I was fifteen and wanted to buy my brother a video game for his birthday, so I stopped in at EB Games in Upper Canada Mall in Newmarket, where we lived with my dad for two days out of 14.
The cashier, a young man, didn’t offer any assistance, and though I would have accepted it, I eventually found what I was looking for and paid. The only other people in the store looked an awful lot like the cashier (and my brother)—young, white men. When I left, the cashier was bantering with a man digging through the bargain bin.
American company Gamestop is to EB Games as Hobby Lobby is to Michael’s. A fairly ubiquitous video game chain in the United States, Gamestop has been a linchpin in many childhoods (and adulthoods).
Perhaps it was that sense of affection or nostalgia that inspired a chain of events the effects of which will remain with the US economy for the foreseeable future.
Maybe it’s the fact that worldwide workers lost US $3.7 trillion dollars while billionaires gained $3.9 trillion during the pandemic. It’s the kind of thing that makes people feel a little desperate, a little reckless.
I was scrawling “eat the rich” on commode walls with crayon as a youth anti-capitalist, but I can’t say I thought I’d see the day when those words were top trending on Twitter as they were last week. Is this what it looks like before the guillotines come out?
Thought experiments aside, the Gamestop debacle was, in part, nostalgia, and in part due to the rampant and escalating class inequality, sure. And some people might have had the intention of getting rich—but the culture of those involved is such that those types are considered cowards.
Did anyone else jump into a wild ride of a rabbit hole with this stuff? If you’re still lost, let’s see if I can muddy the waters some more.
GME is the stock exchange shorthand name for Gamestop, the aforementioned video game and memorabilia company.
Someone noticed the stock was valued unreasonably low considering the stores were in good standing without a lot of debt, etc.
It was noted that something called a ‘short’ was happening. Hedge funds make bets with stocks. To do this, they ‘borrow’ stocks and sell them, taking the short term cash from the sale and BETTING that by they time they need to return the borrowed stock to its owner, it will be worth less than what they sold it for. Therefore, they make a profit.
Anyway, greedy white men be greedy white men, and they borrowed and sold MORE stocks than existed. (Somehow?) But the one rule of shorting is that you have to pay back the stocks you borrowed. No matter what.
So hedge funds work to drive down the price of the stock (the value of the company) so that when the time comes to return the borrowed stocks, they’re worth less and so, yay: profit.
A short squeeze is when the stock prices shoot up, forcing short sellers to buy back at a higher price, usually a loss.
It all went down in the subReddit r/WallStreetBets. A call to action, to stop the shorting of GME, to mess with the carnivorous financial monoliths, to find some way for the common people to exploit the rules put in place to serve the rich and connected. So these folks gathered up their stimulus cheques (aptly named, yes?) or cashed in their 401ks and bought GME stock like it was…
And maybe one lesson from all this is that there is always a way.
These redditors weren’t all altruistic, though – some were certainly doing it for the lulz, and there is at least one new millionaire redditor. But those redditors who sold their stock for profit are considered cowardly and the rallying cry is, indeed, ‘Hold the line!’ Meaning, do not sell your stock and let these guys off the hook.
Kind of beautiful, n’est-ce pas?
Beginning last summer, GME stock value inched up from $4 to around $20 in January, peaking at $500, and easing back down to around $51 per share. Ironically, hedge funds participated in driving the price up because they had to buy back the shares they borrowed.
To add to the atmosphere of different-rules-for-deeper-pockets, the app that was used for laypeople to buy and sell stock suddenly locked the GME stock and only allowed individual users to sell, not buy. But hedge funds and big players could still buy. While apparently not illegal, this grey area is currently awash with lawsuits.
The US Securities and Exchange Commission is investigating claims of market manipulation—by the redditors—but this event is unique and it isn’t the type of conduct usually investigated by the SEC. It’s the ‘banding together’ that’s being challenged by hedge funds—who frequently band together. (More on that via Forbes here.)
This is only the latest in a string of revelations about the rampant inequality, rigging, and moving goalposts of the stock market.
How can a company thrive when people are betting on and then deliberately bringing about its downfall like they’re playing a video game from the store they tried to kill? These money games are just gambling for men who never cared to grow up—the games are all fixed and any semblance of inclusion of the 99 per cent is token at best.
How can a culture thrive when vultures are betting not just on the demise of stores, but on the future itself? On the price of water, when we will start to run out? Does this not create an incentive to make sure these events happen as you bet they would, and therefore your voting, investments, and actions all reflect your desire to see the world deprived of water on the day it makes you the most money?
Does this not seem absolutely, irredeemably sociopathic?
And they aren’t just gaming the system, they’re also the ones in charge?
Big yikes from me.
My question through all of this, which remains unanswered, is whether this is replicable, and scalable. I know there were a couple other stocks that had been treated equally unjustly in the eyes of the redditors, and those stocks skyrocketed as well after they were swept up. Can it be maintained? Can power actually be wrested from those who hoard it simply by playing the game they rigged?
You love to see it. And we’re living to see it all.
Don’t miss out on Doppler!
Sign up here to receive our email digest with links to our most recent stories.
Local news in your inbox three times per week!
Kathleen May is a writer, speaker, and activist. Her column, She Speaks, has appeared in the Huntsville Doppler since 2018. Her work in our community includes co-founding the long-running Huntsville Women’s Group, volunteering with Muskoka Parry Sound Sexual Assault Services, and her role as a front-line counsellor at the women’s shelter. Kathleen is a 2018 Woman of Distinction for Social Activism and Community Development. She was longlisted for the 2020 CBC Short Story Prize, short-listed for the 2019 CBC Nonfiction Prize, and received the Best Author award for her 2018 submission at the Muskoka Novel Marathon, a fundraiser for literacy services. When she isn’t writing, she’s designing a tiny house which she intends to be the impetus for a sustainable women’s land co-operative in Muskoka.