I would like to hear others' thoughts on the unprecedented GameStop trading saga. If this thread topic makes you uncomfortable, please refrain from asking to kill the thread, just avoid it, so others can share their thoughts on this fascinating phenomenon.
GameStop (NYSE: GME) is a brick and mortar game store that is dying similar to Blockbuster and other traditional retailers. Large investors shorted the company's stock to make money as it dies, however, online investors through social media banned together to buy the stock price up and force the large investors to lose over $5 billion and counting. In January the price rose from about $17/share just weeks ago to ~$470/share last week. For more info on stock shorting and the story here are some good articles.
GameStop stock's wild swings: Reddit and Wall Street's 'insane' 'train wreck' (cnet.com)
So if you bought 1000 shares of GME four weeks ago with your IRA and sold it all this past Wednesday, then today you have enough money to retire and never work again. Not a bad return on investment for one month's work.
Questions/Thoughts:
Should online brokers have the right to restrict trading of social media manipulated stocks?
Should "shorting a stock" be made illegal to take away the incentive to artificially inflate a company's stock price?
Is it concerning that $5+ billion of net worth can change hands literally in a couple of days or even hours in the stock market? Literally, in the time it takes to watch a movie, your modest stock holding value could change by tens of thousands of dollars.
Are you concerned about the fact that to cover their short sale losses these large investors sold huge share quantities of Apple, IBM,.. (blue chip stocks) driving those excellent companies' stock prices and the overall market down?
Is it ok that social media manipulation can grossly inflate a company's stock price regardless of their actual business metrics valuation?
GameStop (NYSE: GME) is a brick and mortar game store that is dying similar to Blockbuster and other traditional retailers. Large investors shorted the company's stock to make money as it dies, however, online investors through social media banned together to buy the stock price up and force the large investors to lose over $5 billion and counting. In January the price rose from about $17/share just weeks ago to ~$470/share last week. For more info on stock shorting and the story here are some good articles.
GameStop stock's wild swings: Reddit and Wall Street's 'insane' 'train wreck' (cnet.com)
So if you bought 1000 shares of GME four weeks ago with your IRA and sold it all this past Wednesday, then today you have enough money to retire and never work again. Not a bad return on investment for one month's work.
Questions/Thoughts:
Should online brokers have the right to restrict trading of social media manipulated stocks?
Should "shorting a stock" be made illegal to take away the incentive to artificially inflate a company's stock price?
Is it concerning that $5+ billion of net worth can change hands literally in a couple of days or even hours in the stock market? Literally, in the time it takes to watch a movie, your modest stock holding value could change by tens of thousands of dollars.
Are you concerned about the fact that to cover their short sale losses these large investors sold huge share quantities of Apple, IBM,.. (blue chip stocks) driving those excellent companies' stock prices and the overall market down?
Is it ok that social media manipulation can grossly inflate a company's stock price regardless of their actual business metrics valuation?
