The Gamestop Stock Market Boogaloo

[Odreria]

He likes the stock

[Kowani]

It had to happen sometime: Keith Gill, (u/DeepFuckingValue) is facing a proposed class action lawsuit for his role in the massive GameStop short squeeze.

The suit was filed by Hagens Berman Sobol Shapiro, a securities class action firm, on behalf of Washington state’s Christian Iovin, who sold $200,000 in call options on GameStop stock when it was worth below $100 a share. This proved to be a very bad bet, as users on r/WallStreetBet launched an organized effort to pump GameStop and other poorly-performing stocks, like AMC and BlackBerry, with nostalgia value that ultimately was quite successful. As major Wall Street sharks quickly got clued into and joined the Reddit-driven effort, shares in GameStop spiked to $483, spelling disaster for traders short-selling the company’s stock. Iovin was forced to buy back his calls at inflated rates as a result, according to the suit.

[...] The suit accuses him of not being some layman, but a licensed securities broker that deliberately manipulated the price of the company’s stock to get rich quick.

“Gill’s deceitful and manipulative conduct not only violated numerous industry regulations and rules, but also various securities laws by undermining the integrity of the market for GameStop shares,” the class action proposal said, according to Bloomberg. “He caused enormous losses not only to those who bought option contracts, but also to those who fell for Gill’s act and bought GameStop stock during the market frenzy at greatly inflated prices.”

According to the New York Times, the class action proposal cites Gill’s multiple broker licenses and also names MassMutual’s brokerage arm—where Gill worked until a few weeks ago, and which the plaintiffs claim failed to properly rein in his market activities. Times also noted that securities regulators in the state of Massachusetts are looking into whether his posts potentially violated the law or industry rules. Gill is strenuously fighting claims he was trying to manipulate the market to his own benefit. The short squeeze was only possible because hedge funds like Melvin Capital had taken out greedily large short positions on GameStop, presenting an opportunity for investors to make big money if the stock rose while the hedge funds lost their shirts. The House Financial Services Committee is holding a hearing on Thursday over the whole r/WallStreetBets fiasco, with Gill scheduled to testify. Others scheduled to speak include Robinhood co-CEO Vlad Tenev, Reddit CEO and co-founder Steve Huffman, and Melvin Capital CEO Gabriel Plotkin.

In his prepared remarks to the House, Gill claimed that his position as Director of Financial Wellness Education at MassMutual had been totally unconnected to his side gig as a stock market commentator and that he had genuinely believed GameStop had “the potential to reinvent itself as the ultimate destination for gamers within the thriving $200 billion gaming industry.” Gill added that as of just a few months ago in December 2020, his YouTube and Twitter accounts had just a few hundred followers each and he did not believe he had the capability to sway markets.

“The idea that I used social media to promote GameStop stock to unwitting investors is preposterous,” Gill wrote. “I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the channel. Whether other individual investors bought the stock was irrelevant to my thesis—my focus was on the fundamentals of the business.”

Gill added that “others will have to explain” exactly what happened with GameStop.

“Here’s the thing: I’ve had a bit of experience and even I barely understand these matters,” he wrote. “It’s alarming how little we know about the inner-workings of the market, and I am thankful that this Committee is examining what happened.”

Gill’s attorney, William Taylor, declined to comment to the Times, while MassMutual told the paper it is looking into the matter.

[Blargoblarg]

u/DeepFuckingValue's opening statement at the hearing

1
TESTIMONY OF KEITH PATRICK GILL
BEFORE THE U.S. HOUSE COMMITTEE ON FINANCIAL SERVICES
Thank you Chairwoman Waters, Ranking Member McHenry, members of the Committee. Before I go further, I want to be clear about what I am not. I am not a hedge fund. I do not have clients, and I do not provide personalized investment advice for fees or commissions. I am an individual investor. My investment in GameStop and my posts on social media were entirely my own. I did not solicit anyone to buy or sell the stock for my own profit. I did not belong to any groups trying to create movements in the stock price. I never had a financial relationship with any hedge fund. I had no information about GameStop except what was public. I did not know any people inside the company, and I never spoke to any insider. As an individual investor, I use publicly available information to study the market and the value of specific companies. I consider a complex array of factors and track hundreds of stocks –all in search of market inefficiencies. Like many people, sometimes I post on social media my thoughts and analysis about individual stocks and whether they are correctly valued. I did that with GameStop. I believed the company was dramatically undervalued by the market. The prevailing analysis about GameStop’s impending doom was simply wrong.

A little about my background: I grew up in Brockton, Massachusetts. My father was a truck driver, and my mom a registered nurse. I was one of three kids, and the first in my family to earn a four-year college degree when I graduated from Stonehill College in 2009, amid the Great
Recession and without a long-term job. My first post-college job was in operations at W.B. Mason, an office supplies company headquartered in my home town of Brockton.

Between 2010 and 2014, I worked for a family friend at a start-up company in New Hampshire, trying to build a software program that would help investors analyze stocks and offer related research. We also tried to start an investment firm, which dissolved not long after it was
created. My salary never exceeded $40,000, but I did learn something about investing. I learned how to do the tedious work of digging through a company’s financials and focusing on its real long-term value, not prevailing market sentiment or headlines. I married my wife Caroline in 2016, and I found a job working operations and compliance at LexShares. I left that job in March 2017, and for the next two years I was effectively without a job. During that time, I began actively analyzing a wide array of stocks to try to keep and increase our limited savings. It was both a way to make money and an interest that I pursued passionately while I lacked a job. In April 2019, I accepted a marketing and financial education job at MassMutual. Caroline and I were both happy about our prospects. I had never made a salary over $100,000 a year before, and I was thrilled just to be working and to have benefits again. My title was Director, Financial Wellness Education. My job was to help develop financial education classes that advisors could present to prospective clients. I never sold securities, and I was not a financial advisor.
I continued analyzing stocks on my own time and investing my family’s funds. In early June of 2019, the price of GameStop’s stock declined on worse than expected earnings, and it began trading at a deep discount, below what I thought was its fair value. I was aware from public
reports that a well-known investor, Michael Burry, was interested in GameStop. Because I thought the stock was undervalued, I purchased call options on June 7, 2019. I increased my position throughout much of 2019 and 2020, because as I continued to analyze the company and its
prospects, I became increasingly confident that the share price was indeed dramatically undervalued.

Two important factors, based entirely on publicly available information, gave me and many others confidence that GameStop was undervalued in 2019 and 2020. First, the market was underestimating the prospects of GameStop’s legacy business and overestimating the likelihood
of its going bankrupt. GameStop, the only major retailer dedicated to gaming, has over 60 million members in its loyalty program and continues to maintain a sizable market share within the gaming industry. Its legacy business, comprised primarily of selling physical video games and related equipment within their stores, was likely to generate meaningful cash flow following the release of new gaming consoles in late 2020. I grew up playing videogames and shopping at GameStop, and I’m looking forward to buying a new console at GameStop. I knew the company had an opportunity to reinvigorate this business by improving customer service for gamers, upgrading its online presence, and offering complementary product lines such as PC gaming and accessories. Second, I believed – and I continue to believe – that GameStop has the potential to reinvent itself as the ultimate destination for gamers within the thriving $200 billion gaming industry. The new console cycle provides GameStop a unique opportunity to pivot from a traditionally brick and-mortar mindset toward a technology-driven business that excels in gaming products, experiences and services. By embracing the digital economy, GameStop can pursue new revenues streams including larger gaming catalogs, digital content and community experiences, online trade-ins, streaming services, and Esports. While I may be the only panelist here today who had faith in GameStop, I was hardly the only person who advocated these points or ones like them. Investors including Chewy co-founder Ryan Cohen, whose purchase of GameStop shares and advocacy with the GameStop board helped positively affect the share price in late 2020, publicly expressed similar views.

I want to pause to note that the investment I made was risky, but I was confident in my analysis, and I was willing to accept the loss if I was proven wrong. My timing was far from perfect, and many of the options contracts I purchased expired worthless because GameStop’s stock price remained depressed longer than I expected. I’ve been asked why I decided to share my investment ideas on social media. My
investment skills had reached a level where I felt sharing them publicly could help others. I also thought that by sharing my own ideas and accepting critiques, I would be able to identify holes in my analysis. Hedge funds and other Wall Street firms have teams of analysts working together to compile research and critique investment ideas, while individual investors have not had that advantage. Social media platforms like YouTube, Twitter, and WallStreetBets on Reddit are leveling the playing field. And in a year of quarantines and COVID, engaging with other investors on social media was a safe way to socialize. We had fun.

The idea that I used social media to promote GameStop stock to unwitting investors is preposterous. I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the
channel. Whether other individual investors bought the stock was irrelevant to my thesis – my focus was on the fundamentals of the business. It’s worth noting that after five months of streaming, my final stream of 2020 topped out at just ninety-six concurrent viewers, with an
average view duration of twenty-five minutes. On Christmas morning I had only 529 subscribers on YouTube, and 550 followers on Twitter. These numbers are tiny. There were rarely more than a few dozen folks on the stream on any night. The reality was people didn’t really care about boring, repetitive analysis of GameStop and other stocks, and that was fine. For those of us who did care, the stream provided us an outlet for refining our fundamentals-based thesis. We were able to analyze events in real-time and keep each other honest. Ultimately my GameStop investment was a success. But the thing is, I felt that way in December far before the peak, when the stock was at $20 a share. I was so happy to visit my family in Brockton for the holidays and give them the great news – we were millionaires. That money will go such a long way for my family. We had an incredibly difficult 2020. In addition to dealing with COVID, we lost my sister Sara unexpectedly in June. It brought me tremendous joy to share good news with my family for a change. I am grateful to be able to give back to my community and to support my family, most of all my wife Caroline who has stuck with me through very tough times.

As for what happened in January, others will have to explain it. Threshold lists, order flow, halting purchases – according to the media these all had a material impact on GameStop stock in January. Here’s the thing: I’ve had a bit of experience and even I barely understand these
matters. It’s alarming how little we know about the inner-workings of the market, and I am thankful that this Committee is examining what happened. I believe an analysis of GameStop’s recent price action must start with a discussion of the exorbitant short interest in the stock, as well as an investigation into any potentially manipulative shorting practices and brokers’ reported failures to timely deliver shares and settle trades. As for what I expect moving forward: GameStop’s stock price may have gotten a bit ahead of itself last month, but I’m as bullish as I’ve ever been on a potential turnaround. In short, I like the stock. And what’s stunning is that, as far as I can tell, the market remains oblivious to
GameStop’s unique opportunity within the gaming industry.

That sounds pretty good. I love that he included "I like the stock" at the end there. Kinda disappointed that I'll be at work tomorrow and probably won't be able to see him say this statement when the hearing is happening.

[Comerciante]

The memes of production have infiltrated government records.

We are now officially a Metal Gear Solid Universe.

[Kowani]

Full Hearing (Virtual) here

[Borderlands of Rojava]

It had to happen sometime: Keith Gill, (u/DeepFuckingValue) is facing a proposed class action lawsuit for his role in the massive GameStop short squeeze.

The suit was filed by Hagens Berman Sobol Shapiro, a securities class action firm, on behalf of Washington state’s Christian Iovin, who sold $200,000 in call options on GameStop stock when it was worth below $100 a share. This proved to be a very bad bet, as users on r/WallStreetBet launched an organized effort to pump GameStop and other poorly-performing stocks, like AMC and BlackBerry, with nostalgia value that ultimately was quite successful. As major Wall Street sharks quickly got clued into and joined the Reddit-driven effort, shares in GameStop spiked to $483, spelling disaster for traders short-selling the company’s stock. Iovin was forced to buy back his calls at inflated rates as a result, according to the suit.

[...] The suit accuses him of not being some layman, but a licensed securities broker that deliberately manipulated the price of the company’s stock to get rich quick.

“Gill’s deceitful and manipulative conduct not only violated numerous industry regulations and rules, but also various securities laws by undermining the integrity of the market for GameStop shares,” the class action proposal said, according to Bloomberg. “He caused enormous losses not only to those who bought option contracts, but also to those who fell for Gill’s act and bought GameStop stock during the market frenzy at greatly inflated prices.”

According to the New York Times, the class action proposal cites Gill’s multiple broker licenses and also names MassMutual’s brokerage arm—where Gill worked until a few weeks ago, and which the plaintiffs claim failed to properly rein in his market activities. Times also noted that securities regulators in the state of Massachusetts are looking into whether his posts potentially violated the law or industry rules. Gill is strenuously fighting claims he was trying to manipulate the market to his own benefit. The short squeeze was only possible because hedge funds like Melvin Capital had taken out greedily large short positions on GameStop, presenting an opportunity for investors to make big money if the stock rose while the hedge funds lost their shirts. The House Financial Services Committee is holding a hearing on Thursday over the whole r/WallStreetBets fiasco, with Gill scheduled to testify. Others scheduled to speak include Robinhood co-CEO Vlad Tenev, Reddit CEO and co-founder Steve Huffman, and Melvin Capital CEO Gabriel Plotkin.

In his prepared remarks to the House, Gill claimed that his position as Director of Financial Wellness Education at MassMutual had been totally unconnected to his side gig as a stock market commentator and that he had genuinely believed GameStop had “the potential to reinvent itself as the ultimate destination for gamers within the thriving $200 billion gaming industry.” Gill added that as of just a few months ago in December 2020, his YouTube and Twitter accounts had just a few hundred followers each and he did not believe he had the capability to sway markets.

“The idea that I used social media to promote GameStop stock to unwitting investors is preposterous,” Gill wrote. “I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the channel. Whether other individual investors bought the stock was irrelevant to my thesis—my focus was on the fundamentals of the business.”

Gill added that “others will have to explain” exactly what happened with GameStop.

“Here’s the thing: I’ve had a bit of experience and even I barely understand these matters,” he wrote. “It’s alarming how little we know about the inner-workings of the market, and I am thankful that this Committee is examining what happened.”

Gill’s attorney, William Taylor, declined to comment to the Times, while MassMutual told the paper it is looking into the matter.

When you try to make money on the stock market and instead you get sued for doing nothing wrong.

[Blargoblarg]

Full Hearing (Virtual) here

From what I can tell Keith Gill did really well, probably because unlike the Robinhood and hedge fund CEOs, he just told the truth while they had to lie and read whatever bullshit their teams of lawyers were feeding them.

Also, I love that he said "I'm not a cat" and "I like the stock" in an actual congressional hearing.

[Libertarians]

https://www.wsj.com/articles/gamestop-investors-who-bet-bigand-lost-big-11613385002
"Salvador Vergara was so enthusiastic about GameStop Corp. in late January that he took out a $20,000 personal loan and used it to purchase shares. Then the buzzy stock plunged nearly 80%."

I strongly suspect the only people who lost big in this whole thing were people like the above. A bunch of everyday folks lost big, not hedge funds. This was perfectly thought out to get the most viral spread, and the 'stick it to the hedges' façade was part of it. The dems in the Senate are doing a real disservice to their base if they don't do everything in their power to burst the idealism bubble here IMO.

People who borrow money to play the market are just as sensible as people who borrow money to hit the casinos, and I see no real problem with someone else taking it away from them.

Fill in the blank time, folks: A ____ and his money are soon parted.

The problem with that comparison is Casinos cannot try to make you think that gambling is a good idea, or mislead you into gambling. They disclose you're most likely going to lose, but it is possible to win.

I suspect some very wealthy people with the help of some well designed bots created this fervor specifically to convince people at first that they would not lose money, and then later that if they were losing money the "Hedgies" were losing money faster. Neither case was true. This was just a case of a lot of gullible people being mislead into doing something that was in the interest of those at the top of the pile that got in early. Not really saying the guy wasn't making a dumb decision or should be off the hook for the debt, just that it is not cool the facts he used to make the decision were false, and it should be investigated whether they were posted by people who benefited financially. EDIT: And probably even more importantly, that now there is a record that 'stick it to the hedgies' is a message primed to go viral it would be pretty easy to repeat this if the façade is not debunked in these hearings.

[Kowani]

At the end of January, the percentage of outstanding shares of S&P 500 companies held by short sellers averaged 3.1%, down from 4.1% a year ago, while short interest in the most shorted of the S&P 500's 11 sectors in 2020, consumer discretionary, fell to 4.7% at the end of January, down from 5.4% in the middle of the month and from 6.7% at the end of January 2020.

[Northern Socialist Council Republics]

At the end of January, the percentage of outstanding shares of S&P 500 companies held by short sellers averaged 3.1%, down from 4.1% a year ago, while short interest in the most shorted of the S&P 500's 11 sectors in 2020, consumer discretionary, fell to 4.7% at the end of January, down from 5.4% in the middle of the month and from 6.7% at the end of January 2020.

The market adjusts.

[Corrian]

Lol, the GameStop stock is skyrocketing again.

[Kowani]

Lol, the GameStop stock is skyrocketing again.

GameStop afterhours

[Corrian]

What's triggering it to go up now?

I didn't expect buying GameStop stock to be relevant again, but here we are I guess?

[Ethel mermania]

What's triggering it to go up now?

I didn't expect buying GameStop stock to be relevant again, but here we are I guess?

A bit biased, but someone's guess



https://www.fool.com/investing/2021/02/ ... ed-higher/

[Blargoblarg]

I'm still holding a few shares of Gamestop stock, and I'm gonna be very interested to see what happens when the market opens in a few hours.

[Ethel mermania]

Another take

https://seekingalpha.com/news/3665813-g ... y-above-60

82 million shares traded yesterday, 262,000 call options, and short interest is at 42%

[Parxland]

The memes of production have infiltrated government records.

We are now officially a Metal Gear Solid Universe.

Where's Quiet, the giant mechs, and the soldiers sneaking around in cardboard boxes?!

[Lanoraie II]

Did you buy?

[Kowani]

The other winner? Reddit, who saw investors flood it with $250 million

[Odreria]

the number is either going to go up or down

[Ethel mermania]

Interesting article in Forbes talking about how GME is actually a very rational play.


https://www.forbes.com/sites/georgecalh ... 96fe8625d0

Note the stock was still above 130 as of yesterday

[Kowani]

Melvin Capital made 22% in January, remains underwater

[Corrian]

Melvin Capital made 22% in January, remains underwater

Good.

[Ethel mermania]

264. Cob Friday.


I joined. Wallstreetbets.


( hangs head in shame)

[Washington Resistance Army]

Melvin Capital made 22% in January, remains underwater

insert Joker quote about how everything burns