Once a giant, now struggling and though a familiar household name, it seemed like less light was to be seen at the end of the tunnel. Equipped with poor upper-management and reinforced with a board of directors that had no belief in the very company they were a part of, and growing pandemic concerns; Gamestop was deservedly on the brink of death in 2020.
On a scale of 1 — Gamestop, just how bad was it?
Employees constantly being forced to hit unreasonable sales targets, often understaffed and having to take up multiple roles, all for the minimum wage of 11/HR USD(even Walmart pays more!). With plenty of complaints filed on glassdoor as well, stating that management expected too much from near underpaid employees. To further rub salt into the wound, the board of directors even dumped their shares while the company was trying to fundraise to get out of debt.
However, with all credit to ‘U/DeepfuckingValue’ Keith Gill, decided to take a stand against one of the most shorted companies. Though not affiliated to Gamestop or the organisation, he realised there were plenty of potential gains for the company to do better and there will be a new generation of games and consoles whereas hedge funds were betting against the demise of the company.
Little did he know that his research about Gamestop and his portfolio’s gains would cause a ripple effect throughout /rWallstreetbets; it even went on to rattle wall street’s largest hedge funds. *still ongoing, there’s much more juice and will to include.*
At first, people invested in the Gamestop for potential gains but it very quickly evolved into a revolution, one to get back at the hedge funds(bullies) that ultimately caused the financial crisis to happen back in 2009. A crisis that caused many Gen Ys’ parents to lose fortunes. Businesses were in the ditches and hundreds of thousands, millions even, were left jobless overnight!
The GameStop rally quickly became a bridge for retail investors to get back at hedge funds and short sellers. Many people bought shares over the week and started to increase the price drastically that eventually caused the short sellers; mainly the hedge funds, to lose billions of dollars. A notable example will be Melvin Capital, globally one of the largest hedge funds, famous for being the best at short-selling. Melvin Capital lost over $4.5 billion in a week, due to the buying frenzy of Gamestop shares. At one point, they took a $2.75 billion bailout from Steve Cohen and Ken Griffin. This has caused their portfolio performance of Gamestop to be outstandingly painful.
The demise of hedge funds’ loss has further rallied retail investors in large masses, to put in more money with the aim to bankrupt them. However, As of 10th February 2021, Gamestop shares have fallen from a once almighty price of USD$400 to a measly USD$40. Does this ultimately mean that hedge funds are bound to always win? Will the rallying of collective individuals be successful in combating and defeating the hedge funds giants?
Yet despite retailers being equalizers to hedge funds, the board of directors certainly stand to gain most from this bloodshed. It doesn’t seem right that whilst some are risking a second mortgage for risky bets, others like the board of directors are reaping in the rewards of retailers’ loss.
I therefore stand with my fellow ‘autists’ and ‘apes’ against the hedge funds with my 6 Gamestop shares! GameStonk and urge anyone else to join in the rebellion. WE WILL NOT BE SUPPRESSED ANYMORE!
*this is not financial advice, I implore you to do your own due diligence before investing, I eat crayons dipped in glue for breakfast*
