GME Saga Power To The Players

Why GameStop Still Matters in 2025
A No-BS Breakdown for Your Skeptical Friend

“I can’t believe this GameStop thing is still going on.”
— Your friend, probably.

🚨 The Core Idea in 3 Sentences

1. Hedge funds bet billions that GameStop would go bankrupt by shorting it like crazy.
2. Retail investors (you, me, Reddit) bought and held the stock, refusing to sell.
3. Now the shorts are trapped—they have to buy back shares at any price to close their bets, and we control the supply.

That’s it. But let’s unpack why this could actually hurt billionaires and rattle the entire market.

1. What is Short Selling? (The Bet Against a Company)

Imagine I borrow your PS5, sell it for $500, and promise to give you a PS5 back later.

• If the price drops to $300 → I buy one cheap, give it back, pocket $200 profit.
• If the price jumps to $1,000 → I’m screwed. I lose $500 just to return your console.

That’s short selling:
Borrow shares → Sell now → Hope price drops → Buy back cheap → Return shares → Profit.

Catch: Prices can go up infinitely. Shorting is risky as hell.

2. The GameStop Short Was Insane

In 2020–2021:

• Hedge funds shorted 140%+ of GameStop’s float.
• That means they sold more shares than actually existed.
• Some used naked shorting (selling shares they never borrowed—technically illegal).

They thought: “GameStop is Blockbuster 2.0. It’s dying. We’ll short it to $0 and never have to buy back.”

3. Then Ryan Cohen Showed Up

Ryan Cohen (Chewy founder) bought in, took control, and started turning GameStop around:

• Kicked out the old board
• Pivoted to e-commerce
• Raised cash, paid off debt

Suddenly, GameStop wasn’t dying.
Price went from $4 → $120 (split-adjusted) in weeks.

4. The Short Squeeze Begins

When price goes up:

1. Scared shorts panic-buy to close their positions.
2. Their buying pushes price higher.
3. More shorts panic → more buying → infinite loop.

This is a short squeeze.

In Jan 2021, GameStop hit $483 pre-split (~$120 today).
Melvin Capital lost $6.8 billion in days. Needed a bailout.

5. Why It’s Still Happening in 2025

Most think: “It’s over. Shorts closed.”

They didn’t.

• Short interest still ~20–25% of float (tens of millions of shares).
• Many rolled bets into secret derivatives (swaps, options) to hide losses.
• They’re paying millions in borrow fees daily.

We own the float.
~25% DRS’d (locked in your name). Institutions ~50%.
→ Only ~25% left to trade. Shorts need our shares.

6. The Nuclear Option – Why This Could Crash Banks

Hedge funds use leverage (borrowed money):

• $1M cash → borrow $99M → short $100M of stock.
• If stock up 10% → lose $10M → margin call → forced to sell everything.

Scale it:

• Trillions in derivatives tied to stocks, indices, bonds.
• GameStop is small… but it’s a domino.
• If shorts blow up → banks lose collateral → chain reaction.

Think 2008, but triggered by a meme stock.

The Thesis in One Paragraph

Wall Street shorted GameStop into oblivion expecting bankruptcy. Ryan Cohen saved it. Retail bought the dip, locked shares via DRS, and now controls the supply. Shorts are bleeding borrow fees, hiding in swaps, and praying we sell. If we don’t, they’ll have to buy back tens of millions of shares at any price—triggering a squeeze that could wipe out hedge funds and ripple through leveraged banks. This isn’t about getting rich. It’s about holding the bag they tried to hand us.

🔔 TL;DR for Your Friend:

“Billionaires bet GameStop would die. We bet it wouldn’t—and we’re winning. They owe us shares. We’re not selling. If they’re forced to buy, it could cost them billions and shake the market. That’s why it still matters.”

P.S. Don’t get scared of charts.
Just remember: They need the shares. We have them. We’re not selling. 🚀