For eight days I have dwelt in the halls of Wall Street.
Robinhood buys were restricted for days…
Why did Rocket return to WSB?
In 2019, a freelance day trader named Keith Gill decided to launch a campaign to save GameStop, which was being targeted for demise by Wall Street short-sellers. He bought a large position of the stock when it was $4 and began talking up his campaign on Reddit as “deepfuckingvalue” and on Youtube as “Roaring Kitty.” Gill believed if enough gamers joined this crusade, they might push value, possibly as high as $50. In August, 2020, he began promoting the idea of squeezing the hedge fund short sellers who had highly-leveraged positions and shorted over 100% of the stock. He urged his fans to “hold the line, because we set the price.”
Millennial gamers (as well as many GenX and Boomers) joined this campaign en mass (and suddenly Gill’s shares were worth millions), but it was not until Elon Musk tweeted “Gamestonk,” that value jumped from $70 to $400. Gill’s shares were now worth around $50 million. That’s when Robinhood (run by Vladimir Tenev) suspended sales because so many were buying the stock, crashing value to $150. The reason they gave was concern over meeting SEC requirements, not any liquidity issues, but two days later they got a billion dollar infusion. There seems to be a link between the major shareholders on Robinhood and the hedge funds short selling GameStop. Gill, meanwhile, nonchalantly posted a screen shot of his position, indicating he had sold zero stock and made no attempt to take profits from the surge. His gamer army quit Robinhood, migrated to Vanguard or Fidelity or some other brokerage, and kept buying the stock until it rebounded over $300.
This is not some normal situation. The gamers are refusing to sell their shares, what they call “diamond hands.” The short sellers won’t back down either. They have lost $19 billion so far and stand to lose a whole lot more. They can’t understand why these kids won’t take 5,000 percent profits (what the gamers call “tendies”) and go home.
Wall Street will likely never be quite the same as this group has grown into the millions and they now represent one of the most powerful hedge funds in the world, only they are decentralized and democratic.
Well, not quite since Gill is the leader, and is now to the gamers like Jerry Garcia was to the Deadheads.
The most amazing thing is how they refuse to take the money and have drawn a line in the sand to reign in the predatory practices of Wall Street, which is a fixed game favoring the already rich. But there’s suddenly a new game in town. The gamers have developed their own hilariously nihilistic zeitgeist with an ever-expanding slang that has become almost impenetrable to outsiders. They call each other “autistic retards” as a badge of honor. The best I can correlate is this is similar to black use of the “n” word. They call stocks “stonks.” They talk of somebody’s wife’s boyfriend, which has become an endlessly running gag. The last week, however, the community got an amazing jolt as millions upon millions flowed into their coffers. Then Robinhood cut the wind from their sails.
While a few boomers, like me, immediately sold all shares, I was so shamed afterwards by my millennial son, that I bought back in with diamond hands after spending a few hours at r/wallstreetbets. I sent a tip to Keith immediately, not realizing it was a faux pax. He doesn’t want tips and prefers you buy stock instead.
You really have to go to r/wallstreetbets to get a sense of how passionate these crusaders are.
Not financial advice. I just like the stonk.