원문 보기
Did you know that you can now get four free shares with Robinhood? If you haven't signed up for Robinhood yet, use the link below. You don't even need to deposit any money. Just link your bank account. They will give you one free promotion within 24 hours and three more completely free promotions until February 1st.
Just make sure you register before the end of January 31st. Use the link below. This is a special promotion for creators only. Hello everyone, it's me, Kevin. We need to talk about GameStop. What the hell is going on and what will happen next? I'm going to briefly talk about what the hell is going on , and most importantly, talk about what's next not only for GameStop and stocks like AMC, but also whether we're missing a hidden opportunity .
A potential silent market crash that we could take advantage of. Is it even blasphemous to suggest we potentially consider anything other than GameStop? Eventually, the diamond hands hold GameStop and fly a rocket ship to the moon. The current target price is $420.69. And you know what? Some say we could surpass that mark, reaching $1,000 per share.
After all, there are highly rated people on the Reddit forum Wall Street Bets who bet $50,000 as YOLO and turn it into $47.9 million. And if DFV holds on, then we can hold on too . So, here are my thoughts on the whole situation. First, a quick overview of what's going on. Take almost any stock sold short in 2021 and you've almost completely gone up.
In fact, the 50 stocks that were most shorted in 2021 rose an average of 33%. But of course, if you look a little closer, you can find companies like GameStop and AMC that have more than quadrupled in the last few days alone. You have Express, whose shares have increased 7-8 times in just the last few days.
Wait, Blockbuster Liquidations shares are up over 150% in a day. Nokia, BlackBerry, National Beverage Corporation, also known as Fizz, ticker Fizz. All of these companies have grown significantly. And what do all these companies have in common? Well, these are all companies that the market has effectively decided are dead.
So, we're going to sell you the stock short into oblivion. We sell stocks short —we are essentially betting that these stocks will fail. However, in a very David and Goliath-like situation, you have a community of ordinary investors , gathered together on the Wall Street Bets subreddit on reddit.com, who are making optimistic predictions that no, the Fed's money printer is spinning too fast, and these companies actually have really good fundamentals that can be brought back to life with the help and support of the money printer, yes, but also strong fundamentals.
And these companies will not go bankrupt. In fact, it was Jerome Powell who said today that we have managed to avoid a significant number of corporate bankruptcies because we have managed to weather a significant portion of this pandemic, and hopefully we will soon be done with this pandemic and see good spending growth again.
This encourages people to follow the beliefs of people like Chewy co-founder Ryan Cohen. Chewy sells products online. Ryan Cohen joined the board of directors of GameStop and says, “You know, people buy a lot of things online. But do you know what you can't do online? You can't try the game before you buy it.
At least, that's Ryan Cohen's argument." One, and this is, of course, just one of his arguments. I'm oversimplifying here. But Ryan Cohen suggests, “Hey, you know, GameStop, Toys R Us are gone, Best Buy products barely work when you’re trying to experience the game in person. You know, every time I go to Best Buy, it seems like you can't really experience the game in person.
But when you go to GameStop, you can actually play the game in person." In fact, I have vivid memories of attending an elite Call of Duty tournament at GameStop. I won't mention how well I did because that would be embarrassing for anyone in this video. But in any case, the point is that GameStop has not only been a source of nostalgia for many of us, but also something that we believe, or many of us fundamentally believe, deserves a place in the future from 2021 to 2030.
This is not the kind of company we want to see go bankrupt. Well, as a result of not wanting to see these companies fail, finding a fundamental vision for the companies, and realizing that there were huge short positions against these companies, Wall Street Bets found a way to perhaps once and for all start the money printer for average Americans.
Ultimately, it seems like the money printer only helps wealthy corporate executives and corporations that have to give money back to the average American Joe. But now we Americans have been able to, well, turn the tables a little against corporate greed. In fact, when we talk about corporate greed, we are talking about hedge fund greed.
And this is related to creating the basis for a potential short squeeze. And you see, the easiest thing to do here is just quickly explain what a short squeeze is and what happens, in my own words, because there's a lot of information that people forget. Because remember, when you sell a stock short , for a short squeeze to occur, you actually need to be forced out of that position.
Why doesn't someone who loses money on stocks just hang on? Why are they being squeezed out of position? Well, let's understand that because Wall Street bets have the ability to find greedy hedge funds that are mega- shorting stocks and squeeze them out of their positions to transfer wealth from the rich to the average American.
So, here's how this process works. Let's say you're an individual investor and you decide, "You know what? I think GME with one ticker symbol GameStop will go bankrupt. I think they will drop to zero." And let's say the stock is trading at about $20 per share. Well , what you can do is tell a company like TD Ameritrade or WeBull or whatever, "I want to borrow stocks at $20 a share." Then you get the shares, and now you owe, of course, $20, but you have a share worth $20.
Now you can sell the stock for $20. And let's say you do this 1000 times. Well, you sold those 1,000 shares, so you have $20,000 cash in your brokerage account . But you also have $20,000 in debt. So, from the moment your short position is initiated, you are effectively even. You have $20,000 in debt and $20,000 in cash.
This is how you make money. If the price of GameStop drops from, say, $20 to $5, what you can do as a short seller is simply buy the stock on the public market at market value, which is $5 per share, multiplied by 1,000 shares, that's $5,000. So, buying back those 1,000 shares costs you $5,000. And now you suddenly made a profit of $15,000.
Because remember, you had $20,000 in cash and $20,000 in debt, and it's your obligation to buy back those shares in the future. But since the value of your debt actually changes with the value of the stock, and the value of your debt when the stock falls is only $5,000, you can execute this trade and withdraw 15k.
This is really, really important. Now we're just going to erase that and scroll down so it doesn't get in our way and we can understand what's happening when things are going well and when they're not. Okay, let's figure it out. What happens if GameStop's stock price rises to $100? Now you need to buy 100 or 1000 shares .
I forgot zero. That's it . 1,000 shares at $100 apiece, which is $100,000. So what that means is you're sitting here and your brokerage account has $20,000 in cash, but now you have debt that has actually gone up in value and you're obligated to cover $100,000 of debt. This means that your debt is now 5 times greater than the cash you have.
This is not good. Brokers don't like it when you have a lot of debt compared to the cash or other underlying assets you have because it's risky . That if you go bankrupt, you will end up cheating the broker, and brokers don't like being cheated. So something special is happening here. Since you technically have a loss of minus $80,000, the broker might call you because that's where the "why sell" question comes in, right?
And I want to make this very clear , because I think it's often forgotten. Why are you selling? Sure , you're down $80,000, but just wait. The stock could go back to $20, right? Maybe they'll go up to $5, right? Why sell? Why not wait? Or maybe not sell. Why close a short position by buying shares to cover it?
It is actually buying to cover them when you close your short positions. It's a little more complicated, but why would you do anything? Why not just wait? Well, the reason you're not waiting is because the bank loaned you 20, which is now worth, ahem, $100,000 in debt. You only have $20,000 cash. And so when GameStop eventually goes to the moon, you're responsible for raising that extra 80 grand, and the bank issues a call, a margin call, to force you to buy stock to cover it.
So, looking at it this way, when you have this imbalance, where your debt suddenly was 20 grand, but it's gone up to 100 grand because the stock price went up so much, the broker says, " Dude, either put the money in right now, or we're selling all your other securities." Because often when people have these kinds of margin issues, you know, outstanding balances, they might have, for example, other assets in the account.
Let's say you have 20 grand in cash and, like, 80 grand in, I don't know, AT&T stock, right? Because AT&T shares aren't going anywhere, they're just sitting there. So the broker might say, "Look, either raise an additional $ 100,000 right now, or we'll take your $20,000 in cash and your $80,000 in AT&T stock, and we'll cover your debt right away because we don't want to lose any money." Here's what happens when a margin call happens: these bankers, or I shouldn't say bankers, these hedge funds are forced to cover these short positions, and that creates a short squeeze.
Because when a margin call comes in, suddenly these hedge funds are forced to cover their short positions, and what does that mean? They are buying GameStop stock at these newly increased prices. Well, the GameStop price literally went up from $15, from $3, to be honest. It went from $3 to $15, then to $20, then to $60, then to over $100, then to over $200, and now to over $300.
So , obviously, given the situation that I just explained, the debt on a certain...These hedge funds could collapse so badly that you would have to make margin calls very quickly, and you would eventually need financial assistance. And that's exactly what happened. Because of margin requirements, institutions like Melvin Capital, a GameStop short seller, have already reported that they received $2.75 billion in cash injections to survive, and they are having to give up future revenues to the company that came to their rescue.
Citron Research, a short seller who often intentionally mispronounces SHITRON, also had to get injections to stay afloat. Both Melvin Capital and Citron, as of Wednesday the 27th, reported that they had closed all of their GameStop positions, meaning they were hit hard, really hit hard. These were the guys who bought stocks in bulk at $100, $200, and $300 a share .
This money was essentially transferred to ordinary investors , who were able to sell these shares at crazy profits. This is absolutely incredible , and this is a potentially unique case of a short position, because GameStop found itself in this unique situation where an individual stock was potentially...
borrowed multiple times for short positions, which resulted in the company being shorted over 130% at one point. This means that you have a whole complex for short squeeze. And that craze has also led to people like Chamat, legendary SPAC investor, founder of Social Capital, and potential California gubernatorial candidate, buying GameStop call options on Twitter recommendations from you who tweet about Chamat.
He has since also closed those positions with a profit of $500,000, which he is apparently donating to Barstool Sports. And today, Chamat has also become a hero to the Wall Street Bets community, demanding and stating that there is nothing on CNBC that says that the people at Wall Street Bets are doing anything wrong.
And there's nothing that says people can't have whatever valuation metrics they want, or customized metrics, forecasts, or theses about a company . And the main takeaway from Chamat was why, when big greedy hedge funds and lawsuits end up selling a company, it's okay. But when people get together and short the same hedge funds, it's potentially a problem.
Now CNBC, which conducted this interview and was certainly on the defensive, is saying that no, we just don't want anyone left with a burden on their shoulders. And the counterargument is, let adults remain adults. If they want to invest in a certain way, there is nothing stopping them from doing so.
And this is despite the fact that a bunch of people on Wall Street are panicking and saying, "Oh my God, we're going to call Janet Yellen." Janet Yellen says she is going to investigate. Call the SEC. The SEC says the SEC says we are actively monitoring Wall Street Bets. To the point that Wall Street Bets literally closed down at some point today.
It went down for about 45 minutes to an hour, and the Wall Street Bets Discord server also suddenly disappeared. Now both of these problems have finally been solved. Both were somewhat unique. One of them was that Wall Street Bets was gaining so much popularity with its user base growing to over a million in a very short period of time that they had to temporarily suspend the Wall Street Bets service to try to catch up and make sure they were still properly monitoring or managing and, well, monitoring the content to make sure that no inappropriate posts were being posted.
That their algorithms are actually overloaded, and they don't have the staff to keep up with all the new users . Discord ended well, Wall Street Bets Discord was banned because there were too many new users coming in who were swearing too much, apparently using Icelandic hieroglyphs to get around the curse zone, which led to Discord declaring the community...as two toxic to remain on the Discord platform, and, well, Wall Street Bets, Discord was shut down.
Incidentally, this came after Elon Musk tweeted gaming moans related to Wall Street betting on Reddit and mentioned that Discord was crazy last night . It's all in the tweets and of course all thanks to Wall Street bets gaining a lot of popularity and attention. But now the question begins to arise, is this legal?
Is this normal? And what's next with this whole saga? I mean, technically, federal securities law prohibits anyone from participating in the market while simultaneously misrepresenting information about a company to artificially inflate the value at which that security is being sold . In English, you can't make up something about a company and use it to drive up the stock price.
But Wall Street bettors argue that, hey, we're just sharing our comments and opinions. It doesn't help that it's often difficult to identify who the individuals posting are, given that most people post under different names, such as Deep Effing Value or Roaring Kitty, which are, incidentally, the same user.
This is the guy who turned $50,000 into over $47 million. Dollars. I take off my hat. So now, legally, as long as people aren't misrepresenting GameStop's prospects or stock prospects, it's hard to argue that people on websites like Wall Street Bets, a subreddit on Reddit, or a subreddit are actually doing anything different than what hedge funds do, or even activist investors do.
For example, why might Katie Wood say, "Here's my thesis and target price for Tesla." I think she's flying to the moon , essentially. When she initially said the thesis was a price of $7,000 per Tesla share before the stock split. And now this thing is trading at over $4,000 a share, which is incredible.
And she made this call when Tesla was significantly cheaper. And that's what people are arguing about. There is no difference. So what if a group of people want to come together, share a thesis, and then make deals related to the thesis? In reality, there is no difference between active investors on Wall Street or investment funds and ordinary investors.
They are just grouped together. And is their union somehow illegal? Personally, I don't think so. I don't think there's anything wrong with betting on Wall Street, and I fully support the Wall Street betting community. But the big question now is what's next for GameStop . Because now some are claiming that GameStop has turned into something of a pyramid scheme.
That is, people buy GameStop solely with the intention of selling it to someone else for a higher price. The problem is that at some point you reach the top of the pyramid where no one else is buying your shares. Then, when you come back to sell, you might be caught playing musical chairs when the music stops.
And, unfortunately , in the future, a situation may arise when no one will want to buy shares at these inflated prices anymore. So, at the levels that AMC and GameStop shares are currently trading at, we have to realize that we probably won't see hedge funds buying unless they get squeezed out by short positions, which has already happened so far.
Melvin Capital is out, and so is Citron. So this makes us wonder, how many more short positions are left in circulation at this point? We know that hedge funds are probably not buying, and institutional investors are probably not buying, stocks for fundamental reasons at this level . So there actually remains a set of retail buyers who may continue to be willing to put money into GameStop, AMC or some other stocks with high levels of short positions.
And the question that then arises is , if retail investors start to run out or run out of money, institutional investors won't buy, what happens when some people start selling, especially when you go from peak media attention to losing it? After all, how much more peak media attention can you get than just a congratulatory message from Elon and Chamat, right?
So, this creates an absolute possibility that practically overnight we could lose a significant pool of buyers for these stocks. And when people go to sell their stocks or short-term call options, stock prices may end up opening much lower than we've seen before. And so there is an important warning here for anyone investing in companies that are growing rapidly.
It's normal to lock in profits and withdraw some of the money from the Las Vegas table . I'm not encouraging you to sell, but just remember what people say. You don't go bankrupt by taking profits, and you shouldn't be ashamed of taking them. And even if that means making a small profit, paying off debt or getting money for diversification, then keeping the rest of your money in those investments.
Ultimately, I don't want to take anyone's side by saying you should buy or sell. Ultimately, it's your decision. But I also have a rule on my channel: don't sell. However, this is one case where I would say it is okay for you to sell some of your investments. What about the general recommendation I have?
And what is this talk about this quiet market crash? What is this ? Let's talk about it now. So, right now, think about this. At the same time as these meteoric rises of GameStop, AMC, BlackBerry and some other companies, Fizz and other companies that are growing rapidly, we are seeing the stocks of the rest of the market sell off.
The Dow Jones fell 2% today. The S&P fell more than 2.5% today. The market was quite red. Target, Starbucks, Amazon, Etsy, all of these companies are red, and some of them are dark red, and Face is dark red, Square is dark red, they're on sale today by 7-8%. What's interesting is that so much money is being invested in individual stocks like GameStop and AMC, while at the same time the companies are trying to bail out their sister hedge funds because they are failing and need money to cover their short positions.
It's almost like a huge vortex that these stocks like GameStop and AMC are making, they're just swirling money around. And at the same time, they are pouring money into these stocks, into this sales funnel, the money is not going to the rest of the stocks on the stock market. People are potentially even selling other positions to buy them in this whirlwind.
It literally sucks money from everywhere. And in my opinion, this could, especially if it continues, create a quiet market crash. This means that at the same time as we see these stocks skyrocket, everything else is slowly disappearing and disappearing again and again. And if we keep taking losses of 4%, 5%, 5%, 6%, 6%, 7%, soon all these stocks will be at a 30% discount.
And while the media and everyone else is paying attention to GameStop and AMC, which I'm not saying is wrong, we should be paying attention to that, but at the same time we're overlooking the fact that a lot of companies that we might want to buy and hold for the next 10 years, whether it's Enphase, Shift, Tattooed Chef, Tesla, Neo, Xpeng, Square or some of my other favorites, at the same time we're turning a blind eye to the opportunities that are out there.
And so tomorrow, probably when the market opens, I'll be going live with my course participants to probably buy some long options. So, a few call options on some of these companies that have literally fallen. I can buy options, I can buy the shares themselves. This is due to volatility. We'll see what the pricing looks like.
But the point is, it's entirely possible that while this maelstrom continues, a truly great opportunity could emerge alongside other stocks that are currently being simply ignored. They don't attract attention, and there's no money to even buy them. So, if you are an investor, consider being attentive to everything that is happening.
In the meantime, I highly recommend you check out the birthday coupon below to get my amazing courses on building your wealth and join me on my live streams. You will see this link and the bday coupon code below. Thank you very much for watching. Get your four free shares from Robinhood, and friends, I'll see you in the next video.
Comments 0