GameStop (GME) - What's happening? It's a war!

I've actually decided to write on this topic at 4AM today.. but I prioritized my sleep and decided to do it after. This morning I saw that Seedly wrote on GME as well and it's quite extensive.. so if you want more info, do look up here. 

I was actually losing my sleep over a paper loss of 30% on GME as I jumped in the train a little too high without knowing the stories.. and this is after some effort of averaging it down to make it more bearable.. however, last night's rally put me back neutral as I limit sell my position slightly above cost. I will be lying if I said that I don't regret selling there but then again I am glad I walked away from there in one piece. 

Backstory

I hopped on to the band wagon to do some trend trading seeing the volatile in GME on Monday.. earned some fast cash on that day.. and saw it rallied past 150.. my itchy hand had the better control over my rational brain and it touched 159 briefly and came down. I tried my best to average down and ended the day with paper loss over 30%.. which was quite stressful. 

GME War

I went on to read what started all these in the subreddit of r/WarStreetBets and it helped me through the tough day seeing how supportive the crowds are. 

So long story short.. what started all these was hedgies were shorting the hell out of GME because they can.. while shorting you borrow stocks that you don't have to sell but you incur a borrowing cost. As of latest figures, we are seeing outstanding of ~138% of the overall stocks being shorted around USD20. One of the two prominent hedgies that are aggressive is Melvin Capital who have lost 1/3 of his AUM of USD12.5bn since the year start (many speculate is because of GME's movement on Friday). Which led to him getting bailed out by his old boss at Citadel for a USD2.75bn bail out (including Point 72's 750mio). 

Where are we now?

GME closed at 147.98 (92.71% up on the day) and this is a whooping 685.46% up YTD. Many of the soldiers in WSB are looking at USD 4XX as a target.. but while many hold a meme optimism at USD1k. This is really interesting to see how it pans out especially since the big squeeze has yet to arrive considering that Melvin Capital gotten more capital to cover their bleeding~ 

I currently stand as a proud WSB soldier with ready-capital to buy the dip and hold for the team there! Won't be touching it if it continues rallying, but I will be glad for my fellow WSB who put in every single cents they can afford. Do look over to their reddit.. it is really supportive if you're bleeding on paper loss (which is unlikely at this point of time). 

While many people seems to say one thing.. pls be careful that what they write might not be actually true but then again I wouldn't call this a "Pump & Dump" strategy.. as authorities aren't clamping them down.. and there're many valid reasoning behind this. I will continue helping the team over WSB with my small capital when needed because I like GameStop and by all means, this article is not a financial recommendation/advisory. 

Interesting Highlights

Personally I feel that retail won't have the capability to win institutions usually.. but the hedgies have the cards stacked against them and this is a global movement with many strong support. 

Michael Burry (star of the big-short movie)'s Scion Asset Management owns 1.7million shares at end of Sept 2020 which ballooned from 17mio to 250mio as of Tuesday close, putting it a 1400% up in 4 months. 

Elon Musk tweeted "Gamestonkk!!" along with WSB's reddit link which helped GME jump further in after-hours trading.

Chamath Palihapitiya (billionaire investor) asked in Twitter for stocks recommendation, and if anyone convinced him.. he will dump a few hundred Ks into it.. while many from WSB try to convince him to bet on GME, the main pusher I guess was when Reddit's owner tweeted for the push! He ended up buying 50 Call options on GME with 19 Feb expiry and a strike of USD115 when the price was floating around USD90.. this puts the purchase around $125k... but seeing the stock so strong now.. he is definitely in a lot of profit. 

Screenshots

I will try to share some screenshots that got me through and I thought might be interesting highlights in future posts. Can't seem to get the photos onto my work computer for that.. 

Conclusion

Ultimately.. this is not a trading strategy nor a recommendation for investing.. but is more of a movement for the usual me and you to get back at the hedgies who have been profiting at other's expenses. Do your own DD before hopping on anything! I will try to keep update on GME for sure.. 

As of writing. I don't hold any GME positions but queued a GTC order at lows to support the army! I can't wait to see how this pans out even if I am not holding anything!