It seems that Donald Trump may have been holding internet autists in check. Because no sooner did he leave office than a bunch of online pranksters rose up to bring Wall Street to its knees.
Amateur investors piled further into niche stocks on Tuesday, sending professional short sellers scrambling to cover losing bets, with GameStop skyrocketing for a fourth straight day, thanks in part to Elon Musk.GameStop surged 50% in extended trade after Musk tweeted “Gamestonk!!”, along with a link to Reddit’s Wallstreetbets stock trading discussion group, where supporters affectionately refer to the Tesla CEO as “Papa Musk.” “Stonks” is a tongue-in-cheek term for stocks widely used on social media.
GameStop’s stock price skyrocketed to a high of $365 from a low of $80 thanks to Wallstreetbets’ call buying campaign. Melvin Capital, a hedge fund that heavily shorted GameStop, was forced to close out and may go bankrupt after blowing through a $2.75B bailout.
…. before the stock slumped following a report from CNBC that Melvin Capital, the nemesis of r/wallstreetbets which needed a $2.75BN bailout from Citadel and Point72 to avoid a terminal margin call, had “closed out its short position in GameStop on Tuesday afternoon after taking a huge loss” the fund’s manager Gabe Plotkin told CNBC’s Andrew Ross Sorkin. It was unclear what exactly this meant: did Melvin merely sell its now worthless puts, or did it also have associated GME shorts on the underlying stock? We assume both.
Additionally, moments after the CNBC report, short-seller Andrew Left’s Citron Research fund also announced in a Twitter clip that it had covered most of its GME short yesterday around $90.
And the kicker is that Wallstreetbets didn’t jack up GameStop stock as part of some get rich quick scheme. They explicitly did it to sow chaos in the financial system.
The situation became so serious that trading of GameStop stock was halted nine times. NASDAQ reps have threatened to step in and quash any Reddit-related shenanigans.
If you want to evaluate the significance of an event, look at its outcomes. Big Finance–the folks who enjoyed massive bailouts as teenage usury victims languished under unserviceable debts–went into panic mode over the GameStop affair. What that tells us is that Wallstreetbets scored a direct hit on one of the establishment’s weak points.
There’s an important lesson for the counterculture in Wallstreetbets’ joke-gone-too-far. Whether or not it was a good idea at the time, dissidents have been fixated on politics for the past four years. Now that we live in a one-party state, political action is a nonstarter. The name of the game for the foreseeable future is making ourselves costly to govern.
Surging the stock of a has-been outfit like GameStop is a model for how dissidents can throw wrenches in the ruling class’ machinery. For those who have qualms about fiscal warfare, keep in mind that the financial system is what’s keeping “Get woke, go broke” from becoming real. Big Finance is one leg of the Washington-Silicon Valley-Wall Street tripod–and, it would appear, the weakest one to boot. That makes it a desirable target for legal culture warfare.
Be unruly. Hit ’em where they ain’t. Stay nimble, and don’t let tactics drag on. These are the methods that cultural dissidents must adopt to remain effective in the era of Death Cult hegemony.
