So if you've been paying to the news/social media for the past few days you may have come across GameStop. That's right, GameStop is trending $GME, and the reason it's trending is even better. Gamestop has been hurting for a while now, and the pandemic has done nothing but crush their brick and mortar stores. GameStop is getting the same treatment from online video game downloads and streaming that Blockbuster got from Netflix. Without a change to their business model, they'll most likely end up under water. This is almost a slam dunk dunk stock to go ahead and short to profit on as the stock price goes lower.
The problem is, that it's almost too much of a slam dunk stock to short. Gamestop had 65 million shares in total, and 55 million of those shares were shorts. That's roughly just over 84% of the shares are shorts, and much of these held by large financial institutions. The problem with such a majority of these shares being short, is that if for any reason the stock starts to increase, these shorts are going to end up getting squeezed and having to buy back the shares at a higher price, causing the stock to increase even more. A few investors began to take notice of this and realized a huge risk to reward potential.
Perhaps the one that has gained the most attention, was Citrons Andrew Left who publicly called for shorting the stock. He ended up gaining an angry mob of Robinhood traders off discord and wallstreet bets reddit chats uniting against the institutions and forcing the shorts to cover. This is exactly why it's dangerous to short against cult loving stocks (Tesla, apple, and in this case gamestop). The stock is now up around 700% in the matter of days. Some users in the chats are claiming to have made millions. One trader apparently went all in and turned $53,000 to $11 million. We're curious to see how the institutions fight back on this one.
TA:
No surprise here, but $GME is extremely overbought. I would stay away at the moment, since we don't want to get squeezed against the mob, but obviously a short play will occur once the dust begins to settle, and these traders begin to secure profits.
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Cheers!
Disclaimer:
I do not provide personal investment advice and I am not a qualified licensed investment advisor. I am an amateur investor.
All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. I will not and cannot be held liable for any actions you take as a result of anything you read here.
Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on here, expressed or implied herein, are committed at your own risk, financial or otherwise.
Feel free to give us a follow and shoot us a like for more analysis updates.
The problem is, that it's almost too much of a slam dunk stock to short. Gamestop had 65 million shares in total, and 55 million of those shares were shorts. That's roughly just over 84% of the shares are shorts, and much of these held by large financial institutions. The problem with such a majority of these shares being short, is that if for any reason the stock starts to increase, these shorts are going to end up getting squeezed and having to buy back the shares at a higher price, causing the stock to increase even more. A few investors began to take notice of this and realized a huge risk to reward potential.
Perhaps the one that has gained the most attention, was Citrons Andrew Left who publicly called for shorting the stock. He ended up gaining an angry mob of Robinhood traders off discord and wallstreet bets reddit chats uniting against the institutions and forcing the shorts to cover. This is exactly why it's dangerous to short against cult loving stocks (Tesla, apple, and in this case gamestop). The stock is now up around 700% in the matter of days. Some users in the chats are claiming to have made millions. One trader apparently went all in and turned $53,000 to $11 million. We're curious to see how the institutions fight back on this one.
TA:
No surprise here, but $GME is extremely overbought. I would stay away at the moment, since we don't want to get squeezed against the mob, but obviously a short play will occur once the dust begins to settle, and these traders begin to secure profits.
Feel free to give us a follow and shoot us a like for more analysis updates.
Cheers!
Disclaimer:
I do not provide personal investment advice and I am not a qualified licensed investment advisor. I am an amateur investor.
All information found here, including any ideas, opinions, views, predictions, forecasts, commentaries, suggestions, or stock picks, expressed or implied herein, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. While the information provided is believed to be accurate, it may include errors or inaccuracies. I will not and cannot be held liable for any actions you take as a result of anything you read here.
Conduct your own due diligence, or consult a licensed financial advisor or broker before making any and all investment decisions. Any investments, trades, speculations, or decisions made on the basis of any information found on here, expressed or implied herein, are committed at your own risk, financial or otherwise.
Feel free to give us a follow and shoot us a like for more analysis updates.
Comment:
Up 92% on premarket trading as Melvin Capital has closed its short position.