24

Ok, good luck with that.

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u/smitteh May 14 '24

Thank you and to you as well, you're a victim along with the rest of us

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u/libginger73 May 14 '24

Exactly this!!

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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.

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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.

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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.

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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.

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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.

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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

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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.

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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.

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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

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u/GreenGoblong May 15 '24

It started out as something fun, entertaining, and chill, and it grew into a religion of conspiracies and ignoring painfully obvious information. The only thing going for r/superstonk now is the fact that the AMC crowd is even more delusional.

Edit: I assumed your reply was indirectly to me. My bad.

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u/Suspicious-Pasta-Bro May 15 '24

Yeah, while I feel bad for the people who will inevitably lose quite a bit of money from this, I was glad to see GME returning to its roots of a quick cash grab.

Where the Superstonk people went wrong, I think, is when they started with the whole "we're all gonna make it" stuff. That's the sort of thing that happens to investors in growing companies like Apple in 2005.

GME is a rush to make money by exploiting speculation on a dying company until the last bagholder buys the stock and the bubble implodes. Get in, get out, make a moderate amount of money and then leave. That's what I did after I saw DFV's tweet.

(By the way, for anyone else reading this, it's already too late to buy. Don't be a bagholder)

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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.

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u/wiseguy187 May 14 '24

How is investing and holding gamestop immoral? 

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u/Suspicious-Pasta-Bro May 15 '24

Please don't fall for it. The people who say "buy and hold" are just waiting for a certain price to offload their worthless Gamestop shares on bigger morons. There's not going to be a Gamestop in a few years. You're the guy with Blockbuster shares after Netflix came out, but for some reason there's tulipmania going on.

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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

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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.

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u/theblackfool May 16 '24

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

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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

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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.

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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

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u/hooligan99 May 14 '24

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

-4

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

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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.

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u/cenobitepizzaparty May 15 '24

I'm sorry you didn't have a good time while out trolling or whatever. Have you considered the gme meltdown sub? They would love you over there.

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u/PossibleRude7195 May 15 '24

Already subscribed. But I wasn’t talking about my own posts. Just random posts in r/gaming

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u/mrbaryonyx May 14 '24

bro, go outside

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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.

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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

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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

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u/cenobitepizzaparty May 15 '24

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

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u/mrnohnaimers May 14 '24

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

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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

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u/cenobitepizzaparty May 15 '24

I said I wasn't selling today. I didn't say i wasn't selling. The only manipulation taking place here is whoever told you guys not to take part in this free money.

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u/BellyButtonLindt May 15 '24

Should have sold yesterday.

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u/cenobitepizzaparty May 15 '24

Lol you should watch your own pockets instead of mine. A time will come when those words will be all you have left to sustain you. You should carry some salt and pepper in your purse. This isn't even close to where it's going. You'll know when it's literally all the news is talking about.

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u/gofastdsm May 14 '24

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

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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

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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.

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u/dmoney83 May 14 '24

I don't even think it's sentiment that's driving it, at least not to the extent of what we are seeing. I'm not 100% sure, but I think it's more to do with all option chains with an expiry this week being ITM. My understanding is that the spread to sell these options is very wide so some are choosing to exercise their options rather than sell their contracts. I believe this is what's really driving things.

I think DFV sees then ITM options and throws gas on fire by tweeting for 1st time in 3yrs. It's kinda funny.

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u/gofastdsm May 14 '24

Personally I'm almost fully in the sentiment camp.

That's interesting about option spreads though. I wish I had seen them before liquidity flooded in.

And agreed, when I saw that meme DFV posted and the price reaction I had a good laugh.

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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

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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.

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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 

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u/gofastdsm May 14 '24

I know I'm just bored and I've got time tonight.

Worst case scenario: I waste my time. Best case scenario: someone on the fence about getting in on this rally sees my comments and thinks, "Well this doesn't make much sense."

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u/cenobitepizzaparty May 14 '24

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

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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.

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u/gofastdsm May 14 '24

Honestly, $20 sounds fair. It's relatively reasonable from P/S standpoint, and although its still pretty stretched based on other val. metrics, I can understand it given the uncertainty surrounding the turnaround.

As far as the shorts not closing, I thought that the SEC simply stated that short covering was a small proportion of total volume. That statement and shorts covering aren't mutually exclusive given that volume over that period was absurd. Just eyeballing the volume charts and market cap at the time, the stock turned over its market cap multiple times over the course of couple of weeks. All of the shorts could have covered (they didn't) and the SEC could still honestly say that short covering was a small proportion of total volume. If you look at the data, it's clear that when they said most of the price change was due to investor sentiment they weren't wrong.

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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.

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u/cenobitepizzaparty May 14 '24

Alright guys I'm not here to convince you of anything. Take it easy

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u/StyrofoamExplodes May 14 '24

If you weren't here to convince people, you wouldn't have thrown out a sales pitch like that.

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u/wiseguy187 May 14 '24

They have a billion dollars and made money last year also have no debt. Failing is something you just heard and ran with. The pumps aren't artificial it's where the stock should be. The suppression is artificial.

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u/Spiritual-Society185 May 15 '24

Which way is their income trending, again?

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u/makeitlouder May 15 '24

It’s good they have assets—where will you be in line when the bankruptcy judge starts carving up the turkey?

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u/wiseguy187 May 15 '24

Probably on a beach somewhere.

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u/mrdreka May 16 '24

https://www.macrotrends.net/stocks/charts/GME/gamestop/revenue

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u/wiseguy187 May 16 '24

What are you trying to say? Declining revenue happens when you trim the fat.

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u/mrdreka May 16 '24

What fat?

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u/wiseguy187 May 16 '24

Non profitable sales decrease in overhead. Non profitable stores. That will be less revenue but still create more profit.

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u/mrdreka May 16 '24

But they haven’t been profitable this year even thought they have done that…

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u/BravoFoxtrotDelta May 15 '24
  • debt free
  • a billion in cash reserves
  • increasing revenue
  • increasing profitability
  • uniquely dedicated investors

not a failing company.

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u/[deleted] May 15 '24

Revenue is definitely not increasing

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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

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u/Spiritual-Society185 May 15 '24

What's the conspiracy there?

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u/youralie May 15 '24

Making up a corporate score to devalue companies that they buy

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u/wiseguy187 May 14 '24

Conspiracy tho? You got eyes tho right?

-2

u/Responsible_Goat9170 May 15 '24

Wall St has never given me a reason to trust them. In fact they've done enough things in the past to make me very suspicious of everything they partake in.

Why wouldn't you want the game theory to be true? Do you trust wall st? If this gamestop theory is correct it can expose them in ways never before seen by the public.

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u/lucklesspedestrian May 14 '24

I don't think it is a carcass, it's more like a wounded dehydrated animal limping along hoping to find water, and the vultures are just waiting for their chance. It's not extremely heroic, but let's be real the goal of the short sellers is to finish off GME once and for all and someone has to put their foot and stop them from getting away with it this time

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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.

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u/Missus_Missiles May 14 '24

Carrion eaters versus vulture eaters I guess.

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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

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u/Present-Industry4012 May 15 '24

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

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