Two years after the GME event: If the next party came, what would you do?

Many people have strong emotional connections. But the problem is that now fewer and fewer people are buying game CDs. Over the past few years, it can be said that the commercial situation of game stations has been deteriorating day by day. Earnings were terrible, and stocks naturally underperformed, with a low of only $3 per share.

In 2019, it then announced that the company had lost $470 million; in 2020, the world pandemic and Americans' spending declined. Naturally, the situation at gaming stations was even worse, and 300 stores had to be permanently closed.

Long and short positions reach the battlefield
In September 2020, Ryan Cohen, founder of pet food e-commerce giant Chewy, acquired a 13% stake in Gaming Station. His addition is a strong shot at Gaming Station.

Ryan Cohen

On January 11, 2021, Gaming Station appointed Cohen and his two partners to the board of directors, hoping they can lead the company out of trouble. The stock price at the time was $20, and many investors thought this was good news. Two days later, the share price rose 60% to $31.40.

The rise in stocks attracted the attention of both groups of people at the same time.

A group of people are WSB users. They initially loved this game CD store, which carried the emotions of the past many years; they encouraged each other on the forums and urged everyone to buy this stock.

Another group of people who heard this news were financial institutions that are good at shorting.

First battle
On January 19, Citron Capital (Citron Capital) published an article arguing that Gaming Station is seriously overvalued and that its stock price will fall back to $20.

These reviews caused quite a stir at WSB. Some netizens called on all retail investors to join forces to buy gaming stations to fight against Citron Capital's “greedy predators.” Over the next two days, the stock price continued to rise.

Second battle
On January 21, Citron Capital (Citron Capital) founder Andrew Left couldn't help but make a video explaining his five reasons for being bearish on Gaming Station and predicting once again that Gaming Station's stock price would fall back to $20.

Of course, WSB users saw Left's comments as a challenge and began frantically buying stocks, raised the stock price by 50%, and closed at $65 the next day. WSB users wanted to teach arrogant short sellers a lesson through “short selling” and let them suffer huge losses.

They came up with an inspiring slogan called Yolo (you only live once). Since people only live once, don't worry too much. Currently, this opportunity to join forces to teach Wall Street predators is a once-in-a-lifetime opportunity. We should boldly follow suit, speculate on stock prices, and make a fortune for ourselves at the same time.

Eventually, Citron had to reopen its account and said it would no longer comment on Gaming Station and promised to exit the market.

Until now, the carnage between “Wall Street bets” and the so-called “Wall Street Evil Financial Forces” was inevitable. Since then, Game Station's stock price has fluctuated back and forth between 200-400. According to Wall Street Bets users, the stock price will never stop rising until it rises to $1,000.

On the one hand, retail investors are beginning to buy bullish options in large numbers. On the other hand, in the face of rising stock prices, market makers know that the initially unlikely miracle is becoming more and more likely to material—that is, their own risk exposure is getting higher and higher. This is known as the “negative gamma effect” in finance. Simply put, market makers must buy large amounts of stocks to reduce risk.

On January 29, 2021, Gaming Station's stock price reached a record high of $483. Half a month ago, it was only $20 or $30.