Stop it already, you silly sellers. Can't you tell what is happening? Can't you see how short-sighted you are, how blind to the situation?
No, I am not talking about the entire market, where the battle between a dovish Fed and angry hedge funds betting that bond prices are about to plummet and yields soar, because of rampant inflation plays out every day. That's a hand-to-hand combat blood sport, where stock buyers can run into a hedge fund buzz saw, as the S&P futures react negatively to anything that signals higher consumer or producer prices. Many of the big hedge funds I know have managers that think they can break Jay Powell's resolve by endlessly pointing out steel or lumber or freight or plastic prices, and are thinking he will listen to their reason and slam on the economic brakes. Meanwhile, Powell's more concerned about making sure unemployment goes lower, because he saw with his own eyes that this nation had almost no inflation when we had 3.5% unemployment.
I think Powell wins this one, But that's not why I say the sellers are wrong. They are reasoned and rational. As I like to say to a man I respect greatly, Stan Druckenmiller, reasonable people can disagree on the right course of action to help those who need jobs to put food on the table and I am on the other side of this fantastic investor. He tests my conviction and, I hope, vice versa.
No, what I am talking about are the fools who keep selling AMC (AMC) and GameStop (GME) to the mobs that are determined to take them higher. Admittedly these stocks represent entities that many fear are moribund. While COVID is on the run and we are going back to movie theaters, we also spent a ton making gorgeous home theaters and we found ourselves liking longer-form productions, a "Mare of Easttown" or "Game of Thrones" or "The "Crown" or "The Queen's Gambit." These are intelligent, gorgeous productions with better writing and acting than most movies. Plus, who doesn't like movie candy, popcorn and a Diet Coke, but they long since priced us out and made us feel stupid for shelling out $20 for Raisinets, Goobers and a couple of waters.
Plus, the film companies have now changed the game, wanting their first runs to appear on their plus channels. You think Amazon (AMZN) doesn't want to have MGM's products first run on Amazon. You want the next Bond film? You need Prime, which is cheaper than going to the movies.
So, naturally, there are a lot of hedge fund managers who realized that AMC is like the "Walking Dead Number 11" even though the crafty Adam Aron runs the joint. He has taken down so much debt that it would sink all but the cruise ships which have had a similar battle with shorts but just the greenlight to sail after an insane battle with the CDC which refused at first to even listen to Frank Del Rio, CEO of Norwegian Cruise Line (NCLH) , when he said that you needed a vaccination to sail. How could the CDC not want that.
But I digress.
Aron took one look at the hopelessness of the situation and put his base face on to talk about any state that opened a movie theatre even if you hoped he sprayed Lysol on the backs of the chairs.
What he didn't count on was the most amazing force I have seen in my lifetime, a group ferocious buyers who hated the sellers and the short-sellers but allowed Aron to raise cash in the open market to pay off creditors. Normally buyers would run from these allegedly doomed situation. But the tip sheet that is WallStreetBets created a cadre of buyers, not held to the usual wall street standards of a group that has to be bound by proxy rules, and they lapped up all of the stock that Aron sold, roughly about 43 million around $13 to $14 a share and saved the day for this happy warrior. It was brilliant. They got him a great price and then the stock was free to ramp higher.
So my question is, given this group has no desire to quit and is running over sellers the way tanks disembodied hapless soldiers in World War II, why not get out of the way? They have so much power it would be nothing to take it to the mid-twenties. So sellers, stop it already. Walk away. Don't be their fodder. Let them take it up so you can make more money.
The dynamic is similar in GameStop. I was worried about this chain, because it has lost its reason for being: Electronic games are now downloaded, cheaper, faster better. You don't need GameStop, except for hardware, and anybody can sell you hardware.
But GameStop has a savior, insurgent and now insider Ryan Cohen, a man of great mystery who, like Aron, decided to sell stock in order to fix the balance sheet. The WallStreetBets crowd helped take that down and so now, with the mall booming, GameStop in some form or another has the power to turn itself around. It's got the ammo, thanks to WallStreetBets, so what happens? People keep selling the stock. What kind of chowder-heads offer stock here to a buying group that wants it to go to $250 or $300? I have never ever seen anything like this: A group of people with no sensitivity to price. None. They have unlimited firepower. They are succeeded. They must know something about Ryan Cohen's plan that we don't. It doesn't matter. Get out of their way for heaven's sake. Let it trade higher, much higher, and then if you wish, take profits. Don't be foolish.
Now there is one thing I don't understand. The inventors of the meme stocks, the wildly successful boosters of their own two heavily shorted faves, now have new capital for their own success that can train their guns of any number of stocks. Let me give you their prospective buyers' list.
First, they need to open up the howitzers against Beyond Meat (BYND) , which has a monster 22% short position, yet is doing some incredible deal with McDonald's (MCD) and is also moving into China with KFC (YUM) . Plus the reopening of America is allowing Ethan Brown to sell into all of the different cafeterias at businesses. In the meantime it has lowered the price and improved the taste. Who can the WallStreetBets people not see that they can operate on Beyond Meat and squeeze the shorts to oblivion.
Next, Ford (F) . CEO Jim Farley announced Wednesday that he wants to be second to none in electric vehicles in this country. The gauntlet's down. More important, Farley can accomplish this and if he does it the company will plow more money into more electric vehicles, so it is a virtuous circle. He intends to outsell Elon Musk's new cybertruck when they go head-to-head. Sellers, get out of the way, here comes the Bronco, the Mustang MachE and the EV F-150, America's best-selling truck.
Finally, how about Roblox (RBLX) . When the gaming company came public with a direct listing the insiders sold very little stock. The only real stocks for sale in this amazing stock is form people who bought it earlier and are now selling it even as we saw the incredible report the company just had. This is insane. If the WallStreetBets just decided that they wanted to sop up a couple of days stock, they could convince the sellers by their actions to vanish and I think you see $110 overnight -- a twenty point move. Sellers, move out of the darned way, he comes the WSB Roblox buyers.
Right now, I think the WSB honchos don't know their own strength. They are afraid they don't have enough ammo to take on more than these two stocks. I say wrong. I say this suit, this ex-Goldman guy you regard as your sworn enemy just gave you your playbook. Are you really going to avoid it just because I wear French cuffs and carry a kerchief? If so, you are as silly as the sellers I just described.