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A year Ago, The CEO Of GameStop’s 2.3 Million Shares Were Worth $7 Million… Today… $730 Million – What The Heck Is Going On?

GameStop is the most popular stock this week. This stock is complete. Reddit memes, the New York Mets, Elon Musk, and hedge funds getting booted in the nuts.

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(Stoney voice) GameStop is the most popular stock this week. This stock is loaded… The New York Mets, Elon Musk, hedge funds getting kicked in the nuts, perplexed CNBC anchors… Even if you don’t follow business news, you may have heard that GameStop stock is now experiencing some crazy developments. GameStop, the deteriorating video game retailer typically found at equally deteriorating malls, has had a week on Wall Street that only be described as a fever dream (and the week is only half over!). The stock has soared in a way that makes absolutely no financial sense at all whatsoever for a company that lost $275 million in the last 12 months and generally is considered to be a modern-day Radio Shack. No one is happier than the organization’s CEO, George Sherman, who has only been in the position for a little under two years.

Disclaimer: I do not personally own any GameStop stock, and nothing in this post should be construed as a recommendation to purchase or sell stock in any company.

Please take note that a single share of GME was just under $4 last year.

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Please take note of what happens to the green line once 2021 arrives. And note how as I type this article, a single share of GME would cost you $324.28.

GameStop’s CEO is George Sherman. He took over as CEO in April of this year. less than two years.

At the time he became CEO, GME was trading at around $10 a share. The stock had traded at $25 two years before.

Upon becoming CEO, George Sherman was given 2.3 million shares in the company. The value of the shares was $23 million on the day he was appointed CEO.

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$745 million

$173 million

James Bell, Robert Lloyd’s successor, is the owner of 511,000 shares. worth $1.5 million when new. Worth $165 million at the moment. With his 507,000 shares, Chief Merchandising Officer Chris Homeister has roughly experienced the same. Frank Hamlin, the chief customer officer, has watched the value of his 390,000 shares increase from $1 million to $123 million. There are a dozen comparable instances.

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A member with the nickname “Roaring Kitty” posted a screenshot of his own holdings on the r/wallstreetbets forum. Infamously, he spent about $56,000 to obtain 50,000 shares by combining regular purchases with options. The value of those 50,000 shares today is $16 million.

So what’s going on?

The long story short (no pun intended) is that a “short squeeze” of epic proportions is being coordinated by a bunch of vigilante traders who follow a subreddit called r/wallstreetbets. In digital lingo, it’s started to feel like a running joke or meme that people are joining in on “for the lols”.

Even the wealthiest person in the world, Elon Musk, joined in the fun with a tweet that simply read, “Gamestonk!!” and included a link to r/wallstreet bets:

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To keep this as simple as possible, until recently GameStop was literally the most shorted stock on Wall Street. The person shorting a stock is wagering that the value will decline. Only when the stock’s price declines do holders of short bets profit. The negative of short selling is that it has no upper limit.

For some reason, the people who follow r/wallstreetbets decided to coordinate an attack on all the GME shorts by buying up tons of shares, sending the price to the moon, forcing the shorts to “cover” their bets… For the shorts, this actually starts a vicious cycle. They are compelled to act quickly and buy shares back when the stock soars in order to prevent a possibly infinite loss. This rush causes the shorts to purchase further shares at even higher prices, adding more fuel to the fire. Therefore, “short squeeze.”

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One hedge fund, which I won’t name because these are unconfirmed rumors, was allegedly so damaged that it had to borrow $2 billion from a fellow hedge fund run by the owner of the NY Mets. The hedge fund allegedly went on to lose the full $2 billion rescue the very following day (yesterday).

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