February 2021 | Vol. XX - No. 2
GameStop Stock Price GME:NYSE 2/5/2021 1:59 PM EST 61.58 up +7.61 (+14.22%)
Cheng found GameStop’s shares were not in the top 10 of most traded stocks by small investors, and claims institutional investors rather than Redditors were likely been behind the astronomical rise and fall in the share prices of GameStop. On the retail buying list for January, GameStop was number 15.
Gamestop stocks have blown apart the stock market. Billionaires are losing money and the subreddit WallStreetBets is the mastermind behind it all. But with the stock prices going down, what will be left when this is all over?
(2/4/2021) GameStop plummets again: GameStop's share price -38.91 (-42.11%) to $53.50
Market Cap 3,731.63M
52 Week High 483.00 52 Week High Date 01/28/21
52 Week Low 2.57 52 Week Low Date 04/03/20
GameStop Stock plunged again by 56% -$128 (2/2/2021).
GameStop plunges 40% at the open, AMC drops 35% https://t.co/3ZgeokPW1E pic.twitter.com/aWolq5glxq— CNBC Now (@CNBCnow) February 2, 2021
Between the gap and additional losses, GameStop ($GME) is down 50% from Monday's close. Overall, from Thursday's record intraday high, we are down over 75%. Volume is also fading, which may show appetite to keep the stock up may be waning pic.twitter.com/vvAXLpGEII— John Kicklighter (@JohnKicklighter) February 2, 2021
10-year-old investor from Texas cashes in on GameStop stock rise: Jayden Carr got $60 worth of $GME for Kwanza in 2019, and sold it for over $3,000. He's putting most in savings, but using the rest to diversify his portfolio. Audrey wrote: I love this! Couldn't stop smiling. Great story & very smart mom :)
2/2/2021 Robinhood raises trading limit on GameStop again to 100 shares. Restrictions on trading Genius Brands, Koss, and BlackBerry have been removed.
Outside of our standard margin-related sellouts or options assignment procedures, your positions will not be sold for the sole reason that you are currently over the limit. However, you will not be able to open more positions of each of these securities unless you sell enough of your holdings such that you are below the respective limit.
I have questions for @RobinhoodApp on why they restricted GameStop trades and changed the rules on investors with no warning, their cozy relationship with hedge funds, and their forced arbitration clauses that block users from suing them. We need answers. https://t.co/z7CizGPM5y— Elizabeth Warren (@SenWarren) February 2, 2021
"In addition to putting customers’ finances at risk, Robinhood’s actions revealed a new set of questions about its relationship with large hedge funds and other financial institutions, and follows past criticisms of Robinhood’s insufficient investor protections. Robinhood has a responsibility to treat its investors honestly and fairly, and provide them with access to the market under a transparent and consistent set of rules,” she added. “It is deeply troubling that the company may not be doing so.... The public deserves a clear accounting of Robinhood’s relationships with large financial firms and the extent to which those relationships may be undermining its obligations to its customers,” -- Sen. Warren.
Robinhood blocked users from buying additional GameStop stock last Thursday and has continued to limit trading on a number of companies.
“It was not because we wanted to stop people from buying these stocks. We did this because the required amount we had to deposit with the clearinghouse was so large—with individual volatile securities accounting for hundreds of millions of dollars in deposit requirements—that we had to take steps to limit buying in those volatile securities to ensure we could comfortably meet our requirements. Our goal is to enable purchasing for all securities on our platform. This is a dynamic, volatile market, and we have and may continue to take action to make sure we meet our requirements as a broker so we can continue to serve our customers for the long term. The company, which is popular among small investors, said the move was due to pressure from Wall Street clearinghouses to sharply increase the deposits they’re required to make to cover the trades until they’re settled. Robinhood blog claimed on Friday.
2/1/2021 Robinhood raises trading limit on GameStop again to 20 shares
What if my existing positions already exceed the limits?
If you already hold a greater number of shares or contracts than the limits listed above, your positions will not be sold or closed. However, you will not be able to open more positions of each of these securities unless you sell enough of your holdings such that you are below the respective limit.
Can I buy fractional shares of these securities?
No. Fractional shares are currently position closing only for all of the securities listed in the table above. This means you can sell and close your fractional positions, but you can't open new fractional positions. However, you can still open new whole share positions according to the limits listed above.
Are recurring investments included in the limits?
Any recurring investments in securities listed in the table will be skipped until these restrictions are lifted.
GameStop, WallStreetBets, & 100x Companies | W/ Dave Lee on Investing
300 GameStop GameStonks: The brave GME laden wallstreetbets 300 spartans hold their GameStop GameStonks firm against the Melvin Capital and Citadel Hedge-Fund.
Washington Post piece on wallstreetbets & Gamestop is HOT GARBAGE
Media Launches Coordinated News To STOP GameStop Rebellion
Who Are The Heroes of the GameStop Fiasco?
How Reddit Traders Used GameStop To Totally Spank The Wall Street Big Boys
Here come the shorty apologists— Elon Musk (@elonmusk) January 28, 2021
Give them no respect
GameStop Stock Explained: The GameStop Bubble is Both the Teacher and the Lesson. But Can Wall Street Keep Up with Online Learning?
Such is the nature of an investor’s ego: you’re on your surfboard riding the waves one at a time. Simultaneously, you’re observing your rival’s yacht and for a second there, you’re on it with him. The potent and gratifying validation of this vicarious experience generates, by proxy, a sense of grandiosity or, more accurately in this context, functional stupidity.
If you haven’t heard yet, GameStop’s fading brick-and-mortar operation is last summer’s news. The video game retailer became a real-life game as a queue of subreddit WallStreetBets habitués were herded by one of the rabble-rouser users, who goes by the username of Deep#@#@ingValue, into following his footsteps in talking up shares and buying values. A bunch of naive cyber-utopians were given the key ingredients to make a big greasy dish of “The Rich”, but will they digest it?
GameStop’s previously-plummeting sales had its stocks trading for no more than $4 a share. But the past is past, right? Because on the 27th of January, 2021, the boot landed on the other foot, and their stock was trading at $339 a share, which is 129% more than it was just the night before, and a tenfold more than it was 3 days before that.
Allow me to escort you on a trip down memory lane. Last November, Ryan Cohen, the cofounder of pet-food e-commerce firm Chewy, who made a $76 million investment in GameStop last August, sent a blunt letter to GME’s Board of Directors accusing them of “internal intransigence and an unwillingness to rapidly embrace the digital economy.” In his letter, he seemed pretty determined on highlighting GameStop’s failure at adapting with the digital age, and even more determined to shine a bright light at his failure in providing the Board with viable and strategic solutions, which almost drove a wedge between the two. Nonetheless, he proceeded saying, “It is equally important to stress that GameStop has failed to adequately keep pace with key industry developments in recent years, including: The transition from physical hardware to digital streaming. The explosion of mobile. The shift to purchasing from mass retailers and other online competitors.” Well, Mr.Cohen, your 12.9% stake have transitioned from $352 million worth on January 20, to 3.1 billion today, you’ve exploded with epic tears, and this shift from an almost valium picnic to a tulipmania, was no thanks to you.
Although last August, when Cohen first advised GME to close their stores and move online, investors enthusiastically bought some shares with an absorbing, yet unjustified optimistic vision, and thus tripling the shares’ prices by November. Thereupon, hedge funds as the likes of Melvin Capital Management, began short selling GameStop. Shorting a stock is the act of borrowing shares from a broker, selling them, and returning the shares later on. If the price falls, which is every bettor’s best hope, they can buy back the shares and pocket the difference. Downfall is, if the prices rise, the sweet kiss of financial loss might burn. The math here is simple: Melvin Capital bets GameStop’s shares will go down. Melivan Capital was kissed, and burnt. (Oh yes, it closed its position on Tuesday afternoon after suffering heavy losses of nearly 30% and is promised to receive $2.75 billion investment from Citadel and Point72 Asset Management). But it wasn’t the only one. Citron Capital also declared its loss at 100%.
If Redditors rallying GameStop is unacceptable market manipulation, what would you call it when greedy Wall Street bankers gambled away our entire economy in 2008 and faced no consequences?— Robert Reich (@RBReich) January 28, 2021
Now this is the bit where the most comical dog and pony show of schizophrenic stock-buying, thus far (hopefully it’s just another Superstorm that happens every 200 years), occurs. Among the numerous amateur investors riding the bandwagon were real estate salesman in Valparaiso, Ind., a former line cook from the Bronx, an evangelical pastor and his wife in Huntington Beach, Calif., a high school student in the Milwaukee suburbs, Indian amateur investors, and (wait for this one) American Airlines, which shares have soared as much as 60%. Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas, said, “It does appear that it (American Airlines) may be getting caught up in this day trading frenzy”. It does indeed appear that it’s mania in the time of hypomania (Thank you Covid-19).
To compensate for the gambling withdrawal effect after sports leagues shut down, amateurs rushed into platforms such as E-Trade and Robinhood which have made free trades a piece of cake, and drove up GameStop’s prices in no time. But it all started on Reddit’s WallStreetBets, the hub of armchair traders and the haven for their outpouring memes. Endowed with a cynical intellectual kink, they never cease to also provide perpetual trade tips and analysis. Amateurs’ overabundant shares and options-buying of GME that made them huge profits, subsequently resulted in a short squeeze, and it was a pretty suffocating one for big hedge funds and investors.
Stock Market bubbles of this size are the kind that make the loudest noise when they burst. There is no way to predict the finale of this GameStop squeeze show, but we know that it’s not just about it anymore. Amateur bettors are now Robinhood-ing other struggling stocks like AMC and Blackberry, and those same bettors that haven’t sold their shares might end up at a dark damp pavement holding an empty bag of nothings.
Sen. Elizabeth Warren of Massachusetts seems to be one to acknowledge the uselessness of the Stock Market and decides to lambast a financial system totally out of touch with economic reality as she calls out Wall Streeters who were criticizing the traders driving up GameStop stock, saying, "For years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price." Notwithstanding the many ways through which certain individual trajectories led into a hysterical wave in New York’s buzzing financial heart, there’s an abominable stench of irony that could be smelt from oceans away. The same well-heeled Wall Streeters voicing their complaints about the unfairness of this happenstance are the same ones who were puppeting the stocks up and down to their own convenience, targeting the weak and vulnerable as mere means to an end, and profiting at the expense of those who became poorer as they became richer. I hate to be the one to break it to them, or be one amongst the many who are gloating at this satirical event, but it’s not all lilacs and daffodils.
Lampooning aside, it’s safe to assume that certain WallStreetBets Redditors don’t have the financial literacy to be the David to this Goliath. But let’s illustrate the inner biblical landscape of this economic lesson by saying that speed and agility beat size, precision matters, and living on the cutting-edge of technology is the playfield to disrupt the rules and the status quo. But expect Discord to ban you as it did WallStreetBets on Wednesday in hopes of quelling the hype over GME’s stocks, although allegedly it did not do so “due to financial fraud related to GameStop or other stocks,” but because of “continuing to allow hateful and discriminatory content after repeated warnings.”
Now after BlackBerry’s shares are up nearly 280% this year, stock in AMC surging nearly 840%, and GameStop’s shares going up 1,700% in just 4 weeks, the heightened speculative behavior leaves an upside-down question mark that only time can answer. Whether overzealous Redditors were prompted by the potential of shoveling out big buckets of money or just the sheer pleasure of “eating the rich”, as said by Justin Speak’s wife; the Californian evangelical pastor who’s made $1,700 off GameStop in the past week, this could also be a more nefarious scam or grift on the Redditors led by more experienced options traders, as suggested by Insider's Linette Lopez. From where we’re all standing now, the view is centered around a new (is it new, though?) type of institution: the network, instead of the hierarchy. It is driven by the revolutionary spirit out of which every new movement stems, where thousands of individuals start thinking about change by using and teaching each other a common language, and it’s not long before they turn into millions of roaring crowds. Today, this language is trade. Dumb money or not, laissez les folies roulez!
What is going on with the Market and MANIPULATION | GAMESTOP Short SQUEEZE
This is unacceptable.— Alexandria Ocasio-Cortez (@AOC) January 28, 2021
We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit.
As a member of the Financial Services Cmte, I’d support a hearing if necessary. https://t.co/4Qyrolgzyt
Casino-like swings in stock prices of GameStop reflect wild levels of speculation that don’t help GameStop’s workers or customers and could lead to market instability. Today I told the SEC to explain what exactly it's doing to prevent market manipulation. https://t.co/NWaZe1jFVb pic.twitter.com/MAbjHcq47i— Elizabeth Warren (@SenWarren) January 29, 2021
This is the truth about WallStreetBets that's behind the rise of Gamestop stock
u can’t sell houses u don’t own— Elon Musk (@elonmusk) January 28, 2021
u can’t sell cars u don’t own
u *can* sell stock u don’t own!?
this is bs – shorting is a scam
legal only for vestigial reasons
The Gamestop Stock Situation | This clip is taken from the Joe Rogan Experience #1603 with Brendan Schaub.
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