3 comms lessons from GameStop’s wild ride
A gaggle of investors on Reddit banded together to drive up the price on GameStop stock—and put the squeeze on Wall Street. What should comms pros take from the episode?
The public is getting a crash course on stock market strategy this week.
A subreddit called Wall Street Bets is scoring major coverage in news outlets across the nation as it pulled a traditional “short squeeze” on Wall Street investors who had shorted the stock of GameStop, a video game retailer once ubiquitous in American malls and shopping centers.
The New York Times reported:
While the hedge funds and other professional money managers had been shorting GameStop’s shares, betting that its stock was doomed to further decline, the retail investors — online traders, mom-and-pop investors, small brokers and others — have been pushing the other way, buying shares and stock options. That caused GameStop’s market value to increase to over $24 billion from $2 billion in a matter of days. Its shares have risen over 1,700 percent since December. Between Tuesday and Wednesday, the market value rose over $10 billion.
The losses have racked up for Wall Street, with hedge funds losing billions.
The Times continued:
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