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GameStop, a stock that is on the verge of delisting, its share price has fallen from $28 in 2016 to $3 at the end of 2019.
It is said that GameStop was the most short-selling stock last year. According to FactSet's data, the stock's net short position accounted for more than 140% of the stock's liquidity at its peak.
With GameStop being forced to go bankrupt and facing delisting, some people began to encourage retail investors to buy the company's stocks and options. Driven by Reddit users and Tesla Musk's personal social media talk about GameStop stock, Game Stop's stock price has achieved a major reversal this year and has soared all the way, reaching a rise of 1729%.
The enthusiasm of retail investors has made the bears suffer and let more people know WallStreetBets (Wall Street Casino).
Victory for retail investors
Last week, the investment company Citron and retail investors had already had a confrontation. Citron said on January 19 that Game Stop would quickly fall back to $20 within a day, which touched the nerves of retail investors. Citron became the target of retail attacks. The founder of Citron, Andrew Left, was targeted by retail investors on Wallstreetbets. Group attack.
Facing the crazy offensive of retail investors, Citron quickly surrendered. On January 22, Citron opened a new social media account and said that he would no longer comment on GameStop, which calmed the anger of retail investors.
Citron lost face because of GameStop, but Melvin Capital, a Wall Street hedge fund, was hurt by Gamestop.
Melvin has always insisted on shorting many demon stocks including GameStop, but the enthusiasm of retail investors exceeded its expectations, causing it to suffer heavy losses and have to ask for help. According to the Wall Street Journal, two hedge funds have reached out to help it so far-hedge funds Citadel and Point72 are expected to invest US$2.75 billion in Melvin to help Melvin continue to operate stably. Among them, Citadel will invest US$2 billion, and Point72 will invest US$750 million.
GameStop out of the circle
"Bloodbath" Wall Street, retail counterattacks, "common people's victory"... The "inspirational story" of retail investors uniting and slamming short institutions has spread to a lot of enthusiasm and successfully "occupied" the headlines of major financial media at home and abroad. And its "decentralized" style of play also made Game Stop completely out of the circle.
On January 28, Injective, a decentralized transaction protocol, has launched a decentralized delivery contract for game retailer GameStop (GME) on its Solstice testnet.
Another DeFi developer created the ERC-20 token Wrapped Gamestop (GME). According to Etherscan data, the total supply is 20 million pieces.
In addition, Mike Novogratz, founder of Galaxy Digital, tweeted: “The rise in GameStop stocks means that everyone does not want Citadel to take away their orders. They do not want the IPO to be allocated to insiders. They do not like to be dedicated to the rich. The class-prepared system is a powerful propaganda for DeFi. This change began with people’s distrust of the central government, which is a call for transparency and fairness. In many ways, its occurrence coexists with social unrest. These are all Representation inequality is increasing, which makes the market, political system, and civil society more vulnerable than ever. All this makes me bullish about cryptocurrency, but more importantly, people need to be more focused and committed to system change."
Will Bitcoin be the next "GameStop"?
WallStreetBets forum celebrity and billionaire investor Chamath Palihapitiya said in an interview with CNBC on Wednesday that “market neutral funds can get leverage of $10 billion from brokerage firms with a principal of $1 billion. These are all retail investors. There is no advantage. Wall Street monopolizes the investment market by relying on secrets, by good dinners, and by leaning on each other. The discussion on the forum is very transparent. These are things Wall Street should learn."
Then, as a decentralized currency payment system that is not controlled by any individual, organization or state, can Bitcoin become the next "Game Stop" in the eyes of WallStreetBets?
On January 28, a well-known opinion leader WallStreetBets Chairman with more than 300,000 fans (Note: WallStreetBets Chairman account profile says that this account has nothing to do with the official reddit/Wallstreetbets account) continuously tweeted single cryptocurrencies, mainly Bitcoin and Dogecoin.
After its call, the price of Dogecoin rose from $0.0077 to $0.0145 within half an hour, a 88% increase, and then fell.
In addition, we may be able to see a clue from these people.
American hedge fund Skybridge Capital founder Anthony Scaramucci said that more and more retail traders are avoiding Wall Street and pushing stocks such as GameStop Inc. to rise, which shows that the outlook for Bitcoin is positive. This is because this phenomenon reflects the guiding ideology behind Bitcoin-financial decentralization. Smartphones and low-cost transactions are "democratizing" the previously isolated and highly centralized fund management business.
Morgan Creek founder Anthony Pompliano said that WSB + Tesla + Bitcoin = Wall Street's nightmare.
This has been the craziest thing in the stock market that I have ever seen or heard of. Absolutely unreal that the wall streets bets group can make such an impact on such a stock like GME or NOK, NAKD. But here's to DOGE, and Bitcoin taking off.
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