I still say that rebranding as a place for pc hardware and peripherals is the place to be, like mini-Microcenters in malls. Have a digital storefront like Newegg but leverage your BnM stores for basic PC parts (say, ~3 SKUs of the latest CPU, half a dozen compatible mobos, one each of RGB/non-RGB RAM, enough to build a basic gaming rig or drop in for a replacement part because something broke in yours). Have some space for the gaming peripherals that you need to see in person (VR headsets, high-freq or HDR monitors, maybe a couple chairs, etc) plus keyboards, mice, headsets. Offer free in-store pickup for online orders.
Even with that, there's probably enough room left in even a cramped mall storefront for some AAA console and PC games.
They are doing some of this, they have new storefront space for PC parts, gaming chairs, etc. They're selling gaming keyboards, mice, what not, as well as GPUs. Not sure on the other PC parts though.
It's about time. I can't count how many times I've lamented having to buy things like keyboards essentially blind and hope for the best. I'd absolutely pay an in-store premium to be able to try a handful in person before I buy.
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ShadowfireVermont, in the middle of nowhereRegistered Userregular
The thing is actual new game systems make next to no money. It’s been awhile since I looked at the reports, but retailers only make like $20 a console maybe. That’s why used was what GS focused so heavily on, a single used new release that sold for $55 on average would make them $20-30 (where new it would be more like $5-10)
Accessories are also a big winner for money making since they tend more toward a 35-50% margin depending on the item. If I were a betting man then it would be to see GS doubling down on the PC boom and putting a bigger focus on PC accessories to bolster their flagging used sales.
Yes, waaaaaay back in my best buy days (PS3? era) I could save $0 on a console as an employee, but accessories were like 40-60% off. The Margins on the stuff you attach to the console is the moneymakers, not the consoles themselves.
Online-only what though? PSN, Microsoft, and Nintendo all have their own online stores built right into the console operating system. The PC publishers are at war with Steam over territory that has been online-only for like 12-years and I don't see either side ceding ground for GameStop. The only thing left for them in the video game market would be hardware. The market that made up the very foundation of their business is going to be gone. I don't see how GameStop can go online-only without downsizing considerably.
The more I think about this I think the hedge funds doubts on GME's overall viability were sound but they misjudged the timing. They thought they could accelerate an inevitable demise that was years away not months.
Timing had nothing to do with it. Their short positions only failed to work because a couple of video game enthusiasts with irrational long positions rallied a larger number of gullible video game nerds into also taking long positions.
GME has now managed to leverage that irrationality into being better-off than it was before. At the expense of most of the believers, which doesn't stop the small number of those who cashed out from being the narrative.
The shorts will probably be right in the long run, it's just that the old maxim about how long the market can remain irrational (and it's corollary, the height to which irrationality can rise) kicked in.
I maintain that this couldn't have happened without a year in which casinos were closed, sports betting was extremely limited, and a lot of (mostly white mostly upper-middle class mostly white-collar) workers were sitting bored at home watching a stock market rise driven by the near-term profits of pandemic-favorable companies going up faster than the pandemic-favorable companies were hemorrhaging money market share and thought, surely I'm smarter than average and can use this to my advantage.
2020 will go down as the biggest sea change in market history since 1929, for totally different reasons.
The gullible nerds were inspired by a few rational actors who suspected GME was undervalued based on public information. I agree the shorters will probably be right in the long run but I question their timing because at the time they were shorting like mad GMEs books weren't even bad. They weren't great but they were fine and it turned out the hedgers didn't have any additional insight over contributors to a sub-reddit. They were gambling same as nerds were.
The hedge funds were betting on GME experiencing the same thing that happened to a few other once-high profile retailers (with a twist): a slow decline due to online retail eroding revenues, leading to decreased inventory and staffing, turning into a death spiral until the valuation gets low enough for private equity to snap up the company for less than they get by extracting fees and stripping assets (leveraged buyout not strictly necessary but it is customary). The Toys R Us model, if you will. There was nothing in GMEs earnings reports to suggest they would stop losing money any time soon, and optimism that the company could "transition" to doing what they do now, but online seemed misguided.
The twist is both in what sort of made GME unattractive for an LBO and also at the same time gave the company dubious prospects for executing on a shift to e-commerce: the value of its assets. Let's broadly categorize them into three groups:
-intellectual property. GME wasn't sitting on valuable patents or some deep institutional knowledge of how to successfully run online commerce. They were once immensely good at opening and running a large number of brick and mortar stores! They mostly hire part-time entry-level workers (who the main brand largely treats poorly, from my understanding and limited experience) who aren't typically staffing the kinds of positions you need to run a tech company. Warehouse work would almost certainly be less demeaning than retail, I'll give them that.
-physical assets. Unlike most retailers that have recently been the targets of LBOs or other asset-stripping restructuring, Gamestop mostly leases stores. There's no real estate to capitalize on. There's a bunch of physical inventory, which for actual consoles is fine, but in large part the industry is making a decisive shift to digital distribution for games themselves.
-the brand itself. Gamestop has done a generally poor job of endearing itself to gamers these last, i dunno, fifteen years if the Penny Arcade comic is anything to go by. There's some residual fondness for being that place you could check out games when you were a nerdy child at the mall under duress, but their business practices have by and large failed to transmute that nostalgia into goodwill. Like Valve is no champion of the games industry but it's still going to dominate the PC game space with Epic and various other proprietary distribution platforms taking their cut. I feel like you'd find few gamers who, upon seeing a Steam But Instead Gamestop would think "yeah I'm excited to have one more platform i have to use to play timed exclusives." And on consoles, third party distribution has been rendered virtually obsolete. Microsoft, Sony, and Nintendo can just do it themselves, instead of giving up a share of the profits.
So the case for Gamestop losing value was the same case that made it a poor target for a PE buyout or acquisition by a larger online retailer, even when it had an absurdly low valuation relative to its revenue. It struggled to find ways to turn a profit. It killed off the attempts the former CEO made to diversify and modernize the company after he died from brain cancer. It had a new activist investor whose main claim to fame was running an online retailer at a loss to undercut and steal market share from brick and mortar competition until it got big enough to be a threat, and then sold it to them. Profitability then became the new owners' problem. Textbook Silicon Valley.
I don't know how GME follows the same playbook. If digital distribution was going to pull the same move then the window for that closed probably in 2007, which is the last time Gamestop could have reasonably acquired Valve.
None of this necessarily says Gamestop was overvalued as of the end of 2020. It just says the company's vaunted turnaround was anything but certain.
The case for Gamestop being undervalued, by comparison, was ... it had a new activist investor whose main claim to fame was running an online retailer at a loss to undercut and steal market share from brick and mortar competition until it got big enough to be a threat, and then sold it to them? Also the market cap was sort of low relative to revenues and overall retail footprint, and the pandemic was eventually going to end. But long term success was in part a fiction predicated on uttering the name "Ryan Cohen."
More importantly, someone (several someones, I don't want to single anyone out here) figured out how to manipulate a subreddit into helping them get their out of the money call options back in the money. Everything else I wrote above just kind of didn't matter at the time, relates to Gamestop-the-company and has basically no relation to GME-the-stock-ticker, and is only of interest now as historical trivia.
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BlackDragon480Bluster KerfuffleMaster of Windy ImportRegistered Userregular
I still say that rebranding as a place for pc hardware and peripherals is the place to be, like mini-Microcenters in malls. Have a digital storefront like Newegg but leverage your BnM stores for basic PC parts (say, ~3 SKUs of the latest CPU, half a dozen compatible mobos, one each of RGB/non-RGB RAM, enough to build a basic gaming rig or drop in for a replacement part because something broke in yours). Have some space for the gaming peripherals that you need to see in person (VR headsets, high-freq or HDR monitors, maybe a couple chairs, etc) plus keyboards, mice, headsets. Offer free in-store pickup for online orders.
Even with that, there's probably enough room left in even a cramped mall storefront for some AAA console and PC games.
Basically, roll back the clock to the 90s for them. Back when GameStop was made when Barnes and Nobel bought Funcoland, it was done by rolling the video game focused Funcoland into Babbages and Software Etc, the former kings of mall PC stores.
No matter where you go...there you are. ~ Buckaroo Banzai
More importantly, someone (several someones, I don't want to single anyone out here) figured out how to manipulate a subreddit into helping them get their out of the money call options back in the money. Everything else I wrote above just kind of didn't matter at the time, relates to Gamestop-the-company and has basically no relation to GME-the-stock-ticker, and is only of interest now as historical trivia.
I don't doubt there was some manipulation going on, but the hedge funds certainly didn't help themselves by getting so greedy on the shorts, and that's what really set it off. All it took was a few knowledgeable retail investors to notice the blatant greed and realize how over leveraged these funds were.
More importantly, someone (several someones, I don't want to single anyone out here) figured out how to manipulate a subreddit into helping them get their out of the money call options back in the money. Everything else I wrote above just kind of didn't matter at the time, relates to Gamestop-the-company and has basically no relation to GME-the-stock-ticker, and is only of interest now as historical trivia.
I don't doubt there was some manipulation going on, but the hedge funds certainly didn't help themselves by getting so greedy on the shorts, and that's what really set it off. All it took was a few knowledgeable retail investors to notice the blatant greed and realize how over leveraged these funds were.
Ok sure. Let's assume this is true - now how does a retail investor use this knowledge?
If you have the funds at hand to bring about a short squeeze on your own, you are probably a hedge fund or an investment bank and wouldn't share that information. If you don't have those kinds of liquid assets, this knowledge is useless. (You could also work at an investment firm and fail to disclose it I suppose)
Unless you can persuade a large enough number of people like you to buy enough of the stock piecemeal to make it happen. In which case, what's in it for you? How do you turn your knowledge into financial gain? You do it by buying call options before you share your information, and then push a narrative about greedy hedge funds and sticking it to the man.
The people buying up the stock to rocket rocket diamond hands are going to gain a lot less than you and are as likely to lose money as gain it, but that's not your problem. You just need to get your options in the money.
We know that some posters on /wsb held call options long before GME became a meme stock. Their reasons are as valid as the reasons hedge funds shorted GME in the first place: market participants express their opinions about assets through market activity. Turning that into a morality tale because some of the people were involved are billionaires (to be clear, billionaires are inherently bad) isn't an accurate analysis of either side's motivations.
More importantly, someone (several someones, I don't want to single anyone out here) figured out how to manipulate a subreddit into helping them get their out of the money call options back in the money. Everything else I wrote above just kind of didn't matter at the time, relates to Gamestop-the-company and has basically no relation to GME-the-stock-ticker, and is only of interest now as historical trivia.
I don't doubt there was some manipulation going on, but the hedge funds certainly didn't help themselves by getting so greedy on the shorts, and that's what really set it off. All it took was a few knowledgeable retail investors to notice the blatant greed and realize how over leveraged these funds were.
Ok sure. Let's assume this is true - now how does a retail investor use this knowledge?
If you have the funds at hand to bring about a short squeeze on your own, you are probably a hedge fund or an investment bank and wouldn't share that information. If you don't have those kinds of liquid assets, this knowledge is useless. (You could also work at an investment firm and fail to disclose it I suppose)
Unless you can persuade a large enough number of people like you to buy enough of the stock piecemeal to make it happen. In which case, what's in it for you? How do you turn your knowledge into financial gain? You do it by buying call options before you share your information, and then push a narrative about greedy hedge funds and sticking it to the man.
The people buying up the stock to rocket rocket diamond hands are going to gain a lot less than you and are as likely to lose money as gain it, but that's not your problem. You just need to get your options in the money.
We know that some posters on /wsb held call options long before GME became a meme stock. Their reasons are as valid as the reasons hedge funds shorted GME in the first place: market participants express their opinions about assets through market activity. Turning that into a morality tale because some of the people were involved are billionaires (to be clear, billionaires are inherently bad) isn't an accurate analysis of either side's motivations.
The more you know about how fat cats think, the better you'll be able to predict what they're going to do before they try to manipulate you. If one company is super leveraged in this public way again and you do your research, you can start paddling early and ride the wave instead of having it crash on you.
That's all theoretical. However, it is marginally easier to do than predicting the entire market. I'm not gonna bother.
Marty: The future, it's where you're going? Doc: That's right, twenty five years into the future. I've always dreamed on seeing the future, looking beyond my years, seeing the progress of mankind. I'll also be able to see who wins the next twenty-five world series.
More importantly, someone (several someones, I don't want to single anyone out here) figured out how to manipulate a subreddit into helping them get their out of the money call options back in the money. Everything else I wrote above just kind of didn't matter at the time, relates to Gamestop-the-company and has basically no relation to GME-the-stock-ticker, and is only of interest now as historical trivia.
I don't doubt there was some manipulation going on, but the hedge funds certainly didn't help themselves by getting so greedy on the shorts, and that's what really set it off. All it took was a few knowledgeable retail investors to notice the blatant greed and realize how over leveraged these funds were.
Ok sure. Let's assume this is true - now how does a retail investor use this knowledge?
If you have the funds at hand to bring about a short squeeze on your own, you are probably a hedge fund or an investment bank and wouldn't share that information. If you don't have those kinds of liquid assets, this knowledge is useless. (You could also work at an investment firm and fail to disclose it I suppose)
Unless you can persuade a large enough number of people like you to buy enough of the stock piecemeal to make it happen. In which case, what's in it for you? How do you turn your knowledge into financial gain? You do it by buying call options before you share your information, and then push a narrative about greedy hedge funds and sticking it to the man.
The people buying up the stock to rocket rocket diamond hands are going to gain a lot less than you and are as likely to lose money as gain it, but that's not your problem. You just need to get your options in the money.
We know that some posters on /wsb held call options long before GME became a meme stock. Their reasons are as valid as the reasons hedge funds shorted GME in the first place: market participants express their opinions about assets through market activity. Turning that into a morality tale because some of the people were involved are billionaires (to be clear, billionaires are inherently bad) isn't an accurate analysis of either side's motivations.
The more you know about how fat cats think, the better you'll be able to predict what they're going to do before they try to manipulate you. If one company is super leveraged in this public way again and you do your research, you can start paddling early and ride the wave instead of having it crash on you.
That's all theoretical. However, it is marginally easier to do than predicting the entire market. I'm not gonna bother.
The immediate fallout from the whole episode was that some prominent hedge funds stopped publishing their short positions and are being savvy about when and how they sell stocks short so as to avoid drawing attention.
More importantly, someone (several someones, I don't want to single anyone out here) figured out how to manipulate a subreddit into helping them get their out of the money call options back in the money. Everything else I wrote above just kind of didn't matter at the time, relates to Gamestop-the-company and has basically no relation to GME-the-stock-ticker, and is only of interest now as historical trivia.
I don't doubt there was some manipulation going on, but the hedge funds certainly didn't help themselves by getting so greedy on the shorts, and that's what really set it off. All it took was a few knowledgeable retail investors to notice the blatant greed and realize how over leveraged these funds were.
Ok sure. Let's assume this is true - now how does a retail investor use this knowledge?
If you have the funds at hand to bring about a short squeeze on your own, you are probably a hedge fund or an investment bank and wouldn't share that information. If you don't have those kinds of liquid assets, this knowledge is useless. (You could also work at an investment firm and fail to disclose it I suppose)
Unless you can persuade a large enough number of people like you to buy enough of the stock piecemeal to make it happen. In which case, what's in it for you? How do you turn your knowledge into financial gain? You do it by buying call options before you share your information, and then push a narrative about greedy hedge funds and sticking it to the man.
The people buying up the stock to rocket rocket diamond hands are going to gain a lot less than you and are as likely to lose money as gain it, but that's not your problem. You just need to get your options in the money.
We know that some posters on /wsb held call options long before GME became a meme stock. Their reasons are as valid as the reasons hedge funds shorted GME in the first place: market participants express their opinions about assets through market activity. Turning that into a morality tale because some of the people were involved are billionaires (to be clear, billionaires are inherently bad) isn't an accurate analysis of either side's motivations.
The more you know about how fat cats think, the better you'll be able to predict what they're going to do before they try to manipulate you. If one company is super leveraged in this public way again and you do your research, you can start paddling early and ride the wave instead of having it crash on you.
That's all theoretical. However, it is marginally easier to do than predicting the entire market. I'm not gonna bother.
The immediate fallout from the whole episode was that some prominent hedge funds stopped publishing their short positions and are being savvy about when and how they sell stocks short so as to avoid drawing attention.
Well..that and Melvin Capital had to get a multi-billion dollar cash infusion from Citadel to keep from getting margin called. The Citron guy also supposedly lost a big chunk of cash as well which is why he took his ball and went home.
Unless you can persuade a large enough number of people like you to buy enough of the stock piecemeal to make it happen. In which case, what's in it for you? How do you turn your knowledge into financial gain? You do it by buying call options before you share your information, and then push a narrative about greedy hedge funds and sticking it to the man.
I personally think the "what's in it for me" part for the savvy retail guy was probably juicing the price by getting the dumb dumbs on reddit to buy into this idea and drive it way up. Beyond that none of it really seemed based on rational investing strategy.
As I remember it, Citron put out a bogus opinion on GME shorts. Citron already had a history with the WSB sub for being wrong on shorts. People realized the float for GME was way off because the funds like Citron/Melvin got insanely greedy, and we were looking at a possible squeeze like what happened to Volkswagen. Someone pinged WSB with this fact and it took off from there because here was a chance for the little guys to fuck over the big guys. Nothing about it was ever particularly rational and they're still making fantasy posts in whatever investing sub is left after WSB exploded about how this is the week the shorts get blown up guys!
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zepherinRussian warship, go fuck yourselfRegistered Userregular
More importantly, someone (several someones, I don't want to single anyone out here) figured out how to manipulate a subreddit into helping them get their out of the money call options back in the money. Everything else I wrote above just kind of didn't matter at the time, relates to Gamestop-the-company and has basically no relation to GME-the-stock-ticker, and is only of interest now as historical trivia.
I don't doubt there was some manipulation going on, but the hedge funds certainly didn't help themselves by getting so greedy on the shorts, and that's what really set it off. All it took was a few knowledgeable retail investors to notice the blatant greed and realize how over leveraged these funds were.
Ok sure. Let's assume this is true - now how does a retail investor use this knowledge?
If you have the funds at hand to bring about a short squeeze on your own, you are probably a hedge fund or an investment bank and wouldn't share that information. If you don't have those kinds of liquid assets, this knowledge is useless. (You could also work at an investment firm and fail to disclose it I suppose)
Unless you can persuade a large enough number of people like you to buy enough of the stock piecemeal to make it happen. In which case, what's in it for you? How do you turn your knowledge into financial gain? You do it by buying call options before you share your information, and then push a narrative about greedy hedge funds and sticking it to the man.
The people buying up the stock to rocket rocket diamond hands are going to gain a lot less than you and are as likely to lose money as gain it, but that's not your problem. You just need to get your options in the money.
We know that some posters on /wsb held call options long before GME became a meme stock. Their reasons are as valid as the reasons hedge funds shorted GME in the first place: market participants express their opinions about assets through market activity. Turning that into a morality tale because some of the people were involved are billionaires (to be clear, billionaires are inherently bad) isn't an accurate analysis of either side's motivations.
The more you know about how fat cats think, the better you'll be able to predict what they're going to do before they try to manipulate you. If one company is super leveraged in this public way again and you do your research, you can start paddling early and ride the wave instead of having it crash on you.
That's all theoretical. However, it is marginally easier to do than predicting the entire market. I'm not gonna bother.
The immediate fallout from the whole episode was that some prominent hedge funds stopped publishing their short positions and are being savvy about when and how they sell stocks short so as to avoid drawing attention.
On the flip side the only reason they were publicizing their short positions was to try to get other shorts and manipulate the market downwards.
KoopahTroopahThe koopas, the troopas.Philadelphia, PARegistered Userregular
No, but really 👀...
FYI, 'MOASS' is Reddit's abbreviation for what they're calling 'The Mother of All Short Squeezes." Someone on GS twitter is having a very, very good time.
someone who is angry on the internet is likely going to spend night and day working on a mod so the camera is affixed to Miranda's ass 100% of the time she is nearby
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KoopahTroopahThe koopas, the troopas.Philadelphia, PARegistered Userregular
Something is brewing, and will probably get announced soon. Annual shareholders meeting is coming up soon, and the stock just launched to $216 from $170 over the past two days.
Something is brewing, and will probably get announced soon. Annual shareholders meeting is coming up soon, and the stock just launched to $216 from $170 over the past two days.
I figured something was up when "GME going to the moon threads" started showing up on the front page of reddit out of nowhere today. It was obvious someone was trying to manipulate retail buys, which they clearly succeeded in doing.
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ShadowfireVermont, in the middle of nowhereRegistered Userregular
Something is brewing, and will probably get announced soon. Annual shareholders meeting is coming up soon, and the stock just launched to $216 from $170 over the past two days.
It's funny that everyone holding AMC is along for the ride still.
If I had AMC stock, I'd hold it until the pandemic was over.
I don’t know, at these prices? Hard to pass up doubling your money in like 60 days…especially when the stock may be getting inflated by stonk-hounds and with streaming services buying up theatrical studios (see: Amazon/MGM).
As a general rule if I’m on Robinhood and I see “people who own this also own” followed by GME, BB, NAKD, etc. that’s a sign to me to get out if the gettin’s good, and to only get in for a few quick bucks.
I think AMC’s future is a little better than the $8 price they were at a couple months ago would suggest. But is it $18 worth of better? Meh. Would I keep holding if I’d gotten in at half this price? Jesus no.
This post brought to you by Paper Handed Motherfuckers Inc.
It's funny that everyone holding AMC is along for the ride still.
If I had AMC stock, I'd hold it until the pandemic was over.
I don’t know, at these prices? Hard to pass up doubling your money in like 60 days…especially when the stock may be getting inflated by stonk-hounds and with streaming services buying up theatrical studios (see: Amazon/MGM).
As a general rule if I’m on Robinhood and I see “people who own this also own” followed by GME, BB, NAKD, etc. that’s a sign to me to get out if the gettin’s good, and to only get in for a few quick bucks.
I think AMC’s future is a little better than the $8 price they were at a couple months ago would suggest. But is it $18 worth of better? Meh. Would I keep holding if I’d gotten in at half this price? Jesus no.
This post brought to you by Paper Handed Motherfuckers Inc.
Unless I'm reading the chart wrong (I probably am) they were at 19 in 2019...so why wouldn't they get back to that when the world opens up regardless of stonk bs?
if you bought into AMC at $8 and saw the price more than double in the last few months you either 1) are so spectacularly confident in the post-pandemic movie theater business you think that valuation will sustain itself or 2) should thank your lucky stars and gtfo
I think 1) is pure insanity; the business model was already in trouble before all this began and I can't imagine it'll recover even to prior levels once things are allowed to re-open
ed: particularly with stuff like the MGM deal happening; you think amazon buys a studio to beef up it's streaming content just to turn around and give a swell deal to a bunch of B&Ms?
Eat it You Nasty Pig. on
it was the smallest on the list but
Pluto was a planet and I'll never forget
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MonwynApathy's a tragedy, and boredom is a crime.A little bit of everything, all of the time.Registered Userregular
MGM has been getting passed around like a hot potato for like twenty years, that honestly didn't even register
It's funny that everyone holding AMC is along for the ride still.
If I had AMC stock, I'd hold it until the pandemic was over.
I don’t know, at these prices? Hard to pass up doubling your money in like 60 days…especially when the stock may be getting inflated by stonk-hounds and with streaming services buying up theatrical studios (see: Amazon/MGM).
As a general rule if I’m on Robinhood and I see “people who own this also own” followed by GME, BB, NAKD, etc. that’s a sign to me to get out if the gettin’s good, and to only get in for a few quick bucks.
I think AMC’s future is a little better than the $8 price they were at a couple months ago would suggest. But is it $18 worth of better? Meh. Would I keep holding if I’d gotten in at half this price? Jesus no.
This post brought to you by Paper Handed Motherfuckers Inc.
Unless I'm reading the chart wrong (I probably am) they were at 19 in 2019...so why wouldn't they get back to that when the world opens up regardless of stonk bs?
And they were at 32 five years ago, with a solid, steady downward trend.
I think that COVID harming competitors may well put them in a position to stop their years-long slide, and help offset the push toward day-and-date streaming releases (aka the reason I didn’t pay $10 to see Kong). I think that $18 may be a reasonable near term price for them (noting that I’m a moron on the internet and this ain’t financial advice). But I don’t see any reason to expect further growth from here based on their position as a company. I see a mini-GME getting hyped on Reddit.
MGM has been getting passed around like a hot potato for like twenty years, that honestly didn't even register
Fair, though I still say a streaming platform buying a studio doesn’t say good things about the future of theatrical release. Same with HBO’s day-and-date stuff. And I say this as somebody who loves theaters, and hates this shift.
mcdermott on
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MonwynApathy's a tragedy, and boredom is a crime.A little bit of everything, all of the time.Registered Userregular
My general feeling is that movie theaters will do quite well for the next little bit because it's a relatively inexpensive way for teenagers to go on a date after being cooped up for a year and a half, and Netflix And Chill doesn't work particularly well when you're fifteen and have to worry about your kid brother doing his best Kool-Aid Man impression while you're trying to get to third.
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VanguardBut now the dream is over. And the insect is awake.Registered User, __BANNED USERSregular
edited May 2021
Worth noting that movies like Godzilla vs. Kong and Mortal Kombat did like $50MM in their opening weekend despite being free on HBO Max and there still being capacity restrictions at 50% or greater in the biggest cities
I wouldn’t be surprised if we saw a boost after this weekend
Vanguard on
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MonwynApathy's a tragedy, and boredom is a crime.A little bit of everything, all of the time.Registered Userregular
I have a gamestonk cultist in the cubicle over and this week has been a pretty great list of reasons why 1. There's actually 400% more secret shorts, and that 2. Most if not all of the GME float is owned by redditors.
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KoopahTroopahThe koopas, the troopas.Philadelphia, PARegistered Userregular
Posts
It's about time. I can't count how many times I've lamented having to buy things like keyboards essentially blind and hope for the best. I'd absolutely pay an in-store premium to be able to try a handful in person before I buy.
Protection plans.
The hedge funds were betting on GME experiencing the same thing that happened to a few other once-high profile retailers (with a twist): a slow decline due to online retail eroding revenues, leading to decreased inventory and staffing, turning into a death spiral until the valuation gets low enough for private equity to snap up the company for less than they get by extracting fees and stripping assets (leveraged buyout not strictly necessary but it is customary). The Toys R Us model, if you will. There was nothing in GMEs earnings reports to suggest they would stop losing money any time soon, and optimism that the company could "transition" to doing what they do now, but online seemed misguided.
The twist is both in what sort of made GME unattractive for an LBO and also at the same time gave the company dubious prospects for executing on a shift to e-commerce: the value of its assets. Let's broadly categorize them into three groups:
-intellectual property. GME wasn't sitting on valuable patents or some deep institutional knowledge of how to successfully run online commerce. They were once immensely good at opening and running a large number of brick and mortar stores! They mostly hire part-time entry-level workers (who the main brand largely treats poorly, from my understanding and limited experience) who aren't typically staffing the kinds of positions you need to run a tech company. Warehouse work would almost certainly be less demeaning than retail, I'll give them that.
-physical assets. Unlike most retailers that have recently been the targets of LBOs or other asset-stripping restructuring, Gamestop mostly leases stores. There's no real estate to capitalize on. There's a bunch of physical inventory, which for actual consoles is fine, but in large part the industry is making a decisive shift to digital distribution for games themselves.
-the brand itself. Gamestop has done a generally poor job of endearing itself to gamers these last, i dunno, fifteen years if the Penny Arcade comic is anything to go by. There's some residual fondness for being that place you could check out games when you were a nerdy child at the mall under duress, but their business practices have by and large failed to transmute that nostalgia into goodwill. Like Valve is no champion of the games industry but it's still going to dominate the PC game space with Epic and various other proprietary distribution platforms taking their cut. I feel like you'd find few gamers who, upon seeing a Steam But Instead Gamestop would think "yeah I'm excited to have one more platform i have to use to play timed exclusives." And on consoles, third party distribution has been rendered virtually obsolete. Microsoft, Sony, and Nintendo can just do it themselves, instead of giving up a share of the profits.
So the case for Gamestop losing value was the same case that made it a poor target for a PE buyout or acquisition by a larger online retailer, even when it had an absurdly low valuation relative to its revenue. It struggled to find ways to turn a profit. It killed off the attempts the former CEO made to diversify and modernize the company after he died from brain cancer. It had a new activist investor whose main claim to fame was running an online retailer at a loss to undercut and steal market share from brick and mortar competition until it got big enough to be a threat, and then sold it to them. Profitability then became the new owners' problem. Textbook Silicon Valley.
I don't know how GME follows the same playbook. If digital distribution was going to pull the same move then the window for that closed probably in 2007, which is the last time Gamestop could have reasonably acquired Valve.
None of this necessarily says Gamestop was overvalued as of the end of 2020. It just says the company's vaunted turnaround was anything but certain.
The case for Gamestop being undervalued, by comparison, was ... it had a new activist investor whose main claim to fame was running an online retailer at a loss to undercut and steal market share from brick and mortar competition until it got big enough to be a threat, and then sold it to them? Also the market cap was sort of low relative to revenues and overall retail footprint, and the pandemic was eventually going to end. But long term success was in part a fiction predicated on uttering the name "Ryan Cohen."
More importantly, someone (several someones, I don't want to single anyone out here) figured out how to manipulate a subreddit into helping them get their out of the money call options back in the money. Everything else I wrote above just kind of didn't matter at the time, relates to Gamestop-the-company and has basically no relation to GME-the-stock-ticker, and is only of interest now as historical trivia.
Basically, roll back the clock to the 90s for them. Back when GameStop was made when Barnes and Nobel bought Funcoland, it was done by rolling the video game focused Funcoland into Babbages and Software Etc, the former kings of mall PC stores.
~ Buckaroo Banzai
I don't doubt there was some manipulation going on, but the hedge funds certainly didn't help themselves by getting so greedy on the shorts, and that's what really set it off. All it took was a few knowledgeable retail investors to notice the blatant greed and realize how over leveraged these funds were.
Ok sure. Let's assume this is true - now how does a retail investor use this knowledge?
If you have the funds at hand to bring about a short squeeze on your own, you are probably a hedge fund or an investment bank and wouldn't share that information. If you don't have those kinds of liquid assets, this knowledge is useless. (You could also work at an investment firm and fail to disclose it I suppose)
Unless you can persuade a large enough number of people like you to buy enough of the stock piecemeal to make it happen. In which case, what's in it for you? How do you turn your knowledge into financial gain? You do it by buying call options before you share your information, and then push a narrative about greedy hedge funds and sticking it to the man.
The people buying up the stock to rocket rocket diamond hands are going to gain a lot less than you and are as likely to lose money as gain it, but that's not your problem. You just need to get your options in the money.
We know that some posters on /wsb held call options long before GME became a meme stock. Their reasons are as valid as the reasons hedge funds shorted GME in the first place: market participants express their opinions about assets through market activity. Turning that into a morality tale because some of the people were involved are billionaires (to be clear, billionaires are inherently bad) isn't an accurate analysis of either side's motivations.
The more you know about how fat cats think, the better you'll be able to predict what they're going to do before they try to manipulate you. If one company is super leveraged in this public way again and you do your research, you can start paddling early and ride the wave instead of having it crash on you.
That's all theoretical. However, it is marginally easier to do than predicting the entire market. I'm not gonna bother.
Doc: That's right, twenty five years into the future. I've always dreamed on seeing the future, looking beyond my years, seeing the progress of mankind. I'll also be able to see who wins the next twenty-five world series.
The immediate fallout from the whole episode was that some prominent hedge funds stopped publishing their short positions and are being savvy about when and how they sell stocks short so as to avoid drawing attention.
Well..that and Melvin Capital had to get a multi-billion dollar cash infusion from Citadel to keep from getting margin called. The Citron guy also supposedly lost a big chunk of cash as well which is why he took his ball and went home.
I personally think the "what's in it for me" part for the savvy retail guy was probably juicing the price by getting the dumb dumbs on reddit to buy into this idea and drive it way up. Beyond that none of it really seemed based on rational investing strategy.
As I remember it, Citron put out a bogus opinion on GME shorts. Citron already had a history with the WSB sub for being wrong on shorts. People realized the float for GME was way off because the funds like Citron/Melvin got insanely greedy, and we were looking at a possible squeeze like what happened to Volkswagen. Someone pinged WSB with this fact and it took off from there because here was a chance for the little guys to fuck over the big guys. Nothing about it was ever particularly rational and they're still making fantasy posts in whatever investing sub is left after WSB exploded about how this is the week the shorts get blown up guys!
Could anyone with a similar background talk to me about if anyone is actually doing naked shorts and what asset type they're using?
I know non us citizen entities can trade Cfds on american securities
Which would be a way to bipass that shit
But pls
Edit: to explain that I don’t really think there was naked shorting.
👀
Twitch: KoopahTroopah - Steam: Koopah
"Always has been."
FYI, 'MOASS' is Reddit's abbreviation for what they're calling 'The Mother of All Short Squeezes." Someone on GS twitter is having a very, very good time.
Twitch: KoopahTroopah - Steam: Koopah
I thought one of the biggest changes in the Legendary Edition was less ass?
Less conspicuous ass shots, overall the Miranda model hasn't changed much.
~ Buckaroo Banzai
Something is brewing, and will probably get announced soon. Annual shareholders meeting is coming up soon, and the stock just launched to $216 from $170 over the past two days.
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I figured something was up when "GME going to the moon threads" started showing up on the front page of reddit out of nowhere today. It was obvious someone was trying to manipulate retail buys, which they clearly succeeded in doing.
Oh for fuck's sake.
Oh hey thank you for reminding me to set a limit order
If I had AMC stock, I'd hold it until the pandemic was over.
I don’t know, at these prices? Hard to pass up doubling your money in like 60 days…especially when the stock may be getting inflated by stonk-hounds and with streaming services buying up theatrical studios (see: Amazon/MGM).
As a general rule if I’m on Robinhood and I see “people who own this also own” followed by GME, BB, NAKD, etc. that’s a sign to me to get out if the gettin’s good, and to only get in for a few quick bucks.
I think AMC’s future is a little better than the $8 price they were at a couple months ago would suggest. But is it $18 worth of better? Meh. Would I keep holding if I’d gotten in at half this price? Jesus no.
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Unless I'm reading the chart wrong (I probably am) they were at 19 in 2019...so why wouldn't they get back to that when the world opens up regardless of stonk bs?
I think 1) is pure insanity; the business model was already in trouble before all this began and I can't imagine it'll recover even to prior levels once things are allowed to re-open
ed: particularly with stuff like the MGM deal happening; you think amazon buys a studio to beef up it's streaming content just to turn around and give a swell deal to a bunch of B&Ms?
Pluto was a planet and I'll never forget
And they were at 32 five years ago, with a solid, steady downward trend.
I think that COVID harming competitors may well put them in a position to stop their years-long slide, and help offset the push toward day-and-date streaming releases (aka the reason I didn’t pay $10 to see Kong). I think that $18 may be a reasonable near term price for them (noting that I’m a moron on the internet and this ain’t financial advice). But I don’t see any reason to expect further growth from here based on their position as a company. I see a mini-GME getting hyped on Reddit.
Fair, though I still say a streaming platform buying a studio doesn’t say good things about the future of theatrical release. Same with HBO’s day-and-date stuff. And I say this as somebody who loves theaters, and hates this shift.
I wouldn’t be surprised if we saw a boost after this weekend
I would again like to thank you for reminding me to set a limit order. Dumped half my stake at $22, just playing with house money now.
Congratulations, you jerk.
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I hope that was a good decision and it doesnt go up to 400