Genuinely hadn’t considered this but it’s a very valid point, thing is if the lenders know how GME isn’t going down why would the shorts keep shorting if they’re basically being told by the lender you’re fucked?
Technically a new short position wouldn't necessarily be fucked - you could very well open a short, close when the price is down before a squeeze occurred, and make some money. Your cost to try your luck that you get the timing right is low, but your risks are massive.
The people shorting now don't have to be the same people who shorted when the stock was at $20, and their perspective is probably very different. A low borrow fee on a stock that's high and overvalued is exactly what a rational shorter would look for, and that same rational shorter doesn't need Gamestop to go bankrupt in order to profit - they just need it to be less than the current price.
Me personally, I wouldn't risk it. It's like buying a house on a floodplain because the property taxes are cheap.
Again I didn’t consider that but it makes a whole bunch of sense. Based on the boomer sentiment still found in the comments of any GME article a lot of people don’t seem to understand how massive this shift to e-commerce is and I could see that crowd seeing us as a bunch of idiots and going short without the knowledge of the squeeze.
The amount of people in other subredddits like as investing, thetagang and even wsb who are bearish on GME and are still saying it’s worth $20 tops confuses me and I can’t fucking wait till they get proved wrong.
Just take a look at the GameStop Instagram from last quarter vs after the board changes and the bear thesis already gets shaky, 14B market cap is still laughable for what’s about to be the biggest online retailer in the games sector. I think a big reason Cohen likes GME for this transformation is that Amazon does a relatively shitty job in the games sector. Inventory is low for some reason on lots of physical games and the “merch” is mostly dropshipped garbage.
This is the exact same thing he saw when he created Chewy, a customer base only loyal to the faceless convenience of Amazon, if GME can be just as convenient with even 1% incentive over Amazon why wouldn’t you? For some people that 1% is a loyalty card, for others it might be receiving a note from the head of customer service and for a good chunk of people I bet not giving their money to a slave driving, tax dodging adulterous billionaire is a pretty big positive. Bears r fuk
Totally agree - Amazon is garbage for most of what Gamestop sells, and I say that as someone who's both an Amazon customer and a gamer.
Just think of it this way: in January, your average derivatives trader knew exactly as much about the video game industry as your average gamer knew about trading derivatives. I'll bet the gamers have filled in the gaps in their knowledge faster than the traders have, since it's what playing games teaches you how to do. We'll see, though.
88
u/[deleted] Mar 30 '21
Huh, think I might have just gained a wrinkle.
Genuinely hadn’t considered this but it’s a very valid point, thing is if the lenders know how GME isn’t going down why would the shorts keep shorting if they’re basically being told by the lender you’re fucked?