Eli5 gamestop stock reddit. Which would be a huge profit.
Eli5 gamestop stock reddit This is just how capitalism works. Stock dividends Help I understand that stock dividends are basically the company taking a portion of the company's earnings and buying back a portion of their shares as a dividend. If they do a split, the price falls from $400 to $100, and now I can invest in it, but the people who had a $400 share don't lose any value, since they now have 4 $100 shares. If you do the opposite and 'short' 100 shares of a stock, you are essentially selling stock that you do not own and are obligated buy it The stock price of Gamestop skyrocketed and the market makers and clearing houses decided to not buy the stocks back at the now inflated prices because what they had planned to buy at under a dollar a share suddenly would cost them over $100 a share. Crypto Here's some examples of some real world companies that have changed stock prices: In December 2004, Apple stock prices were $10 each. A reverse repo is simply the other side to a repo, one does not exist without the other. Due to the infrequent trading, information about the stock (they just released a crazy good new product, the CEO died) etc will not be reflected as quickly as it would be in 1). Since you own it you'd like for the stock price to increase. 23M subscribers in the explainlikeimfive community. A stock sells for the highest price a buyer is willing to pay. 9 trillion. A stock is bought for the lowest price a seller is willing to sell. The price of a stock typically reflects the last trade, and what price per share the trade was executed at. If the stock price falls to, say, $40, you buy the stock and sell it for $45 at the closing date. There is no way you can make money parking in the middle anymore. If someone wants to buy a few shares of Activision-Blizzard stock, they'll start with the people who are willing to sell it for the lowest price. Owning a stock in a company means you have partial ownership of the company. In addition consumers are very upset at this and consumer backlash may doom the Xbox one or cause microsoft to reverse it's stance. That last point, the liquidity, is probably the most important. If I invest into a stock and the price of the stock doubles, and then I sell the stock. Anyway, the technicalities are that US stock trading is T+2 (takes 2 business days). A company gives you a stock option which will allow you to buy 100 company stock at 100 dollars with an expiration of 2 years. In the summer of 2025, you have these options that let you buy stock at $55. They're not modified from production cars, they're purpose built race cars. It's not borderline gambling, it's actual gambling. com They have a tab at the top called "academy" that has educational material for beginners. I'm concerned that you have the expiration date wrong, I'd expect that to be after the exercise date, maybe something like 12/1/33. You sold the initial share for $100 and bought it back later for $80. Rather than giving you stock outright, they set it aside, but with your name on it. But suffice to say they provide liquidity to facilitate stock transactions. the value of a share of stock is the value of expected future earnings of the company. For example. A repo is a repurchase agreement where one sells a bond and agrees to buy it back at a future date. It can be zero or very low if the company wants to insulate themselves from the stock price potentially going low, causing it to be a liability. Stock prices are calculated very simply, they are just what the last person who purchased a piece of stock paid for it, or the lowest price someone is willing to sell the stock for. Internet Culture (Viral) A feature length movie has been made about the GME event in 2021 and it features an actor portraying the character of DeepFuckingValue so I think as far as making posts about GME stock and driving the price DeepFuckingValue might have similar pull to a well respected analyst saying the stock is undervalued, he certainly has way more pull than any other single person posting A lot of the stock market is speculative, i. Year 2: Stock price is now $15 a share, my 11 RSUs are worth $165 now, sweet! Dividend this year is $1. Let's say Reddit is on the stock market. Explain Like I'm Five is the best forum and archive on the internet for layperson-friendly Robinhood has a stock lending feature, which I've never heard of before. It says that I could accrue interest on my stocks and still be able to sell them at any time. A put option is a bet that a stock will go below the "strike price" by the expiry date. This is common practice to stop early investor from selling too much stock after a company first joins the stock market. Welcome to r/stocks!. That's $3 billion they didn't have at the time, so Robinhood had to restrict further stock buys on the most volatile stocks (including GME). Or check it out in the app stores TOPICS. Now imagine no one wants it, you go to sell it Basically, an RSU is a stock grant that you are given by your employer, but you are not allowed to do anything with for a specific period of time - called the vesting period. When the stock market crashes- all of these forms of borrowing except perhaps venture capital and personal money freeze up. ELI5 - Why if I own stock in a company and am literally a partial owner of that company I don't have a right to access all financial information of Once those stocks are on the secondary market, you can't really gain anything from buying them. Once you meet those requirements, the restrictions are removed and the stock becomes yours to do with Selling the stock drove the price of the stock down. It basically keeps individual stock prices to sane levels so you don't have $100,000 stocks. Please direct all simple questions towards the stickied 23M subscribers in the explainlikeimfive community. Likewise, Board Members, theoretically representing shareholders, will not be happy with a per performing stock price and may elect to replace the executive team if the stock isn't performing well. Short Sale. ELI5: Preferred stock . By way of example: You buy a stock today that you think is going to go down in the future, you short sell 100 shares @ $1 each - so now you have $100. The company sees "new money" when it sells new shares from its stockpile, and the opposite when it buys When you are long, you own the stock until you decide to sell it. Or Gamestop? An ELI5/Elevator Pitch That Got Stuck Between Floors. The stock is yours so long as you meet the conditions of vesting (usually, remain employed with the company). I’m Lets say for some reason the fund doesn't go up based on a stock price going up (lets say it's a fund tracking 10 stocks and the price of one of the stocks doubles, so a stock doubling should cause the fund to go up by 10%), investors are going to buy it seeing it as cheap and traders looking to arbitrage will come in and buy up the fund till it hits its intended price target. Great job putting this together! One thing of note is that Keith originally noticed GameStop seemed undervalued based on fundamentals, noting the short interest was just a byproduct of his research into the company. In reality when CEOs are paid in stocks, the shareholders are actually paying their salary. GameStop is _not_ going bankrupt. There are stocks that don't pay dividends though. STEPN is a Web3 lifestyle app with Social-Fi and Game-Fi elements that uses a dual-token system. Like the situation and why it's at the forefront It's only possible to short sell stocks that are liquid, i. For retirements you do pay into it using stocks. PRO: almost guaranteed 15% (depends anong price ng stocks yung ibibili for your money, samin yung lowest between a certain period of time) minus the tax which is 12% yata ng 15% gain mo. How do I invest in stocks? You can use a Human broker. In 2009, it's lowest point was 7000. If the stock stays at $50, you still have to sell it for $45 at the closing date (losing $5). With all of the buy-and-hold investors, IRAs, 401ks, etc. It sells immediately, and the lowest price remains $50. At a most basic level they just reflect what the market is willing to pay. Hey look, finally an ELI5 that I can be helpful on. Users equip NFT Sneakers – walk, jog or run outdoors to earn tokens and NFTs. I use the 30,000 cash and then I get 50% return, so 30000*1. For beginner advice, brokerage info, book recommendations, even advanced topics and more, please read our Wiki here. This should cause stock prices to go down because there's a larger supply. And so far the story looks true especially with that big purchase of stock. CON: lock in period. Robinhood didn't have to put up collateral on stock sells so that was allowed to continue. You can also use a company like Fidelity, Vanguard, Schwab, eTrade, &c as a broker. Can someone ELI5? Every halt has had an order book full of single share transaction. The only exception is for limit orders, where exchanges usually give rebates. 06 Billion], Axos [≤ 920 Million] <OC><New Video><Reddit Upload><4 min> Open menu Open navigation Go to Reddit Home. Some mutual funds also invest according to automatic rules, for example they'll only invest in the top 10 companies in sector X. A stock is partial ownership of a company. Of course, this is kind of a feedback system - people's buying and selling decisions are based on their guesses about future price changes, and the price changes are themselves based on people's buying and selling This has been a 10 year run just to get started , they say they’re in it for the long term. You wait 90 days, and now that same share of stock is selling for $80. Sister subs: /r/GME_Meltdown_DD Members Online The trading stock price usually reflects the valuation of the marginal shareholder. It’s So I was reading a bit more about stocks and heard that once your money is on the secondary market it never leaves. There's more than 2 attributes to a stock. Stocks are basically just like baseball trading cards. At this price I don’t think there’s another stock on the market that can compete in the next couple years. Let's say I'm looking to invest in a stock, but it's $400 a share and I only have $100 to invest. If a stock isn't liquid, then when a short sale went bad the broker might not be able to buy back the stock easily to return to the people who lent it. Technically it doesn't affect price, but when the board decides to do a split it's a vote of confidence that the stock price will continue to increase, because stocks worth small dollar amounts psychologically look bad. Well, paying them in stock adds shares in the company to the market. The expiration just means it's ending so A place for theoretical discussions about business and stocks - specifically GameStop Stock ELI5: How is a share split different than stock dilution? 🗣 Discussion / Question LEK [≤ 1. ELI5: The significance of Gamestop's SEC filings today and what forward-looking implications it can have on the shorts and our stock 🗣 Discussion / Question Can any wrinkles out there explain the significance of these filings? 32 votes, 11 comments. 🏃🏾🏃♀️🏃🏻♂️ _____ Users can trade their NFTs on the in-app marketplace. There are a lot of intermediaries involved (clearing houses, market makers etc) dealing with many millions of daily transactions. This doesn't happen to big stocks like Apple, but for small companies one investor (almost always a company, not one dude) can own, let's say, 50% of a company. But what often happens is people sell stocks & buy bonds or other securities that aren't part of the stock market (because they're not stocks), which leads to a drop in the overall stock market (and a rise in prices in whatever other market, often the bond market, the money is flowing to). Perform a keyword search, you may find good This week, Reddit was inundated with stories about GamesStop shares, which soared after a community-drive of ‘amateur investors’ played against experienced hedge fund players. If the order is sent to the exchange, the broker has to pay for it. when demand for the stock goes higher or lower than the expected future earnings of the company, it creates a situation where people start to "play" with the stock - trying to profit off the expectations that it's price will drop or rise to it's expected value. If the expiry date arrives and the stock hasn't done this, the option expires worthless and you won't get When the difference in the stock price had to be at least $0. So they usually cannot offer this for free. By restricting stock buys, Robinhood was able to reduce the required collateral from $3 billion to $700 million. They are "reinvested on your behalf" The exercise price is $55, saying you can buy shares of the stock at this price when you want to, after the vesting date of 5/1/25. 50 so you now have 12 RSUs Year 3: Stock price is now $20 a share. You can make a deal to sell someone a stock for a given price at a given date, for example, $45 one month from now. . I'm curious about the numbers. But that generally doesn't happen for companies that are doing well because of investor demand for the shares. If you buy a stock through a broker, the order either goes to the exchange or is directly sent to the market maker. And instead, they give you a contract that says you have the option to buy the stock from them at a later date. An open position means you either own a stock/option or haven't covered a short (I'm assuming you know what these mean if you've read up on stocks). Stocks gets listed on the open market. A lockup means certain people, usually early investors can't sell their stock for a while. EMH suggests Suddenly, Wall Street can't stop talking about GameStop, a video game retailer whose stock price is popping far beyond what most people think it's worth. There are also "market makers" which goes beyond an ELI5 level. Imagine a stock is selling for $50, many people want it, and someone tries selling it for $40. A stock increases in price because people expect increased performance in the future. When someone says a stock is overvalued, they're giving A call option is a bet that a stock will go above the "strike price" by a certain date, called the expiry date. A place for theoretical discussions about GameStop stock Shop Collectible Avatars; Get the Reddit app Scan this QR code to download the app now. GameStop Moderna Pfizer Johnson & Johnson AstraZeneca Walgreens Best Buy Novavax SpaceX Tesla. In brief though, an investment account is more or less like a bank account accept that you can use funds deposited there to purchase investment assets like shares, mutual funds, etc. It doesn't have any bearing on the market price of the stock though. If you own part of, a whole, or multiple stocks//shares, you own a portion of that company. Usually, the contract says you have the right to buy the stock at its current low price. If Tesla were to “give” everyone 2 dividend shares at the same share price as the current share price, they would be “giving” away $1. So companies started to do something clever. Then they've made $50 per stock, minus the interest and commission fees they paid to borrow the stock in the first place. Posted by u/FearAzrael - 446 votes and 91 comments Also had experience in this. When a company goes from 10 to 11 (or from 11 to 10) there may be a sudden shift in stock price when all the investment computers suddenly sell off, or buy up, stock for their funds. 001 differences. A stock's value is subjective, something determined by each individual person based on a number of things, including its price but also how much one likes a company, its products or services, its industry, its CEO, its policies, its strategies, etc. Get the Reddit app Scan this QR code to download the app now. Those days are passed. However, that's like getting a $240 bonus which means taxes. Uh oh, they borrowed more shares of the stock than actually exist. IBKR CEO says that GameStop will "go to 0", paid journalists shills says it will go to 0, etc. You buy one share and return it to your broker. One way of seeing how this works is looking at large trades of small companies. Stocks now trade for as low as $0. If you spent $1000 (100 shares) on Apple stock in 2004 you would currently have around $66,600USD. It's a scam in the abstract sense but in theory it's not a scam. , stocks that are easy to buy and sell on short notice. 02. Basically, the system is set up so that you are supposed to be able to use the stock price trends as a legitimate part of your “homework” to determine if you should buy a stock. My first question: I can sell that stock at any time. Back when stock car racing originated, they were stock cars that you could buy, but over the years, they became more modified until they have no common parts with the stock car of the same name, to improve performance and safety. Also, a lot of stocks pay dividends, so you miss out on that part of the investment while you are waiting. Say, $0. As of the time of this posting Apple stock prices have climbed to around $666. The stock market is virtually indistinguishable from a casino, except casino games have known, calculable odds for each game whereas the odds of winning in the stock market are more dynamic and variable, and your risk can be managed by collecting accurate information about the market. , it seems like the amount of money constantly entering the stock market would vastly eclipse the money used by people in the finance industry or casual day traders actually selling their Stocks, owners putting their personal money in, venture capital. Get app A stock's "price" is basically the lowest price that people are willing to sell it for. It can be hard to judge where low tide really is. For ease of explanation, let's say Reddit has 1,000 stock, each worth $1. People see other investors enthusiastic about a stock, they think those people have done research into it, they think those people plan to hold the stock for long-term profits, and they assume it is a good idea to A Reddit sub figured out a load of big hedge fund traders had shorted Gamestop - ie bet on it to fail - and collectively bought so much stock they artificially pumped the price back up, costing the hedge fund enormous amounts of money, enough to bankrupt at least one. 000$ as a dividend that year. 25, you could park yourself in the middle of the bid and ask price and collect quarters all day long (for stocks with low volatility). There's common vs preferred sure, but there's also voting vs non voting, an ones that guarantee a dividend vs those that don't, In the early days of the stock market some traders used a tactic called a "bear raid" to manipulate the price of a company's shares. " This is both right and wrong. Or ELI5: Bond dividends vs. Not as simple as it sounds, I understand more people selling than buying means a stock price will drop. 5=45000. Everything is worth what someone will pay for it. Explain Like I'm Five is the best forum and archive on the internet for layperson-friendly Par value is the value for which the security or share can be redeemed. They have no debt and they are not bleeding cash anymore. I’ve just recently gotten into stock trading and have a general sense of what to do but I’ve been obsessed lately with it even though I’ve lost about 100$ since stocks are shit right now because of everything in the world rn but that’s the perfect time to buy because eventually with certain companies it will go back up That said, stocks and stock options are typically part of an executive and other employee compensation packages, so they have vested interest in the stock price. The Short Seller sells the stock at one price (say, $100) with the hope that the stock will drop before they have to return the stock. If you're wondering why a stock moved a certain way, check out Finviz which aggregates the most news for almost every stock, but also see Reuters, and even Yahoo Finance. When you buy stocks in an IPO it goes to the company and Bogleheads are probably familiar with the the Efficient Market Hypothesis (EMH), and I’m trying to understand how it explains what happened with GameStop stock back in 2021. Day trading is a form of trading where you basically want to start and end the day with no open position. 15,000*2=30,000. But GameStop Moderna Pfizer Johnson & Johnson AstraZeneca Walgreens Best Buy Novavax SpaceX Tesla. Which would be a huge profit. Baseball players have stats like 'number of homeruns' printed on the back of the card that lets people easily judge how good they are; companies have stats like 'quarterly earnings' that do the same thing. A call option gives you the right to buy 100 shares of stock. " They've been doing this for years, driving GameStop down to dirt cheap prices. If the bid/ask is 25/30 and you put in a buy order for 300 IBKR will put a cap on the fill price and either your order will fill a little above 30 or not at all, even though Stock options is a contract or promise to let you buy a stock within a timeframe in the future at the current stock price. You sell it, and now you have 100 dollars cash. A dividend is your share of the companies profits based on how many parts you own. They would take immense short positions in a company through blind trusts and shell companies (to hide the fact that the short was one trader) and the signal that would send to other investors was that there was something fundamentally wrong with the It is for memes and casual discussion of GameStop (GME), Bed Bath and Beyond (BBBY), AMC and other meme stocks, and their associated cult(ure)s. The bigger the stock exchange the better this is - in a small stock exchange there are no guarantees anyone is wanting to sell any of the shares you want at a given time (this is what is known as the 'liquidity' of the market). 12 x $20 = $240 worth of stock gets awarded to you and moves to your investment account. If you don’t know what Reddit is, LI5 means friendly, simplified and layperson-accessible explanations - not responses aimed at literal five-year-olds. Reddit iOS Reddit Android Reddit Premium About Reddit Advertise Blog Careers Press. A put option gives you the right to sell 100 shares of stock. In the future, they planned on rebuying that stock at a lower price to return to the lender and "close their position. But who is buying it and how are they able to buy it instantly? As of Friday’s close, Tesla’s current market cap is roughly $940 billion. Since stocks and debt are the most common ways for companies to fund operations, they go bankrupt when that money freezes up. e. An army of traders on the Reddit forum r/WallStreetBets helped drive a meteoric rise in GameStop’s stock price in This is basically what happened with GameStop with a little razzle dazzle thrown in called Reddit, specifically a subreddit called r/wallstreetbets. This is governed by the SEC and stock market rules. Thus only those who own GME stock are then the only owners of all money in the world when it comes to dollar during the exposure of the naked shorts being a shy reality. If your research is enough for you to feel confident that it's the right investment for you, then all you need to do is buy, register, and hold your shares. Say they're right, and the stock drops to $50 a share. I gather that this interest is from the lender? But if they're paying me, and the stock is still mine to sell, I don't see why anyone would borrow stocks. When the reality was confirmed, it was found to be only half as bad as it could have been (PS4 will support used games). 💡 Education Again- there's a lot more to it A stock's price is objective (though constantly changing during trading hours). Here's a guide to understanding why and It’s really been interesting me lately. Not a damn thing. So if a company made 1 million $ in a year and you own 1% of it you'll receive 10. Despite reddit's search function Stock? A stock, or share, is a portion of ownership in a publicly traded company. The company is worth the sum total of all the stock. Is all of this protected from capital gains? 23M subscribers in the explainlikeimfive community. If you notice the bear's main point, it is that GameStop is essentially already bankrupt. Investopedia has a really good glossary where most stock market and other financial investment terms are defined, often with laymens terms and given examples. Your stock broker has a share of stock, which is currently selling at $100, you borrow it for 90 days from him. It might help to remember that in normal, day-to-day trading of some company's stock, the company doesn't see any of that money -- those trades are shares sold to and bought by other traders -- and therefore the TOTAL number of shares in circulation doesn't change. This means that traders The internet, in a middle finger to those people, bought a ton of shares of GameStop to boost it on the stock market. Wat mean? Thank you in advance for the No, it prevents you from accidentally trading too far away from the market. Gamestop keeps dropping the price to try and get people to buy. Explain Like I'm Five is the best forum and archive on the internet for layperson-friendly Back to 1994, the Dow was at 3500. Well, they're trying to forecast the future and buy the stocks which are going to gain value in the future, and sell the stocks which are going to lose value in the future. On top of a thorough, easy to follow explanation of the whole Gamestop fiasco, you also managed to slide in the first explanation of stock shorting I've been able to fully understand, both why it's ELI5 What happened during the Game Stop stock craze in 2020? A very talented and highly trained security analyst noticed that the stock was heavily shorted. Gamestop stock took a hit a long time ago because of that possibility. ELI5 of this whole thing: Hedge funds have killed themselves many times over shorting this stock, and there will be a biblical payout from the resultant short squeeze. And in the Great depression, there was a big crash in 1929but stocks kept falling for several years. You can make money if you're lucky, but it will come at someone else's expense. Upon hiring, the company stock price is 100 dollars. The problem is that CEOs nowadays are compensated by being given stock in the company, and a stock buyback is a quick and easy way to inflate the share price. In the short term, buying and selling stocks is close to a zero-sum game (see: the front page of Reddit right now). the stock price doesn't actually represent how well the company is doing, it's based on hype or antihype. Since then, it has been this strange battle of people propping up the corpse In the GameStop saga, at least, the answer is yes. Hope this helps Get the Reddit app Scan this QR code to download the app now. A pretty good resource to learn about all this stuff is investopedia. Let's say you believe McDonald's stock is really going to take off next year. Business, Economics, and Finance. I own 100 stock, leaving 900 left - I paid $100. The allegation is that most of these stock buybacks are motivated by executives looking to increase their own pay rather than use that money to invest in the company. They can be used in lots of different ways but usually they are bought almost like a lottery ticket, to take advantage of leverage. Shorts NEED GameStop bankrupt. Reddit found out. EDIT: I gotta mention also Robo-Funds. Making a stock's value be in infinite range since demand is defined only by those who are willing to sell their DRSd as in "owned" stock which is the only way to truly own stock with a locate. A number of factors could result in an increase in share price (typically due to an influx of buy orders hitting the market) or decrease (influx of sell orders hitting the market). r/explainlikeimfive A chip A close button. fmgtszkxeodwmqhineyjjdgbryifmmcirqpanjtknulbqhlkdxjzsabzmxpqmtnllvqtdltqu