Here's kinda the full story and backdrop. I wrote this like a week ago so it's a little outdated.
Take it back to March 2020. Gamestop is a dying company. Everything Gamestop did in the past can now be done online. Worse, Covid-19 is decimating physical retail. People expect Gamestop to file for bankruptcy anytime. Share price: ~$2.80.
While all this is happening, hedge funds/investors have been shorting Gamestop. I won't go into the exact mechanics of shorting a stock, but what's important to know is that unlike buying a stock and making money when it goes up, in short (aka selling short and short selling) you make money when the stock goes down. Short selling is important to the story. The funds who sell short are called short sellers. The biggest short seller is Melvin Capital. Short sellers made a lot of money shorting Gamestop from $45 to $2.
IIRC, things are quiet from April end to June. GameStop stock keeps seesawin between $3 and $6.
It's near the end of August now. GameStop has made some good moves in regards to paying of their debts and taking better loans. They might have done other stuff too, I don't fucking remember. Console release hype for the new Xbox and PS are setting in.
Out of the blue, Microsoft announces a fantastic partnership with GameStop. The next couple days, GME share price rockets from $5 to $10. On WSB, the crowds is turning bullish. They're further motivated by u/DeepFuckingValue, who, in his end of September update posts his position... and he is a [FUCKING MILLIONAIRE] (https://old.reddit.com/r/wallstreetbets/comments/j2u3zn/gme_yolo_monthend_update_sep_2020/). Throughout the summer, DPV has continued to add to his GameStop position. From being 40k in the red, DPV is now 989k in the GREEN. He has taken his initial investment of ~140k and turned it into 1.4 Million. He isn't even fucking done yet.
All this while, short sellers like Melvin Capital are getting antsy. You see, short selling is far more dangerous than simply buying a stock. When you buy a stock at $1 and it goes to $10, you have made $9. If it goes to $0, you have lost $1. But you can only lose at most your initial investment. On the other hand, if you short a stock at $1, expecting it to go to $0, and it goes to $10, you have lost $9 - 9 times your initial position size. Now imagine shorting 10 million dollars worth of GameStop at $5. If it goes to $10, these short sellers OWE money to their brokers. They owe 10 million dollars.
In order to exit their shorts, short sellers have to buy back the shares from the open market. Buying raises the price of a stock - that's simple supply and demand. The problem is that these short sellers have gotten SO FUCKING GREEDY, that they've started to sell short stock that doesn't exist. This is called naked short selling. For GameStop, more than a 100% of the stock is being sold short. WSB autists theorize that the resulting buying pressure from short sellers exiting their positions will cause the share price to sky rocket. This phenomenon has a name: [Short Squeeze] (https://www.investopedia.com/terms/s/shortsqueeze.asp). It happened to Voltswagen in 2008, Tesla in Feb 2020, and the retards on WSB are hoping it's going to happen to Gamestop too.
WSB has a brilliant idea: buy shares of GME to reduce the shares available for short sellers to buy back. This buying should drive the price of GME higher, forcing the short squeeze to happen sooner. It's a positive feedback loop that's putting short sellers on suicide watch. The name of the game: the Gamestop Infinity Squeeze.
For many reasons, whether the strong bullish case from the console releases, the restructuring of corporate debt, or partnerships with company like Microsoft, the folks on WSB found reasons to buy GameStop.
And from September to November, WSB continue to buy shares of GameStop. [Some attempts at tabulating ownership] (https://old.reddit.com/r/wallstreetbets/comments/k5ociy/gme_ownership_survey_update/) show that /r/wallstreetbets owns ~4% of the company. For a billion dollar company, that's nearly 40 million dollars in shares held by the basement dwellers on WSB. Share price mid month November: 15 bucks flat.
Mr. Cohen doesn't like the way GME is being run by its executives. He thinks that GameStop should transition from physical retail to ecommerce. He thinks he can run GameStop better than the shrooms already on the board of directors... and he probably can. Ryan Cohen is a smart. He founded and ran Chewy, a company that sells pet products online. He essentially went toe-to-toe with Amazon and survived, netting himself a cool 3.35 Billion when he sold it to PetSmart in 2017.
Like WSB, Mr. Cohen has been slowly been buying shares in GameStop. But it's not to trigger the Infinity Squeeze. At 10% ownership, Cohen can put people on board of directors and change GameStop in a way he see fits. Cohen begins tweeting about GameStop. [In late November, Mr. Cohen announces he has a 9.99% stake in GameStop, slightly below the controlling amount, and issues a letter demanding that GameStop begin a transition to ecommerce.] (https://www.cnbc.com/2020/11/20/former-chewy-ceo-ryan-cohen-urges-gamestop-to-become-the-amazon-of-video-games.html) The letter falls on deaf ears.
At this point, the hype on /r/wallstreetbets is unparalleled. GameStop is one of the most mentioned companies on the sub. People who have been following this saga are ecstatic about Mr. Cohen's board takeover. His leadership should set the stock higher. Retards hope it forces the Infinity Squeeze.
Melvin Capital and other short sellers are in danger. Instead of covering, they continue to sell GameStop short. The supply for shares available to short is rapidly dwindling. Some brokers have less than a 1000 shares available to sell short. As the price of GameStop continues it's steady trend up, short sellers hemorrhage more and more money. December end of month share price: $19.26.
That all brings us to this week.
On Monday, Ryan Cohen announces his board members. It's him and two other people who worked with him at Chewy. The stock shoots up 10%. It's quiet on Tuesday. Then suddenly today, the stock shoots up from it's $20 open to $38.87 at it's highest today - up more than 80%.
The retards on wallstreetbets rejoice. Months of nervously waiting for this moment have paid off. Thousands and thousands of people wake up with $10,000s more than they went to sleep with. Short sellers like Melvin Capital continue to buy back stock, realizing millions of dollars in losses, sending the stock up even further. WSB celebrates, laughing at the snooty analysts and news figureheads that said such a recovery with GameStop wasn't possible. Jim Cramer, CNBC anchor and beloved autist, says that [wallstreetbets is in control] (https://old.reddit.com/r/wallstreetbets/comments/kwhxsr/whos_in_control_here_we_are/) and even joins in [bashing short sellers on twitter.] (
https://twitter.com/jimcramer/status/1349429511981592578?ref_src=twsrc^google|twcamp^serp|twgr^tweet)
The share price at today's close: $31.40, up 57.39% today alone.
Nobody knows what is going to happen now. Maybe short sellers will continue to exit their positions and drive the stock up higher. This might become the new normal for the next several days, with daily 20-40% increases as short sellers continue to buy back. Maybe this was a one off day, and the stock tanks 50% tomorrow, with mourning following today's celebration. Nobody knows. The market is a fickle mistress.
Edit:
I rarely revisit my posts, so I wanted to make an exception and say thanks. I didn't know this would be well received. I'm not the best narrator/writer and my post is FULL of grammatical errors and mistakes.
Something of a timeline via Minds, all credit to @plasmarob
This was a RIDE
r/wallstreetbets tortures greedy short sellers out of existence (think 4chan but hiding on reddit and playing the stock market)
STORY TIME
u/TheCopyPasteLife:
Here's kinda the full story and backdrop. I wrote this like a week ago so it's a little outdated.
Take it back to March 2020. Gamestop is a dying company. Everything Gamestop did in the past can now be done online. Worse, Covid-19 is decimating physical retail. People expect Gamestop to file for bankruptcy anytime. Share price: ~$2.80.
Enter wallstreetbets, the autistic capital of the online investing world. Several users begin to go bullish on GME. They're laughed at and called retarded. Most notably, a user, u/DeepFuckingValue, who has been invested in GME for a very, very long time, reiterates his position in the stock while providing monthly updates. In [January 2020 he is down thousands of dollars (-40k).] (https://old.reddit.com/r/wallstreetbets/comments/ex040l/gme_yolo_monthend_update_jan_2020/) However, by the end of [April 2020, he's finally green (+41k).] (https://old.reddit.com/r/wallstreetbets/comments/gb3ctb/gme_yolo_monthend_update_apr_2020/) And he's just getting started. Share price EoM April: ~$5.75.
While all this is happening, hedge funds/investors have been shorting Gamestop. I won't go into the exact mechanics of shorting a stock, but what's important to know is that unlike buying a stock and making money when it goes up, in short (aka selling short and short selling) you make money when the stock goes down. Short selling is important to the story. The funds who sell short are called short sellers. The biggest short seller is Melvin Capital. Short sellers made a lot of money shorting Gamestop from $45 to $2.
IIRC, things are quiet from April end to June. GameStop stock keeps seesawin between $3 and $6.
It's near the end of August now. GameStop has made some good moves in regards to paying of their debts and taking better loans. They might have done other stuff too, I don't fucking remember. Console release hype for the new Xbox and PS are setting in.
Out of the blue, Microsoft announces a fantastic partnership with GameStop. The next couple days, GME share price rockets from $5 to $10. On WSB, the crowds is turning bullish. They're further motivated by u/DeepFuckingValue, who, in his end of September update posts his position... and he is a [FUCKING MILLIONAIRE] (https://old.reddit.com/r/wallstreetbets/comments/j2u3zn/gme_yolo_monthend_update_sep_2020/). Throughout the summer, DPV has continued to add to his GameStop position. From being 40k in the red, DPV is now 989k in the GREEN. He has taken his initial investment of ~140k and turned it into 1.4 Million. He isn't even fucking done yet.
All this while, short sellers like Melvin Capital are getting antsy. You see, short selling is far more dangerous than simply buying a stock. When you buy a stock at $1 and it goes to $10, you have made $9. If it goes to $0, you have lost $1. But you can only lose at most your initial investment. On the other hand, if you short a stock at $1, expecting it to go to $0, and it goes to $10, you have lost $9 - 9 times your initial position size. Now imagine shorting 10 million dollars worth of GameStop at $5. If it goes to $10, these short sellers OWE money to their brokers. They owe 10 million dollars.
In order to exit their shorts, short sellers have to buy back the shares from the open market. Buying raises the price of a stock - that's simple supply and demand. The problem is that these short sellers have gotten SO FUCKING GREEDY, that they've started to sell short stock that doesn't exist. This is called naked short selling. For GameStop, more than a 100% of the stock is being sold short. WSB autists theorize that the resulting buying pressure from short sellers exiting their positions will cause the share price to sky rocket. This phenomenon has a name: [Short Squeeze] (https://www.investopedia.com/terms/s/shortsqueeze.asp). It happened to Voltswagen in 2008, Tesla in Feb 2020, and the retards on WSB are hoping it's going to happen to Gamestop too.
WSB has a brilliant idea: buy shares of GME to reduce the shares available for short sellers to buy back. This buying should drive the price of GME higher, forcing the short squeeze to happen sooner. It's a positive feedback loop that's putting short sellers on suicide watch. The name of the game: the Gamestop Infinity Squeeze.
For many reasons, whether the strong bullish case from the console releases, the restructuring of corporate debt, or partnerships with company like Microsoft, the folks on WSB found reasons to buy GameStop.
And from September to November, WSB continue to buy shares of GameStop. [Some attempts at tabulating ownership] (https://old.reddit.com/r/wallstreetbets/comments/k5ociy/gme_ownership_survey_update/) show that /r/wallstreetbets owns ~4% of the company. For a billion dollar company, that's nearly 40 million dollars in shares held by the basement dwellers on WSB. Share price mid month November: 15 bucks flat.
There's a knock at the door. It's a stunningly gorgeous man. He says his name is [Ryan Cohen.] (https://specials-images.forbesimg.com/imageserve/5ffcc3658284b47415e4a523/960x0.jpg?cropX1=0&cropX2=6392&cropY1=498&cropY2=3493)
Mr. Cohen doesn't like the way GME is being run by its executives. He thinks that GameStop should transition from physical retail to ecommerce. He thinks he can run GameStop better than the shrooms already on the board of directors... and he probably can. Ryan Cohen is a smart. He founded and ran Chewy, a company that sells pet products online. He essentially went toe-to-toe with Amazon and survived, netting himself a cool 3.35 Billion when he sold it to PetSmart in 2017.
Like WSB, Mr. Cohen has been slowly been buying shares in GameStop. But it's not to trigger the Infinity Squeeze. At 10% ownership, Cohen can put people on board of directors and change GameStop in a way he see fits. Cohen begins tweeting about GameStop. [In late November, Mr. Cohen announces he has a 9.99% stake in GameStop, slightly below the controlling amount, and issues a letter demanding that GameStop begin a transition to ecommerce.] (https://www.cnbc.com/2020/11/20/former-chewy-ceo-ryan-cohen-urges-gamestop-to-become-the-amazon-of-video-games.html) The letter falls on deaf ears.
On [December 21st, Ryan Cohen discloses that he has a 12.9% stake in GameStop.] (https://www.thestreet.com/investing/ryan-cohen-chewy-13-percent-stake-gamestop) He's going to get his people onto the board and change the way GameStop is run.
At this point, the hype on /r/wallstreetbets is unparalleled. GameStop is one of the most mentioned companies on the sub. People who have been following this saga are ecstatic about Mr. Cohen's board takeover. His leadership should set the stock higher. Retards hope it forces the Infinity Squeeze.
u/DeepFuckingValue has achieved legendary status for having balls of steels and holding GameStop through thick and thin. His [December, end of Month, end of Year update puts his GameStop position at 3.2 Million dollars] (https://old.reddit.com/r/wallstreetbets/comments/kny2rx/gme_yolo_yearend_update_dec_31_2020/). He is up 1.9 Million dollars.
Melvin Capital and other short sellers are in danger. Instead of covering, they continue to sell GameStop short. The supply for shares available to short is rapidly dwindling. Some brokers have less than a 1000 shares available to sell short. As the price of GameStop continues it's steady trend up, short sellers hemorrhage more and more money. December end of month share price: $19.26.
That all brings us to this week.
On Monday, Ryan Cohen announces his board members. It's him and two other people who worked with him at Chewy. The stock shoots up 10%. It's quiet on Tuesday. Then suddenly today, the stock shoots up from it's $20 open to $38.87 at it's highest today - up more than 80%.
The retards on wallstreetbets rejoice. Months of nervously waiting for this moment have paid off. Thousands and thousands of people wake up with $10,000s more than they went to sleep with. Short sellers like Melvin Capital continue to buy back stock, realizing millions of dollars in losses, sending the stock up even further. WSB celebrates, laughing at the snooty analysts and news figureheads that said such a recovery with GameStop wasn't possible. Jim Cramer, CNBC anchor and beloved autist, says that [wallstreetbets is in control] (https://old.reddit.com/r/wallstreetbets/comments/kwhxsr/whos_in_control_here_we_are/) and even joins in [bashing short sellers on twitter.] ( https://twitter.com/jimcramer/status/1349429511981592578?ref_src=twsrc^google|twcamp^serp|twgr^tweet)
u/DeepFuckingValue posts his GME update: [5.8 Million Dollars, 2.7 of which he made today alone] (https://old.reddit.com/r/wallstreetbets/comments/kwpviw/gme_yolo_update_jan_13_2021/). He is crowned the King of the Retards.
The share price at today's close: $31.40, up 57.39% today alone.
Nobody knows what is going to happen now. Maybe short sellers will continue to exit their positions and drive the stock up higher. This might become the new normal for the next several days, with daily 20-40% increases as short sellers continue to buy back. Maybe this was a one off day, and the stock tanks 50% tomorrow, with mourning following today's celebration. Nobody knows. The market is a fickle mistress.
Edit:
I rarely revisit my posts, so I wanted to make an exception and say thanks. I didn't know this would be well received. I'm not the best narrator/writer and my post is FULL of grammatical errors and mistakes.
https://www.minds.com/newsfeed/1201031217605980160?referrer=thatyellowbastard
There's really only one problem with your post - it ends too soon.
At close of trading on 1/27, $GME last traded at $347.51, up $199.53 today.
DeepFuckingValue's holdings at the end of December, at this price, are worth $4.5 million dollars.
Christ this is worthy of an hour long Internet Historian video.
It has to be on works. And it's going to be epic in its narration.