The fact that Wallstreetbets and superstonk have picked up on this is a sure indication to me that this means absolutely nothing at all. Their track record approaches 0%
Sure, they are mostly smoke but their mere interest in something doesn’t disqualify it.
Prior to the GME squeeze, the talk on WallStreeBets was basically "GME is sound fundamentally, its got +revenue AND its shorted to hell, conditions are right for upward movement".
It wasn't about sticking it to anyone, screwing hedge funds, etc, it was like "we think short sellers are perhaps screwing up here, we suggest you buy some GME".
Fact of the matter is WSB was right about GameStop when other investors were not. It may seem obvious now but was certainly not at the time.
It's still going
I'll bet you've never even had one look at their balance sheet or income statement, are just winging it from Reddit comments when it comes to financial evaluation, and that should tell anyone rational, including yourself hopefully, whether you're with the smart money on this position... If not, enjoy the new QAnon.
r/wsb completed it's transformation into r/the_donald of dumb finance echo chamber by the advent of GME. Truly, they will both be case studies of the anti-wisdom of crowds when it comes to current digital interfaces with a sprinkle of bot propaganda.
There's a reason the "buy" (not sell) button was turned off for a day on $GME alone. That's market manipulation. There's a reason it no charges were filed. The SEC openly admits it's corrupt. There are talking heads on the finance channels who openly admit the markets are rigged.
You're right, FTX was a scam. And SBF openly admitted fraudulent actions. So he's in jail, right? Oh, sorry, no -- he's a "distinguished" guest speaking on a New York Times panel.
It's all a scam. All of it. The difference with $GME is that, in this case, they got caught. Hedge funds naked shorted the stock and got caught. At some point they will need to cover and won't be able to. Here's some reading:
https://archive.org/details/superstonk-dd-mega-back-up/mode/...
You are mad because you think this stock is overvalued?? Well, guess what: The entire market is overvalued! It's all bullshit. P/E ratios are off the charts when we're facing a deep economic downturn. No one should be in the market -- at all. If there's one stock to hold, it's this and for three reasons: they naked shorted; they got caught; and they're fucked.
So many people desperate to help me sell my position! Wow. Thanks.
The point I disagree with (and I think the original post is making) is just because an unpopular group (WSB) is interested in something, doesn’t discredit it.
If that groups has consistently been wrong about everything for two years, then it absolutely does. It's like Jim Cramer: If he states something, there is at least a 90% chance that the opposite will happen.
That'd be cool. You could make a lot of money. Unfortunately he's probably closer to 50%.
I was there watching him get shat upon, and thought "Man, maybe this guy's on to something.. ah, screw it, it's not worth the risk"
He was consistently posting about GME for a long time, slowly losing his life's savings to its mediocre performance in the process and getting laughed at by everyone. Before GME took off, he'd actually stopped posting to WSB for the most part since he'd get jeered about it so much, haha.
Out of curiosity, why is that? Would you care to prove the profits you've made from following GME?
I don’t have any shares but it is really fun to watch as an outsider.
I actually did a cursory search, and the actual number appears to be 23.4% as of the most recent filing.
https://www.thestreet.com/memestocks/gme/gamestop-stock-71-3...
According to this (have no idea how accurate it is) it's estimating 58.46% locked up:
https://gme.crazyawesomecompany.com
I think the new numbers get released in a few days time so will be interesting to see where it's at.
If you could just issue additional shares willy nilly without adjusting the shares of existing shareholders everyone would take their money out of your company and no-one would put any into it because you'd have devalued the original shareholders investments overnight and subsequently you'd no longer be trusted. You would be bankrupting your company.
No idea why you think it would bankrupt the company, it changes nothing. The new shares is balanced by the new money on the balance sheet.
Share dilution: more shares added, existing shareholders percentage of company decreases, investments are devalued.
Share split: more shares added, existing shareholders percentage of company remains the same, value of investment remains the same.
As far as I'm aware, share dilution is a lot less common than share split precisely because shareholders are essentially losing money. If GameStop had done a share dilution everyone who invested previously would have lost 75% of their value. That kind of thing absolutely could lead a company going bankrupt because it would not be looked kindly on, both by existing or prospective investors.
Excerpt from https://valueofstocks.com/2022/06/18/share-dilution-vs-stock... :
> Of course, investor sentiment can be negative if a company dilutes shares for this reason alone. Issuing new shares is often seen as a less risky way to raise capital because the company does not have to pay back the money it raises.
> However, there are some risks associated with share dilution, as it signals that the company could destroy shareholder value, and it leads to poor investor sentiment towards the company.
> Issuing shares can also be a warning signal for shareholders, because it may signal that the company can’t raise capital by borrowing or issuing bonds.
> What are the risks of share dilution?
> The most obvious risk of share dilution is that it can hurt stock prices. When a company dilutes its shares, the value of each existing share is reduced. This most of the time leads to a decline in the stock price, which is proportionate to the reduced value of each share.
> It can also make it harder for the company to raise capital in the future, by issuing shares because shareholders take dilution as a serious risk.
> It makes it more difficult to raise money because potential investors will see that the company has already diluted its shares and they'll be less likely to invest. Another risk is that dilution can increase the volatility of the stock.
> The lower stock price can also lead to more volatile swings in the stock price. This can be a problem for investors who are looking for stability.
According to Google their market cap is currently 7.78B but I don't know what it was when they issued them so it's hard to say how big of a proportion it was at the time. The stock price did go up when they did it too, against all odds.
There are issues with issuing shares as described in the link you shared, I don't want to minimize that. And you're right about diluting existing shareholders.
My point was more that many companies do it and the money the company raises by doing so gets added on the balance sheet, which can be used to fund profitable ventures, or to burn. The main differentiator is whether they are raising money because they believe they can make more money out of it (ie Shopify) or because they have to in order to avoid bankruptcy (ie Hertz).
> I don't think this is possible?
Have you looked at how the underlying financials look for GME?