Show an ad over header. AMP

I am the FIRST

GameStop stock trading story hits economic, cultural bullseye

A half-forgotten and unprofitable videogame retailer is, bizarrely and incredibly, on the lips of the nation. That's because the GameStop story touches on economic and cultural forces that affect everyone, whether they own a single share of stock or not.

Why it matters: In most Wall Street fights, the broader public doesn't have a rooting interest. This one — where a group of small traders won a multi-billion-dollar bet against giant hedge funds by buying stock in GameStop — is different.

The appeal of fables: The core GameStop story is a simple morality tale. A scrappy band of Wall Street outsiders, armed with little more than moxie and their stimulus checks, have not only made millions for themselves, but have also humbled big-name fund managerswho had dared to bet against a blameless retailer.

  • Schadenfreude: Gabe Plotkin is a hedge-fund gazillionaire who just spent $44 million buying two adjoining properties in Miami Beach. He's also famous for short-selling — for betting that companies will fail. If he and his ilk lose money, many people would feel happy.
  • Lol nothing matters: The Reddit slogan "putting the FU in fundamentals" is perfectly calibrated to enrage investors who purport to care about things like valuation and price discovery. There's nothing worse than losing a game to people who aren't even taking it seriously.

Shamelessness: The conspiracy to bid up GameShop stock took place in broad daylight, enraging old-time traders with a tendency to go on unhinged Twitter rants about "market manipulation". (They never complained when Jim Cramer was doing it.)

  • Eat my shorts: There's a highly complex financial system underlying the GameStop rally, involving discount brokerages, payment for order flow, short sales, margin calls, delta hedging of call options, and much else. Lots of people bear longstanding grudges against some or all of that system, and are taking this opportunity to shout loudly about how the GameStop story proves that they're right about... something. (Spoiler alert: 99% of the time, it doesn't.)

The attention economy: GameStop stock has risen in direct proportion to the number of people paying attention to it. It went viral in much the same way that a white-and-gold dress does.

  • The internet has become reality: The GameStop story was born on Reddit, cultured on YouTube, popularized on TikTok and Twitter. Like any internet joke, the longer it lasts, the funnier it becomes — and the more attractive it becomes to memelords like Elon Musk.
  • Media wars: If you want to know what's really going on with GameStop, the place you need to be is Reddit's wallstreetbets channel, not CNBC. Both are cacophonous and confusing, and both can consume hours of traders' attention. On some level, they are competitors — and for now Reddit is winning the relevance wars.

The Trump vacuum: Now that Donald Trump is no longer taking up a permanent position in news consumers' brains, other parts of the news cycle expand to fill the space available. Quite literally: CNBC expanded its programming by an extra hour today, thanks to all the demand for GameStop-related content.

The bottom line: Whatever your interests, there's something in this story to grab your attention. Grab the popcorn, it's not over yet.

4 ffp

Why the startup world needs to ditch "unicorns" for "dragons"

When Aileen Lee originally coined the term "unicorn" in late 2013, she was describing the 39 "U.S.-based software companies started since 2003 and valued at over $1 billion by public or private market investors."

Flashback: It got redefined in early 2015 by yours truly and Erin Griffith, in a cover story for Fortune, as any privately-held startup valued at $1 billion or more. At the time, we counted 80 of them.

Keep reading... Show less

Scoop: Facebook's new moves to lower News Feed's political volume

Facebook plans to announce that it will de-emphasize political posts and current events content in the News Feed based on negative user feedback, Axios has learned. It also plans to expand tests to limit the amount of political content that people see in their News Feeds to more countries outside of the U.S.

Why it matters: The changes could reduce traffic to some news publishers, particularly companies that post a lot of political content.

Keep reading... Show less

Scoop: Amazon quietly getting into live audio business

Amazon is investing heavily in a new live audio feature that's similar to other live audio offerings like Clubhouse, Twitter Spaces and Spotify's new live audio platform, sources tell Axios.

Why it matters: As with Amazon's efforts in podcasting and music subscriptions, the company sees live audio as a way to bolster the types of content it can offer through its voice assistant, Alexa, and its smart speaker products.

Keep reading... Show less

Hurricane Ida exposes America's precarious energy infrastructure

The powerful hurricane that plunged New Orleans into darkness for what could be weeks is the latest sign that U.S. power systems are not ready for a warmer, more volatile world.

The big picture: “Our current infrastructure is not adequate when it comes to these kinds of weather extremes,” Joshua Rhodes, a University of Texas energy expert, tells Axios.

Keep reading... Show less

"We must go further": 70% of adults in European Union are fully vaccinated

About 70% of adults in the European Union are fully vaccinated against COVID-19, Ursula von der Leyen, the president of the European Commission, said Tuesday.

Why it matters: The milestone makes the E.U. one of the world's leaders in inoculations, after an initially lagging vaccine campaign, the New York Times notes.

Keep reading... Show less

What Elizabeth Holmes jurors will be asked ahead of fraud trial

Jury selection begins today in USA v. Elizabeth Holmes, with the actual jury trial to get underway on Sept. 8.

Why it matters: Theranos was the biggest fraud in Silicon Valley history, putting both hundreds of millions of dollars and thousands of patients' health at risk.

Keep reading... Show less



Get Goodhumans in your inbox

Most Read

More Stories