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Quantfury Daily Gazette

The stonks revolution is just beginning

by

We’re getting to the point where we’re all a little sick of talking about GameStop.

The story has been told, right? A bunch of bored dudes on Reddit decided to push the price up as a lark to stick it to the man. That’s the narrative, anyway.

If you talk to the average person on the street – people that aren’t checking their trading app every 14 seconds – they probably assume that the stock (NYSE: GME) has fallen back down as the Reddit folks got bored. Most non-financial news has stopped talking about the story, for certain. No one outside of the financial press is still writing about it.

No, it’s just seen as a prank (by a bunch of punks) that happened back in January and that will likely not have any lasting impact on the business world.

It is true that GameStop’s stalk is a bit down from the $347.51 USD high water mark it hit on Jan 27, but it’s not like its crashed down to its Q4 2020 numbers. It closed yesterday at $140.99, compared to the price of $18.84 that it ended 2020 at.

The fact that the “stunt” is still continuing into April, long after the January media hype has past, has led GameStop to file to list 3.5 million more stocks. At the current price that would raise $493m for the company, which it plans to use to help pivot more efficiently into a digit marketplace.

Basically, the “punks” and their “stunt” might have saved the company. And, that’s why we still need to pay attention to GameStop.

It’s also why we need to stop thinking of it as a prank, or a lark, or a meme. Rather, we need to view it as part of a changing investment landscape.

For multiple generations the way to properly invest was to diligently put your $150 a paycheque into your mutual fund and to then sit back, shut-up and let the experts invest your money for you. Most people didn’t care about how the sausage was being made so long as the numbers went up each quarterly statement.   

That’s fine. Many are going to do that still and there’s nothing wrong with enjoying safe, predictable returns and dreaming of having enough money to retire at 65 and take the grandkids to Disneyland.

However, for many, that’s not enough.

For those people, they want more control over the investing process. That’s why most of you are here. You want to make your own choices and what matters to you is going to be different than what matters to a hedgefund manager.

Although choices are going to differ from person to person, in general, the individual investor is going to want to invest in companies that they believe in – companies that do things they like and appreciate. It’s not that the pure numbers of a company are irrelevant to the individual investor, but rather that they aren’t the only thing that matters, as is often the case with institutional investment.

People want to be true shareholders in something, rather than passive consumers of a fund. And they want the businesses that they invest in to actually have value and operate in a way that pleases them.

Many in the business world will resist this. Trying to please individuals that are interested in what the company does, rather than simply how much profit they can grind out of it, is difficult. Rather than just firing a bunch of staff to cut costs, increase profits, and cash those dividend cheques, they might actually have to add value to the world.

So, what is the GameStop story teaching us? It’s showing just how powerful individual investors are and how much good that power is for everyone.      

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