The latest drop from $492 to below $200 should be enough to make an investor rethink all of their choices; however, a struggle is the least important part of the story when it comes to GameStop.
Crypto investors who are disappointed over Bitcoin’s price dropping by $10,000 in several days could learn something from the members of the WallStreetBets subreddit, who have Today, following the temporary halting of trading for GameStop on the New York Stock, accurately pumped the price of GameStop’s stock from the previous week.
Exchange and trading apps like Robinhood blocking purchases, this decrepit group of million-day traders witnessed the stock’s price go from an open of $263 to a high of $492 and then down to $193.
They have taken the hit like it was a walk in a park.
And why is that? For many of these traders, it isn’t about the money, or not just about the money. It is about a collective effort to give Wall Street something and hit hedge funds, particularly those who have taken out short positions in GameStop.
What is this all about?
GameStop is a company that is specialized in selling physical copies of video games. The business was profitable; however, it declined as digital content distribution boomed and the online retailers beat out mall-based businesses.
Many institutional traders started short-selling their stocks with enormous leveraged positions through the years, generating a downward spiral for the stock price. The company’s stock went from around $45 each share to lower than $5 in 2020. The people on r/WallStreetBets have noticed and pitted against the big, evil capitalists who have opened shorts, like Melvin Capital and Citron Research.
The self-organized army started acquiring vast amounts of shares, driving up the price in only a matter of hours. The hedge funds, supported by millions in capital, were held initially out; however, they were no match for the millions of retailers united. At least two principal funds had to close their positions with significant losses – though one of them, Melvin Capital, received a $2.8B bailout right after that.
And Now…
GameStop shares recently opened at $265 and surged up to $480. After the spike, news came on that the Robinhood trading had banned further buying of the stock. GME then crashed to $113 before rebounding.
Typically, it would be enough to spook any investor back to satisfaction. But judging by some of the responses on r/WallStreetBets, it will all be worth as long as the big guys go down as well.
“Call it an opportunity, call it revenge, or justice, I know we are on the right side of this. I’m proud to be held next to you fellow brothers and sisters in arms. I will not sell,” stated user u/Zdubzz19. “I will hold until Melvin and Citron and any other fucker who think that they can get away from the inevitable by using dirty tactics and misinformation to [deplatform] us fails at their own game.”
There is no technical or fundamental analysis to elaborate this; there is no sentiment analysis around the $GME stock. It all seems to be driven out of resentment – a vendetta against the big capitalists.
When GameStop’s stock went down, the retail investors can be wrecked, but they don’t believe they need a bailout – whatever Robinhood says.
Many of them are gladly embracing the losses as a kind of necessary evil to send a collective message.
A user wrote a memorandum to Melvin Capital, calling it “a firm who makes money off of exploiting a company and manipulating markets and media to your advantage. Your continued existence is a sharp reminder that the ones in charge of so much hardship during the ’08 crisis were not punished.”
The user, u/Ssauronn, added: “This is personal for me, and millions of others. You can drop the price of GME after hours $120, I’m not going anywhere. You can pay for thousands of Reddit bots, I’m holding. You can get every mainstream media outlet to demonize us, I don’t care. I’m making this as painful as I can for you.”
So the losses don’t seem to bother the people, who have seen every struggle as one more provocation that boosts their morale amidst this sort of economic war.
“GME is about more than just money, GME is about sending a message,” said u/aoechamp, who has 25k invested in GameStop stock.
With the policymakers and regulators monitoring the situation, it is hard to say how or when the uprising will end. However, it seems that even at a loss, many felt like something good has come from all of this.
“I only have one measly share. I missed the boat on this, I was preoccupied the last few months with my wife’s cancer battle,” stated u/Sir-xer21, “but thank you for letting me feel invigorated… For the first time in a long while, I feel a fire inside me. Thank you for this.”
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