Someone might have to clarify, but the way I understand it, the hedge fund Melvin Capital was a deep short seller of GameStop. A bunch of kids from reddit with day trading accounts then proceeded to short squeeze the stock and in effect, nearly bankrupt a $14 billion hedge fund in the process. The Mets new owner tried to bail it out yesterday with a $2.7 billion infusion, but that went "poof" in a matter of hours. It's a little double edged because there were probably everyday joe's that had their retirements tied up in that fund, but on the flip-side that was super unethical of the fund manager for tying the bulk of their funds up in short sells....did I get the gist of it? [Reply]
PLUG touched $75 yesterday and opened at 65 today after they announced an issue of common shares at that price. They did the same at $25 about two months ago. Room to grow? I bet it gets up to100 by March if there’s no massive market adjustment. Thoughts? [Reply]
Originally Posted by arrowheadnation:
Someone might have to clarify, but the way I understand it, the hedge fund Melvin Capital was a deep short seller of GameStop. A bunch of kids from reddit with day trading accounts then proceeded to short squeeze the stock and in effect, nearly bankrupt a $14 billion hedge fund in the process. The Mets new owner tried to bail it out yesterday with a $2.7 billion infusion, but that went "poof" in a matter of hours. It's a little double edged because there were probably everyday joe's that had their retirements tied up in that fund, but on the flip-side that was super unethical of the fund manager for tying the bulk of their funds up in short sells....did I get the gist of it?
I think that's the gist, yes.
Originally Posted by KCUnited:
Is short selling in general frowned upon or is it more about Gamestop nostalgia and big money funds betting against it?
Eh, there's nothing particularly "wrong" with short selling except that it can depress the stock's price. However, since stock price has very little to do with a company's day-to-day operations, it MOSTLY doesn't matter. The exception that comes to mind is that companies with a high stock price have more flexible financing options in general, so if they're looking at raising capital or taking out a loan, having a ton of shorts on the stock can make that more difficult.
From what I can tell, this situation is much more about gaming the system and "sticking it to the man" than about Gamestop itself. [Reply]
Originally Posted by ReynardMuldrake:
Anybody else hopping on the GME train?
I wouldn't buy that stock with a 20-foot pole right now. In fact, I might buy stock in a company that makes 20-foot poles since a lot of people will need those to keep the proper distance from GME.
That's pretty much the definition of a bubble, right? I'm not reading in detail about it, but on the surface it seems like people are bidding the stock up past its real value just to stick it to a hedge fund. It will eventually re-center on its real value. [Reply]
Originally Posted by ReynardMuldrake:
Anybody else hopping on the GME train?
Almost debated it, but it really is a "wall street bet." At some point it'll crash hard, so you're just trying to time it to not be one of the people who loses their ass. You could easily quadruple your money today or lose 90% of it. [Reply]
Originally Posted by Rain Man:
I wouldn't buy that stock with a 20-foot pole right now. In fact, I might buy stock in a company that makes 20-foot poles since a lot of people will need those to keep the proper distance from GME.
That's pretty much the definition of a bubble, right? I'm not reading in detail about it, but on the surface it seems like people are bidding the stock up past its real value just to stick it to a hedge fund. It will eventually re-center on its real value.
Yep. And if you assume its price from a few weeks ago of around $18 is the "real" value, its current price of around $360 is overpriced by a factor of 20. Good luck with that. [Reply]
