If some people knew how to read a chart, they would see that GME was in danger of making a new annual low, by breaching a double bottom. With the news and sentiment all negative on this name, the company had to step in and try to protect the share price now, or watch the selling potentially spiral down out of control. They have the cash to throw at it. And with earnings looming, it's the perfect time to challenge short positions.
They can maybe get this back up to fill the gap, but in the long run, the downtrend will resume on GME, and shorts will win, because like all mall concept chains, it has a shelf life.
I've been enjoying the banter here too. Can't post messages during trading hours when I have to report to the office like today. But I did want to throw in a little bit to the discussion tonight.
First of all, I believe that what we are seeing in this stock the past couple of days is a successful effort by the Specialists to "Shake The Tree". Go ahead and look it up, it is an actual market phrase for when the market makers, trading between themselves, bring the price up and down to shake lose buyers and sellers. Their goal being to put in reserve as many shares as possible in order to prepare for an expected large market move.
Large players will frequently do the same thing by being long and short at the same time with the money being made from the eventual move exceeding the spread. But I digress.
I believe that the Tree Shaking exercise shook some of the smaller retail shorts into covering. Thus the nearly 5% move upward. Might see the same thing tomorrow. Its been pretty clear since before Black Friday that the price of this stock for the next year is going to be based almost completely on Christmas sales.
Here we go!
The same reason it went up for months last year. The company is buying it to jack up the price. Their stock options and bonuses are determined by the share price. That's the only "reason" they need. It's not because it's suddenly "worth more" this afternoon, than this morning.
Shorts are playing against the house. In the short term, that favors the house.
My two cents: so much pessimism priced in that shorts are covering in case holiday sales come in ok. Like you, I've learned a lot here, too, as a long-time GME owner.
Any thoughts on the 4% bump here?
Somehow I don't think it's because people are expecting giant earnings... not sure though.
(Side note: I've been a long-time investor, and same for GS. However... I've got a lot to learn. Some good debates/conversations here make me aware of the stuff I need to focus on...)
tytus' call may be a stretch but it's not crazy. I would say the odds of $50 by the end of Feb are 25%. here's a stock near a 52 week low with massive short interest and the holiday sales numbers tomorrow. The short thesis (ie GME=Blockbuster) is by no means bullet-proof. With such a crowded trade, a low valuation, and potential earnings growth of 15% over the next year, shorts have better be right because this stock is a coiled spring.
Three things take place for short raids like this:
1. Promote media members to make statements that are lies for a period of time like - downloads end gme, box stores to end gme dominance etc etc all BS
2. Short large numbers of shares outstanding
3. Buy shares all the while shorting shares downward
What does not make sense is at roughly the 33.00 price the MM's are buying shares and shorting shares against themselves, no value in continuing this behavior.
It is not illegal but at this point makes no sense, oh well, I am a true believer in GME for future value and earning so I will add at appropriate time.
you're saying that the market always gets it right. Do you really believe that. HPQ traded at a very low valuation of earnings a few years ago. the market got that very wrong as the stock is up almost 3.5x since.
I think it's unlikely that GME doesn't come in within the guided range this quarter. Lower gas prices and busy stores in my area make me feel comfortable that they meet and may even beat. As for the coming year, you'd have to have SSS be negative and operating margins contract to get to $2.70 to $3.00 EPS. I doubt that happens with new title launches, a larger and larger installed base of new-gen consoles hungry for content, and lousy full-game download experience for gamers.
for this year and beyond. When a stock trades at 31 and $4+ a share in earnings is projected you just
know EPS is coming way down. My best guess is $2.75 $3.00 a share. Dangerous adding to a falling knife.
My 40+ target is out the window now. My new estimate after earnings is 32-35 at best.
This is a classic short manipulation by hedge funds, very surprised with such a small float available that price could continue below 33.00.
Brings about another questions: With hedge funds buying shares and driving share price down at the same time, just what advantage or value does this create for them, financially it does not add up. I have stated several time over the many weeks that this stock is very interesting, the plot grows more with this morning trades. Regardless of what the stock price is doing, REAL VALUE is minimum 33.00 today and after Tuesdays report we will have guidance for the quarter.
Margin of error forth quarter: 2.40 to 2.70.
GME elected low end guidance of 2.40
every 1.8M shares buyback worth 4.5 cents if applied prior 4 quarters.
a lot of bullets available in the guns of GME, shorts should be wary this week
If you miss one quarter, you'd better sandbag the next quarter. Miss two quarters in a row may cost your job. I believe gme q4 guidance is very conserative. IMHO.
bump: 3 simple guesstimates, no one has any idea who will be closes but at least post your three best guesses.
Speaking of your studies and experience tytus, just how long have you been trading in the market and what kind of experience do you have?