The Lesson Of GameStop: Investing Is Not A Game
Taylor Tepper, 03 February 2021
In a matter of days, GameStop has gone from being a dying retail chain to the latest obsession of media and markets. Along the way, the GameStop saga has morphed into a lesson in American populism, an allegory of Main Street taking a pound of flesh from Wall Street.
To recap: Video game retailer GameStop was struggling to survive even before the pandemic struck, and Covid-19 only worsened its ailing condition. Hedge funds on Wall Street smelled blood and took out massive bets that the company’s shares would drop, maybe even to zero—so-called short trades or short positions.
Meanwhile, a group of stock market enthusiasts who congregated in an online chat room—Reddit’s WallStreetBets—came to the realization that they might just be able to beat the Wall Street guys at their own game. It took time, but they did just that, aided and abetted by commission-free trading platforms like Robinhood.
Much is being said about this unlikely story, and the drama will keep unfolding for some time. But there’s an immediate lesson to be learned from the GameStop saga: Investing isn’t a morality tale, and it’s not a game.
