IDIOTS GUIDE TO GAMESTONKS

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IDIOTS GUIDE TO GAMESTONKS




Hi!
This is Kodo with Kodoan. You can find out more about me at
kodoan.com.





That’s
K O D O A N DOT COM.




If
you keep hearing about the “GAME STONKS” and were kinda hoping
for an “idiots guide” version – heads up! this might be just
what you’re looking for!




The
word Gamestonks is a clever combining of two words (GameStop and
Stonks) by an even clever-er-er guy named Elon Musk.





Musk’s
short tweet: “Gamestonks!!” shortly after the closing bell on
Tuesday, January 26, 2021, added to the price of GameStop’s already
soaring share prices which rose nearly 93 percent to a close of
$147.98 - more than seven times its value just a month prior. By
Thursday, January 28, 2021, GameStop’s share prices reached nearly
$500 per share at $483 before closing at $193.60.




Ok,
you ask...what the hell is GameStop?





GameStop
is an American video game, consumer electronics and gaming
merchandise retailer headquartered in Grapevine, Texas. GameStop
operated over five thousand retail stores throughout the United
States, Canada, Australia, New Zealand and Europe.




As
a brick-and-mortar chain, GameStop’s heydays were arguably behind
it due to the rise of online video game services like Xbox Live,
Playstation Network and others. Now, you could simply download a
digital version of games instead of having to leave your basement and
walk outside among the “normies”…..ewww!




By
2016, things started to look bad. Shares of GameStop’s stock fell
16 percent throughout the year. The holiday season alone showed a
16.4 percent drop in sales. On February 28, 2017, shares dropped an
additional 8 percent following Microsoft’s announcement of its Xbox
Game Pass service.





Afterwards,
GameStop announced it would close over 150 stores by the end of the
year. By late June of 2018, GameStop confirmed rumours of a possible
sale. However, on January 29, 2019, GameStop said it had stopped
looking for a buyer and was now looking at other ways to regain a
financially solid foothold.





It
must not have found it because, immediately following this
announcement, shares dropped 27 percent to a 14 year low. Help!
I’ve fallen and I can’t get up!





Determined
to out do itself, GameStop reported a record-breaking net loss of
$673 million dollars for the 52 week period ending on February 2,
2019.




Then,
along came the “coof”...the “bug potion number 19”….the
“great bug of 2020”. The government required GameStop to close
its doors on all its stores from around March to May 2020. “It’s
just two weeks to slow the spread! Come on people! It’s just to
flatten the curve! A year from now we TOTALLY won’t be on
lockdown, forced to wear a Niqab like veil on our face that doesn’t
protect against airborne disease and have twenty thousand military
troops in our nation’s capital!” Nope...no way THAT would
happen!




Like
Blockbuster movies, 1 hour drive up photo booths and VHS porn,
Gamestop was on a downhill spiral of the cultural toilet bowl.





That
is….until the internet got involved. Reddit’s “wallstreetbets”
forum to be exact.





Wallstreetbets,
also known as WSB is a “subreddit” which basically means if
reddit was a tree, then a subreddit like Wallstreetbets would be one
small branch. Well, not that small. As of January, 2021,
Wallstreetbets had 5 million users.





On
the Friday of January 22, 2021, users of wallstreetbets initiated a
short squeeze on GameStop that, along with Elon Musk, ended up
causing its stock price to soar as previously mentioned.





Ok,
you ask….what the hell is a short squeeze?





Sounding
more like something you’d look forward to on your prom night, a
short squeeze is an abnormally rapid increase in the price of a
particular stock that has nothing to do with the rest of the market.
….which still kinda sounds like a prom night euphemism if you ask
me…




In
simple terms, there are two basic types of stock market investors:
those who buy stocks for the long term and those who buy stocks for
the short term.





Those
who buy stocks for the short term tend to be hedge funds and day
traders.




Day
traders try to make a profit from intraday market price action –
gambling whether a stock price will rise or fall from the opening to
the closing bell.




A
hedge fund is a group of investors that use their power as a group to
make money from fairly complex trades in the stock market that others
normally wouldn’t be able to do alone. One of these types of
complex trades is short selling. Short selling is something akin to
betting that your horse will lose instead of win.





In
any case, If you were a stock market trader that was betting on the
price of the stock to fall, the rapid increase in price would force
you to “pay for the bet” quickly in order to stave off even
greater losses. This mad dash to avoid losing more money tends to
add upward pressure on the stock price. This, my lad’s, is known
as the “short squeeze”.




Just
such a “short squeeze” happened with GameStop’s stock market
shares and it nearly bankrupted the hedge fund known as Melvin
Capital. Melvin closed its short position on Tuesday to the tune of
about $3 billion dollars. Total stock market short squeeze loss are
estimated to be more than $5 billion so far. Chalk one up for the
little guy...








“Not
so fast!” said the big guy… Buying GameStop’s stock was
halted several times for “intraday volatility” by the NYSE. In
addition, several brokerage companies put limits on the ability of
their customers to buy shares of GameStop (but not to sell)….I’m
looking at you app-based Robinhood, Charles Schwab and TD Ameritrade.




Not
only that Discord, the well known platform for online video gamers,
removed Reddit’s WallStreetBets server, citing “violations of
policies on hate speech” and “spreading misinformation”.





Soooo….basically,
it’s now “racist” for outsiders to make money on the stock
market. Oh, and by the way, you’re an insurrectionist!





Interesting,
interesting times we’re living in now…




It
remains to be seen what the end game will entail but, reportedly,
after all of the hedgefunds have dumped their GameStop stocks, they
don’t care what you do with it.





Wait
a minute you say…. I get it…. Wall street is a bunch of pricks….
But you never said what a “Stonk” is?




Basically,
“Stonks” is a playful and deliberate misspelling of stocks.





Not
to be confused with a Stonk; which is an old world label for a “heavy
concentration of artillery fire”, Stonks is internet slang and a
meme that emerged on the facebook group “Special meme fresh” in
2017. It features the word “stonks” in white below an orange,
upward-pointing arrow indicating that stock prices are on the rise.





Next
to that is a man in a business suit with a computer-generated generic
head. The Stonk meme is considered a so-called surreal meme – some
times called a dank meme. It’s characterized by being strange and
absurd. That certainly fits what happened with GameStop and Elon
Musk was all the more clever for using it.





It
has been said that the meaning of life is to learn and then share.





In
classical martial arts, the Masters say, “no matter where you
start, strive to always get better”.




Remember,
no matter where you are in life – “always get better!”