Diamond hands to the moon meaning4/19/2023 ![]() In the end, Melvin (and others) lost billions of dollars when they were short squeezed. However, instead of the price dropping as they anticipated, the value of $GMA actually rose to roughly $400. The hedge funds who had been shorting $GME, primarily Melvin Capital, had no choice but to buy those shares back to return what they had borrowed. They liquated other assets and bought and bought and bought. With $GME, retail buyers from WSB realized it was being massively shorted. Then the law of supply and demand kicked in. If almost all of the stock for a certain company has been shorted (or more than 100% of it, as in $GME’s case), it creates a shortage. When a certain stock is shorted by large amounts, a situation called a “short squeeze” can happen. ![]() Let’s add another layer, to make things really complicated. You returned exactly what you borrowed - 1000 shares. The fact that the stock dropped in value is irrelevant. You return the 1000 shares you borrowed, leaving you with $7,000 profit (minus a small fee for borrowing the shares in the first place).You buy back the 100 shares, spending $3000. The price of $GME drops to $3 per share, as you expected.You sell those shares for $10 per share, the current value of the stock.In the meantime, you sell the stock (that you are only borrowing) because you feel strongly that it will lose value. In non-complicated terms, to “short a stock” is to merely borrow the stock from someone else with a promise to give it back eventually. If you’ve never seen the award-winning 2015 film The Big Short, about the 2008 crash of the housing market, it’s a good place to start. To start, you have to understand what it means to “short” a stock. But let’s go ahead with a shorter, simpler explanation. There’s an excellent, detailed summary of the GameStop ordeal right here. So he does know what he’s doing, for the most part. He has previously worked for LexShares and MassMutual, both in the financial and/or legal industries. He graduated from Stonehill College and became a licensed security broker. Gill isn’t just a lucky day trader, though. ![]() His investments would eventually turn him into a millionaire - and an internet celebrity. It was roughly $5 per share when Gill started investing. He originally posted about GameStop stock in September 2019, investing over $50,000 and arguing that the stock was undervalued. Or more accurately, how to separate it from all the other garbage posted there.Īlso known as Roaring Kitty on YouTube and DeepF**kingValue on Reddit, Keith Gill is a financial analyst and investor known for his posts on WallStreetBets (WSB). But buried amongst the memes and rocket ship emojis was some genuinely good stock advice. It was a strange place, to say the least. They would happily YOLO their life savings into a risky investment, content to either win big or end up homeless. They referred to each other (and themselves) as “retards” or “autistic” - not as insults, but terms of endearment. Users regularly upvoted “Loss Porn” - screenshots showing major financial losses. It was a place where (mostly) inexperienced stock traders traded stories of wins and losses, as they attempted to eke out some profit by picking winning stocks. ![]() For novice day traders, the subreddit r/WallStreetBets was formed in 2012. And for Marvel movies or Star Wars fans or bird watchers or sculptors or gardening enthusiasts. If you love running, there’s a subreddit for that too. If you love baseball, you probably subscribe to r/baseball. There’s a Reddit community (subreddit) for almost every interest. So what happened? Who made it happen? And just what the hell are “stonks” and “diamond hands?” We have the answers.Īnyone who’s spent time on Reddit knows it can be a weird place. In just a few short weeks, it’s been an unprecedented wild ride. Even Keith Gill, the Redditor with a vulgar username who started the whole GameStop phenomenon, was dragged before Congress to testify about the possibility of insider trading. Millions of average citizens downloaded stock trading apps to see if they could cash in on the craze. There are multiple movies already in the works. The GameStop story has caught the interest of almost everyone. It went from about $45 a share back up to $200+, for no obvious reason. Even after it seemed like the excitement had all died down, GameStop stock ($GME) jumped up again in late February and early March. Some savvy traders on WallStreetBets - a Reddit community for stock market enthusiasts - made millions, while big name hedge funds lost big. It took Wall Street experts by complete surprise. It was a relatively inexpensive stock just months ago, before shooting up over 100x in value. You’ve almost certainly noticed the skyrocketing mentions of GameStop stock prices recently.
0 Comments
Leave a Reply.AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |