If you're playing a game,
Suddenly from this sitting position,
Turned into this sitting position:
What does that mean?
That's right, it means you're going to get serious!
People who want to become serious this time,
His name is Keith Gill.
Who is Keith Gill?
Then we have to talk about the "game station" of U.S. listed companies.
On May 13, the stock of the game station rose by more than 50% at the open, and once rose by more than 110%, because of excessive volatility, the circuit breaker mechanism was triggered 6 times during the session.
Let's turn the clock back to the beginning of 2021.
Looking back on the long-short battle that went down in the annals of Wall Street history-
The capital market is not friendly to everyone,
For inexperienced leeks to speculate in stocks,
It often ends like this -
All this,
On the eve of a big war, it seems that a little bit has changed.
GameStop, Chinese name "Game Station", is a veteran listed company, US stock code GME, founded in 1984, mainly offline retail video game products.
video game
That was the dream and the faith of countless boys.
However, with the development of the times, GameStop's offline business model has been impacted by online games.
GameStop has been losing money year after year, with a loss of $670 million in 2019 and a loss of $470 million in 2020;
During the epidemic, it was even worse, and 300 stores were closed permanently.
At the same time, the boys who used to play GameStop games have gradually grown into retail investors.
GameStop's stock price continued to decline, and on April 3, 2020, the stock price was only $2.8.
Many institutions are not optimistic about its future.
But things seem to be turning around,
On January 11, 2021, GameStop welcomed 3 new directors, one of whom is Ryan Cohen, the founder of the well-known pet online e-commerce.
Ryan Cohen has rich experience in online sales, and retail investors feel that the GameStop sales model is going to be changed from offline to online, and the business is going to be reversed!
The morale of retail investors has been greatly boosted,
The stock price rose in response, from 20 yuan to 30 yuan!
But the rally has also attracted a large number of short-sellers and hedge funds.
They believe that retail investors do not see the underlying problems of GameStop, and Ryan Cohen cannot turn the tide, the stock price will definitely fall, and GameStop is doomed to fail.
Hedge funds began to short GameStop.
Let's briefly explain what short is.
Suppose you predict that the price of rice will fall in the future, so you ask the old man next door to borrow a bag of rice.
Then, you sell the borrowed rice at the market price of $100.
After a while, as you expected, the price of rice began to plummet, becoming 60 yuan a bag.
At this time, you buy back a bag of rice at the market price of 60 yuan and return it to Lao Wang.
In this way, without interest, you earn a gross profit of $40.
This wave of operation is shorting.
For the bears, as long as the price of rice falls as they expect, they have room to make a profit.
This time, the target of the short is not a bag of rice,
It's GameStop stock!
A short-selling institution called Citron jumped out and released a bearish view on GameStop, believing that GameStop's stock price is only worth 20 yuan at most, allowing retail investors to wait and see.
It can be admitted that the withering of childhood faith,
But faith is not to be defiled!
The retail investors were enraged,
Citron's remarks were attacked by a large number of retail investors.
Among them, there is a forum called Wall Street Gamblers (Wallstreetbets), known as WSB.
That's also scolding yourself, okay, you don't care about this detail.
The people of WSB call themselves degenerate investors, believing that stock speculation does not require sober analysis, no need to look at financial reports, ignore the business model, and follow the feelings.
他们把买股票称为YOLO——你只活一次（you only live once）！！
There is a leading brother in WSB who calls on everyone to buy with all their might,
Blow up the shorts.
And this "leading brother" is Keith Gill we talked about at the beginning.
In order to make money, but also for dignity, the former big boys cheered each other up and began to take revenge on the institution.
On one side are American retail investors, and on the other side are various hedge funds on Wall Street.
A seemingly disparity of power has begun!
In the past, the reason why retail investors were called leeks was because retail investors were scattered and allowed to be slaughtered by institutions.
But this time the leeks were organized and exploded with amazing energy!
Retail investors are not only buying a lot of stocks to push up the stock price,
Also bought a large number of call options.
A call option is equivalent to a right.
By buying a call option, a retail investor will be able to buy the stock from the counterparty at a certain price in the future.
Let's take an example,
Suppose that slippers on the market now cost 200 yuan a pair,
Wait until the agreed deadline,
If the market price of slippers does rise as expected-
Here, slippers are the equivalent of stocks to be bought by retail investors.
In this process, liquidity is provided by market makers in the market. When a retail investor buys a call option, the market maker acts as its counterparty and takes a short position.
But in order to hedge risks,
Market makers buy stocks in the spot market.
In this case, the market maker becomes the force to go long on the stock.
The stock price accelerates, and the more shares are bought by market makers, the faster the stock rises.
GameStop stock has a small plate and is also more susceptible to money.
Retail investors don't look at the fundamentals, frantically buy stocks and call options, and the stock price soars all the way.
Retail investors regard death as home, and show the momentum of ending up together.
As the stock price rises, short-sellers lose more and more money.
Let's get a feel for the timeline of the stock price skyrocketing at that time!
(Please turn your phone sideways to watch the picture below)
In the process, the citron surrendered, cut the meat and closed the position.
hedge funds Point72 and Citadel ran out of ammunition and lost billions of dollars;
The star hedge fund Melvin was directly liquidated, and the market once speculated that it was on the verge of bankruptcy.
The retail investors were in high spirits, and in this way, they overcame all the obstacles and bloodied the institutions.
And some institutions have also begun to go long, anti-water to join the army of retail investors.
This time it seems to be the revenge of retail investors, so that short-selling institutions understand that retail investors are not always at the mercy of others.
But behind this war of the century, is the confrontation between retail investors and institutions, or the long-short game between institutions, everyone has an answer in their hearts.
in a word
There is a power,
It's called the power of unity and faith.