GameStop has captivated Wall Street’s attention. The stock’s rise has been otherworldly. But the obsession isn’t just with the rally, it’s with who’s making money off of it. Legions of individual investors -- regular, everyday people -- gathered on social platforms like Reddit and decided to send GameStop stock, as they would say, to the moon. This week, GameStop shares soared 400%, a hedge fund had to get bailed out, and online trading platforms had to restricting trading on GameStop and other hot stocks. Here’s how the GameStop saga played out, and what’s next as lawmakers turn their sights on the story that took over Wall Street this week.That's a good explanation, although favors the long-time and institutional investors over the Redditors, who may not have been regular investors and watchers of CNBC before the COVID-19 pandemic; as New York Magazine points out, they were probably sports bettors who had to find a new way to satisfy their gambling fix while sports were on hold. Still, it's up to the high journalistic standards and production values I expect out of CNBC. The network may have a perma-bull attitude and prioritize entertainment as much as information, but they do have to give their viewers good advice or they'll leave for Bloomberg or the Wall Street Journal. Also, I'm glad they interviewed Senator Elizabeth Warren, who, along with Kourtney Gibson, warned that this may not be the "David versus Goliath" story most people are making it out to be. In the later stages, big investors may have joined the Redditors in the short squeeze.
The Economist also uploaded GameStop: what it reveals about the US stockmarket this morning — again, perfect timing!
The frenzied rise of GameStop’s share price baffled Wall Street and panicked the US Treasury. What does the GameStop story reveal about American stockmarkets? Our experts answer your questions.Instead of letting the experts guide the discussion, The Economists let their readers ask the questions and had their experts respond. I find that democratic approach fitting given the populist nature of the interest in GameStop, AMC, Nokia, Blackberry, and, as Trevor Noah mentioned in yesterday's entry, Tootsie Rolls. About the only gatekeeping was by the editors in selecting the questions and editing the video. I don't begrudge them that; they were only doing their jobs to maintain quality and pacing.
00:00 - GameStop surge explained
00:55 - Was Robinhood right to restrict trade?
01:56 - Short selling and short squeezes
03:05 - Is the stockmarket fair?
06:03 - Will it lead to more regulation?
06:51 - Is the US stockmarket overheated?
10:09 - Is this a trend?
CBS This Morning got into the act Thursday by following the prevailing narrative, Small investors turn GameStop into a Wall Street "David and Goliath" story.
Small investors using a Reddit forum appear to have driven the stock of the struggling retail chain GameStop up nearly 800% and it's causing some major financial losses for seasoned Wall Street investors. Vladimir Duthiers has the details. CBS News business analyst Jill Schlesinger also joins "CBS This Morning" to discuss.I found this valuable because, in addition to providing a third perspective to the story, I learned something new about CBS News anchor Vladimir Duthiers; he used to be a Wall Street executive. That means that I will pay more attention to his takes on investing and the economy from nowon, just as I do to Ali Velshi and Stephanie Ruhle on MSNBC and NBC News.
Follow over the jump for more from CNBC and Retail Archaeology about GameStop.
CNBC Television had an earlier take on this story Thursday evening, GameStop drops 44% after Robinhood and others restrict trading: CNBC After Hours.
CNBC.com's MacKenzie Sigalos brings you the day's top business news headlines. On today's show, CNBC's Kate Rooney breaks down the trading restrictions that retail brokerages like Robinhood imposed in the wake of unprecedented volatile action in stocks like GameStop and AMC. Plus, Washington Correspondent Eamon Javers explains the parallels that Republican political strategists see between the populists who gained traction in their party and the populist cause of these amateur Reddit traders.While a lot of viewers voted this video down on YouTube, I was not one of them. It think it included a comprehensive and valuable list of likely regulatory and legislative responses from the U.S. government that did not make their way into this morning's CNBC report. The Redditors may not have liked those along with the news of GameStop's stock falling on Thursday, but that doesn't mean that they're right and CNBC was wrong. In this case, the ratio is lying!
All of the above stock discussion is one step removed from the actual business of GameStop. Retail Archaeology looked at the actual business from street level in GameStop: Store Closures & Crazy Stock!
In this episode we take a look at a GameStop store closure and discuss the latest news on their stock.The stock price may be going "to the Moon," but the actual business is still not good. I'm sure that means I will be writing more about GameStop in future installments of Tales of the Retail Apocalypse.
That's it for this week's two-part series on the saga of GameStop and its stock price. Stay tuned for the next installment about Emmy winners of color that I promised in 'Watchmen' leads diversity in 2019-2020 Emmy winners for MLK Day.