$GME TO THE MOON!

February 18th, 2021 by admin

Scrabble tiles spelling stonks

Before we dive into "stonk" history, there are a few things you need to know to truly understand the Gamestop, AMC, Blackberry, Koss, and other stock frenzies.

WallStreetBets: WSB is a reddit forum where rich gamblers throw money at volatile stocks, usually losing their money. They enjoy acting dumb and immature, yet have extensive stock knowledge and lots of money to lose.

Hedge Funds: a group of crazy rich investors that invest with borrowed money or other methods, trying for large capital gains.

Meme Stocks, aka "Stonks": The hot stocks purchased by the reddit and meme community (GameStop, AMC, BlackBerry, KOSS Headphones, and Nokia

Emoji Language: 🤚 💎 🧻 🦍 🍌 🚀 🌕 As retail investors surged to WSB, they began creating their own trading language. Investors are apes 🦍. Stocks are bananas 🍌, and to hold your stocks means to have diamond hands 🤚 💎 while to fold and sell is to have paper hands 🤚 🧻. The rocket heading to the moon is a way for investors to say the stock will surge or rise in price. 🚀 🌕

So what the heck happened last week?

(This is a basic explanation of recent events and has been simplified for ease of reading)

I'm not sure if I should say this proudly or not, but I'm a WSB Ape, a retail investor who participated in all of these shenanigans. I'll give you the inside scoop on the "stonk" market and how a bunch of teens using their mom’s money almost took out a Hedge Fund.

Melvin Capital, a prominent Hedge Fund on Wall Street, bet against the retail video game company GameStop. When doing this, they borrowed millions of stocks (around 75m) and sold them. The point was to sell them at a higher price, wait for the stock price to drop, and buy all of them back at a lower price, keeping the profits, and returning the stock to its rightful owners.

DeepF***ingValue, a veteran member of WSB had noticed trends and patterns that suggested GameStop was a risky move, but a rewarding one as well. He bought $700,000 dollars worth of stock at $13, right when Hedge Funds began to short the stock (sell it with the purpose of buying it back again). Shocked at his returns, the head ape would post daily to WSB with his "YOLO investment", gaining some serious attention and leading other investors to pour money in the stock… and I mean pour money. I've seen people take out second mortgages, their student loans, their entire trading portfolio, and more to buy GameStop stock. We're talking about some true million-dollar investments here. The purpose was to SQUEEZE the Hedge Funds (this is essentially to drive up the price of the stock and force them to buy the GameStop stock back at an insanely high price, which would make the stock go up even more, and everyone invested would become millionaires). Redditors banded together (as apes band together, hence the ape emoji) and encouraged each other to have diamond hands, to hold the stock! The risk/reward was a no-brainer: risk $200 dollars to make $1,000+. If the retail investors could hold long enough, the Hedge Funds would have to buy the stocks back and send the stock price “to the moon”. This led to a 500% increase in GameStop stock, with DeepF***ingValue’s initial investment of $700k easily hitting $46 million dollars.

Why'd the price go back down so quickly?

Robinhood (the biggest name in retail investing) and other trading firms amid surging stocks and floods of new investors decided to limit the number of stocks that their users could buy. So instead of the demand increasing, the price increasing, and the pressure mounting against hedge funds, suddenly you could only buy 1 single stock. Jacob from Provo said: "Robinhood not only broke the law, but violated the trust of its clients, and proved that it is a biased and unfair stock trading platform".

This was bad news, as the stock was rising only because people were buying thousands of stocks… as the buying was grinded to a halt, the hedge funds employed several tactics to lower the price of the stock. The paper handed investors - they sold. Those who speculated that the squeeze against the Hedge Funds had already happened - they sold. The investors who heard the media manipulation warning them to leave GameStop - they sold. Others who lost interest in the stonks - they sold. Unsure if the "squeeze had been squoze", the millions of retail investors - they sold. I'm trying to say that everyone sold.

I was one of the many investors who put money into GameStop and AMC, the movie theater chain who faced the same situation as GameStop. I lost money, and so did many others, but we don’t really care, as the small price to pay for sending a big message is worth it: retail investors are a force to be reckoned with, and they won't show Wall Street or other billionaires any mercy. "We're starting a revolution, showin Wall Street what's up!" commented Bryant, another GME investor. Apes together are strong. They hold bananas till the rocket hits the moon!

Posted in: News, Tech, Toys, and Trends