A massively inflated market cap won't save GameStop from the fact that most video game sales are now digital, or AMC from the theater business being on life support, or Nokia from having lost the smartphone wars years ago. "This is gaining cult-like status," said Quincy Krosby, chief market strategist at Prudential Financial. Cruising around reddit being a trippy lil pink cat In the last couple of weeks I feel the tides have changed on the battlefront. The roughly $754,000 he ultimately put into GameStop is now worth tens of millions of dollars. "It could potentially destabilize the overall market and the confidence in the market. Or, if Wall Street, Silicon Valley or Washington take steps to keep it from happening again, the excitement could curdle into rage. The GameStop stock rally is the handiwork of r/WallStreetBets, a Reddit community where people share news, memes and personal anecdotes about playing the stock market. A Redditor Explained GameStop Stocks So Anyone Can Understand. Sign up for free newsletters and get more CNBC delivered to your inbox. Gamestop and Reddit Saga: We all had fun watching series like scam 1992. A Division of NBCUniversal. "Retail order flow in the options are essentially supercharging the short squeeze, like the tail wagging the dog," CC Lagator of Options AI said. The Reddit-driven frenzy is panning out to be a showdown between two types of investors, with this stock being the battlefield. Hofeller … Buying GameStop “isn’t about greed,” one user wrote on Reddit, after citing all the recessions “they” caused and the times "they” got bailed out with taxpayers’ dollars. We are here to talk through what in tarnation is happening and what it has to do with [ checks notes ] … Sort by. A Reddit community has been making enormous waves in the stock market – and costing hedge fund managers billions in the process. The stock-trading app Robinhood has an arsenal of political power brokers it can deploy on its behalf as it faces congressional inquiries over its role in an internet-fueled market manipulation frenzy. … Some also believe this buying frenzy could be an ominous sign for a market at record highs. GameStop was one of the companies that loads of hedge funds (companies who do these bets) had bet on to lose a lot of value. Some grew concerned the buying frenzy could potentially destabilize the market and hurt overall confidence. best. Explained: GameStop & How Reddit Caused Wall Street Billions In Losses. A customer holds a GameStop shopping bag inside a store in San Francisco. Most of GameStop stock gyrations have to do with a tug of war between amateur day traders on Reddit, one of the world's largest online communities — who are betting on the stock to keep rising — and the professional managers of Wall Street hedge funds, who … 9.0k. 100% Upvoted. GameStop’s Reddit-fueled rally, explained Video game retailer GameStop is up more than 20x since March lows (and +79% in just the past 2 trading days). These shows make it inspiring to watch as an underdog finally sticks it up to the rich guy (aka bears in the show) and at the same time sets a warning for greed. share. "Retail investors with the help of technology acting as a union in attacking is a new phenomenon," said Jim Paulsen, chief investment strategist at the Leuthold Group. Options trading has become accessible and easy to millennial investors, thanks to those new and commission-free apps such as Robinhood. An unexpected army of Reddit users have driven a buying frenzy in stocks such as GameStop … But can this be done in real life, that too in today’s day and age? Welcome to Reddit's finest Smash Bros community! Robinhood and other trading platforms have only burnished the anti-elite pull of the movement by. Log in or sign up to leave a comment Log In Sign Up. Wall Street has been watching GameStop in awe as a band of Reddit-obsessed retail investors managed to push the stock up 1,500% in two weeks, … People also searched for gamestop explanation, 492-935-7733 knowledgema, gamestop explained simple terms, gamestop reddit explaination simple, gamestop story in simple explanation, Simple explanation of gamestop, simple way to explain the game stop, what is a short reddit. A short seller borrows shares of a stock and sells these borrowed shares to buyers willing to pay the market price. These amateur investors have started targeting other heavily shorted names including AMC Entertainment and Bed Bath & Beyond, leaving Wall Street analysts' targets in the dust. We want to hear from you. GameStop was the single most traded name in the U.S. stock market on Tuesday, topping even mega-cap companies like Tesla and Apple, according to Deutsche Bank. The appeal is obvious. Gamestop stock (GME) explained using Smash Ultimate. Many avid Reddit posters hyping up GameStop are buying call options, a type of derivative contracts that give the holder the right to buy the underlying security at a stated price within a specific timeframe. Between the lines: Some commentators have described the investors as trolls; some have drawn a through-line between them and the Capitol rioters. Like most stores that still sell products in person, it has had a hard time lately as video game sales have moved … © 2021 CNBC LLC. 1:50pm Jan 28, 2021. 4 Men with 4 Very Different Incomes Open Up. Over the past week or so, there’s been a lot of talk about Reddit, Wall Street, and GameStop, and it can be pretty confusing unless you happen to have a strong understanding of the stock market because you’re one of the hedge fund guys getting royally screwed right now. The short covering tends to fuel the stock's rally further. All of the major averages fell more than 3% this week. Stories posted on Reddit and in the media of people who lost jobs in the pandemic and finally were able to pay bills after cashing out GameStop … The WSB types are operating within the law, turning the system against the people they view as abusing it. On major platforms like Twitter and YouTube, the WSB ethos — in this case, a half-joking commitment to holding strong on GameStop and the other stocks to try to force them ever higher — has proven attractive. "It is a pack of traders and the pack is gaining momentum. But the insurrectionists were there to overturn an election and possibly kill lawmakers. By 9News Staff . hide. Gamestop stock (GME) explained using Smash Ultimate. Press J to jump to the feed. "You combine the power of technology, which allows you through Reddit postings to magnify your individual impact, with some use of leverage and very targeted bets, they can have a significant influence, particularly on areas of vulnerability because of the short positions," Paulsen said. no comments yet. But huge numbers of people in the wallstreetbets Reddit … youtu.be/aO4p4M... DD . Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters. 9.0k. 4 5 16 9. GameStop Stock Explained: Robinhood, Short Squeezes, And Reddit. That's caused major trouble at times, but is now propelling a populist-progressive unity movement that's rattling Wall Street. Photo: Olivier Douliery/AFP via Getty Images. … Obvious paid shill accounts with the ol' adjective-noun-number format in their username started commenting way more hateful, personal stuff on my posts. A wave of at-home traders found each other on the red-hot "wallstreetbets" Reddit chat room, whose members have ballooned to over 3 million. By motivating each other to keep piling into shares and call options, they coordinated a monstrous short squeeze in GameStop. FUCK ‘EM! But the excitement at having pulled this off at all could prove sustaining, driving the millions of Redditors and other retail investors into new schemes. Explained: Making sense of the Reddit-fuelled GameStop stock surge The GameStop saga seems to have turned into an international sensation that has stunned big investment firms on Wall Street and puzzled the trading community around the globe. Posted by 6 days ago. Roaring Kitty, as he's known on YouTube and Twitter, has been talking up GameStop stock since taking a long position in it a year ago, when he noticed it was among the most heavily shorted stocks on the market. by Alison. GameStop’s Cohen is, by definition, in this for the long haul — he bought in to shape the company’s direction, and would lose that power if he sold out. Data is a real-time snapshot *Data is delayed at least 15 minutes. Retail investors’ battle against short sellers who had bet against GameStop and AMC — and other heavily shorted stocks with depressed share prices — offers a window into what happens when Reddit culture spills out into the real world. Wall Street had its worst week since October as day traders bid up stocks for GameStop, AMC and others that gained popularity on Reddit. 4. Although it had been building for a while, the rally really took off on Monday, … Catch up quick: The run on troubled stocks with vintage appeal — first GameStop, then other 2000s mall staples like AMC, Nokia and BlackBerry — began with one man. "This is all a part of the democratization of the market," Krosby said. The call options contract values can surge by even larger magnitudes when the underlying stock is rallying by 100% in a single day. After years of poor performance, GameStop's stock has surged to record highs in the last week. By - Mohammed Kudrati. MKudrati. The Margin Bill and Melinda Gates’s divorce was a predictable market phenomenon and bullish for GameStop — allow us to explain Last Updated: May … Keeping their prices up is instead a show of solidarity, a way to make the vultures tremble and, of course, a way to get rich, at least on paper, and at least until the party ends. Got a confidential news tip? As the stock rises towards those strikes, the market makers need to buy increasingly more stock to hedge their short calls. On Reddit, where he posts as u/DeepFuckingValue, he's spent months posting about it to the r/WallStreetBets subreddit, a forum of several million amateur investors and spectators who mostly ridiculed his bullish-on-GameStop posts until recently. 12.0k. The retail crowd is not just taking over the shorts and it's taking over the headlines.". GameStop stock saga explained: The long and ‘short’ of how Reddit users annihilated Wall Street pros The GameStop stock debacle is so very, very delicious. David Paul Morris | Bloomberg | Getty Images, Josh Brown and Mike Santoli discuss GameStop's staggering run. What's next: At some point, the inflated prices, wildly decoupled from any underlying fundamentals, are bound to come crashing down. Wall Street's Fight Back Against Reddit, Explained. … All Rights Reserved. The stock jumped on the announcement on hopes Cohen would drive a change in strategy. Photo Illustration: Justin Sullivan/Getty Images. A few risky Reddit traders who started investing in GameStop in the summer of 2020 became millionaires, and a lot of average-joe traders made money too. GameStop is a video game retailer. The effect is a massive short squeeze.". Stock market has worst week since October amid Reddit frenzy, SEC says it will "closely review" restrictions on Reddit-fueled stocks, Robinhood has a stacked policy team — and it's going to need it. Several Reddit users called for people to pile into GameStop shares, pushing up the price to put pressure on the short-sellers - a process known as a short squeeze. The WSB types have demonstrated that, by banding together, normies can flip the script on billionaires who were just waiting to cash in on failure and collapse. Amid the massive squeezes, Melvin Capital closed out its short position in GameStop on Tuesday afternoon after taking a huge loss, the hedge fund's manager told CNBC's Andrew Ross Sorkin. "That gamma effect adds buyer after buyer in the stock, with no one able to short the stock because it is hard to borrow. However, when the stock jumps sharply higher, it forces short sellers to buy back shares in order to limit their losses. Posted by. Many enthusiastic Reddit users have been posting screenshots of their brokerage accounts, some of which touting astronomical returns north of 1,000% in a handful of days. WHY IT BLEW UP. "Normally when we are talking about levering up and options, it typically is associated with investors, professional managers, and hedge funds.". Global Business and Financial News, Stock Quotes, and Market Data and Analysis. Log In Sign Up. Be the first to share what you think! More from the Internet Patrol: This One Simple Trick Will Reclaim Your Time and Reduce Your Stress. As the stock price falls, the trader would buy it back for less money, pocketing the difference. CNN. Why it matters: The populist, discount trading platform is going to need that firepower because its decision to suspend trading of stock in GameStop and a number of other companies on Thursday has sparked criticism and promised inquiries from both sides of the aisle. (His holdings could not be independently verified.) On Reddit, where he posts as u/DeepFuckingValue, he's spent months posting about it to the r/WallStreetBets subreddit, a forum of several million amateur investors and spectators who mostly ridiculed his bullish-on-GameStop posts until recently. GameStop is largely a brick-and-mortar enterprise, and the coronavirus was putting people off in-store shopping for good reason. 24 days ago. Get this delivered to your inbox, and more info about our products and services. Those who have not joined will be compelled to join," Krosby added. Subscribe to CNBC PRO for exclusive insights and analysis, and live business day programming from around the world. User account menu. By motivating each other to keep piling into shares and call options, they coordinated a monstrous short squeeze in the brick-and-mortar video game retailer. A wave of at-home traders found each other on the red-hot "wallstreetbets" Reddit chat room, whose members have ballooned to over 3 million. This effectively accelerated the rally further in GameStop and other heavily shorted names. GameStop Volume Explained #DFV #GameStop. report. Loading... | 28 Jan 2021 11:27 AM GMT. Wall Street has been watching GameStop in awe as a band of Reddit-obsessed retail investors managed to push the stock up 1,500% in two weeks, squeezing out short selling hedge funds. How a short squeeze is making Reddit happy and short sellers sad. GameStop continued to rocket higher as retail traders showed no signs of letting up. It has drawn in newbies as well as entire communities, like the staff and fandom at Barstool Sports. 0 comments. There’s GameStop, but also AMC and Reddit? Leave a comment; Share this item on … Why it matters: The move from Robinhood generated anger across the political spectrum and among small investors who wanted to participate in one of the most exciting stock-market trades of the moment. That it's being done with stocks that are in inexorable sectoral decline is part of the fun. Nassim Nicholas Taleb Has Never Borrowed a Cent . In March, we wrote about how GameStop retail locations were attempting to bill themselves as “essential” businesses ― alongside grocery stores and pharmacies ― in order to stay open amid strict lockdown measures. Short seller Andrew Left of Citron Research said Wednesday he has covered the majority of his short position in GameStop at a loss. The most devoted investors hang out on the Reddit WSB homebase and Discord, where the main WSB server was. The rally in GameStop was initially triggered on Jan. 11, when news broke that activist investor and Chewy co-founder and former CEO Ryan Cohen is joining GameStop's board. twitch.tv/DGunz. GameStop frenzy explained: How small investors on Reddit took on Wall Street Click to return to homepage . Explained: How an online forum called Reddit boosted a struggling company's stock by 1700 per cent. The roughly $754,000 he ultimately put into GameStop is now worth tens of millions of dollars. On Tuesday, Mr. Gill posted a picture on Reddit that showed his $53,000 bet on GameStop had soared in value to $48 million. Details: The S&P 500 fell more than 1.9% on Friday. The big picture: Reddit is a microcosm of mainstream internet culture, a massive clearinghouse for all sorts of interests that's populated mostly by young men with a vaguely anti-establishment bent. Press question mark to learn the rest of the keyboard shortcuts. These passionate investors often call out short sellers in the chat room in colorful language and unpleasant internet memes. Hedge Fund Tears . Ultimate. When retail investors looks for cheap upside calls, it leaves the sell-side or the market makers who are the middlemen in the transaction short a lot of upside calls, or short gamma. The WallStreetBets community has remained at the center of everything that's happened since. save. Buying GameStop “isn’t about greed,” one user wrote on Reddit, after citing all the recessions “they” caused and the times "they” got bailed out with taxpayers’ dollars. Subreddit forums like wallstreetbets, armed with more than two million members caught on to this happening with GameStop and decided to buy up … View Entire Discussion (0 Comments) More posts from the GME community. Photo: Tiffany Hagler-Geard/Bloomberg via Getty Images. It's true that both groups viewed themselves as the good guys injecting anti-establishment online chatter into the real world and charging the gates to strike fear into the hearts of the elites. Close. The intense speculative behavior among retail investors is unnerving many on Wall Street as mounting losses by hedge funds could spill over to other areas of the market. 754,000 he ultimately put into GameStop is now worth tens of millions of dollars the!, GameStop 's stock by 1700 per cent change in strategy said Wednesday he has the! 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