Marker

Marker was a publication from Medium about the intersection of business, economics, and culture…

Follow publication

Member-only story

Money Talks

The GameStop Fiasco Proves We’re in a ‘Meme Stock’ Bubble

What the new dynamic between Redditors and Wall Street reveals about the stock market in 2021

James Surowiecki
Marker
Published in
6 min readJan 26, 2021

Photo: Boston Globe/Getty Images

Money Talks is a column that explores what happens when business, the economy, and culture collide.

GameStop is a struggling, kind of boring, mid-size retailer stuck in a legacy business — selling physical video games. But it’s also pretty much the only company anyone on Wall Street is talking about right now after its stock rose 160% in a matter of hours on Monday morning to an all-time high of $159. (By day’s end, GameStop’s price had been cut by more than half, but that still left it up more than 300% this year and almost 3,000% from its 52-week low. And it was up another 15% at Tuesday’s open.)

It isn’t GameStop’s precipitous rise, impressive as that’s been, that has everyone fascinated. Instead, it’s what is fueling that rise: concentrated buying by thousands upon thousands of small individual investors who are using sites like Reddit and Robinhood to drive up what are now being called “meme stocks.” GameStop is the best-known of these meme stocks, simply because its gains have become so outrageous. But it was preceded last year by Hertz and Kodak, which, despite having struggling businesses…

Create an account to read the full story.

The author made this story available to Medium members only.
If you’re new to Medium, create a new account to read this story on us.

Or, continue in mobile web

Already have an account? Sign in

Marker
Marker

Published in Marker

Marker was a publication from Medium about the intersection of business, economics, and culture. Currently inactive and not taking submissions.

James Surowiecki
James Surowiecki

Written by James Surowiecki

I’m the author of The Wisdom of Crowds. I’ve been a business columnist for Slate and The New Yorker and written for a wide range of other publications.

Responses (76)

Write a response

I am one of the "WSB" people and I think the reason we are doing this to GME is to stick our finger in Melvin Capital and Citrons eye. This is about attacking the system and proving. a point. A lot of us has made fortunes playing options this year…

I think this misses a broader point about the mechanics. It works, and the WSB subscribers have faith, because "market makers" sold short so many shares of the stock that if every short had to cover tomorrow, and every eligible holder sold, there…

“autists” — their self-mocking term for each other

Why did you include this? People using autism as an insult isn't "a self mocking" internet funny, it's rooted in ableism and isn't otherwise relevent to the content of the article.