The GameStop stock play finds accountability in a system that has none. For the past few days GameStop, the beleaguered retailer that’s seen its share price skyrocket under the influence of a Reddit mob attempting the mother of all short squeezes, has dominated the text group I have with a handful of high school friends.
Not usually a crew for deep-dives into finance, we’re suddenly following every twist of the saga. I suspect we’re not alone. While a slice of the world is dissecting the logic of r/WallStreetBets or analyzing the deeper meaning of it all (of which there is plenty and also none), the rest of us who aren’t foolishly joining the pile-on are just giddy spectators.
Who wouldn’t be? Well, other than the hedge funds, like Melvin Capital, which lost billions. And while it’s likely a mistake to draw too close a connection between Reddit’s invasion of the stock market and Occupy Wall Street — the last smart mob to flood the financial corner of the world — at least part of the Redditors’ motivation seems to align. They want Wall Street to eat it.
“I think that what you’re seeing is essentially a pushback against the establishment in a really important way,” Social Capital CEO Chamath Palihapitiya explained during an interview on CNBC Wednesday. Among the Reddit crowd, he continued, are people who understand the fundamentals of trading as well as hedge fund traders on Wall Street, while momentum traders are joining for the ride.
Anyone living in a capitalist society has surely wondered at some point where the accountability really lies.
But there’s also a third group: “People who believe that coming out of 2008, what happened was Wall Street took an enormous amount of risk, and they left retail as the bag-holder,” Palihapitiya said. “And a lot of these kids were in grade school and high school when that happened. They lost their homes, their parents lost their jobs, and they’ve always wondered, why did those folks get bailed out for taking enormous amounts of risk and nobody showed up to help my family?”
Or, as Democratic Rep. Alexandria Ocasio-Cortez put it: “Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino.” What’s good for the goose, in other words, should be good for the, uh, gamer, even if this whole thing ends in tears for some of them, or worse, with yet another misguided attempt at platform regulation to stop a similar episode from occurring again instead of a more necessary but difficult systemic reformation.