By Jack Kelly
The pandemic brought upon us a lot of lunacy. One of the weirder quirks of the covid outbreak was that people found themselves stuck at home with time on their hands and unemployment and stimulus checks in their pockets.
After binge-watching everything on Netflix, many turned into day traders. It offered a thrill to break the tedium and earn some much-needed cash. A massive stock buying frenzy ensued, spurred on by social media sites. Hordes of younger Millennials and Gen-Z started trading stocks and options with their “stimmy” checks.
The social media-induced stock-fever was stoked by the over five million dudes on Reddit’s WallStreetbets and Robinhood’s list of fast-moving stocks. Young Tik Tok and Instagram wanna-be Gordon Gekkos (the main character in the movie Wall Street) became instant stock market analysts and prognosticators.
A handful of “meme stonks” went parabolic due to the buying frenzy and subsequently nosedived. Robinhood prohibited trading in these ‘story stocks’ and was accused of causing massive losses, inspiring a number of lawsuits.
Hedge funds were accused of being bad actors and accused of possibly illegally selling stocks short to crush targeted companies such as GameStop and AMC Entertainment. The mob of novice traders stands accused of allegations of running a ‘pump-and-dump’ scheme to manipulate the markets.
It seems that Congress, bored of impeaching Trump, now has new villains to pursue. Reddit CEO Steve Huffman, Robinhood co-CEO Vlad Tenev, and Keith Gill aka Roaring Kitty aka Deep Fucking Value, Gabe Plotkin from Melvin Capital, and hedge fund Citadel’s Ken Griffin are all on the witness list for an upcoming hearing before the House Financial Services Committee.
According to a release from Chairwoman Maxine Waters (D-CA), the hearing, entitled “Who Wins and Loses When Short Sellers, Social Media, and Retail Investors Collide” will take place February 18. The goal is to find out what the hell is going on in the stonk (yeah, that’s not a mistake, ‘stonks’ is the goofy name the wacky traders refer to stocks) market?!
The New York Times reported that Roaring Kitty invested $53,000 in GameStop stock back in 2019. Mr. Kitty tweeted and posted videos promoting the stock. His investment was believed to have boomed to around $48 million. Since the stock precipitously plummeted, it’s not known if he sold his position before it crashed and burned.