I swear, GME is the feel-good story of the year.
- Their primary product is used game sales, and the biggest players in that sector are making active moves against such sales (see: the disc-less PS5 and Xbox Series S consoles).
- Digital storefronts make purchasing new games much, much easier (and a borderline impulse purchase).
- Free-to-play multiplayer games cut Gamestop out of the customer acquisition loop. The most $GME gets is a cut of any prepaid cards, but those cards are commonplace nowadays (my local chain drugstore has an end-cap with dozens of prepaid cards of various types).
- Their primary model is to lease space in malls. With the pandemic, malls are either closed or seeing substantially less foot traffic.
- Consoles are typically a big driver of purchases, but their limited availability also limits $GME's potential. That said, that can be counterbalanced by very profitable bundles made more attractive by the limited availability of unbundled consoles.
I don't play the stock market, but even if I did, $GME wouldn't be something I'd look at in a buy-and-hold strategy.
the biggest player in /r/wallstreetbets is /u/DFV, and last I checked he had cashed out a small portion of his position. Still has like 30mill tied up in GME stock though.
Crazy story looking at his posts from 2019-now, though. At one point his GME portfolio was only worth 42k, and now it is over 40mill.
The current market cap of GME is $25 billion. Meanwhile, the size of the subprime mortgage market in 2008 was in the neighborhood of $50 trillion.
Argument for cascading.
Something like this could trigger a cascade, but that cascade would rest solely on the people who built this bubble.
A lot of people are also going to be disappointed to learn that some Wall Street firms profited massively from this situation.
And finally, a lot of retail investors who were late to the party are going to lose a lot of money on this. Some of that will flow to early Redditors who got their exit timing right. Some of that will flow to hedge funds who cleverly scooped up the naive money in the chaos.
I'd go so far as to bet that journalists are already working on articles with all of these angles. They'll start to trickle out just as soon as the market euphoria wanes.
It's categorically false to suggest that Wall Street hedge funds are all suffering from this.
Some of them are making massive amounts of money on this situation. Some of that money comes at the expense of casual investors.
This idea that Redditors are siphoning money out of hedge funds is just not true for the last round of GME investors. In fact, those latest investors will probably end up funneling their losses right into hedge funds who short this on the way back down.
What if, rather than make the sentiment shift in the direction you think it's going, it actually makes people more upset for hedge funds gambling away main street's money irresponsibly? It's almost as if those who treat other people's money as a casino shouldn't get sympathy from those other people.