GameStop Getting Played

Over the past few days, but really over the past few weeks, GameStop’s stock price has been on a rocket ship ride. It all started when a bunch of folks on the Reddit board WallStreetBets observed that several large institutional investors had shorted GameStop’s stock. So over the past month or so, all of those private investors who follow that Reddit board started buying GME’s stock to drive its value up, thus driving huge possible losses for those institutional investors who bet against the retailer. From the CNBC article:

GameStop has rallied more than 680% in January alone as an army of retail investors marshaled against short sellers in online chat rooms, encouraging each other to pile on and keep pushing the stock higher. Short sellers have amassed a mark-to-market loss of more than $5 billion year to date in the stock, including a loss of $917 million on Monday and $1.6 billion on Friday, according to data from S3 Partners.

This activity was then sent into overdrive when Elon Musk tweeted about it.

Those are some big numbers pointing in the wrong direction. As noted when chatting with a friend today about this, someone is going to be holding the bag on this and it will not be pretty.

Tesla Is Crushing It – No (April Fools) Joke

For all of Elon Musk’s ambition to re-invent the automobile through his bleeding edge electric car company Tesla, the knock has always been that the pricing for his existing models have been way too high for the average consumer – and yes, at $100K+ a pop, that is not a price tag that is going to go over well anywhere save San Francisco, NYC, LA and several international cities.  That all changed today with Tesla’s launch of it’s $35K Model 3, which has generated around 200,000 orders in roughly 24 hours and has produced lines outside of Tesla stores that rival Apple launches (as Re/Code put it – h/t).

As has been well documeted, there is ample environmental change happening around us and the introduction of accessible, affordable electronic cars is a small but important step in the right direction.  To be clear, it’s not the end of the ‘warming’ problems facing us (and I’m not nearly smart enough to take that on).  All I’m saying is that what Tesla is doing, and how they are introducing a relatively affordable all electric vehicle, is an important milestone.  Let’s hope that the principals of “Moore’s Law” applies to electric vehicles and the pricing and innovation can continue to improve and lead to longer driving times (past the ~200 mile distance capabilities of the Model 3) and lower prices all around.