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January 2021 Retro Gaming Article


January 28, 2021 Retro Gaming Blog Post:

GameStop is front & center in a huge news story having nothing to do with video games

GameStop stock leap
It would be nice if the silver lining to this astronomical stock price rising was a boon for GameStop, but that's unlikely
A hedgefund taking advantage of GameStop's poor standing in the market decided to option the stock and bet against any rise in their stock value. In fact they were betting on further demise for the video game reseller's prospects - called "shorting" the stock. A savvy bunch of investors summoned the masses to show the power of the "little guy" in the stock market. A large cavalcade of low-key investors used apps and web sites to purchase GameStock Stock. Lots of it!

The result was a hugely distorted rise in the stock value. For many, this is funny. For the hedgefund, it's disastrous. Rather than pocketing a ton of cash for the diminishing GameStop company, they have to pay back it's newly distorted value which has nearly quadruped (I believe) as a result of renegade buying.

GameStop Has Been Floundering For A Long Time

Each time a GameStop employee asks me if I want their extended warranty on a game purchase, I wonder if they'll even be open for business the following week. They're not doing well, financially. We've seen them go through many stunts to reinvigorate the brand and it's retail & online business. Even a holiday season of new Sony and Microsoft game consoles didn't help them a whole lot.

The purchase of the stock was to show the mighty hedgefunds that small investors, banded together, are a force to be reckoned with. but are they gamers? Did they do this to fend off a financial assault of GameStop? Was this stock choice simply a show of force to Wall Street? I wish I had answers to this. But this is also where the story takes a dark turn.

The Dark Reality Of Big Business

As GameStop's stock price rose and rose, the panicked hedgefund had to protect itself. It had to ensure it would be able to meet the monetary demands of this option gone wrong. But who owns hedgefunds? Really owns them. Depends on them. Controls them. It's big corporate businesses. The kind of businesses that donate millions to political campaigns (as a form of bribery). These guys have power beyond anything you can imagine, but they usually use this power behind the scenes, making it seem like business as usual.

Big Business relies on you, but does NOT care about you!
This story is anything but usual. If water is leaking into your basement, you can bail it out from where it is collecting or you can stop the flow of water from above. Curbing the out-of-control rise in price was done from above.

Mysteriously these consumer apps and sites used for low-key trading suddenly stopped working. Maintenance issues and unplanned down-time messaging was foisted on traders who wanted to buy more GameStop stock, but couldn't. They couldn't buy or sell anything! Big Business stepped in and shut off the leak - so to speak.

The nefarious evil behind this move is they stepped in to save the rich. This trading went on until it was deemed time to stop the leak and they turned off the ability to buy stocks. One app that was singled out was Robin Hood. It's a mobile trading app and it's ability to buy more shares was stopped.

Think of this in a different metaphor. What if a global pandemic caused a severe food shortage? In this same scenario, food deliveries to wealthy areas would remain intact. Deliveries to rural and poor areas would cease. Big business would starve the poor to feed the rich. Have you heard the expression: Eat the rich"?

What About GameStop?

None of the new stories address the outcome of this stock war on GameStop - or other companies that are now being targeted with similar buying strategies. GameStop has been on the brink of ruin for many years and the hedgefund's actions would likely have sent it into closure. But what about now? The vastly overstated value of it's stock will fall. The value was based on a buying frenzy that had no basis in the reality of the company.

GameStop did nothing to bolster or improve their financial standing. The stock buys were to show the strength of the little guys - and it worked. But at what cost? So, once the battle is over, what becomes of GameStop? The fact that news outlets are not covering this aspect of the story makes me feel as though the game retailer will go back to survival-mode and try to remain open.

The scary thing about this story is the way in which consumer's ability to buy stock through means like RobinHood were so easily "disabled" to save the wealthy. Big Business took from the poor to save the billionaires. Never believe the US Government is here to help "the people". It's a tool for the rich. Nothing more.



One Final Thought

A global pandemic has destroyed vast majorities of our lives and livelihoods. During the year, the US Government has given citizens a total of $1,800. That's little more than cost of a single month's rent and food. In a matter of days the same Government halted the ability to buy stocks - as a measure to protect the rich billionaires. Common citizens will never be a priority to the US Government unless you interrupt the transfer of wealth to the wealthy 1%.

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