01/27/2021 11:59 AM
Clarín.com
Technology
Updated 01/27/2021 7:58 PM
The story is so
unusual
that it became the topic of conversation in the
tech scene
.
A group of users of the
digital forum
(a sort of US Taringa) made this Monday that the shares of the video game store
GameStop soared up to 144%
only to
troll
the analysts who predicted that there was going to be a drop in share value.
And this spread to Blackberry, which was also an industry behemoth.
First of all, GameStop is a chain that sells physical video games in the United States.
Due to the boom in the sale of digital games in recent years, added to the coronavirus pandemic that decreased face-to-face sales in stores, it is in decline and many anticipate its disappearance: they
speak of "the next Blockbuster"
, referring to the already defunct movie rental store.
For this reason, the action of GameStop (
GME
) became very popular in
what is called "short"
, that is, betting that it will fall.
Faced with the number of "vulture" shareholders who bought under this modality, dozens of users of a "subreddit" (subforum) called Wall Street Bets (Wall Street bets) reacted: they
began to furiously buy shares of GameStop,
which came to trade at almost $ 160 per share amid high trading volume and having started the year at just $ 17.
And during the afternoon of this Wednesday he
reached $ 300:
GameStop stock, at $ 325.
Photo Google Finance
In this way, the stock, which was known among market experts for its bearish potential and many had bought put options, a bet that was
"squashed" with the recent rises.
It happens that a first rise in the shares due to an unexpected increase in the volume of purchase forces those in the short options market to reduce losses by buying the securities on which they are betting on the downside,
which further boosts the share price.
"WSB is bringing Wall Street down on its own. Power to the damn people.
I am very proud of all of you illiterate
retards," wrote one of the forum users this Monday, linking to a news item that explained that "sellers short "GameStop lost $ 1.6 billion.
The tremendous rise of the firm forced the New York Stock Exchange
to paralyze its listing
- a tool to cope with volatility - up to nine times before it plummeted and closed the day at almost $ 77 per share.
The issue captured the attention of the tech scene in the United States but began to spread throughout the world.
Of course, Elon Musk did not want to be left out and tweeted the Reddit sub to publicize the action,
for a kind of personal revenge
: one of the main shareholders of GameStop "in short" is Melvin Capital, from where they bet that Tesla would fall in value and relevance.
Gamestonk !!
https://t.co/RZtkDzAewJ
- Elon Musk (@elonmusk) January 26, 2021
And, how could it be otherwise, the memes in the Reddit sub did not wait:
When you read fake news on CNBC that Melvin supposedly closed out from r / wallstreetbets
6 days ago: "If GME reaches 200 by end of year I will get this tattooed on my ass" - / u / Camel-Kid from r / wallstreetbets
WE LIKE THE STOCK from r / wallstreetbets
Everyone tomorrow when the market opens.
AKA GME.
from r / wallstreetbets
r / WallStreetBets also "saved" Blackberry
These small investors like those on Reddit, who generally use "trading" applications to play on the stock market without commissions, also shot up the prices of other companies that are going through bad times such as the
AMC
cinema chain
, the
Blackberry
phone company
or the retailer
Bed Bath & Beyond.
Always challenging the arguments of analysts.
"What has happened to the GameStop action is a reminder of
how times are changing
. A new army of 'traders' not focused on valuations, but on momentum opportunities that they see on Reddit's Wall Street Bets, YouTubers, TikTok or Robinhood (a brokerage app), "opined analyst Ed Moya, from the firm Oanda.
Blackberry went through the same situation.
Reuters photo
The case of BlackBerry is revealing: it saw its value tripled in a few days, going from
$ 6.68 on January 1, 2021 to $ 18.81 today
.
And it is the same case of GameStop: the rise in the stock is not supported by company announcements, as is often the case with big tech, but by the collective action of this Reddit forum.
For its part, Melvin Capital, the company that had the most shares of this type, is projected to go
bankrupt
for next week: "According to sources, Melvin Capital will go bankrupt next week," they explained from a specialist website on
Wall Street .
Melvin Capital, to file bankruptcy as soon as next week according to sources.
The bailout they received yesterday from Citadel and Point72 went “poof” today as the GameStop ($ GME) momentum continued.
The fund was forced to liquidate its Alibaba ($ BABA) position after hours.
- WallStreetBets & Co. (@WSBConsensus) January 27, 2021
Another case that reflected the new behavior of investors, especially the youngest, took place a few days ago when Tesla founder Elon Musk recommended on Twitter the messaging application Signal and an action
that had nothing to do called Signal Advance it shot
up to 1,100% the next two days.
But without a doubt the case of
GameStop
and now Blackberry reflects how a coordinated action can have effects, something little new.
But that may be the first time that
it has been done from an internet forum.
With information from EFE
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