Back in the day, I’d get my computer games at Fred Meyer. Then I found Electronics Boutique at the mall. Then the mall patrons decided two video game stores were redundant and the subsequent rise of GameStop put Electronics Boutique out of business. Then GameStop phased out their PC Game offerings in favor of console exclusivity. Then I found Steam and quit going to the mall.
All that to say, I should have spent more time paying attention in Economics 101 and less time conquering the known world with Attila the Hun in Age of Empires II. Because now GameStop is an unexpected battleground where hedge fund firms face off against individual investors gathered and spurred on by online message board WallStreetBets, a subdivision of Reddit.
If I were the last person on earth and aliens spared my life on condition I could explain this perfectly to them, I’d doff my hat in condolences for the human race and face peaceful oblivion alone. Best I understand it, let’s say I have a taco worth $2. You borrow that taco and sell it to another person for $1 because you think that my taco will go down in price, lower than $1. If it does, you buy that taco back at the lower price, give the taco back to me along with the interest and then pocket the profit. This is called “being short.”
Essentially, various hedge funds were being short with Gamestop Corp (GME). Many members of the subreddit WallStreetBets decided to buy the low-price GME stocks and soon had enough to worry the firms who started buying/borrowing more GME tacos. This sent the stock price higher and higher, inflated by more and more people noticing the gain and entering the taco-purchasing field. Some of these people were wealthy and could buy mass quantities of the GME tacos. Elon Musk and others commented on the situation, bringing more and more attention and investors into the fray.
Ultimately, two sizeable hedge funds managed to buy enough tacos to get out of the war, one with a heavy investment from another firm to shore up their losses. Both lost a couple billion dollars. A couple members of WallStreetBets reportedly became millionaires, others sold their stock to fund schooling and pet surgeries, and so on.
In my opinion, this is probably a one-off event. Members of financial media are grumbling and demanding the government put regulations in place to prevent this happening again. With the amount of money these firms have, it is not outside the realm of possibility this will happen. Lobbying efforts are fueled with financial backing, after all.
Also, the internet is rarely this united and active. During the last four years, everyone complained about things but when it came to actually risking money, time, and energy beyond the push of a button to like, subscribe, or share, what did they actually do? For the record, I didn’t do anything besides upvote Imgur posts. And block people who ranted about politics. I’m part of the inactivity.
Again, so what’s my point?
I wish it wasn’t a one-off event. I wish this wasn’t one of those instances in history where we get a big huge swath of documents and then the fallout fails to hold the world’s attention for longer than the next kerfuffle (Hey, Panama papers! You there?). I wish this wasn’t a bunch of Republicans ignoring they made a huge mistake four years ago and digging themselves deeper and deeper in an effort to deny the emperor is naked and that he’s running around decrying nudity.
I suppose that’s why I tell stories. To inspire, to teach, to instill hope in defiance of my own cynicism and pessimism. And hopefully to usher in a better world.