The Stock Market

[yovargas]

So if the stock was steadily increasing in price since August what made the broker think it was going to go down instead?

As someone who follows gaming very closely, people have been saying Gamestop was obsolete and dying for a while now. I happen to agree. They have way too much competition from huge players and don't offer any reason to pick them over anyone else. They seem to have made some moves to change their business model since their old model is nearly dead, but if I were a betting man (and all of this is just betting), I would not bet on them being worth much in a couple years.

[Frelga]

The run up was clearly not about fundamentals. The stock was so overshorted that when retail investors started to buy and hold, short sellers had no choice but to buy high to cover the short, adding to the run up.

Eventually the reddit bunch will get tired of the game, collect their gains, and bail, at which point the stock will crash. Lots of people who did not understand what they were getting into will lose a lot of money. Then the short sellers who time it right will make a lot of money.

But one of the reddit guys who organized the stock buying was quoted saying something like "We can stay idiots longer than they can stay solvent."

[Dave_LF]

Speaking of markety stuff, the CBOE volatility index aka "fear index" closed (just barely) below 20 today for the first time since, oh, about this time a year ago. By March 13 of 2020, it was in the low 80s. 19 is almost a normal number.

[Frelga]

An unexpected sequel.

On Reddit, a group of traders began investing in GameStop, using a famous slogan from Planet of the Apes:

"Apes together strong."

Some people dismissed them.

After becoming successful, they have now donated $77K to save endangered gorillas, tigers, falcons, and more.

https://twitter.com/Goodable/status/137 ... 72263?s=19

[River]

As someone who follows gaming very closely, people have been saying Gamestop was obsolete and dying for a while now. I happen to agree. They have way too much competition from huge players and don't offer any reason to pick them over anyone else. They seem to have made some moves to change their business model since their old model is nearly dead, but if I were a betting man (and all of this is just betting), I would not bet on them being worth much in a couple years.

So I have a couple coworkers kinda involved in this. One of them is part of the reddit team. The other is a hardcore gamer who thinks GameStop should just be put out of its misery. Fortunately, the two of them are friends and know how to have friendly sparring matches. I think the gamer has also been pulling punches because the redditor was in a really rough and vulnerable moment in life when this whole thing blew up. And the whole thing got the gamer focused on legit financial planning. Not so sure about the redditor. The redditor has some growing up to do.