A week after its logic-defying surge began, GameStop stock is still holding strong, despite more shenanigans and goofy twists, closing at $325 today. That’s higher than Facebook, Apple, and Microsoft. The bubble seems destined to burst any day now, but boosters on the WallStreetBets subreddit are continuing to hype the meme stock anyway.
Princess Peach’s Leading Role And More New Releases
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It’s weird writing a new story each day that says basically the same thing: GameStop, the gaming chain that closes more and more stores each year as more and more people buy games digitally, continues to be having a wild moment on Wall Street. And yet, every day this fact leads to bizarre new developments as everyone’s attention comes to be focused on how GameStop’s saga exposes the brokenness of our economy and financial system.
Yesterday, the circus seemed to be coming to a close as commission-free trading platforms like Robinhood put a freeze on trading GameStop and other meme stocks. Today it put on an encore as some of those restrictions were eased. Here’s what else happened:
With GameStop, AMC, and other stocks frozen yesterday, traders found other meme stocks. Most notably DogeCoin, a near worthless cryptocurrency based on a literal meme. Robinhood ended up freezing that too after it surged over 300%.The SEC, the agency responsible for making sure Wall Street doesn’t do crimes, finally spoke up. “[W]e will act to protect retail investors when the facts demonstrate abusive or manipulative trading activity that is prohibited by the federal securities laws,” its commissioners wrote in a statement. “Market participants should be careful to avoid such activity. Likewise, issuers must ensure compliance with the federal securities laws for any contemplated offers or sales of their own securities.”Sen. Elizabeth Warren told the SEC to be more specific about what it’s doing. “Casino-like swings in stock prices of GameStop reflect wild levels of speculation that don’t help GameStop’s workers or customers and could lead to market instability,” she wrote in a tweet. “Today I told the SEC to explain what exactly it’s doing to prevent market manipulation.” A reporter yelled, “Did you discuss GameStop?” at President Biden during a press event in the White House ended. He didn’t respond. Neither did Press Secretary Jen Psaki when asked about it again during the daily briefing. “I know it’s a big story, but our focus and our big story is getting the American people back to work,” she said. The trading app Robinhood said it would start letting users trade GameStop stock again today within certain limits, but those limits kept changing. First they were able to buy up to five shares of GameStop stock. By the end of the day the limit was one. Traders on the WallStreetBets subreddit claimed these changes in its policy directly corresponded to massive downswings in the price of the stock. At least one person seemed to find an exploit, saying they could get around the restrictions by buying and immediately executing futures options.In order to boost morale among employees frustrated with Robinhood over blocking certain stocks, the company reportedly tried to make it up to them with $40 in Doordash credit.The Wall Street Journal interviewed DeepFuckingValue, AKA RoaringKitty, AKA Keith Gill, the certified financial analyst and former life insurance marketer who led the movement with GameStop by making his case for it on the WallStreetBets subreddit back in 2019. Contrary to the memes and David vs. Goliath narratives that have taken over the subreddit, he says he was never in it for any of that. “I’m not out for anybody,” Gill told The Wall Street Journal. “Roaring Kitty was an educational channel where I was showcasing my investment philosophy.”DeepFuckingValue, who has achieved cult status on the subreddit, closed out the day by sharing the latest screenshot of his GameStop portfolio in a post titled “GME YOLO month-end update.” His total current investment of almost $755,000 is currently valued at just over $31 million.But as Timothy B. Lee wisely pointed out over on Ars Technica, most people aren’t DeepFuckingValue, and they won’t be making millions or following him to the moon. “[T]he GameStop bubble will have the same practical effect as any other pump-and-dump scheme: transferring wealth from those who got into the scheme late to those who got into it early. The fact that there are short-sellers on the other side of some of these trades doesn’t change the analysis.”
