Recently, there have been more and more stock investors on HuffPost, and as a stock market whiz in North America, I personally travel back and forth to various forums on HuffPost and reddit for the purpose of learning.
Today I would like to talk to you about r/WallStreetBets and share a story of a retail investor against an institution that I find outrageous and hot.
WallStreetBets, which is a reddit partition, means Wall Street Casino. As you can imagine, the people who come to this forum are not believers in the role of reason and value investing. Instead, they treat the stock market as a casino and fantasize about using their pokies to turn their bikes into motorcycles as gamblers. The WSB is a place where people dream of living a Life like the Wolf of Wall Street’s Little Li Zi.
The first Time I went to WSB I found that it was a posting bar that played with stalwarts, and people sent all kinds of sand carved pictures to meet the approval of their pokers. All the forum members call themselves autists and retards, classifying their investments as decisions made only by autistic and mentally handicapped people.
Everyone feels they are not leeks but astronauts who will fly to the moon soon. ( There is a word called mooning in WSB, referring to the price soaring to the moon.)
The daily position chart. Everyone either earns flying or loses to the pants.
More than hundreds of thousands of dollars lost to zero eggs is not unheard of.
WSB’s everyone agrees that buying call options is the only way to get rich, and will not move this Friday’s otm call.
From time to time, someone will post a survey they did (DD post) to discuss at length which stock is worth betting on the target, the post must not be missing a lot of ?????? .
The autist who replied to the post would say, “I didn’t read a word of what you wrote. The length of the post is so long, and so many rockets, this stock must be good, I’m all in.
However, this is such a sand carved full of zzz community, recently in Wall Street stirred up a lot of turmoil. The center of this storm revolves around the stock of the company GameStop.
Gamestop GME is a game retailer that I believe all of you JR’s in the US are familiar with. Nowadays, with the advanced technology of everyone’s network, fewer and fewer people will go to physical stores to buy physical games. The owner himself went to Gamestop to buy some hand-me-down game peripherals or something. Most people are not optimistic about GME since the past few years. The stock price fell from 28 in 2016 all the way to more than 3 yuan at the end of 19. It hasn’t picked up.
I didn’t buy GME myself and didn’t get on the options bandwagon because I’ve felt since then that the fundamentals of GME just sucked and didn’t see much hope.
There is a lot of institutional shorting in this share price drop, and it is said that GME was the most shorted stock last year. We don’t know if that’s true, but GME does have a lot of short positions, and FactSet data shows that GME’s net short position is 138% of the stock’s outstanding volume.
And just as GME was being forced into near bankruptcy and facing delisting, reddit users saw these vigorous short-selling institutions, and some began encouraging people to buy GME stock and options. One of the most famous was this DeepFxxingValue, who bought $50,000 in calls at the lowest point of the stock price and posted his views and predictions on reddit. The price of GME will gradually rise in the future, and the shorts will eventually be pressured to buy back the stock, forming a short squeeze (forced short, rolled short), and the stock will then soar to the sky.
This was DFV’s first posting, when the stock price had slowly started to rise, his $53,000 had become $110,000, and the web had advised him to run. The DFV, however, was not convinced, believing that there was still room for the stock to appreciate and that the short-sellers had not yet seen the pressure.
Over the next year, he converted his options into a half-option, half-equity portfolio one after another. Gamestop changed CEOs, with a new bigwig from the original pet supply site chewy, and the company’s earnings report temporarily ensured that it would not go under. Yet with this faintly positive news, reddit users kept pace and bet along.
On Jan. 12, ’21, GME shares came close to $20, at which point DFV’s GME single-share portfolio had risen to $3 million in a year and had more than $1 million worth of Jan. 15 $20 calls.
GME shares rose from $20 to $40 on the 14th in two days.
That’s when DFV updated.
Yes, he went from $53,000 to $7.3 million in a little over a year.
However this is not the end of the madness, just the beginning of it. After a few days of selling and stopping profit, GME shares have been floating around 40. With today’s 22nd US time, another Friday and another options deadline, the short-sellers again didn’t wait for the stock to come back down and had to bear the pain and continue buying. This morning the stock spiked all the way up 70% and was called off by the meltdown. The stock was trading at a high of $73 a share.
Everyone at WSB couldn’t hold back, and a special discussion thread was opened in the forum:
Those who bought GME were cheering, those who didn’t regretted why they didn’t get on the train in the morning, and those who didn’t take a steady $40 to throw away and only made a few dozen times regretted why they ran so early.
At this time, YYDS, DeepFxxingValue to post, we look at this old brother’s position now, I go cry for a while.
Starting capital: $53,000, equivalent to about 340,000 RMB
The current capital: $11.17 million, equivalent to about RMB 72 million. 17 months, an increase of about 210 times.
This year, the owner also bought a few stocks that WSB Autist touted and became a member of the ZZ army. Among them are NIO Azera, PLTR, CRSR Corsair, and TSLA tesla, which also made a lot of money. Of course this kind of stock I also do a lot of DD before they dare to enter, missed a lot of time. But the investment also doubled in a few months.
In the future if there is any bull WSB story I may also turn around to show you.
By the way, the new trend of WSB: BB BlackBerry BlackBerry, interested in gambling on the old brother can go to study for themselves. Recently the stock price is also up a lot.
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