GameStop Investors Who Bet Big–and Lost Big
I&#x27;ll repost my comment on this from 15 days ago.  Not well received at the time (in the middle of the frenzy).  Not sure why...I always assumed that HN has an audience that is decent at math and analytical thinking.  Here it is:<p>What nobody is talking about yet are the thousands (tens of thousands? hundreds of thousands? millions?) of people who got hurt and will get hurt by this event.
Sure, it&#x27;s neat to see stories of people making from tens of thousands to millions of dollars due to the short squeeze. And yet it is easy to forget that those who played the game were buying GME all the way up to $500 one day, $420 the next day and $300-something the next. People also bought puts at different levels.<p>All of this will come crashing down on top of them. It&#x27;s a Ponzi scheme (or whatever the appropriate analogy might be). The people who, through hubris and ignorance, bought these stocks chasing them up the price scale to &quot;Help our brothers who bought at $350 get positive&quot; and other encouragement found on r&#x2F;wallstreetbets are going to get shafted (if they haven&#x27;t already).<p>In other words, the institutional short sellers are not the only ones who lost money. The difference is, they KNOW they can win.<p>Why?<p>Because there is no way GME is worth $200, $300, $400, $500 or $1,000. At some point in the future gravity will do its thing and this stock will suffer a violent crash. And you can bet there will be short sellers there to profit from it. And you can bet a large number of people who are hoping to get rich quickly are going to lose unimaginable amounts of money.<p>Today&#x27;s addition to this 15-day old comment:<p>We already know at least one fund made $700 million on this fiasco.  For some strange reason the stock is holding around $50 these days.  Here&#x27;s a company that lost four billion dollars in the past four or five quarters with a stock that might not even be worth 1&#x2F;10 of current levels.  And people are still playing the game (or being played).  As I said two weeks ago:  Gravity will eventually do what gravity does.  I don&#x27;t know why people think they can magically violate the laws of physics.