Ujjwal and colleagues looted treasure – gamestop share turned many investors into millionaires and pushed some hedge funds to the brink of bankruptcy


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My son Ujjwal Singhania is now infamous Gamestop And shares of AMC Entertainment Holdings were bought very cheaply. He got amazing returns from them. I considered myself a smart investor until Ujjwal had told about it. He bought GameStop shares for $ 10 and AMC for $ 2.

Sunil Singhania gave this information about his son Ujjwal in a tweet on Wednesday. Sunil Share Market Has been active for decades. He now runs his own company named Abacus Asset Manager LLP. Prior to this he was the boss of a mutual fund company. The stock of AMC closed at $ 19.90 on Wednesday and has earned a bright 3,540 percent return from GameStop. Sunil did not say how much money his son had invested in these two companies. But suppose that if he had invested Rs 1 lakh in GameStop, then his value would have been Rs 3.54 crore.

Like Ujjwal, many Indians have invested in video retail company GameStop. Stockl is an Indian company, with the help of which Indians residing in the country can trade on the stock exchanges. Company co-founder Vinay Bhardwaj said that Stockl’s platform has invested $ 2 million in GameStop in the last two days. Today GameStop is in the headlines around the world, but not because it has garnered millions of people in a very short time. In fact, it is also a symbol of rebellion of common investors against head funds which are dominant in the stock market.

GameStop’s InvestorsThe change of fortunes began in August last year, when Ryan Cohen took a major stake in it. Cohen has previously been the boss of online pet food store chewy. In November, he wrote a letter to GameStop’s board of directors and asked the company to invest in e-commerce. The board liked this. He proposed giving board membership to Cohen and some of his former colleagues. This also made the investors happy. Cohen joined the board on 11 January. He took a 12.9 percent stake in the company for $ 7.6 million and by the day he joined the board, its value had doubled.

The real twist in this story came due to the users of the forum named WallstreetBets on Reddit, which has 4 million followers. These people felt that it would be unfair to implicate hedge funds that managed billions of dollars of assets by placing short bets at Gamestock, or when their share price fell. Wallstreet’s big investors have been infamous. A few years ago there has been a movement like ‘Occupy Wallstreet’ in America. The global financial crisis of 2008-09 also started due to American investment banks, which had to pay from investors to the general public all over the world. Hence, there is anger against investment banks and hedge funds among general investors.

In the case of GameStop, this was the fight between the rich versus the common investors. The short sellers sold more than the shares of the company. So people associated with WallStreetBets started buying shares of GameStop. You do not necessarily have to own the company while doing short selling. Those who place this bet expect the share price to fall further. And then they buy it and work with the intention of completing the transaction and making profits. That is, if someone has short-sold 1,000 shares of Gamestock, then he has to buy 1,000 shares to complete the deal.

In this case, the hedge funds which had short selling did not get a chance to buy them because of the investors associated with the Reddit Forum by purchasing shares of Gamestock and keeping it with them. Meanwhile, its value was increasing by buying shares of other people with these investors. Therefore, whoever came to sell in the stock market, hedge funds were forced to buy them at a higher price to complete the deal. This led to a loss of $ 5 billion to institutional investors. Melvin Capital, a hedge fund short selling at GameStop, had to borrow $ 2.75 billion to keep it alive.

What happened to GameStop also affected countries like India. Like WallstreetBets, forums like DalalStreetBets and IndianStreetBets became. They started talking about GameStop. Such a discussion also raised the question whether the same feat can be repeated in Indian stocks. In a post on IndiaStreetBates, “As WallStreetBets has raised the share of GameStop, here we are trying to do the same with Suzlon.” For short term, buy 50-100 shares of the company. It is very cheap. ‘ Another user wrote, you buy 100 shares of Suzlon and come with us. It is not very expensive.

Can it really happen? Can Suzlon or Yes Bank become India’s gamestops? The first thing is that while there are 4 million followers of WallStreetBets, 12,000 of IndiaStreetBets and 800 of DalalStreetBets means that these forums do not have the numbers. The second thing is that it is not possible in the kind of rules which are in India. Nitin Kamat, co-founder and CEO of Zerodha, the country’s largest retail stockbroker, explained this in a tweet on Thursday. In India, in India, there is a limit for short selling in a company’s stock of a single entity or buying from the derivatives market. There is no such restriction in America. Circuit filters are also applied to stocks in India, so like in the US, no stock can climb 200 or 300 percent in a day.

So if someone is claiming to bring you profits like GameStop or AMC in Indian shares, then beware of that, otherwise you will have to pay.

Voice: Rohit Upadhyay


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