The spotlight pointed at GameStop by its ongoing stock market chaos is getting brighter by the minute.
Efforts from day traders collaborating in Reddit’s WallStreetBets subreddit to take advantage of investors gambling on GameStop’s low stock price have now escalated to the point where GameStop’s stock has peaked today at $380 a share and the White House is keeping a close eye on the situation.
“Our economic team including secretary Yellen and others are monitoring the situation,” said White House press secretary Jen Psaki in response to a press question (via Forbes). “It’s a good reminder, though, that the stock market isn’t the only measure of the health of our economy.”
Up until just recently, GameStop’s chronically low share price made it an appealing target for short sellers, or individuals who borrow shares from investors with a stake in a company like GameStop and sell them, with the expectation that they’ll be able to turn around and repurchase those shares when the stock price dips even lower and claim a profit.
There’s a longer explanation of the whole affair and a collection of other resources here, but in short the high volume of short sellers playing around with GameStop stock encouraged traders over on WallStreetBets to invest heavily in GameStop, buying up stocks and costing short sellers billions in the process.
On Monday, GameStop’s stock closed at $65.01 after setting a then-record for 2021 at $159.18 a share. Today, with just over two hours until market close, GameStop stock has danced between $249 and $380 a share as the chaos continues on.
Update: The U.S. Securities and Exchange Commission has issued a public statement addressing what it calls ‘ongoing market volatility’, presumably in regards to the entire GameStop saga, as well as similar trends spreading to AMC, Blockbuster, and other publicly traded companies.
That short statement is as follows: “We are aware of and actively monitoring the on-going market volatility in the options and equities markets and, consistent with our mission to protect investors and maintain fair, orderly, and efficient markets, we are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants.”
Update 1/28: Incoming U.S Senate Committee on Banking and Housing chairman senator Sherrod Brown plans to hold a hearing on the ongoing stockmarket debacle kicked off by GameStop’s surge, and the resulting commotion in trading circles (and with some brokerage smartphone apps).
“People on Wall Street only care about the rules when they’re the ones getting hurt,” reads that statement. “American workers have known for years the Wall Street system is broken – they’ve been paying the price. It’s time for the SEC and Congress to make the economy work for everyone not just Wall Street. That’s why, as incoming Chair of the Senate Banking and Housing Committee I plan to hold a hearing to do that important work.”
Politicians like Representative Alexandria Ocasio-Cortez have also spoken out about the reaction to the GameStop stock saga, with AOC also announcing a discussion on the issue scheduled for later today on Twitch.