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Jim Cramer, a well-known anchor for CNBC’s financial show, said on Friday (29) that he praised GameStop’s retail investors (GME-US) who have come together against legal entities, but also recommends that they close it now. The data shows GameStop’s empty order balance has barely decreased, showing that the mighty Air Force lost nearly $ 20 billion this month without being shaken.
Cramer said, “Just hit a home run, don’t expect a grand slam (home run). Take the home run away, you’ve won, you’ve won this game, you already did.”
“Please don’t waste a lot of money on GameStop.” Cramer, who was treated at the hospital for illness, specifically called CNBC, hoping the public would understand the potential downside risks from GameStop shares and other stocks that were squeezed higher. .
He said, “Don’t let them get hurt. This is our job. We have to make sure everyone knows that if the stock price collapses, they are catching fire.”
Cramer’s comments came as GameStop’s share price soared nearly 68% again on Friday when trading platform Robinhood reopened for trading. The day before, the platform suspended trading in GameStop and other stocks whose share prices were pressured by retail investors, such as AMC (AMC-US).
Although GameStop and AMC fell dramatically due to the platform’s delisting on Thursday, GameStop is up 1500% year-to-date and AMC has soared 475%.
Referring to the gains made by retail investors due to the short-term downsizing, Cramer said: “Congratulations, we all hope everyone can make more money.” But he stressed that he prefers investors to make money by investing in companies with good fundamentals. For example, Apple (AAPL-US) and Microsoft (MSFT-US).
He said, “I am not against anyone, and there is no conspiracy against me or GameStop or any group. This is a stock that is simply overrated.”
On the other hand, Cramer believes that GameStop should take advantage of the rising share price to issue new shares, which can be used to pay off debt. GameStop Season 4 ends on Saturday.
According to its third quarter financial report, as of October 31, GameStop’s balance sheet contained $ 269.5 million in short-term debt and $ 216 million in long-term debt.
On December 8, GameStop filed an application with the U.S. Securities and Exchange Commission (SEC), requesting that it be able to sell its common stock through a public sale at any time. The day before the document was presented, the closing price of the share was $ 16.35 per share.
Cramer said the longer this crazy retail transaction lasts, the more he worries about the stability of US stocks and other markets.
“Nobody wants to do some common sense here. Both extremes have gotten into trouble. What is happening now is just a tragedy.”
Cramer does not intend to comment on the quality of the Reddit forum, and regardless of whether the short sellers are right or wrong, “I just said that the government should stand up and at least try to resolve this issue so that other markets not be affected by the 4 serious short selling actions. panic. “
The air force is strong and I’m not afraid
Some hedge funds that open GameStop said they have closed their positions. Still, Cramer said: “What happened recently needs more exposure. For these short sellers, let’s see who actually covered it and at what price. Let’s have more information to disclose. Let the government get involved in investigating the progress of these transactions to that those things never happen again. “
GameStop’s compression transaction caused short sellers to lose nearly $ 20 billion this month, but it still failed to shake up these powerful air forces.
According to data from S3 Partners, short sellers lost $ 19.75 billion on GameStop this month and lost nearly $ 8 billion on Friday alone. Despite this, the Air Force still clings to the bearish position, and even if the position is closed, new blood will join the Air Force camp.
According to S3 data, the number of GameStop shares short last week only decreased by about 5 million shares, meaning the short order balance only decreased by 8%. Most of the short positions were covered on Thursday because it was the first drop in 6 trading days.
Ihor Dusaniwsky, Executive Director of S3’s Forecast Analysis Department, said: “I have always heard the statement that ‘most of GME’s short positions have been closed’, which is completely false. In fact, the data shows that the balance of short orders has not changed much. “
He said that although “short stocks” that were previously short on GME have been scaled down to cover, most of them have been borrowed and sold short by one new push after another.
GameStop’s equity loan interest rate (the cost of shorting GameStop) jumped from 29.32% for existing short positions to 50% for new short positions.
S3 said: “If most of the short positions have been covered, we will not see such high securities lending rates”, GameStop is still the shortest stock on the market, with a short order balance of 113.31%.
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