I've been thinking about what happened with share prices of GameStop and other companies that were bid up last week and want to give you a few thoughts on what I think happened and why it matters. Part of this is about the mechanics of market functioning and another part is about the psychology of social media in a post-Great Financial Crisis world. So, this post will be one part finance and one part political economy.
The rumor is that Ken Griffin called Janet Yellen who called the DTCC who increased a margin call on Robinhood. If that's the case, they all need to explain themselves immediately. Especially Yellen.
Rumor and narrative aside, is it legal to collude to run up a stock's price? I'm thinking about the WSB's members and their cheerleaders(From Dave Portnoy, Chiamath P, Elon M, CNBC's talking heads, etc....) kept putting fuel to the fire. I know the whole thing about freedom of speech but, I believe these folks need to be reminded to put a bit of education to infotainment before it gets ugly. The next couple weeks will be interesting to see how the folks that bought these stocks at these level will convert their paper gain to real money.
How to think about the GameStop saga
The rumor is that Ken Griffin called Janet Yellen who called the DTCC who increased a margin call on Robinhood. If that's the case, they all need to explain themselves immediately. Especially Yellen.
Thanks ED,
Rumor and narrative aside, is it legal to collude to run up a stock's price? I'm thinking about the WSB's members and their cheerleaders(From Dave Portnoy, Chiamath P, Elon M, CNBC's talking heads, etc....) kept putting fuel to the fire. I know the whole thing about freedom of speech but, I believe these folks need to be reminded to put a bit of education to infotainment before it gets ugly. The next couple weeks will be interesting to see how the folks that bought these stocks at these level will convert their paper gain to real money.