One of Q’s drops said “do you want to play a game?”
That is a classic line from the movie WARGAMES, said by the AI. People have speculated what it meant.
Recently some big hedge funds “shorted” the stock of GameStop. Word got around.
Gamers and guys on the chans heard, and they LIKE GameStop.
Traditionally, investors make money with “buy low, sell high” and pocket the difference in price as profit.
Shorting is similar, but reversed – sell high, buy low. The speculator borrows the stock first, sells it high, waits for the price to fall, buys it back, then returns it from whence he borrowed it. That is a key part: you have to return what you borrowed, the stock.
If the stock performs as expected, all is well for the investor. But if the price rises, then he has to buy the stock back at a higher price in order to return it from whence it came.
Here is a key difference from normal trading, though: If you buy a $10 stock outright, the most you can lose is $10 if the stock goes to zero in bancruptcy. But with “short-selling,” the price can go up much farther than you might think. If you borrow and sell at $10 expecting it to go to $5 for the buy, you are expecting a 100% gain. But if it goes to $20, you are looking at a 100% loss. But it can go to $30, and you are looking at a 200% loss. What if it goes to $75? Yes, you are looking at a $650% loss. when the guys who started this thing out by borrowing and shorting start to buy stock in desperation to cover their shorts, this increases demand, and can drive the stock even higher. When this death-spiral starts running, it’s called a “short squeeze.” It’s what was engineered in the movie Trading Places. [Holy smokes. Just realized Trading Places was playing in the background of some video recently posted… gods, what was it…. I’ll update if I think of it]
As of this writing, it’s at about $200 a share. Five days ago it was under $40. Two weeks ago it was under $20. Yeah, looks like an epic short squeeze, putting a big hedge fund in a vice that will crush them.
Fast forward to recently. Gamers and Channers don’t have a fondness for Wall Street, bankers, etc. They just got an economic stimulus money check. They start buying GameStop stock, and the short squeeze is on. Short version – for every $11 this stock goes up, the hedge fund loses about $1 billion dollars. As I understand it, they have to return the borrowed stock by THIS FRIDAY.
“Do you want to play a game?”
This might be Qs plan to force a banking reset. The cascading hedges and bets and derivatives are have been what triggered the Peso crash, the LTCM crisis, the Tech boom/bust, the housing bust of 2008, the S&L crisis, etc. It appears it is not only GameStop, too. (A bit more background on how this particular item came about is here). The irony of all this getting triggered this time around by the GamerGate crowd and channers is just too priceless for words. The debt implosion will likely cause a spike in dollar value (may sound counter-intuitive, but in a debt-based currency a debt wipeout decreases available collateral, and…. up she goes, at least for a while).
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Update (7:50 AM, 27 Jan 2021 PST): now over $300 a share. Get the lube; some big Wall Street names are getting screwed, and hard.