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$GME is Definitely Poggers but is it Based?

Updated: Feb 21, 2022


Unless you just got done "backdooring" your opponent while your buddy "ACE-d" their last "Champion" in "League", the title of this post probably confused you.


To explain, we turn to the all-knowing Urban Dictionary:


Poggers is defined as "an expression of extreme excitement or hype, particularly after an impressive play is made."


Based is defined as "word used when you agree with something; or when you want to recognize someone for being themselves, i.e. courageous or unique."


But to define "$GME" we actually turn to Wall Street.... it is the shorthand for GameStop's stock.


Now unless you live under a rock (or don't revel in the panic of the rich) you might not have heard about Reddit's showdown with multiple multi-million dollar hedge funds.


Now, I am not an economist. My background in economics focuses on the most macro of macros, discussions of the New International Economic Order, The North-South Conflict, and Dialectical Materialism are much more my speed, so I am no expert in the stock market.


But essentially the TL;DR of what happened is a few hedge funds (teams of investors that use a myriad of investments and strategies to profit off the stock market) "shorted" GameStop (and AMC... and BlackBerry... and Nokia... and damn the 90's really do be back y'all) and Reddit got pissed.


"Shorting" is when an investor borrows a stock and then sells it with the expectation the price will go down, once the price goes down they buy the stock back and return it, keeping the difference in price as profit. So "shorting" is a bet, a bet that whatever stock you buy will go down; when it does you make money but if it goes up, you lose money.


Except this bet is not like a bet at a Roulette Wheel, where essentially chance is what decides your success. By "shorting" a stock, an investor can sow doubt in the strength of that stock which can actually contribute to driving down the price. This is what the hedge funds did to GameStop.


The beloved video game retailer is predominantly a brick and mortar, mall-based video game store so as video game retail moves online, malls close due to the pandemic, and in-person shopping grows generally less popular; GameStop was suffering.... but it wasn't headed for bankruptcy. The PlayStation 5 served as revenue boost and GameStop's successful preowned market (my own Nintendo Switch was bought preowned online from GameStop) paired well with the reduction in overhead expenses (fewer storefronts and in-person employees) to maintain a degree financial stability.


Still, the aggressiveness with which these investors "shorted" GameStop tanked their stock price. This is when Reddit joins the chat.


Redditors (users of the internet forum Reddit) on a sub-reddit (a genre-specific forum) called r/WallSteetBets noticed that hedge funds had shorted GameStop so much they actually had borrowed more GameStop stock than existed in the market (which is just legally a thing people can do I guess). So they got organized.


Amongst those of us who are digital natives and O.G. nerds, GameStop is a beloved (if albeit smelly) place. The generationally-shared joy of buying you first GameBoy, Nintendo DS, or PSP is a high that many of us will chase and never fully replicate as adults.


The shared-trauma of receiving three cents and some already chewed gum of in-store credit when we went to trade in those cons0les for their very disappointing successors bonds us. No mom-dropped-off mall trip was complete without a pretzel and window shopping at GameStop.


So, Redditors started buying massive amounts of GameStop stock and driving up the price. Like... the price literally went from a five-year high of about 30 dollars a share, to a high yesterday (1/29) of 325 dollars a share, and an all-time high of 485 dollars a share the day prior. This after hitting a low of just over two dollars a share about a month ago.


This screwed with Wall Street. The Melvin Capital hedge fund had to close out all its GameStop investments and received over 2 billion dollars in a bailout funds from other hedge funds just to stay above water and to try to stabilize the market. Though so far... the market hasn't exactly stabilized.


Mechanisms for amateurs and causal-traders to access markets, most notably the smart phone app "Robinhood", have taken steps to lock traders out of buying more GameStop stock to try and level out the value (questionable legality there but the government isn't all that motivated to prosecute).


At this point, it is just a waiting game until the value comes crashing down (which it must because its universally agreed the current high is artificially inflated). When that happens, the Redditors who haven't sold yet will lose the small fortunes they've amassed and bring down god knows what with them.


So, I return to the original question, was this action Based? It certainly was Poggers, it was a ridiculously impressive move where a bunch of white internet bros. beat the white Wall Street bros. at their own game. But just because the action was impressive, doesn't mean it was courageous.


This is revealing to many (in a much more concrete and meme-able way than the 2008 Housing Market Crash) how stupidly designed and easily manipulated current financial markets are. That is Based. People are fundamentally questioning how this happened and why we are all ok living in a world where the economy can be shaken by some dudes fucking around on the internet. But the Reddit finance-bros. did not do this so spark a reassessment of global capitalism and Wall Street (most of these guys are pretty invested after all).


Still, there are stories coming out everyday of people who rode the GameStop high "to the moon" (a popular phrase in the sub-reddit) and then sold off their shares to afford college, surgeries, immigration fees, and other life changing expenses. Now, of course, its fucked that it took fucking with the foundation of the free market to be able to afford those things but it is certainly Based that these casual-traders where able to literally take money from Wall Street and spend it on healthcare.


So, its no Occupy Wall Street... but it might be better. It is certainly received better coverage. Outside the financial papers, journalists have been bemused but generally positive. Wall Street's lack of regulation and recklessness is the primary culprit here and looks like more and more people are coming to that realization.


So, is time for guillotines and all-spice? No, probably not. But could we get this generation's version of Glass-Steagall legislation (or just a fucking restoration of the original Glass-Steagall legislation)? Maybe.

Tonight's selection pairs well with a sugary, artificial, Mountain Dew rich "Snake in the Grass" Cocktail




 
 
 

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