GameStock - The Big Long

Things to consider:

The company simply isn't worth $330.

It was being heavily shorted for a reason, see above.

Small fish were lucky to move a market AT ALL. They cannot also prop it up.

The big boys are frickin' PISSED OFF. They are probably not broke, however.

There is such a thing as a "bag holder". Would you like to know how it feels? Trust me, you do not. Don't ask how I know this, just trust me, but if you simply must know, see the sad story of SUNE.

You know what a squeeze is, so you should know what happens next.

If it were me and I was long and up 100%+ in a month, or even a year, I would thank my god(s) and RUN LIKE HELL. This is a gift, you can take it off the table, or leave it there and walk away with an empty bag instead. Go to top of list...

I do a good bit in crypto but wouldn't touch this, so I am used to volatility. But I don't even consider this. I have rarely shorted through the years before bitcoin was ever  a thing. But as far as this game stop is it is way too late to do anything but sit back and watch. The only winners would be early in and early out. You don't want to be last man standing as you wouldn't be standing tall and proud. Bent and broken would be closer. Just my take on it. I haven't looked deeply nor with any real interest.

100% in a year is decent, but stay away from crypto if that is what you are limiting yourself to. I have taken out my original investment and am risking profit only. Same as I have since first buying bitcoin and ether, now extended to  over a dozen other cryptos, and keep an eye out on when to get the heck out. Same as I did early Christmas Eve 2017. I had been watching for a drop and was able to get out just after the beginning of the drop. But I bought in throughout 2014 and 2015, some in16 very little in 17. I didnt think it would go as far as it did. Nor did the newsletters that I read and mostly follow. I bought back in in middle of 18. I have only invested less than 5% of my investment capital into crypto, but it is nowover 20% of my total investments, AFTER taking out the original capital. Physical precious metals are not investments, they are assets, more like your home, which hopefully goes up in value at least as fast as inflation and loss of value in the US dollar. Gold has kept up. Real estate, much like my undies, depends. Where located, and what's hot.

@nottamiata

It's definitely not worth the price, but that isn't the point of that trade.  There are more shares shorted than shares outstanding... which shouldn't be legal but somehow is.  Little guys might make a few thousand but we bleed the institutional traders billions the longer we hold - and I'm certain there are big guys now trading our direction and moving the needle as well.

Basically, this is the proper way to "occupy wall street".  

I'm up 1000% by luck of timing, but I'll gladly chop that gain in half if it bleeds the hedge funds out.  

Also, I do remember Sun Edison (2017 if I recall).  I was very green and it was the first time I'd seen a listed stock go bankrupt.  The lesson I learned from that day is to stay away from energy.

-

@grumpy 

The bet is against the shorters.  At some point they will have to buy back these borrowed shares at a high price.  The strategy is modeled after the 2008 VW incident.  Germany actually created laws to prevent levered short selling after that, but America kept on being America.

This is just a trade in the end.

The end goal is of course real estate and a supercharged 2zz spyder.

@scotched

Yes I understand the hedge funds shorted the stock of a decent company. Small, by comparison investors got together on social media and decided to back GameStop, make a point that hedge funds were borrowing more stock than was ever available or made. That is illegal but often done by hedge funds. the small investors are trying to make a point.

The stock exchange will suspend trading and settle it. Probably in the hedge funds favor. The SEC will probably get involved and settle it...again probably in the hedge funds favor. It will show the hypocrisy of the hedge funds SEC and judicial branch of the gov't. 

Pretty well sums up what probably y will happen. Yes I am a cynic. By many of the definitions of that word.

Ah, Robinhood stepped in first to shut down the hedge fund killers. I hadn't followed this enough to even know they were a part f it. Even the name of the company is hypocritical in this case. Hope you got out, or wish you well dealing with the gov't, but on that last score it is the gov't, who do you think pays them better? the hedge funds or the small, by comparison, investor, no matter how many of them there were? I am sure you can guess what a cynical ba$tard would think. I think I may just resemble that last statement. I do hope you got out.

@grumpy

Robinhood was the big one.  Crazy that the market makers have investments from the very same companies we are up against.  When's the last time a retailer broker said no to "dumb/new" money entering the market?  The one nice thing is that the real manipulation is now in the open for us to see... The bigger brokers are still allowing trades.  Europe and Asia are watching this show as well.

Obviously the Gov't won't be on our side, but the one thing they cannot print more of is shares of that stock.

I'm not leaving.

@scotched

I wish you well. I have long known (several decades, over three) how shorting works and that more stock is borrowed for shorting than has been issued. Same as paper gold. Their is more gold, sitting in a few vaults that is loaned out to be sold and certificates made than are in those vaults. That is one reason I only have physical gold and silver in MY hand. Also mine is mainly numismatic coins, mostly US.for other reasons. You can gain from those coins from them gaining value on top of just gold going up.

I am too old for selling stocks short. I have no debt outside of ranch/farmland. I sold my Idaho house and half section. California is coming into Idaho. Idaho Falls was second favorite area after Boise. I got a better house and buildings (with a lift!) and a bit more ground, plus a bit of cash. My wife and I debated real hard with ourselves whether or not to get a mortgage. Ended up with 60% down and 10 year mortgage with NO prepayment penalty. The low rate and tax advantage was too hard to walk away from. I hate having to make payments on anything, and haven't for well over a decade. Only made payments on one vehicle to establish credit, and real estate. never on a card, car, or anything else. Worked and saved from9 ears old, invested from 13. Rarely had less than a job and at least 1 or 2 sidelines making money. Mostly hobbies that I made money doing. I retired at 55, I took my pension at 65, if I took earlier I would have gotten less than full value. I will take SS at 70, again I will get 22% more at 70 than I would at 66 which is my full retirement age. I will take regular IRA disbursements at 72, as I am required to do. My Roths... Don't expect to touch them. they will probably be inherited. Unless I think the federal gov't will try to screw up the retirements of those who saved and invested for decades. That won't surprise me in the least. After all I didnt earn that myself. it is others that allowed me to do so. I read too much about what our Congress and others have said about those who invest. No matter what my "job" paid, and no matter that I saved instead spending. Living well within your means is bad when you save and invest. spending and paying interest on loans is a much better thing. Just ask the gov't. I wish I could say sorry for the rant...but telling the truth is not a rant.

Just a quick question. Will you ever use Robinhood again? They are opening for buying and selling in everything again tomorrow.

From my understanding, making money isn't the point anyway. 

Denying new dumb-money longs is doing them a favor. They just don't know that yet.

Scotched, if you are willing to lose half, why not just take half off the table now?

1,000% and staying all-in, at the end of a squeeze, no less. I dunno... bagholders WILL be made at some point. Contrarians win at the end of a trend, and it is starting to look like a very juicy short. The redditors just dont have the resources to prop it up forever like the hedgers do. It's only REALLY worth $100? Fifty? GME has a crap business model. Like being in the used cassette tape business?

Easy for me to say "run away!" though. I don't have any skin in the game, and my greed (and fear) almost always beat my discipline when sh*t got real. It's totally different when you are looking at that account screen with a big, FAT, GREEN number looking back at you. I know, believe me. Big red ones are tough too.

If you own stock and don't want to lighten up, I hear that the option premiums are STUPID inflated-- I heard the ATM premium on puts was $6,000??? Yeah, six-frickin-K. But I never confirmed that. Maybe sell some calls against the position for a bit of cushion?

And for god's sake put in a stop. The most effective kind you can. Stops don't always fill. Talk about pissin' a guy off... it can blow right past there. All it takes is one big short order or sale all at once, and the bots will commit mass seppuku in 8 miliseconds.

@grumpy Robinhood still has one of the best looking apps out there, but they are too small a broker for their amount of traffic.  Limit orders on non-volatile stocks execute just fine.  Anybody who is serious about timing is not buying/selling options on RH.  I have another account at Fidelity that I never use, but I'll be transferring to them once I close out my orders this month.  For the average buy and hold RH is still pretty good.

RH had their reasons for restricting sales (SEC net capital obligations / clearinghouse deposits).  The other reasons include pressure from their own investors - but the most likely reasons is market making, they do not have the shares to sell.  It would explain why other brokers had no problem with sales.

@NottaMiata I'm not losing my shirt here.  I got into GME at $30 basically as a joke.  I've been a member of WallStreetBets since 2017 and the DD behind this one looked good.  What is $1000 against a hedgefund losing millions?  It is a show you would pay to see. 

We sat there and watched the Citron (hedge fund) put out articles like "Reasons why GME is going to $20" - as if it were for the sake of average investor.  Typical hedge fund behavior pretending to care, these dudes profit on bankrupting companies and lives.  Then they lied on the networks about covering their short positions - no they doubled down.  Then the networks got professionals to try and side with their narrative - but half of them ended up saying the hedge funds deserve their comeuppance.  Even Jim Cramer can't help but love it.  Finally, they tried pulling the plug at brokers.

Many of us were just going the take small profits, but after watching what unfolded it just made us angry.

I have a stop loss to cover, but I'm not giving up shares to be bought back.  

@scotched

I hope you guys continue with the silver. My numismatic coins, have gone up rather nicely, also the mining stocks have been doing the same.I didn't expect to even consider buying more stock till the dow to gold index to hit 5 and then sell most of my precious metals coins, and mining stocks and buy what I consider blue chip stocks that pay dividends. I am at an age where I don't want to lose value in my investments. Increasing, other than keeping ahead of inflation and value loss in the dollar, is not what I am looking for. Cryptos are just to keep me interested. 

I do thank you guys for the unexpected big bump in silver. I like it when such things just fall into my lap, just like a lap dancer. 😎 

Thi is a copy and paste from a newsletter that I get. It pretty well tells you what I tried to in my first post. He does it much better. Robinhood is not on your side.

The link below will only take you to the newsletters free side, not the pid side which I copy and pasted.

Robinhood was lending out shares of GameStop and other highly shorted companies to hedge funds. Robinhood generated lending fees by doing so. It also allowed – arguably encouraged – the retail users of its platform to trade stocks and options on margin.

But there was so much activity around GameStop that Robinhood could no longer meet its capital requirements from a regulatory perspective. It had to quickly raise additional private capital to shore up its balance sheet and provide enough capital to clearinghouses to avoid getting into trouble… or something much worse.

More specifically, it drew down on credit lines of $500–600 million and raised more than $1 billion in emergency funding. The most ironic part was that it did so hours after stating that it had no liquidity problem.

But in order to stop its increasingly large capital requirements from growing even larger, Robinhood suspended trading on several shorted stocks like GameStop.

And it didn’t just suspend trading. Robinhood actually started selling its users’ positions at its own discretion. Many traders using Robinhood reported having their shares sold without their permission.

That’s not a typo. Users profiting from GameStop were closed out of their positions – without their consent – at rapidly declining prices in GameStop. This was done so Robinhood could shore up its own business.

And it resulted in the loss of more than $1 billion in profits for retail investors. Of course, it saved hedge funds an equivalent amount of bleeding.

Robinhood is certainly an inappropriate name for the online brokerage. I propose renaming the company “Robbing the Neighborhood.”

Robinhood was supposed to let regular investors do “commission-free trading.”

But the company did exactly the opposite. The platform is not commission-free. And apparently the company can trade our stocks in a way that benefits Robinhood and its customers… and hurts its users.

I use that language intentionally. Robinhood’s “users” use the brokerage to trade and invest. Robinhood’s “customers” are actually the hedge funds that pay Robinhood for order flow.

Robinhood’s largest customer is Citadel. More than half of the orders that Robinhood users place are routed through it.

The absurdity of this situation is baffling.

Robinhood is the online broker equivalent of what Facebook is to social media.

Robinhood takes users’ data – their order flow – and sells it to the highest bidders.

What do Robinhood users receive in return? “Free” trading. But Robinhood users do in fact pay for trading through suboptimal order execution. That results in more profits for Robinhood’s real customers – the hedge funds – and fewer profits for Robinhood’s users.

And politicians are now looking at retail investors to determine if they are manipulating the markets. I predict that this will end in new regulatory changes to “protect” us retail investors from any speculative behavior.

And, of course, the hedge funds are crying foul due to the sting of losing billions. But the real focus should be on the hedge fund activity and naked short selling.

I doubt that will happen. After all, the new U.S. Treasury Secretary, Janet Yellen, received $810,000 of speaking fees from none other than Citadel over the last couple of years.

I suspect that the old saying will ring true…

"Don't bite the hand that feeds you"

@grumpy

WTF! am I right that this revelation should include Jail time?