![]() When a stock that a lot of people are short starts to move up, and some of the shorts get nervous, they start buying to cover. If they’re wrong, and the stock goes up, they may have to buy stock to cover the loan at a higher price, and lose money. If they’re right, and the stock price does go down, they’re in a position to buy the shares they borrowed for cheaper than they sold the borrowed shares for, pay back the lender, and keep the difference. Traders betting that a stock will go down in price borrow stock and sell it into the market. The part about this “absolutely NOT…” being a short squeeze for reasons that amount to, “I know it isn’t and I know more than you do!” was compelling. Left goes on to use various industry metrics and fundamental failings to illustrate the fact that Gamestop is a terrible business in the near term, rapidly losing market share and likely to lose more before the turnaround takes effect… but nobody has six minutes to listen to Left yammer on about stuff they already know. ![]() Within, Citron Research Founder and Executive Editor Andrew Left outlines the various reasons he’s short GME, prefacing it with an emphatic pronouncement that there is NOT a short squeeze in GME, so you can forget about it being a short squeeze, because a short squeeze isn’t what this is.Įvidently, Left was getting too many views on this video, and has since taken it down. If it did, it’s since been removed, making the sum-total of the material backing the firm’s short position a January 21st video. We aren’t aware of Citron Research having published a formal research report on Gamestop. Cohen was given three board seats on January 11th by a board of directors that seemed like it didn’t really know what it was going to do in the first place, and was happy to shirk responsibility to someone who seemed like he cared. Sometimes, the activist investor pushes his fight for the hearts and minds of his fellow shareholders all the way to a proxy fight at the annual general meeting, but Gamestop didn’t put up much of a fight. ![]() In November, he started what might be called an activist investor’s campaign, in which an investor buys a not-insignificant stake in a company, then makes a nuisance of themselves, publicly questioning management’s aptitude and agitating for control of the board of directors. (NYSE: CHWY) and generic venture capital type guy Ryan Cohen started accumulating shares until he owned 12.9% of Gamestop. This past August, as Gamestop the stock failed to keep up with a broader equities market that was heating up, former CEO of pet food e-retailer Chewy Inc. Notably, though, the people who complained about GameStop trade ins tended to complain about them a lot, indicating they went back. Even before the pandemic made shopping malls a bio-hazard, consumers were done with Gamestop, which was best remembered for giving a trade-in value of around 3% on old games towards the purchase of new games. That made some very obvious sense, because Gamestop is a physical retailer of a product generally sold over the internet. Prior to about two weeks ago, Gamestop the stock had more or less been a reflection of Gamestop the business, which had been sucking wind for quite some time. It’s best to start at the beginning, which isn’t complicated at all. It’s one of those confluence-of-events types of scenarios where everything’s set up just so, and the setup is so widely followed that it takes on a life of its own. There’s no simple reason that Gamestop (NYSE: GME) became the subject of the most high-profile short squeeze anyone can remember.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |