Protestors show up at Robinhood

I'd say short selling can definitely hurt a company a lot. For example, if a company is hurting anyway, losing money and having a considerable amount of debt, and then the short sellers come in and drive the price to the basement, which means that selling the stock becomes useless(you won't get any money) and any outside financial institutions/creditors will watch your company's stock having gone off the cliff, thus they would be much less likely to give them a loan as well.

Gamestop had a path to recover. They just had a new CEO who is trying to create a more viable online business model. That type of new direction requires investment and taking out loans. They can't do that or it becomes considerably harder when a hedge fund short sells 140% of their stocks.

 

I don't care what lie they say. They are aholes.

 

Yes, if a company needs cash that short selling could potentially hurt their ability to secure additional financing - you are right.

But none of that changes that GameStop is built on a dying business model as the industry moves increasingly towards digital downloads. I think GameStop's online effort will be as successful as Blockbuster's online business.

 

They are retooling their brand around site based entertainment and e-sports they will be wildly successful if they can raise the capital they need and build the right subscription based CLUB model.

I actually nearly took a gig with them recently to help them re-org....still might at some point.

DD

 

Won't somebody think of the billionaires?!?!

The housing crisis is a great comparison point because all the billionaires talking about needing protection now were all screaming for letting the market take its course and were up in arms about protecting lending institutions and working class people who got stuck with upside down mortgages because of "the unfortunate necessity of letting the market find its own equilibrium" or whatever self serving argument they were using to make sure they got paid.

Protecting them here is the exact opposite of everything they were screaming was totally necessary back then.

 

It’s a direct response to your comment.

 

Russian name....story checks out.

 

Well in that case I am honored..

 

I get it people want to stick it to the hedge funds but I'm not sure it's worth it to prop up a company that is likely to fail anyway. I really hope the people jumping in on this aren't committing big chunks of their savings to this.

 

So, not just Robinhood, but Interactive Brokers, Charles Schwab, Ameritrade and others that restricted trading (you can sell, but not acquire new position). It's also not limited to GameStop. AMC, Nokia, Blackberry, ... are also limited. They have also beefed-up margin requirements (of course they would).

The conspiracy theorists think they are all out to protect the big guys instead of understanding what possible reasons for all of them to take similar actions. Maybe it has something to do with risk to themselves, duh.

 

Yea, but apparently, we are into mob buying and some people think it's good. Yes, it's up to individuals to risk everything, but how many of them actually understand the risk? When a bunch of these newbie come crying about huge losses, Congress will be demanding new regulation on retail brokerages for not stating the risk clearly enough to them.

 

Knowing newbie investors, a number of them are buying on margins and risking everything they have. It might just be 10-20k, but that's everything they got. Some of them even borrow on credit. SMDH.

 

This is the kind of stuff that makes me uneasy about things like this. Too often stuff like this get's put into a simplistic of hedge funds bad, Reddit small cap investors good. Or worse pumping stocks up as part of some wild ride like something out of Boiler room really could leave a lot of people in trouble.

 

+1 low share price hurts talent retention and can hurt the interest rate you borrow at as well.

 

hard to justify current share price, but i really doubt gamestop will go bust. they've got a reasonable biz plan, add to that zirp and ability to issue shares they will be around for a loong time imo. It's really hard for businesses which are much worse than gamestop to go away these days - hertz and freaking fraudsters at wirecard are still operating.

 

Unless ur a WSB redditor, u won't understand the real reasons to buy and hold the line, it's about principalities....most of the people buying have already been in the red...it's not about losing money, they are used to it lulz