GME to a $1,000?
Gamestop, GME, A stock that went 100x in less than 5 months with no fundamental reasons but a rebel sign. It is a sign of fighting against Wall Street elites. A Reddit community called WSB — WallStreetBet full of retail traders has created history, a new movement that will change the markets forever, now that everybody is talking about it. Here are three reasons why GME might reach $1,000 and beyond.
- Community is Power! 👑
WSB subreddit’s community has about 5.6m followers (at the time of writing this article) or as they called “degens.” To me, they are like the Spartans. Outnumbered, out powered but they stood together with no fear. Fundamentals, “market efficiency hypothesis,” “DCF,” or any traditional Wallstreet methods means nothing. They are thirsty for excitement! The belief is 100x or go homeless.
2. The Power of Decentralized Leverage 🏦
Let’s do a simple math here, assuming 5.6 million WSB Spartans with an average $1,000 buying power. That’s 5.6 billion dollars in pure ammunition. And, the culture of the community is YOLO. This means highly leverage of $5.6 billion in margin trading and/or options trading, which amounts to about $33 billion with a modest *5 margin. $33 billion of capital influx into a company like GME with such a high short ratio is a recipe for “Mooning.” I have not done the proper due diligence on this, but let’s assume 1$ dollar of influx into GME = $10( could be less could be more) in price action because of various reasons( Not trying to be technical). We are looking at a 330 billion dollar market cap company with just a measly $1k from the WSB community. And, ladies and gentlemen, equate to about $2,000+ per share💰.
3. Stock market is a Casino 🎰
Stocks prices are the main table for betting. Options trading, futures trading swaps, and derivatives like instruments are highly levered bets on the side. The odds have always stacked against retail traders. However, GME is a unique situation. A hedge fund, at one point, shorted more than 150% of the float. A mistake was made, and WSB seized the opportunity. Now, other institutions have realized the opportunities. They will too jump in and take advantage of the situation. A loop effect has happened. The momentum will be hard to stop in the short term. However, in the long run, there is no doubt that the ending will be a massacre. GME is a game of musical chairs, which means only a handful of winners at the end. Be safe, folks, and enjoy observing history.
Disclaimer: This is not financial advice nor a recommendation. I do not hold any GME stocks nor options. I am just an observer.
