Should you invest in GME

Gamestop is being pumped by memes and s**t-talk on the WallStreetBets Subreddit. They’ve been so successful in their crusade that they’ve managed to force one of the most successful hedge funds in the world, Melvin Capital, to take on emergency funding.

My guess (and it’s just a guess) is that Melvin needed funds to avoid a margin call. If they got margin called, their position would be worth nothing. So they are trying to desperately stay in the game.

It might be tempting to jump on the bandwagon and buy into GME. Or even potentially short GME (although you’d be hard pressed to find a someone to lend or a company willing to offer a contract at the moment).

The reality is that GME could plummet at any moment. The stock is being manipulated. Investors aren’t buying because they truly believe in the value of Gamestop. Some are buying becuase of they view GME as an underdog. Others are buying to spite the hedge funds. But most people are buying because of the hype.

It’s probably too late to make anything decent out of this trade. And there is certainly a lot of downside risk. And whatever you do, don’t invest or short because you believe you are more rational than the market. Markets aren’t rational and markets aren’t intelligent. You can’t “outsmart” this trade. Remember every screenshot of someone making crazy profits from their GME trade, is only being shared to further manipulate the markets. When they exit, you won’t know about it.

If you want to make a crazy bet, sure risk a tiny amount in GME. But if you’re looking to invest with a view of making it out with more money, i’d stay away.