What comes after you take down a stock for fun? And more importantly, why on Earth would you pump your money back into the stock you just destroyed? Jim Cramer takes aim at these questions in one of his Real Money columns.
People keep asking me why I give the WallStreetBets people a hard time on so many different realms. The answer? It's because they are possessed with some sort of ridiculous zero-sum class struggle with enemies on the other side of the trade. ... They aren't investing as much as playing some sort of blood sport where they must beat the man, the man who has stuck it to them their whole lives.
In recent months meme traders have jumped in and out of stocks, starting with GameStop (GME) - Get GameStop Corp. Class A Report. They have traded to punish short sellers and hedge funds; to make a quick buck; or just for the sheer fun of it. And professionals… don’t think much of it.
“That desire to belittle and crush the opponent” is a waste of everybody’s time, Cramer writes. Investors should have something better to do with their time, and especially with their money.
For some reason, though, the meme investors on Reddit have stayed focused on the crushing and belittling. Having infamously taken down GameStop’s stock, now they’re jumping back in. Convinced that GameStop’s new CEO Ryan Cohen will lead the company to a new future, and particularly sold on the “team of Amazoners” that he has brought with him, meme investors have begun buying back into GameStop for real.
How’s that working out for investors? Well, so far Cohen’s plan to rebuild GameStop is to sell 5 million shares of his legacy retailer, doubling down on their business model of selling physical video games while his market moves on to digital distribution.
That doesn’t mean there isn’t an alternative though. Read Cramer’s column to understand exactly what he wants to hear when a CEO decides to rebuild their company, and why he thinks Chewy CHWY CEO Sumit Singh has some answers.
As of Tuesday afternoon, GameStop shares were down nearly 26% over the previous five trading days.