GAMESTOP my phone has been red hot, well at least pink, with calls about GameStop. In case you haven’t seen the story, it is one of David screwing over Goliath. In this case Goliath is a bloke called Gabriel Plotkin, honestly Plotkin, could it be a plot? Perhaps.
So, who are GameStop? GameStop is the gamers version of Blockbuster had to fail didn’t it? Who buys stuff from bricks and mortar shops these days, besides which it is based in Texas and you can’t play games from the back of a horse!
Anyhow Mr Plotkin, who escaped being charged in the wake of the 2008/10 stock market debacle although he was mentioned in the trials of others, then launched a fund of his own which he named after his grand daddy, Melvin Capital. This was initially funded by his ex-boss a chap called Steve Cohen, same connoisseur who paid many millions for Damian Hurst’s dead shark. The boy did amazingly well returning many millions to his investors. Now the technical bit. Mr Plotkin’s plot was to short against stocks. What this means is that you borrow someone else’s shares in a company that you think is going to the dogs, selling them immediately and when they tank and buying them back for a fraction of the original cost and pocket the difference. His problem this time was that another clever lad called Keith Gill who had been promoting GameStock since 2019 on a site called Reddit. He was followed by loads of amateur investors and another entrepreneur called Ryan Cohen, no relation to the first Cohen mentioned above, who piled in with $76 million and bought the shares at about $4.00, and joined the board. The stock price soared out of all relationship to its Price Earning Ratio- I know more gobble de gook- give me a ring if you want to know what this is, better still speak to George Rashbrook who has a new role at Straight Talk Wealth Management where he is now running our portfolios. The share went from $3.00 to a high of $492. Any how Mr Plotkin was in all sorts of poo and had to go to his original backers for wadges of wonger to stay in business which they coffed up.
I’m going to stop now other than to say that this was a really rare event where the big guy was stuffed by, in the main, a group of day traders, give us a ring, who struck lucky. This is not a good reason to go daft and start trading on your own account unless you are prepared to put the time in to study the markets. No doubt there will be huge increase in the number of offers to teach you how to trade and make millions, but bear in mind that most day traders make little or no money.
So, to the markets