The GameStop Phenomenon


This post is by Brad Feld from Feld Thoughts


I expect we’ll be exploring, unscrambling, pontificating, and dealing with what is happening with GameStop (GME) for a while.

If you are reading this in the future and want some historical context for the rest of this post, this chart from the last 30 days of trading is instructive. At the end of 2020, we start at $20 / share.

30 days later, it’s at $238 / share with a high of $482 / share.

I’m not going to analyze this. I know what I think GME is worth, and it’s not $238 / share.

This morning, Fred Wilson wrote a post titled The Revenge Of Retail. It’s got a lot of good stuff in it, but plenty of things that are very different than what I’m actually thinking about today.

He ends with a recommendation.

What we need to do is stop printing money to stabilize the economy. And start addressing the real economic issues that exist on main street, not wall street. Monetary policy is not the answer. Fiscal policy is. That won’t stop more Game Stops from happening. They are a by-product of markets. But it will get the money to where it is needed versus where it is just gameplay.

I’m more interested in the 2nd, 3rd, and 4th order effects instead of the financial and market dynamics. For example, from Fred’s post.

The generational aspect of this is important. Boomer hedgies getting crushed by young folks self-organizing in social media. It feels like a (Read more...)