Markets are no strangers to “black swan” events, including the 2001 Dotcom Bubble and the 2008 Financial Crisis. A “black swan” event is typically described as one that is unpredictable but, in hindsight, becomes obvious. The GameStop (GME) craze is another great example – and one that author Ben Mezrich takes readers through in his book, The Antisocial Network.
Mezrich looks at the stories of big shot CEOs and hedge fund founders – from Kenneth Griffin (Citadel), Elon Musk (SpaceX), and Gabe Plotkin (Melvin Capital) – to those of nurses and college students, all of whom invested in GameStop. He provides readers with the chance to take in the heart-racing turn of events from all those perspectives, as well as the story of the man behind the mayhem, Keith Gill, better known as Roaring Kitty.
The story of GME is simple: Keith Gill fell in love with GameStop and began sharing his research and appreciation for the company on YouTube as Roaring Kitty, as well as on the subreddit WallStreetBets. As Gill’s obsession grew and GME became a meme, the stock morphed into a symbol of power, giving private investors and internet trolls alike the opportunity to shift market dynamics and overtake one of Wall Street’s biggest hedge funds. Retail investors, many of whom knew very little about stocks, began buying GameStop to squeeze out institutional investors who shorted the company. With enormously high market volatility, many trading platforms including Robinhood, were forced to block investors from purchasing additional shares of GME. However, despite potentially huge profits, investors refused to sell their shares to avoid letting Wall Street and hedge funds “win” once again.
The story of GameStop is truly remarkable. Once considered a struggling company with little hopes for revival, GameStop’s stocks skyrocketed in a matter of hours, thanks to a rally by an online Reddit. The influence of Keith Gill has also endured, as his simple “YOLO” posts and images that don’t even mention GameStop continue to spark market reactions amongst meme stocks to this day.
