So about that Gamestop silliness

[hyorinryu]

I find this pretty funny. For everyone not in the know, a bunch of people decided to buy Gamestop despite being a bad stock, and so many people are buying it that it's messing up some of the big players in the stock market. I have no idea what'll happen based of it tbh.

[aListers]

Doesn't this kind of thing just cause a bubble? Anybody got a good source on what's happening around it?

[Gobbles]

There is this weird thing called short selling. It somehow reverses the normal flow speculation. From what I understand you promise (contractually) to sell someone a bunch of stock later for a price that at that moment seems reasonable. However, you do not actually need to own the stock until that time comes. So if the company whose stock you promised to sell does poorly, you can buy the stock cheaply but still sell it at the promised price.

Expecting Gamestop to do poorly due to corona and the transition to digital sales, some big hedge-funds decided to use this short selling tactic. However a bunch of smaller investors banded together and started buying Gamestop stock. The hedge-funds that saw the stocks rise decided to buy the stock they had promised at that time instead of later to avoid bigger losses if the stock price continued to rise. This caused the stock to rise further.

The winners here are the smaller inverters (unless they decide to stab each other in the back). Gamestops stocks will most likely normalize in some time.

[Ghaleon]

To me it does seem kinda dirty that big billionaire stock groups can basically unify to bankrupt a company and profit from it.

Even before COVID though, I feel like gamestop was legitimately kinda going downhill pretty steadily. Not suddenly, but steadily. People like to buy games online more now, some people prefer buying from amazon instead of the gamestores too, and every time I would go inside a gamestop, only like 2/5ths of the store are games, the rest are weird little plastic doll toy things and knick-knacks that I've never seen anyone actually buy. I don't really get it.

I heard that Gamestop had a recent change of leadership with the CEO or CFO or something like that, and some people thought it would get a kind of boost because of it, but the investment groups thought otherwise, and decided to bet on its bankruptcy (and to my understanding when people try to short sell in the millions/billions, it accelerates this into happening most of the time).

So a bunch of people on some redit group said hey wait, don't you profit form Gamestop's demise! There's still hope! and they all collaborated together to buy the stocks to prevent it from going under. Then the billionaire investment groups decided that the stupid plebs can't mess with them, so they told the stock market trading software being used the most (robinhood) to stop them from being able to participate, and they did. So no Robinhood is being sued, and are pretending to let people participate again (but not really, you can only buy a couple and then you're locked again).

It's really like a rigged game where the old winners who are in cahoots with each other are making new rules in their favor. I haven't heard any news on this for a week or so though, so things may have changed since.

[NucleusWaffles]

I think Gamestop has always been an underdog because it is a brick-and-mortar, and it undercuts sales with middlemen because it is a local force and buys and sells games at a very low price which damages the whole development economy.

I am not sure if the stock markets make sense, they probably don't, but someone is paying top dollar to have this discussion, and it is important to make the point we like Gamestop employees and probably will still buy from them locally.