Betting on Whether GameStop (GME) Surpasses $420 Per Share Before 4/20

My compulsive Reddit habit and spending far too much of my existence online is finally paying off! And now, thanks to MyBookie, it might just pay off in more ways than one (three if you count this article!).

If you’re at all plugged into the world around you, you’ve probably – at the very least — heard something about GameStop’s surging stock prices in connection to the social media platform Reddit and lots of whining from hedge funds and elite financial institutions. Even without getting into the finer details, it’s a phenomenal story.

Retail investors are beating the Wall Street crooks at their own game, and it is making the billionaires who have manipulated the markets for their personal gain for ages – at the expense of the rest of us – lose their ever-lovin’ minds.

Seeing as the GameStop / Wall Street Bets saga is the biggest story in the world right now, it’s only right that the oddsmakers at MyBookie are offering additional action for bettors looking to wager on the video game retailer’s stock value – beyond investing in the company itself.

You will find the following odds in the “Current Events” section of MyBookie’s top-rated betting site:

GME Price above $420 before April 20, 2021?

  • Matchup Odds
  • Yes-160
  • No+120

We’ll dig deeper into the betting lines and make our pick a bit further down the page — first, a brief overview of what’s happening along with my best attempt at explaining why.

The Short Squeeze

The GameStop / WSB story in a picture.
Disclaimer:

I learned of /r/wallstreetbets’ GameStop short squeeze late last week and bought in for a few shares at around $61. I won’t go further into detail about my position, only that I have a small investment in this story’s outcome.

I am not a financial advisor, and this is not financial advice. I only recommend investing in GameStop after doing your own research (if you like the stock).

Any speculation done in this article concerning the future of GME pertains to MyBookie’s betting markets exclusively.

You may have noticed that GameStop’s stock value is skyrocketing, seemingly out of nowhere.

One week ago, the price of one GME share was just under $40; this morning, it will open at $292 after seeing a $55 decline during after-hours trading.

While multiple factors are playing into the surge, a Reddit community called “Wall Street Bets” is getting most of the credit.

I won’t go through the entire history of GameStop trading on the Wall Street Bets forum, but the story begins over one year ago with an individual WSB poster investing roughly $53k in the mall-based video-game retailer. That initial investment is now worth around $50 million.

(Unfortunately, the person’s username contains an expletive that I cannot share here, but I’ll link to his posting history. You’ve been warned about the “bad” language.)

The maniacs on Reddit identified hedge funds and Wall Street’s institutional players shorting GME and a handful of other stocks to ridiculous degrees. They noted that these big wigs’ had overextended themselves and were ripe for the squeeze.

The larger story is that, for once, the little guy (retail traders) is fighting back! And David is giving Goliath absolute fits.

What Is Short Selling?

Short selling is essentially a bet against a given company.

Let’s say a stock is worth $10 currently. But like GameStop, the analysts have determined that the corporation’s future looks bleak. Malls – where most GameStop’s are located – are struggling, and most gamers download the latest titles directly to their consoles, rendering retail stores obsolete.

A hedge fund borrows shares of the stock from another fund (or naked short sells – illegally selling shares they don’t yet have), promising to return them later at a price agreed upon upfront. So, a short-seller who expects a stock to drop from $10 to $5 in a month borrows and immediately sells 20 shares at their current price, netting $200.

They’re betting that when the short option expires and it’s time to buy and replace the borrowed shares, the price will be considerably lower. For example, if the value has fallen to $2, returning the 20 shares will only cost $40 – the $160 difference is all profit.

However, if the stock price gains value, short-sellers get stuck holding a rather expensive bag because they’re still responsible for buying back the shares at the current market price. And the act of repurchasing them can move the price even higher!

From /r/wallstreetbets.

That’s what’s happening with GameStop. According to CNBC, GME was the most shorted stock on US markets. Big investors like hedge funds shorted an absurd 40% more shares than the total number of shares than ever even existed!

Traders on Reddit noticed this and spotted a lucrative opportunity to make vast sums of money while punishing Wall Street institutions that had gotten all too comfortable taking on massive risk without ever suffering the consequences.

“Then came the wager: If big investors had bet more shares than GameStop had in existence that it would lose value, what would happen if lots of individuals investors — retail interest, as they say — started buying the stock? That might drive its value up, forcing the hedge funds and other big capital pools to decide whether to hold onto their negative bet and take strong paper losses as GameStop rallied, or cover their short, buying the stock at a higher price than they initially paid for it, losing money. Covering shorts would require buying the stock at high prices, perhaps boosting its value yet again.”

So, thousands of retail traders from Wall Street Bets started investing in GameStop, with their sights set on the eventual squeeze – when the shorts are forced to begin buying back the stock at prices many times higher than they anticipated.

Several hedge funds have already lost billions of dollars and will likely be bankrupted by this ordeal if GameStop investors hold their shares long enough.

Betting “Yes” on GameStop (GME) Price Going Above $420

Forget about GameStop surpassing $420 before April 20; I think it’ll fly past that mark by the end of the week!

So far, the Wall Street Bets traders have been incredibly resilient to price fluctuations and other dirty tricks used by the institutional forces.

Many are holding out of principle, wholly detached from the stock value. It has become an all-out war against the Wall Street fat cats; Redditors want to make them bleed.

If they can’t be scared into selling off their shares, making more available to the shorters, GameStop’s rocket ship to the moon is inevitable.

Now, the squeeze has become a cultural phenomenon to boot, with different groups from all around the internet drawing their own meaning from the story. For some, it’s merely a one-time opportunity to redistribute wealth to the masses. For others, it’s a new form of activism — the rebirth of Occupy Wall St.

With the shorts starting to expire this Friday, GME should see another significant rise this week. I don’t think it will last through April, but the price of GameStop shares will easily surpass $420 within the next month – if not by this weekend.

Get your bet in while you still can!

Will GME Exceed $420 by 4/20?
Yes!
-160
Will Cormier / Author

Will Cormier is a sports and political betting writer living in downtown Las Vegas, Nevada. When he’s not wandering around the streets of the Arts District aimlessly, a lifetime of pessimism and paranoia has made Will perfectly suited for handicapping politics. Cormier tries to analyze current events as objectively as possible – a strategy that often enrages loyalists on both the right and the left. When he’s not covering major upcoming elections, Will enjoys writing about basketball, football, and MMA from a betting perspective. He also loves dogs, ice cream sundaes, the movie “Stomp the Yard,” and long walks on the beach.