The market, like Soylent Green, is made of people. That’s never more clear than when there’s something bonkers happening — like what’s happened with video game retailer GameStop’s stock since last September. Back then, it was trading at around $6.68; by this morning, however, it was trading at $146.97. (Since that astounding high, it fell to $61.13 as of 12:26PM EST.) What happened?
For that, check out this wild story from Bloomberg, which reported exactly how the subreddit r/WallStreetBets grabbed hold of a huge opportunity — found, naturally, in the mass shorting of GameStop stock. As writer Brandon Kochkodin explains, the stage for the rise was set in 2019, when two important things happened. “One was Michael Burry — of Big Short fame and the veritable spirit animal for internet stock gurus hoping to hit the big time — saying he was long the shares through his fund Scion Asset Management,” writes Kochkodin. “Second was the surfacing of an idea, first in jest, that eventually evolved into the blueprint for the crowd-sourced short squeeze that has blown up in January. Could GameStop fall so far as to make a takeover possible — by WallStreetBets itself?”
The rest of the story involves ballsy moves from a cadre of retail investors with, as they say over on r/WallStreetBets, “diamond hands.” These Reddit users managed to move the needle — to change the stock price — with their distinct brand of semi-disciplined investing. The whole thing is worth a read, as Kochkodin deftly explains the market conditions that led to at least one person becoming a millionaire (at least on paper).
This content was originally published here.