Gamestop explained (so far)

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T_Laurich

Senior Member
Mar 24, 2013
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#1
Part 1, prolog

So, you have all likely heard of the Gamestop news. Here is the run down of what I understand so far.

Gamestop as many of you are aware, is a retail industry that sells videogame products. Like a Barns&Nobels but instead of books they have videogames.

In March 2020 their stock hit a low of $3 and change, some people bought in saying the evaluation that the media is saying is vastly underpriced. No big deal, these people were just betting the stock would go up.

About 2 weeks ago, Citron Research a Hedge Fund released a video on YouTube explaining that they are shorting gamestop.
A hedge fund is basically a Mutual Fund that is invitation only. Both are investment companies that take your money and invest them into the market as they see fit in order to produce profit for you. They follow slightly different rules, but the main thing to remember is that if this was ThanksGiving, the Hedge Fund is the grown-ups table, the Mutual fund is a children's table.
A short is a bet against, basically they borrow a share normally from margin (debt) they then sell the share, once the price drops, they buy the share back at a lower price and pocket the difference. The only thing required to give back is the share by a time you specified and a price you set, it's like you take out a loan to buy a car worth $20k, you drive the car for 5 years, and the car is now worth $3k, you give the car back to the bank and they give you the remaining $17k, but there is a time limit, and if the price you said it would be worth is not reached by the end of your time, you owe the stock in full. (it sounds stupid, I know but this is roughly how it works).

Once the video of Citron hit a specific part of reddit called WallStreetBets, people were very angry. Gamestop is extremely nostalgic for my generation, and a frenzy ensued of trying to save Gamestop, roughly through nostalgia. (This started roughly January 11th).

The plan was simple, if they make money by the negative difference, and people increased the price, they would now lose money and have to pay the bank, because when they return the $20k car and its worth $100k you pay them the increased %. So they drove the price up from $20 a share on January 12th to $60 a share on January 21st. The trend started gaining traction through reddit and it hit $100 a share on January 26th.

At this time of $100 a share, big names started tweeting and making videos such as Elon Musk, which gained it more traction and this is where the fiasco begins.

Part 2, Bring me the MONEY!

People started seeing major dollar signs, as pictures with shares purchased in March for a few grand were now worth MILLIONS. Everyone wanted in, they bought the stock and rode the wave. This new wave of buyers was different from the last. The first group were willing to loose thousands and hundreds of thousands per person just to punch the bully in the face, which they did achieve with an amazing right hook. This second group was focused on the profits, they wanted to be millionaires (on paper) as well. So, they would take out shares at $100 sell at $125 for a gain that would take a normal market over 3 years. Yet, the price kept going, and going, and going.....

Quickly everyone started to realize, this is not just another Pump and Dump scheme. (Pump and dump is a possibly illegal strategy where you buy lots of shares, people assume this is stock is worth tons of money buy into it making the price go higher, and you sell all your shares for profit leaving them with the debt.)

This miraculous stock would only grow, and grow, and grow. People started finding this weird. So they scoured the news to find everyone talking about WallStreetBets. I will not get into the lingo of wall street bets, but for the least we can say it is coded with extreme sarcasm and profanity. When they scoured the reddit sub forum and got the jest of lingo they understood.... This was not about simply making money, they were doing what is called a squeeze. The goal was to make the stock so much above the short value that the Hedge Funds lost as much money as possible. This is not illegal AS LONG as there is no one spear heading the campaign. Quickly many people found themselves entranced by the altruistic idea that they too could stifle the big guys who always come out on top.

What came next was a surge in price. The stock within 2 days went from $100 a share to just a few dollars shy of $400. To explain this increase... This is roughly (discounting compounding interest) the equivalent of having a retirement fund for roughly 5 years.

People were elated and on cloud 9, a caravan of all creeds and colors came together and have made a historic moment! In a few hours, the first big wave of shorts would expire, leaving the Hedges with billions of losses.

Part 3, Rules for Thee but not for Me.


Out of no where thousands of people started begging for help, most of them new to the market. "We cannot buy!!!" The cry echoed through all social media. Astonished at the naivety of the new players, the veteran traders assembled their brokers to show that buying is very much possible.

Error screens, N/A prices, server down messages, and much more waxed cold onto their phones. The young traders were correct... They were locked out of the market.

Prices plummeted as major holders started selling. The lower and lower prices had all the 2nd wave traders panicking that their years of potential gains would turn into a mountain of debt and they sold as well. "Diamond Hands" would echo through the forums, the veterans explaining that the hedges are manipulating the market to make them panic. "Diamond Hands" they would cry again, the battle cry of never letting go.

At the end of the day, the price was $197 a share with a low of $132, a pile of ashes from the few hours before. This decrease would end up saving the Hedges over 6 billion dollars.

The people rallied over night, FURIOUS at what had just transpired. The new traders with the taste of their own blood still fresh in their mouth from the sucker punch were now ready for an all out war. Even if it cost them EVERYTHING!

The market opened at 8:30 on a Friday, this was their time! Bright eyed and bushy tailed they went back out to the battle field to buy, buy, buy. The market opened and as they stormed the battle field increasing the stock back to over $300 a share in a matter of minutes. Their charge was met with a bone shattering halt. The hedge funds had even stronger barricades. Everyone was limited to 1 share. If you owned 1,000 that was fine, but you could not buy another one since you reached the 1 share limit. The market was stuck.

Slowly it crept up to $374 a share, but their charge was broken. As the new buyers started dwindling once again the price dropped to $259 as stock was sold. But then! A heroic band of brave veterans found the breech in wall!!!!!!
 

T_Laurich

Senior Member
Mar 24, 2013
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#2
Part 4, where there is a will there is a way!
Rumors started spreading that if you signed contracts to buy the stock in a month, you could do so at any price. This nice thing about these call options were, for a small fee you could exercise them immediately. Meaning, you could create an option for 1,000 shares at $260 and it would let you. Then you could turn that piece of promise into real shares as long as shares were available for your price.
With an hour and a half left of trading they soared back to $328. But it came at a cost... The breach was sealed. No longer was it available to exercise thousands of options... You had a limit of how many you could do depending on your broker.

Friday ended... And people were frustrated. They had suffered major wounds and some lay dead on the battle field. As the newer traders were losing their will to fight, once again the veterans would arise.
They came back to the warm comfortable forums explaining other loop holes. By donating X amount to charity they could then tell that charity to spend the proceeds only with buying stock in GameStop. On top of that as long as you were under your yearly tax return limit this would be theoretically free and still accomplish the same goal.

Others began finding out they could roll their day trading account into their retirement accounts and invest back into game stop with no limits. And others found new brokers to take on their contracts in hopes these new brokers would honor their hard earned money and invest it as they rightfully asked.
Part 5, Rumors and Speculation
Now, this is as far as I could go by stating only "facts"(as I remember them), hence why this is in conspiracy. What follows may or may not be true. that is for you and God to decide together.

There are many places I can start with these rumors, but for some reason, every time a new one pops up, Biden is at the center. So we will start with the White House.

Jen Psaki, many of you will know her as the red headed woman who used to speak for Obama and now speaks for Biden as his Press Sec.

An interesting thing that many people are saying is her brother Jeff Psaki is the Portfolio Manager of Citadel (one of the largest hedges shorting gamestop). Ontop of that the entire family has multitudes of money tied into the short of game stop. Meaning, Biden's press sec. is directly tied to the profit or loss of hedges. Conflict of interest if you ask me.

This Citadel hedge is also rumored to own RobinHood, one of the most popular broker apps, and arguably the most agregious one in terms of violating the rights of consumers to purchase stock.

RobinHood at the time of stopping people from purchasing stocks and stiffling other methods of purchase. Was given a 1billion dollar "life line" some of which is from angel investors. This cries fowl play and bribery.

Stocks that were not GME (Gamestop) but were pushed as alternative ways to make money such as AMC are owned by multibillion dollar chinese companies. Ironic that the alternatives were chinese owned.

Janette Yellen, Biden's Treasury Sec. many of you would remember her as the "FIRST FEMALE" since cornflakes in recent headlines. She was given over 800k dollars from a hedge that is losing money due to the gamestop fiasco. Since that time she has not said a single word about the gamestop phenomina, but I would speculate by Monday she will enact on the side of the hedges.

The company that gave Jannete the hundres of thousands was, you guessed it CITADEL... When Jen Psaki was asked if Yellen would recuse herself of the gamestop issue do to conflict of intrerest now. Psaki the woman also losing money to gamestop (as well with her family) replied "No, she is an expert and deserves that money".

Media articles that said the Hedges have already lost 50% of the options are being contradicted by people who work in wall street saying they still own 112% of their options. (I know it goes above 100%, its not a made up number, remember we are talking about corruption).

Media articles that said there's a couple billion at play here with hedges, are being contradicted again by people who work in wall street. They are insinuating this value could likely be much, much, much, much higher.... No one knows how much exactly. But its not a measly few billion.

Robin Hood, one of the brokers that sucker punched everyone, gave their employees a $40 fast food gift card as compensation. With many employees running to twitter and facebook claiming they through away their morals for $40. Insinuating the company is commiting MASSIVE fraud and paying people off like serfs with $40 of food.

Both political parties and celebrities have come full force into the movement (after it is past the point of no return) and in some people opinion are trying to sway the movement from sticking it to the big guys, to "lets remember our political values". The biggest offender of this is AOC (Alexandria Ocasia Cortez) herself. Do not get me wrong, both the left and the right wings are involved.
Rumors are circulation that people who bought stocks on margin (debt) do not own the stocks, the hedges are selling the stocks for profit, yet the small guy retains all the debt even after the sale.

All media is saying "Good job, we stand with you, you did amazing, but you might want to stop now" Litterally all media, fox, cnn, nbc, pbr, EVERYTHING.

Part 6, buckle in for a wild ride
If even a fraction of the rumors are true (I did not cover them all nor do I know them all). This makes nearly every conspiracy look like childs play... This makes 2008 look like a speed bump. And in my opinion, this is not the peoples fault. They accidentally through nostalgia and wonderlust discovered a massive scheme that was been going on for years.

Only God knows what is going to happen now, but we are in for a ride... This is pretty big... If you are not following I would follow it.
I am not invested in GME in any way shape or form, nor is my family. I don't know everything and could have gotten facts wrong. If you read the whole thing, I am impressed and also apologize for how long it is....

My goal here is that we update eachother on what we hear, and correct eachother in truth. Not one of us is perfect, and as such we truth and God we can follow this story and see what He is doing with this world.
 

T_Laurich

Senior Member
Mar 24, 2013
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#3
Upon re-reading this I noticed two errors...

1st $100 to $400 in the share price is not 5 years but over 40 years of gain (without compounding interest).

2nd is pbr is supposed to be NPR. (for the news media stations)


Lastly for rumors I missed, one thing I did not mention about the rumors... Media keeps saying roughly 2 hedges, Melvin Capital and Citron Research, but we know at least Citadel is heavily invested and again people inside the stock market are saying 10 if not more hedges are bankrupt as of Friday, and there are a plethora of more hedges still in the game extending their options.

Despite robin hood getting roughly 1 billion dollars to fix the "glitches" people were experiencing with not being able to purchase or sell stock. And they have yet to fix any glitch or remove caps on the market. Much smaller brokers are some how able to offer services without glitches, and buy the stocks despite the increased cost.
 

breno785au

Senior Member
Jul 23, 2013
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#4
I heard about this Game Stop fiasco the other day and how big it was. I've been meaning to look into it to see what was happening so I appreciate your thread and write up but I still don't know what's happening lol

Not because there's anything wrong with your explanation just my lack of understanding of how the finance system works, even though you did well to try and explain. These things, though interest me, they also elude me.
 

T_Laurich

Senior Member
Mar 24, 2013
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#5
I heard about this Game Stop fiasco the other day and how big it was. I've been meaning to look into it to see what was happening so I appreciate your thread and write up but I still don't know what's happening lol

Not because there's anything wrong with your explanation just my lack of understanding of how the finance system works, even though you did well to try and explain. These things, though interest me, they also elude me.
Basically a bunch of billionaires are making money by bankrupting companies on purpose.

Some people found out, and discovered a way to stop them by buying the company.

Now its a war, a total war.... Billionaires have been cheating in this game and nothing is done about it.

The value the working class lost in 2020 was trillions of dollars.

Some working class found a way to make those billionaires lose a few billion and now all hell is breaking loose.

Biden and his admin has major ties to the billionaire side.
 

Magenta

Senior Member
Jul 3, 2015
55,249
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#6
If you read the whole thing, I am impressed and also apologize for how long it is....
I did, and I must say, it was very interesting, and also, that I do not normally read such long strings of posts :D:giggle:
 
Nov 15, 2020
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#7
Basically a bunch of billionaires are making money by bankrupting companies on purpose.

Some people found out, and discovered a way to stop them by buying the company.

Now its a war, a total war.... Billionaires have been cheating in this game and nothing is done about it.

The value the working class lost in 2020 was trillions of dollars.

Some working class found a way to make those billionaires lose a few billion and now all hell is breaking loose.

Biden and his admin has major ties to the billionaire side.
so it's a computer game ?
 

T_Laurich

Senior Member
Mar 24, 2013
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#8
so it's a computer game ?
Exactly, one of the purposes of this is to show the average person that the stock market is NOT a casino. It's a money printing machine that only a few people have access to.
 
Jul 9, 2020
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#9
Lastly for rumors ...
Nice thread, Laurich. This Gamestop thing is absolutely glorious! Hedgefunder rat scum getting a tiny taste of their own medicine. Worth it to own some GME just to say you were part of the movement. Never, ever sell it. Just pass it down to your children and tell them the tales of the great Gamestop battle of 2021 where the little guys started to fight back! hahaha!

I'd love to see a similar movement in the silver market. That one might be ripe. LOTS of people saying the price of silver is manipulated low.

Regarding rumors:
1. Someone was tell me that Blackrock is backing these guys. Reddit has drawn the attention of Sauron himself!?

2. Here's a rumor about the Robinhood situation: https://voxday.blogspot.com/2021/01/never-trust-ticket-taker.html
 

T_Laurich

Senior Member
Mar 24, 2013
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#13
and they are targeting actual companies ?
Basically what they do is they put trillions on a multiple layer bet.

They then use media and stock manipulation to force the company into bankruptcy. And they make their money.

Basically what is happening is this




The big guys (billionaires) make bets on the game, then play the game and force outcomes that only benefit them.

And we are the two men on the couch just hoping things go our way.
 

T_Laurich

Senior Member
Mar 24, 2013
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#14
Nice thread, Laurich. This Gamestop thing is absolutely glorious! Hedgefunder rat scum getting a tiny taste of their own medicine. Worth it to own some GME just to say you were part of the movement. Never, ever sell it. Just pass it down to your children and tell them the tales of the great Gamestop battle of 2021 where the little guys started to fight back! hahaha!

I'd love to see a similar movement in the silver market. That one might be ripe. LOTS of people saying the price of silver is manipulated low.

Regarding rumors:
1. Someone was tell me that Blackrock is backing these guys. Reddit has drawn the attention of Sauron himself!?

2. Here's a rumor about the Robinhood situation: https://voxday.blogspot.com/2021/01/never-trust-ticket-taker.html
Silver and gold is vastly over valued.

Adjust silver from 1901 price to today with inflation its a simple task, you will see how over valued it is.

This is false information to get people to sell gme and buy stocks that are not shorted.

Silver was worth $1.83 in 1913. X10 less than gold.

With inflation that is $26.14 today.

Right now its $26.91....

Its not under valued... its over valued due to silver being vastly more abundant and not being used as collateral.

Just another scheme of the silver companies trying to force people into a losing situation... and the hedges increase the spread of this misinformation because it takes the squeeze off.
 
Nov 15, 2020
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#15
Basically what they do is they put trillions on a multiple layer bet.

They then use media and stock manipulation to force the company into bankruptcy. And they make their money.

Basically what is happening is this




The big guys (billionaires) make bets on the game, then play the game and force outcomes that only benefit them.

And we are the two men on the couch just hoping things go our way.
so, like in cricket, they are "fixing" the outcome to suit themselves ..
 

T_Laurich

Senior Member
Mar 24, 2013
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#16
so, like in cricket, they are "fixing" the outcome to suit themselves ..
Exactly, but its more than just making money.

They are destroying jobs, killing retirements, and stealing wealth of people who are not even in the stock market.

If a ref fixes a sports game, only those who play the game or bet on it are effected.


When these jerks short and fix the market, they are slaughtering innocent peoples jobs and retirements!

That is what this is about.


Its exactly like a corrupt cricket game, except instead of making the game less fun to watch, they steal your job, house, car, retirement, etc. even though you never placed a bet.

It's 100% evil
 

T_Laurich

Senior Member
Mar 24, 2013
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#17
Yeah I have heard this as well from a few places... Many independent (small) media companies were saying the call came from the Whitehouse at that time...

What I didn't know was sequoia... That is, extremely interesting... (if true)

For those who don't know this is sequoia https://en.wikipedia.org/wiki/Sequoia_Capital

It is basically a company that "loans" money to businesses for equity (partial ownership). It is not the same as owning shares in the stock market as these companies are not listed on the NYE, but Sequoia has an extreme success rate on getting their investments an IPO (on the stock exchange).
 

T_Laurich

Senior Member
Mar 24, 2013
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#18
I think I have vastly understated what is going on here....

In my little conspiracy brain, this is biggest conspiracy we have seen (excluding pizza gate).

If gamestop holds and grows we can win... But if they cannot, we lose EVERYTHING. It will be 2008 times who knows how much.... And it will be blamed on us the small guys and Trump.

This is a war so much bigger than what people realize... and in my personal opinion this is God doing this.

I know it doesn't make sense that you can lose your job and house and everything because of Gamestop.... But this is the way the world is set up, fortunes that could be worth more than America itself are possibly at play against gamestop...

And all our bubbles like the car market with it's ninja loans, and the credit bubble, the education bubble, EVERYTHING is at risk of pop right now...


Hopefully I am wrong, I don't own a single option or stock (I don't believe it is morally correct) but this effects all our lives.

This isn't a bunch of people getting together to make money off increasing a stock price... This is a bunch of people getting together to squeeze the rich out of all their money they are stealing.
 

T_Laurich

Senior Member
Mar 24, 2013
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#19
New News

Micheal Burry, the first big hedge that bet against the US housing market (predicting the bubble) has tried exercising his called shares for GME... Took his broker 2 weeks to find them despite shares being available.....
https://web.archive.org/web/20210130030954/https://twitter.com/michaeljburry?lang=en

What he is hinting at is through shorting, hedges have created a metric ton of fake shares, these fake shares cause inflation decreasing the value of the original stock allowing the stock to hit a lower natural value. This gives the hedges the availability to hit a short mark despite natural market conditions, and then buy into the stock and sell at the true natural....


According to data, 122% of gamestop is owned by Companies while 27% is owned by private people. This is absolutely impossible....
https://finance.yahoo.com/quote/GME/key-statistics




Basically what is happening, is not only did they short GameStop more than market value and more than shares are available...
The hedge funds created millions of fake shares to depreciate the value of gamestop...



I cannot explain how big this is.... this is not only EXTREMELY ILLEGAL, but this is 100% insane....



Why should you care? If you worked for a corporation, or a family member did and they went bankrupt during covid… The likelihood it was due to covid is relatively small. These Hedge Funds have been doing this to a multitude of companies throughout covid and it just so happens they got caught with their pants down on this one.



If in 2008 you lost your house, your job, your retirement, or anything... You couldn't eat or clothe your children.... This is one reason why...
This is the exact same attack that happened to Fanny and Freddie mac...


https://www.sec.gov/comments/s7-08-09/s70809-407a.pdf
 

T_Laurich

Senior Member
Mar 24, 2013
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#20
So a simple explanation of what is happening...

This is called naked short selling.

Normal short selling is as I described early but for a recap... You rent a car that is worth 20k and tell the owner you will return it in 3 years. You then sell the car that day for 20k, and 3 years later you buy him a different car when the car is worth 3k and give that to him. Making a profit of 17k.

Gamma Squeeze works like this: lets say there are 100 Toyota corollas in the world... Each is worth 20k. The amount people own are 80, and 20 of them are unsold. Technically you could only short 20 cars, as you need to rebuy cars later... So the short seller rents 20 cars from people who already own them and sells them that day for 400k. What we have now is 80 people who owned a car from the start plus 20 new people who own cars, and 20 still unsold. This equals 100 people who own cars with 20 that are unsold.
If 20 people go out and buy those unsold cars, now 120 people claim a car when only 100 are available. This means the short seller cannot buy a car back and give it to the original owners and now has to pay what ever the owners say the car is worth even if it is 1million a piece.

Naked Short- This the issue of the shorter failing to deliver the car within 3 days of the date they agreed upon. The insurance company (DTC) will pay the original owners the values of the cars, and the short sellers get away because it is to hard to sue them due to their money and connections.



How Short Selling Ladders can bankrupt a company.

Lets say 100 people own cars, and they all own these cars expecting them to go up in value as an investment each car is worth $20.

Person A and B are wanting to profit.
Person A rents someone's car and sells it to person B for $19 instead of $20.
Person B then rents someone else's car and sells it to person A for $18.
They now continue selling the cars they rented to eachother for $1 less each time.
This happens until the value of the car hits $10.
Take note, the amount of money person A has spent is $1, the amount person B has spent is $1.

Upon the cars value hitting $10 all 100 people now want to sell their cars ASAP because they are not holding value. Everyone sees the cars selling for $10 and wants out immediately and to find a better car to invest in. Multiple start selling their cars, but since there are now dozens of cars for sale, anyone who wanted to buy one thinks they are broken or not good. So they haggle for lower prices. The sell ranges keep going down and down and down.

Person A and B's time expires and they must give the cars back. They give the cars back to the people who immediately sell it because it's worth nothing.

Eventually every car, or nearly every car is available for sale and person A and B buy them all for pennies.

They now own all the cars and liquidate them (meaning scrapping them as junk) or they release youtube videos on how amazing the cars are and once they hit $20 again they sell off all their cars for major money.


Naked short ladders

Now same situation 100 cars all worth $20.

Person A decides to get creative.

He makes an internet ad selling a car at $19, instantly someone buys the car because that is a nice deal. He tells them the car is in delivery.

He then puts another ad up for $18 and someone buys it, and he tells them the car is in trasit.

Person A repeats this process a few more times, and suddenly everyone notices the cars are dropping in value FAST!

Everyone starts selling their cars at $10 in which person A then starts buying real cars and shipping them to the people who have already bought cars from him. He makes $45 dollars from the 9 cars without ever owning a single car.

When the prices go back up, he repeats the process... On paper 18 cars were sold, in total cars only changed owners 9 times, meaning 9 fake cars...


If however, no one panic sold, the cars would still be worth $20 and the short seller would be in debt $45.



Who profits? Who loses?

Everyone who originally owned a car lost money.

The short sellers made money as long as the cars value kept going down, with each sale they would increase their profit.

The insurance companies made money because no matter if the car was real or fake, it had to be insured.

The internet company hosting the car sales made money due to fees and ads.








What happened to Gamestop?

Game stop had a short sell ladder as far as I can tell, driving the price much further than what was possible. They wanted the price to hit 0 so they could buy it for mere pennies (all while making profit on the stock going down). Instead at roughly $3 people started realizing this fortune 500 company was massively undervalued so they invested.

The stock started to slowly climb, but they ran into an issue where more shares were being sold than what were available to be sold. As people started to buy back game stop, the short sellers are left with millions of shares being sold, yet all of them are already owned and not being rented.

This creates an issue for the shorts, normally they would just fail to pay and let the DTC (insurance) cover the cost, but now the entire world is watching. And just as the 9 fake cars show the manipulation of the car market, these fake shares show the manipulation.

So their goal is not only to squeeze the shorters until the DTC makes them pay, but also to demonstrate to the world how this has been used against everyone to steal their wealth from them without them realizing it.