GME has opened at $300, a doubling over yesterday when it doubled from $70 to $150.
The meme stock has gained the attention of even Elon Musk who tweeted: Gamestonk!!!
That was enough to send it rallying in after hours trading, but now that markets have opened, it seems to be falling.
GME is down to $250 at the time of writing, with trading halted because it was falling too quickly.
That halting is quite unusual to this space because no one can halt bitcoin, but for GME it appears to happen quite often. Markets afterall just opened.
The big question is obviously where this might find support with Melvin Capital, the short-seller apparently bailed out.
They claim to have closed their position, with $300 a very big milestone for this stock which was at just $20 this January 12th.
Many shorters therefore would be called at this level, but that’s only if they don’t have enough capital to cover their losses while still keeping the position open.
Why on earth would they want to, is unclear, but where fundamentals are concerned, GameStop lost some $250 million last quarter.
It has significant revenue at $5 billion a year, but their P/E ratio is some 1,000, so obviously fundamentals have little to do with it.
Short hunting does because it is the most shorted stock in the world currently. However, it’s not clear how long this game can go on because new shorters can always enter and most probably have entered.
The more price detaches then the more it would fall you’d think, but on the other hand the more people buy it, the more it would rise.
Making it a very edgy game currently because this could go even to $1,000, but it will crash at one point and not recover unless the business is somehow turned around into decent profits.
Some bitcoiners have probably gone to GME just to play, maybe a bit late to the party, and some maybe have even made profits.
Some of that profit may well make its way to bitcoin, with wsb and the crypto crowd a very overlapping one as they’re bitcoiners really who also play stocks.
Some of the party therefore may well move to bitcoin, but the big day is Friday because that’s when the GME short contracts expire.
First however we’ll have to wait and see what happens today with it unclear what can top Elon’s tweet. So many of the players have probably gradually been taking profits as the stock market starts becoming a bit like the bitcoin market.
Thats because the digital revolution has brought the investment tools to anyone that can complete a five minutes form on Interactive Brokers or Robinhood et al.
Making the stock market the real bailout because that’s where the Fed money goes.
Thankfully there’s now quite a few bitcoin traded stocks, and many of them are probably in wsb’s portfolio to diversify risk and increase returns.
Thus bitcoin should benefit from this bullishness as a new era dawns with millennials now announcing their arrival in the money markets.