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Comment by vasco | Hacker News Reader

> Sooner or later, GameStop's stock is going to return to normal levels.

I'd like to schedule an appointment with the crystal ball that generated this insight, on which the whole article is predicated.

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It really doesn’t take a crystal ball to come the conclusion that the stock value for a dying company isn’t going to remain high. Even less so for the liquidated remains of Bed, Baths, and Beyond.

Well they make 5 billion revenue a year, are close to profitable, and their online revenue is up 34% in 2020 to more than a billion. And now they can print money with share dilution, and they’ve become a household name and are touted as a weapon in a class war. So IDK if dying is the right word for it.

I've seen a number of suggestions that they take this as an opportunity to pivot to something (crypto?) intended to keep the mania going.

The efficient market hypothesis - that over the long term prices will reflect what something is actually worth - is the core underpinning assumption of pretty much all finance.

Yes and those people have been predicting TSLA's decline for several years now. How long term is the "long term"?

I have heard that Tesla is a self fullfiling prophecy. Elon Musk has an infinite amount of crazy ideas that he is willing to try out. The fact that TSLA is going up allows him to dabble with all of them. Most of them don't pan out. However, there is a decent chance that at least one of his ideas works out and actually ends up justifying the value of the stock.

Yeah it’s almost a VC firm at this point. You’re not investing in the discounted future cash flows of Tesla absent influx of capital, rather you’re investing in the ROI you think Tesla can generate using money from equity raises.

Decades? Next actual long term recession? Hard to say, how long did housing market keep going up?

Tesla is a leader in several emerging markets like electric vehicles, large scale battery production, and autonomous vehicles. While it's price seems high to me, it is perfectly reasonable to think other people legitimately value it that highly. Gamestop, on the other hand, is a brick and mortar retailer of essentially digital goods in the midst of a global pandemic. This week I was genuinely surprised to hear it still existed. No sane person does nor should see Gamestop as having a strong future outlook. People bought with the express purpose of market manipulation, and when they lose interest the stock will cease to be manipulated.

Tesla shorters lost 38 billions of dollars last year on that hypothesis.

https://markets.businessinsider.com/news/stocks/tesla-stock-...

The crazy thing is that the connection between the worth of a company and its market performance is so tenuous that the emh shouldn't make sense in the stock market.

The only connections are: if a company does a buyback if it's share price gets low and can afford it off of existing revenue, if a company needs to raise cash and does a dilutatory raise, if the company exits the market via merger, acquisition, or bankruptcy, or if it's a dividend stock. All of these events are relatively rare.

It will happen but only after the squeeze, which hasn't happened yet. One of the hardest parts of running a business is having a product that people want to buy. GME is a stock that every short seller is guaranteed to buy. It's like scalping. There is the obvious risk of having left over inventory but it's guaranteed that at least some units get sold for horrendous prices.

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