13Oct10:35 amEST

Gamers and Their Dorky GameStop Schadenfreude

I am well aware that many a gamer still harbors ill will towards GameStop (GME) for various transgressions over the years, namely low-balling customers during their bartering process. 

However, if those gamer nerds grew some bear claws as they became older and lusted after short-selling GME into the ground as a new era Blockbuster video they may want to reconsider that thesis at this critical juncture. 

With one of the most prominent short percentages of its float (shares outstanding), GME is the quintessential nightmare short squeeze play right now after agreeing to a partnership with the estimate and trillion dollar market cap mature tech giant, Microsoft, last week. 

All kidding aside, the numerous shorts in the float here have been essentially betting on bankruptcy and equity being hammered down to penny levels if not outright zero. The MSFT deal likely postpones that, if not takes it off the table outright. 

Moreover, all of a sudden after years of bearish price action we now have a sound technical daily chart, seen below, with a tight multi-day bull flag pattern, to boot. 

As we have discussed with Members in the service often, until the indices are in an established bear market we often favor short-selling mega cap names with very little shorts in the float if we do go short individual names, in lieu of getting swept up in the nightmare that GME may prove to be to the lopsided shorts suddenly caught in what look to be the wrong end of the boat. If GME holds over $12 going forward, I am looking at a long here to probe the violent short squeeze thesis. 

Schadenfreude, as the Germans call it, is a dangerous mindset which can often blind you to unnecessary risks. 

Kafkaesque Rally Stock Market Recap 10/13/20 ...


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