• Daniel Ethan Finneran

GameStop Drops

GameStop, the humble brick-and-mortar retailer that now saunters about town as a financial bon vivant, has met its inevitable fate. It’s a destiny, compelled by market forces unseen but always felt, to which all artificially-boosted companies and over-valued stocks must, at one time or another, submit. Perhaps GameStop, so vigorously ascendant and convinced of its inherent worth, hoped it might prove the exception to so unbending an economic rule.

Much to its misfortune, and to the sadness of all those by whom it was momentary success was cheered, this appears not to be the case.

It’s meteoric rise, you’ll recall, was the subject of a previous episode to which, if you so desire, you’re not only sincerely welcome, but enthusiastically encouraged to return. In brief, an astute collection of retail investors, by whom such sites as Robin hood and Reddit are often used, detected an abnormality in the market. These people realized the disproportionate pessimism surrounding the company GameStop, the nostalgic seller of cherished video games from whose imminent collapse, many professional “short sellers” hoped to profit. They saw that the professionals were banking on the company’s failure, so long as the company played its assigned role and, well, failed.

With an understanding of this peculiar type of “borrowing” and “betting” of which so many lay people are frankly innocent, and with a confidence in collective action by which even the tightest of sports clubs would have to be impressed, these retail investors beat the professionals at their own game. They dedicated their dollars to the purchase of GameStop stock, to which, at great loss, the short sellers were forced to respond.

The “Davids”, as we might call them, were rewarded with incalculable profits, while the “Goliaths” were burdened by intolerable loss. In response to so extraordinary an event, and, as we might suspect, fearful of so imbalanced a shift of power, the executives at Robin Hood took it upon themselves to intervene.

For them to have done so is shocking. Robin Hood is, at least so far as we were led to believe, one of the few unique sites through which, with unusual freedom and capitalistic spirit, democratized and non-commissioned trades were allowed to flow. It’s one of the only platforms by which so copious and wild an amount of transactions has been not merely facilitated, but cheerfully encouraged.

Yet, suddenly, and without the assuagement of a good reason, Robin Hood prevented its users from buying further GameStop stock. Its members were permitted only to sell the stock, no longer to buy it, thus halting the velocity of its dizzying, “short-destroying” binge.

Users of the app, upon whose soaring profits, a heavy lid was suddenly placed, protested with vehemence the injustice of so unexampled a move. Politicians, always sensitive to a corporation exerting too much power and, perhaps more than that, to the conduct of a business by which the personal liberties of their constituents are infringed, joined in expressing their displeasure.

The explanation given by the CEO of Robin Hood, while not entirely convincing, was deemed adequate to those offering scrutiny. Facing insolvency, he explained that the move was not just a temporary inconvenience, but a necessary intervention. Opinions remain unsettled on the validity of this claim, and it’ll subjected to further examination.

What’s clear is that, since that time, GameStop’s value has continued to drop. Its decrescendo is taking effect, as the law of the market so accurately preordained.

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Success, ‘tis said, yet more success begets– On the prosperous rains ever more profits. So reads the adage of the Gospel’s Jew: The iron law, the Effect of Matthew. “To him who has much, more will be