There are three things to remember as you watch the chaos unfolding with GameStop’s stock price. First, Wall Street is just what happens when you mix money with feelings. Second, the internet is real life. And third, the Street always wins, especially if you’re trading with Robinhood.
If you haven’t been paying attention, GameStop’s stock has been soaring in a remarkably volatile fashion; on January 22nd, GameStop
zoomed upward 69 percent (nice) before it triggered a circuit breaker halt. The following Monday, January 25th, GameStop trading was
halted nine times.
The idea was to punish short-sellers, and for the little guys to pummel Wall Street
On the surface, this doesn’t make sense. GameStop, founded a year before Blockbuster, is part of a dwindling cohort of IRL businesses that are being starved by online marketplaces. These days, you can just buy video games over the internet instead of going to a soul-killing strip mall in Iowa City to buy a physical copy of the game. GameStop’s business has been suffering as a result.
Currently, many people are at home and bored, and consequently, interest in day trading has shot through the roof. There is
a Reddit forum for this, r/WallStreetBets, which describes itself as being “like 4chan found a Bloomberg Terminal.” A year ago, a user called
delaneydi argued that GameStop was underpriced by the market. For a while, the idea that r/WallStreetBets would take over GameStop was a joke — but then it turned serious,
Bloomberg reported. The idea was to punish short-sellers, and for the little guys to pummel Wall Street.
