At the end of the day, people are betting on what they believe (or throwing away their money for the lulz).
I genuinely, no bullshit, think TSLA is more irrational than GME, and has been for years. I put my money where my mouth is and I'm up 5x in 2 weeks. I know it won't last, but hey TSLA is crashing too. Nothing lasts forever.
All this retail interest in meme stocks is gambling, plain and simple. More people entering the market creates a Ponzi effect where new entrants pay for the gains of holders, but by definition this is unsustainable. You can see this basically everywhere in the economy but the meme stocks are the most obvious.
Not financial advice, I thought Tesla was laughably over valued at $40 a share, never bet more than you’re willing to lose.
Gambling is when you take big risks with hope for a big payoff. It’s possible to invest in the stock market and limit risk by diversifying and hedging positions, but how many meme stock investors are doing that? It’s much more likely to see people yoloing their life savings on Tesla or GME and hoping to retire from the windfall. Not going to be pretty if stocks ever go down again.
GME is going back up right now. I don’t believe it’s disenfranchised Reddit young people anymore (if it ever was?).
I guarantee there’s hedge funds who infiltrated the group playing up this one. Fictional fresh faced MBA from Jamie Diamond‘s outfit, “too the moon homie. Hold forever. They can take my wife, but not my GME. We tards are bringing down Capatalism.” (I used the T word because that the vernacular they use.)
I find it sad that the Retail naive investors will get fleeced again, but by professional billionaire trading outfits.
No one from JPM or even big hedge funds was involved -- this is the one single thing that compliance and legal departments would be all over, so any well-regulated outfit with a compliance department would have staid well away from pump&dump. (The JPMs and Citadels made money from market making on stocks and options - there they made a year's worth of profits in a week.)
You are likely right that finance bros were (and still are) behind the polished 24/7 rocket memes, but they were likely small single-PM funds and non-regulated private players, posting behind 7 proxies to provide anonymity and plausible deniability against the SEC.
A bank going on reddit to try to influence public behavior and therefore the price of a stock so they can make money is definitely illegal. A competent legal department would reject an organized attempt to do this. This is why many people believe that it is "finance bros" doing this on their own in their spare time rather than somebody at JPM leading a team to do it.
TSLA is crashing because TSLA is not worth more than the rest of the top 10 manufacturers combined, as their market cap would suggest.
Other notable differences include actively building the largest and most advanced factories on every major continent, disrupting the entire automobile industry such that even jaguar is going full electric by 2025, mainstreaming self-driving, and cutting the costs of residential solar in half.
Meanwhile, gamestop is trying to make a profit out of a portfolio of dusty commercial real estate.
> actively building the largest and most advanced factories on every major continent
They are not the most advanced factories, not even close. Tesla uses much more human labor per vehicle than its competitors; the "alien dreadnought" never materialized. "Toyota remains well ahead of Tesla in terms of manufacturing efficiency, producing more vehicles per employee, while utilizing its fixed assets and inventory more effectively":
> disrupting the entire automobile industry such that even jaguar is going full electric by 2025
The industry shift towards electric vehicles is because it's finally becoming profitable to make them. This is largely due to a dramatic reduction in battery costs which is driven by R&D for smartphones, not cars. Personally I don't believe Tesla has much to do with it.
> mainstreaming self-driving
They are mainstreaming dangerous driver assistance technologies well before they are ready because they've been pre-selling "full self driving" for years. They are nowhere close to completing an autonomous cross-country drive, something they promised would be done five years ago. Waymo is far ahead of Tesla on self-driving technology.
> cutting the costs of residential solar in half
I'm not sure there's even any point in arguing this because solar is an insignificant fraction of their business. They are a car manufacturer, nothing more. But in my personal opinion, I think the SolarCity acquisition was a fraudulent bailout of Musk's family, the solar shingles were mostly a sham, and Tesla has no significant proprietary solar technology at all.
> The industry shift towards electric vehicles is because it's finally becoming profitable to make them. This is largely due to a dramatic reduction in battery costs which is driven by R&D for smartphones, not cars. Personally I don't believe Tesla has much to do with it.
As much as I agree with the rest of your comment, I have to disagree with this part. Yes, there is a shift towards profitability with electric vehicles now and that has a lot to do with battery advancements from smartphones. But EVs still aren't exactly profitable, and when they are it's usually because of tax credits (granted that still counts, but it's important to mention).
It's important to remember traditional automobile manufacturers have decades of accumulated knowledge from spending hundreds of billions, if not trillions of dollars, on R&D for the internal combustion engine. Their processes are set up for it. Their tooling is set up for it. And more importantly, their business model which almost always focuses on maintenance costs is set up for it. It's like how Kodak invented the digital camera, but decided to continue with their legacy business because they were already set up for it.
There are many things I dislike about Tesla. But I genuinely believe they are responsible for bringing EVs to market ~3 years before it would have happened without them.
> There are many things I dislike about Tesla. But I genuinely believe they are responsible for bringing EVs to market ~3 years before it would have happened without them.
This feels vaguely ahistorical. The best-selling electric car platform in Europe today is the Renault Z-E platform (or at least it was; VW may have overtaken by now). That platform was announced in 2009 or so, with the first cars in 2011, and the first Zoe (the popular car based on the platform) in 2012. The Nissan Leaf came out in 2010. The Tesla Model S came out in 2012.
So given that, it's hard to see what Tesla had to do with it, really. Some of the most popular models came to market BEFORE Tesla (if you ignore the roadster, a contemporary of the Z-E concepts, which you almost certainly should).
Honestly if either the brand or charging were as big a deal as all that, I'd expect them to be doing better in Europe. The US seems to be the only remaining territory where they're the market leader, and they may be a bit stickier there, but it's not clear that EU sales of, say, the Zoe or id3 would be any different in the parallel universe where Tesla never existed. Those sell because they've hit a price/range point, and that's more due to the relentless slow progress of battery technology than anything else.
Not to say they're not a significant electric car manufacturer, but "coming third in the biggest western market, behind Renault, who apparently still exist" is not a great argument for them being either a market leader or having a particularly sticky brand.
I don't see how that works as an analogy _at all_. The iPhone lead to a complete change in what a phone _was_, with the Nokia view of a phone (and even of a smartphone) fading out.
By contrast, a Leaf or Zoe that you buy today is just a better version of the Leaf or Zoe you could have bought before the Model S came out.
You know what else "their tooling is set up" for? Being changed in a short period of time for whatever the next hotness is.
But I genuinely believe they are responsible for bringing EVs to market ~3 years before it would have happened without them.
How do you reconcile that statement with the fact that while folks were waiting for Tesla to fill their Model S pre-orders, we were already driving a Nissan Leaf? The Leaf was going to happen whether or not Tesla ever built a single car, or even if Tesla never existed. I mean it's nice that Tesla fans jumped on the EV bandwagon, even if a little late, but let's not pretend Tesla wasn't late to the production EV game.
Find another factory which produces something as advanced as a car, which also produces its own battery cells, produces its own motor, and I'll consider it as advanced of a factory. Giga factory is a revolution in manufacturing that cannot be encapsulated in your efficiency metrics.
Also consider that the tesla gigafactory will build the entire frame and body of the vehicle as one part in under a second. Nothing close to this is being done, because the machines to do it are being invented for tesla.
If you'd like to discuss your other points with me, i'm down. But I don't like the "I disagree with every one of your points so here's a pdf" format
I agree that TSLA is irrational, and I think that this is true regardless of whether you think there are more gains to come. My impression of TSLA investors is that many of them just want to be a part of the future, and many others are trying to make money off the volatility & irrationality.
I think the cult of personality plays a part in it, too. Tesla makes cool, futuristic cars and has a rabid user base (and even a rabid fan base of people who can’t afford to be users) but even still I don’t think the valuation would be anywhere near where it is today without all of the Musk super fans & Musk initially fanning the flames with his war against short-sellers.
Yes. Weird effects in the stock market just reflect consumer interest in the stock market. If you think Michael Jordan is cool, you express that by buying his shoes. If you think Elon Musk is cool, you express that by buying his stock. But that's not a comment on the value of the stock. It's branding.
Indeed nothing lasts forever but TSLA at least has something to show while GME's business is passé. TSLA is overpriced but at the moment it crashed and will jump back to new heights. Why not take advantage of the notoriety and make a gain yourself?
I think it's obvious that I am holding a substantial amount of GME right now, and I think I should disclose that.
Ryan Cohen, the guy who founded Chewy, is on the board for GME and leading an initiative to transform Gamestop into an e-commerce store. In other words he wants to compete directly with Steam, and while many don't realize it yet, Amazon. And this is one of the only people in history who has successfully beat Amazon in a product category before. Chewy absolutely dominated the pet market for e-commerce.
What I think Gamestop should do is compete directly with twitch, and set up an online game store on top of that. Basically do what twitch is doing but better, because twitch is shockingly bad for an Amazon acquisition. Then Gamestop could host online game tournaments, and they could even draw attention at local brick-and-mortar stores. They've got the real estate, they've got the brand recognition, and they've got the goodwill of the public right now (which is something you can't even buy, Amazon doesn't have that even with a trillion dollar market cap).
I don't think this will happen. But if it did, GME would be ridiculously undervalued right now.
Do you mean you don't think they'll compete with Twitch, or you don't think they'll compete with Steam and Amazon?
Personally I think investing in GME today is no different than investing in Blockbuster ten years ago. Competing with Steam is a terrible idea. EA tried it with Origin and despite having huge exclusive franchises, they're essentially throwing in the towel by abandoning the Origin branding and moving their newest titles back to Steam. There are also few physical goods to ship anymore so the experience in selling pet supplies online is irrelevant. Something like 80% of PS5s sold are the digital-only model; they don't even have a disk drive (and 99% of modern PCs don't have one either.)
Most of GameStop's profit was on used games. A game would get purchased, completed in a few days, then sold back to GameStop. When GameStop re-sells it as used, that's pure profit; the original publisher doesn't get a cut. Rinse and repeat a few times and within a few weeks of the launch of a game, GameStop has made more money off of it than the game developers. This is no longer possible with digital game sales. These games are locked to accounts and cannot be individually transferred. (And if you think GameStop's digital storefront will support game resales to try to capture this profit, no publisher in their right mind would publish their games on it!)
This is just crazy though as GameStop has no demonstrated capabilities or plan to compete with Steam. They don’t make good software, they don’t have content or publishing experience.
I mean they can say they want to, so can McDonalds. But their plan is magical thinking and not sure why folks fall for this.
The worst but though is that they have a terrible reputation with gamers. Every gamer I know hates them. Some shop there like some tolerate Comcast, but they don’t have a fan base.
Competing with Twitch is not realistic and I’m surprised you think it’s bad. Facebook and Microsoft have both spent huge sums of money trying to and failed. And both those companies have deep engineering talent which GameStop does not and it will not be trivial to compete with those companies for engineers. Plus livestream is just really expensive in terms of compute and network costs. Finally and most importantly, Twitch has more network effects than people realize with its follower/subscriber ecosystem. Streamers spend a lot of time building that audience and make more money than you might expect when they do it, so it won’t be easy to pull them away.
Everybody I know that uses twitch hates it. Like seriously, it's really bad. The conversations streamers have on discord are very different from what they'll say while streaming. They use it because there is no alternative. I am well aware that others have tried to compete and failed.
But there is a market and nobody likes the only player. Eventually somebody is going to figure it out. And I am extremely confident it won't be Amazon. I'd short twitch in a heartbeat if it weren't propped up by the most valuable company on Earth.
This is a very poor assessment. I'd suggest watching some Devin Nash videos. Whoever you're talking to on discord is not giving you a complete picture.
Twitch is essentially a hardcore user's platform. Engagement is extremely high vs other platforms. That's what keeps content creators on twitch, even if they're making the bulk of their income from putting the VODs on youtube: they can't create the same content and interactions on other platforms.
Again, as explained in a sibling comment, competing against twitch is a terrible opportunity. It's a miserable business to try to make a profit margin on, and your #1 competition doesn't care if twitch loses money all day. The ad market for streamers is all wonky because so much of the content is radioactively toxic.
What in particular do they hate about twitch and what type of streamers are they? (top, emerging, casual, etc).
I too hear a lot of complaints about Twitch too but I feel that most of them have nothing to do with the product, but the zero-sum and competitive nature of gaming streaming. It's just difficult to succeed as a gaming streamer (or content creator more generally) and the vast majority of people who try will never make any meaningful amounts of money, so frustrations tend to be attributed to the arbitrary quirks of the platform, even though that's just the nature of any content business.
> What in particular do they hate about twitch and what type of streamers are they? (top, emerging, casual, etc).
Everything and everyone. Seriously, even the people making literally millions on twitch hate the DMCA takedowns, the completely capricious bans, the ridiculous barrage of forced ads which twitch has straight up lied about, the fact that Amazon streamed anti-union ads on twitch and then pretended it was an accident, the fact that titty streamers get special priveleges...and that's what I thought of in just 30 seconds off the top of my head.
twitch is fucking awful because it's owned by Amazon. It was great before the acquisition and shortly thereafter.
I never said it was easy. I'm saying twitch fucking sucks and when somebody makes something that doesn't suck it will instantly be an 11 digit market cap company. Right now the most likely contender is Gamestop, even if I'd only put that at about a 1% chance of happening.
> even the people making literally millions on twitch hate the DMCA takedowns, the completely capricious bans, the ridiculous barrage of forced ads which twitch has straight up lied about, the fact that Amazon streamed anti-union ads on twitch and then pretended it was an accident, the fact that titty streamers get special priveleges..
Why would GameStop not do these things? They wouldn't be immune to copyright problems. They'd surely need to implement automated ban systems. They'd surely need to advertise. They'd surely want to make money on "titty streamers".
I don't see how any of these are deal-breakers for the viewers and if the viewers are there, the streamers aren't going anywhere. The network effect is real - it doesn't matter how good your streaming platform is if no one is using it.
You're talking about the streamers? As I mentioned, streaming is a tough business, it's going to have a lot of churn. In terms of viewership, there's publicly available data and it's not going down:
What kind of data do you have? Do you work at one of these companies and know that the data is fudged? Do you run an analytics company? There could be some measurement errors or biases but it's virtually impossible that it's directionally incorrect when we're talking about 67% growth y/y.
>> Facebook and Microsoft have both spent huge sums of money trying to and failed.
That does not mean it is not possible, it is not shocking to me that large institutions like Facebook and MS could not compete even with their deep pockets.
you seem to have conflated Money with creativity, and/or vision.
it will not be a Microsoft of Facebook that will topple twitch or you tube, it will be a startup of some kind that is completely removed from Corporate culture and the extreme chains on innovation that large companies have
How does any of this change GME's valuation? Any company can decide to get into anything - the existence of an opportunity that everyone is aware of doesn't impact the company's valuation unless the company's uniquely suited to exploit the opportunity. I don't see how GameStop is particularly well-situated to take advantage of e-commerce or streaming opportunities. They don't have any unique offerings or substantial online presence. They obviously don't have any real tech or product talent or expertise. They also primarily deal with console games and all new consoles lock you into their own online store. They are suddenly going to compete for 2nd place for PC games?
And, Ryan Cohen has no operational role at the company and changing an existing company is very different from building a new one. It's not just having some grand vision, but having the culture and talent to execute on it at every level. And it's unclear Ryan Cohen himself would have any particular expertise here - selling digital goods is very different from selling physical goods.
>I don't see how GameStop is particularly well-situated to take advantage of e-commerce or streaming opportunities
I don't massively disagree, but perhaps you underestimate the prevalence of their brand right now. Gamestop is salient in the gaming and internet communities.
Twitch in essence is a giant ad for Prime. That's it. It's doing exactly what they want. It's a terrible business to try and make profitable as its own silo, which is why mixer et all have failed.
The only thing happening with GME is some opportunistic behavior around their sudden unexpected ability to raise speculative capital. Jeff Bezos himself could take over GME and there is zero chance it's going to become some sort of online ecommerce competitor to steam. They have absolutely no comparative advantage for that. All that's happening is GME management finding every way they can to redirect this influx of cash into their bonuses.
> Chewy absolutely dominated the pet market for e-commerce.
Indeed, I think we get as many Chewy boxes as Amazon boxes. Of course three dogs and three cats will do that.
Chewy used to send every customer a handwritten personalized Christmas card each year. I think they had every employee spend some time writing these cards when they weren't busy.
Later they switched to printed cards using a handwriting font, but those early years of handwritten cards certainly left an impression.
You're basing the valuation on Gamestop being able to build, market and compete with twitch/amazon, when they've expressed 0 plans to do so, and are unable to even maintain a website?
https://www.gamestop.com/ (down all morning)
I genuinely, no bullshit, think TSLA is more irrational than GME, and has been for years. I put my money where my mouth is and I'm up 5x in 2 weeks. I know it won't last, but hey TSLA is crashing too. Nothing lasts forever.