Revenge: An Internet Mob Is Turning The Stock Market Into “A Video Game”, And The Establishment Is Freaking Out
Scoop Publisher Francesco Abbruzzino
Retail investors have banded together to turn over the tables on Wall Street, and it has created a wild frenzy that is making headlines all over the globe. Unprecedented short squeezes have pushed the share prices of GameStop, AMC, Macy’s and BlackBerry to insane heights, and prominent voices in the financial world are complaining that trading in those stocks has become completely divorced from the fundamentals. In fact, these young retail investors are actually being accused of turning the market into “a video game”. Infamous investor Michael Burry, who made crazy amounts of money betting against the housing market during the last financial crisis, even had the gall to claim that recent trading in GameStop was “unnatural, insane, and dangerous”.
Of course Burry is right, but the truth is that the entire market has been transformed into a giant casino and has been “unnatural, insane, and dangerous” for a very long time.
If the entire market fell 50 percent tomorrow, stock prices would still be overpriced.
So it is more than just a little bit hypocritical for the Wall Street establishment to be complaining about GameStop when they have been gaming the system for years.
Ultimately, GameStop is not a good long-term investment. Most people download video games these days, and so a brick and mortar retail chain that sells physical copies of video games shouldn’t be attractive to anyone.
GameStop lost money last year, and they will lose money again this year.
But a group on Reddit known as “WallStreetBets” noticed that some big hedge funds had taken ridiculously large short positions against GameStop, and they sensed an opportunity. They realized that if they all started to buy GameStop all at once, it would likely create a short squeeze of epic proportions.
And that is precisely what has happened.
A year ago, a single share of GameStop was going for about four dollars.
At the beginning of the month, GameStop was sitting at $17.25.
On Wednesday, it closed at $347.51.