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> "In 2021, Gill's social media activity on Reddit helped drive GameStop stock to historic highs. At that time, Gill encouraged others to invest in the stock—no
by elihu 2y ago
> "In 2021, Gill's social media activity on Reddit helped drive GameStop stock to historic highs. At that time, Gill encouraged others to invest in the stock—not based on the fundamentals of GameStop business but on his pure love for GameStop. The craze that he helped spark rapidly triggered temporary restrictions on GameStop trading, as well as a congressional hearing, but ultimately there were few consequences for Gill, who disappeared after making at least $30 million, the WSJ reported."
That seems like a willful mischaracterization of what really happened. The thing that made GameStop share value go way up wasn't that some guy started an internet fad, it that the stock was heavily shorted and an Internet community was able to successfully take advantage of that fact.
As the price went up, the shorts had to buy shares to cover their positions, and that caused the price to go up even more. It was a short squeeze. People blame Keith Gill and /r/wallstreetbets for causing the stock price to diverge from its rational value, but as I see it, it was the shorts that did that. The squeeze was just a means by which an inherently unstable and irrational market condition corrects itself.
(Though I suppose it's also worth adding that at least some of the enthusiasm for buying GME was the prospect of causing hedge fund managers to soil their trousers.)
https://en.wikipedia.org/wiki/GameStop_short_squeeze https://en.wikipedia.org/wiki/GameStop_short_squeeze
- voisin 2y ago> Gill encouraged others to invest in the stock—not based on the fundamentals of GameStop business but on his pure love for GameStop This is incorrect as well. He had a ton of videos about the fundamentals.
- thunky 2y ago> People blame Keith Gill and /r/wallstreetbets for causing the stock price to diverge from its rational value, but as I see it, it was the shorts that did that So you think GME was rationally valued and the shorts were wrong?
- slowmovintarget 2y agoThe shorts were trying to deliberately drive GameStop into the ground so they could cash out. It was an indirect form of the private equity shred and dump move.
- thunky 2y agoThat's not what it says here: https://en.m.wikipedia.org/wiki/GameStop_short_squeeze https://en.m.wikipedia.org/wiki/GameStop_short_squeeze This says that there was a massive short interest in GME because the company was circling the drain. No mention of private equity manipulation that I can find.
- elihu 2y agoNo and yes. GME was overpriced for a bit, but I think that was just a natural consequence of the shorts getting too greedy and putting themselves into an untenable position. Basically, the shorts told the market "please take all my money away" and the market said "okay, no problem".