Is not going to end? This is a problem. This article is from the WeChat official account:Touch Music (ID: chuappgame) author: Zhu Siqi, head Figure from: vision China
return to life
“Are you here to’whip the corpse’?” This is the first sentence Zhang Hao asked me when I asked for an interview.
On January 28, the brokerage firm Robin Hood (Robinhood) restricted retail trading on the day that the “Game Post” (GameStop)‘s stock (hereinafter referred to as GME) closed down for the first time in more than a week. Prior to this, GME’s stock once rose to a staggeringly high price, from around US$20 at the end of December last year to more than US$300, and it remains high in fluctuations.
GME’s stock price has continued to rise for a month, reaching an astonishing peak on the 27th
Zhang Hao just returned from the United States not long ago, and is now in a period of concentrated isolation. On the 27th, when GME’s soaring stock price occupied major news media, he spent more than $2,000 to buy several shares. Zhang Hao is currently a student and has no fixed income. More than 2,000 yuan was allocated from the money he sold used cars before returning home.
I asked Zhang Hao what the concept of the money he invested was for him. He had the final say, equivalent to two or three months’ rent and 40 barrels of gasoline in the United States. In short, it is not a decimal. Because he won’t be able to use U.S. dollars after returning home, he put part of his funds in the U.S. stock market. On the one hand, it is trying to manage assets; on the other hand, it is thinking about traveling to the United States in the future, or when there are new opportunities, it can be used.
Zhang Hao is not cold about the game station itself. Game Station is a multi-channel retailer of electronic games, consumer electronic products and services in the United States, selling new and second-hand electronic game software, hardware and peripheral products, and has many physical stores in North America. However, Zhang Hao has only visited the game station store twice during his years in the United States, one of which was to buy a Switch. “At that time, the online channels were all out of stock, and only physical stores had the supply.” He explained, “The company’s business model will definitely be eliminated every minute. It has nothing to do with the quality of service, it will definitely disappear. You still rent now. DVD?”
In fact, it has been more than two years since the game station has been in trouble. The primary reason is similar to that of other physical retail stores, which is the huge impact of online shopping. Buying and downloading electronic games is becoming more and more convenient, and generally cheaper than physical disks and cassettes, people are no longer willing to spend time shopping in physical stores. Before the launch of the next-generation console, the long-term stagnation of old consoles and accessories sales, coupled with the well-known large environmental impact, also made Game Station’s revenue in the first three quarters of 2020 very unsightly.
In order to save operating costs, Game Station has closed 783 stores in the past two years. It is reported that this number will reach 1,000 by the end of the fiscal year in March 2021. In this situation, before this year, the company’s stock price continued to be depressed, and it was a veritable “junk stock.” Financial institutions represented by Melvin Capital saw the opportunity and poured in one after another, turning GME into the most short-selling stock in the U.S. stock market last year, and it was almost delisted.
“Selling” refers to an operation:In the future, a certain stock will continue to fall, so when the price is high, you will borrow a large amount of the stock and sell it, and then buy it back when the price is low, and make the difference. The four protagonists of the movie “Big Short” made a lot of money in the 2008 subprime mortgage crisis by relying on the technology of short selling.
Different from the common predators’ battles in financial films, retail investors have also become one of the leading actors in this GME drama.
Gamblers enter
“Why did you stop at that time? The stock price was already quite high at that time.” I asked.
Zhang Hao’s transaction records show that on January 27, when GME was over $200 per share, he bought 6 shares and sold them soon. More than 200 US dollars is already a very high stock price for GME. When GME was in a delisting crisis in 2019, its price fell to 3.15 US dollars. On the 27th, after Zhang Hao bought, the stock price even continued to rise, soaring to more than $400. In the process of rising, Zhang Hao bought in different price ranges.
GME stock price on the brink of delisting was once as low as $3
There are not a few retail investors like Zhang Hao. On the day when Zhang Hao bought, Tesla founder Elon Musk tweeted about “Wall Street Gamblers”. Venture capital expert Chamath Palihapitiya spoke to the world’s famous financial media CNBC and told retail investors He expressed support. With the help of celebrities, overnight, the streets and alleys were full of passionate news of “retail investors holding groups and shorting out financial institutions”. More people joined the ranks and kept pushing up GME’s stock price.
Chamath believes that the conclusions drawn by retail investors are sometimes more correct than institutions. This time they are using “Wall Street’s own magic to deal with it”
The goal of retail investors is to “squeeze the short.” Since the short-sellers are optimistic about the decline in stock prices, the stocks they sell are “borrowed” and need to be repaid. If the low prices expected by the short-sellers have been delayed and the market continues to rise, the shorts will be forced to Liquidation of (may be active or forced liquidation or agreement liquidation), which means spending a lot of money on the market High-priced stocks.
Generally speaking, whether it is shorting or shorting, most of them are conducted under the dominance and competition of institutions. Retail investors, due to limited funds, lack of professional knowledge and experience, are unable to compete with institutions that have strong funds and specialize in securities and stock trading. But this time, some retail investors insisted on being optimistic about the future of the game station. Coupled with their dissatisfaction and grievances about the institution’s wanton short selling, individual investors are united (at least on the surface It seems so), buying in large quantities and pushing up GME stock price. This makes short-selling institutions face large losses, even to the point of bankruptcy.
However, the matter is not over yet. Are there any long-selling institutions hidden among retail investors, if so, whether they will suddenly leave the market at a certain moment; how many short-selling institutions have not withdrawn, whether they are another There are back-hands, causing retail investors to sell stocks in large quantities; if the retail investors win “victory” and the short-selling institutions that have not left the market declare bankruptcy, what changes will happen to the market at that time…no one can assert.
Experts who have spoken through CNBC and the New York Times believe that the behavior of retail investors is irrational, because the fundamentals of the game station are obviously not enough to support its current stock price. Once it collapses, someone will always suffer. The base camp of this retail group, Reddit section “Wall Street Gamblers”(WallStreetBets) is not known for its professionalism.
In this atmosphere, Zhang Hao also admitted that his buying GME is not an investment, but a bet. “GME pulled the entire market down. Everyone sold other stocks in their hands to buy GME to brush up the price, blasting short positions. If you don’t join the battle, I will lose money. I choose to take a gamble.”
Anyway, this is a new scene never seen before. As many short-selling institutions have cut their positions and liquidated their positions, on January 29, the well-known short-selling institution Citron issued a statement stating that it will abandon its short-selling bank, and will pay more attention to long-selling opportunities in the future, especially those with “good governance, A company with social responsibility”. Yesterday (January 31), the well-known investment institution Goldman Sachs warned that if the short-squeeze continues, the entire financial market will collapse.
Accumulated grievances are difficult to solve
If it’s just a struggle between short and long, the GME incident can also be interpreted as a pure financial behavior. The only difference is the change of players, and retail investors have also sat on the table. But things are even more complicated than this. This incident was also mixed with a lot of emotions and years of resentment.
Similar to Zhang Hao’s situation, many Americans who got together to buy GME had nothing to do with the game station in their original intention to participate in the war, but to “pop the shorts” and participate in the alignment with the organization. In the past few days, in addition to the slogan calling on retail investors to unite and knock down institutions, the slogan that has been widely circulated on social networks in the past few days is a video screenshot of the financial elites watching the excitement and tasting champagne during the 2011 “Occupy Wall Street” movement. What they watched as “lively” was gathered on the street, protesting people angry at the greed of big companies and social inequality.
This brings back painful memories of the 2008 subprime mortgage crisis in many people. They believe that in the financial crisis, ordinary people paid the price for the mistakes of the Wall Street elites, but the elites did not receive any punishment. This picture was then made into an emoticon package with text: “Never forgive, never forget.”
The emoticons circulating on the Internet evoke painful memories of many people about the subprime mortgage crisis
Faced with the huge losses caused by short-squeeze, every countermeasure of the institution seems to arouse greater anger among retail investors and accuse institutions and financial experts of “disrupting the market”, “speculation”, “amateur”, etc. Cynicism. The U.S. House of Representatives and star politician “AOC”(Alexandria Ocasio-Cortez) satirized on Twitter: “Take our economy as a casino Wall Street complained that a bunch of retail investors also treat the market as a casino.”
On January 28, Robin Hood and many other brokerages took measures to restrict trading, preventing retail investors from continuing to buy stocks, and GME’s stock price fell by 44%. Most netizens regard this move as another repression of the institution. To this end, many users in the “Wall Street Gamblers” section encouraged everyone to continue holding shares, Don’t sell anyway, and vowed to fight the big shorts to the end.
This is of course risky. Generally speaking, a sharp drop in stocks is likely to cause stockholders to panic selling, making the stock price lower, a vicious circle, and those who fail to leave the market in time will be “trapped” and suffer huge losses. Calling on everyone to continue to hold shares is to avoid this from happening.
“This is for my father,” a Reddit user wrote. This user invested nearly $10,000 in the stock of AMC Entertainment, which is in a similar situation. Because it was unable to open during the epidemic, AMC theaters faced the risk of bankruptcy last year. The user’s family lost his company and house during the subprime mortgage crisis. He will always remember “the scene where his father and his brother were sitting at the kitchen table and counting the change”, “that is all his remaining money”. At present, even if the value of the stocks he holds has nearly doubled, he still does not intend to sell, but intends to use all his assets to make the superior financial institutions difficult.
Even Zhang Hao, who is not in the whirlpool, feels that their call is very inflammatory, not to mention that he is also dissatisfied with the organization’s behavior. “Robin Hood did not allow trading before the market, and it was okay after the market opened. The price rushed to 500, and then it was blown again.System transaction, the price goes down. He said, “I was very angry. I originally wanted to stop the loss, but now I want to stop if I don’t have any money. “
Afterwards, the restrictions were lifted due to retail investors preparing to file a class action lawsuit against the brokerage firm, coupled with condemnation from legislative bodies such as the House of Representatives. GME’s stock price resumed its rise. This tug-of-war continues.
In addition to all kinds of confrontational statements, the soaring stock price has indeed improved the lives of some ordinary shareholders. In Chamanth’s words, this proves the correctness of retail investors’ vision. On the 30th, the “Wall Street Gamblers” section built a tall building dedicated to collecting such stories. “Please take this post seriously, not in the sense of a’Wall Street Gambler’, but serious in the true sense”, the poster said.
Currently, the post has received more than 6000 replies. A depression patient shared that the rise in GME’s stock partially resolved his debts, making him less pessimistic about the future for the first time in years. Someone decides to use the money earned to pay for a friend’s heart surgery so that he can live another 20 years. Someone has only $40 left after paying their monthly bills. Because of stocks, they finally don’t have to worry about eating and drinking this week. The soldier who is stationed in Qatar said that 10 years ago his father was sent abroad to maintain the life of his family. Now he can finally see the possibility of helping his parents pay off their debts after returning home.
Most people don’t hold a lot of shares, and they don’t get rich overnight. For them, GME stock is a symbol, meaning a new car, a new heater, one month’s food expenses, a job that does not have to consider student loans-a hope to start a new stage in life .
“In the past year, I feel that the whole world has been split like never before,” one user concluded, “Maybe the whole thing will be over soon, and we will attack each other again. But at least for this moment, everyone Stand together and do silly things together. In any case, these few weeks will leave me with good memories.” This reply received more than 4,000 likes.
The Silent Player
In contrast to the carnival of stock investors, the consumers targeted by the game station, the players, did not react strongly to the whole thing.
Some players may have bought GME stock, but they were not very enthusiastic about the discussion. Someone joked with the topic of insisting on holding shares: “Ten years ago, the second-hand game offered to me by Game Post was better thanno. They taught me not to sell. Another netizen PS issued a fake news: “Stocks have skyrocketed, and the purchase price of second-hand games at Game Station has risen to 25 cents. “
This is of course an exaggeration, but the second-hand purchase price of Game Station is indeed not high. Last year’s popular console games were purchased at about half the original price, but when they were sold they were only $2 cheaper than the brand new ones
There are also players who have created emoticons for the millennial generation to feed back the game station. At first glance, it looks very warm.
Compared with other emoticons that beat bears, this backfeeding picture has limited popularity on Twitter
In general, during the fermentation process of the entire event, the voice of the player’s perspective did not occupy the mainstream. Compared with the popular “Wall Street Gamblers” section, the game station section on Reddit is almost silent. On January 28, the moderator posted that all posts related to stocks will be removed: “We will not allow a small group of users to try to influence others and let others make wrong decisions. If you don’t know the stock market, this is not for joining. Good time. Yes, you may make a lot of money, but those who make money are often those who know what they are doing.“
“Isn’t it said that Game Station is a national retailer in the United States?” I asked an American student who had just graduated from an undergraduate degree. He should happen to belong to the millennial generation mentioned in the emoji.
This young man named Alex told me that he hasn’t visited the game station for 10 years. “About 2000, (this shop) was indeed very common, but now it’s the Internet age.” He said, “At the game station It’s expensive and inconvenient to buy things.” Now, almost all of his games are bought on Steam, and he even thought that Game Station had declared bankruptcy last year. “Artificially pushing up the stock price will not save this company.”
A 40-year-old engineer who has been working in the United States for many years said that he would only buy second-hand games at game stations, and new games would go to platforms such as Amazon.
None of them participated in this GME stock war.
Zhang Hao also plans to get out as soon as possible at the right time. He summarized the reasons for buying stocks as the inflammatory nature of the incident and emotional instability during the isolation period. “This time I really gambled too much, it was crazy, it was like a dream.” He said, “Although I am very angry, I am still afraid. This matter will definitely return to zero in the future, and the bet is that I am not the last one.” At press time, he sold half of the stocks he had on hand while waiting to see a profit of $160.
I asked my friends in the United States to ask the staff of Game Station, and they all declined to comment on this matter. It was the weekend. Compared with the fast-moving clothing store that was closed nearby, the game inn store that my friend patronized was doing business as usual. Due to the epidemic, only 7 customers can enter the store at a time, and people often line up outside the door. In one store, 3 parents accompanied their teenage children to buy Switch games.
The children seem to be shopping well, but most of the adult customers just come to the store to order things online, and then leave quickly.
The operation of the game inn’s physical store is business as usual, and the most conspicuous advertisements are hanging overhead”Call of Duty: Black Ops Cold War” and the “Cyberpunk 2077” game poster posted at the door
From beginning to end, the game station official did not make any statement on the stock issue, although more and more people mentioned stocks in the comments on social platforms. “Just say it once,” someone commented on their official Twitter account, “saying’power belongs to the players’ (Power to the players) , We only need this.” This sentence is exactly the slogan written by Game Station under the Logo.
However, as of press time, Game Station’s official accounts on all major platforms have remained silent except for publishing game discounts and live broadcast information.
(The characters in this article are pseudonyms.)
This article is from WeChat official account:Touch Music (ID: chuappgame), intern editor: Zhu Siqi