The GameStop Stock Market Saga Explainer Dictionary
In some ways, this week’s stonks story has odd historical precedent. In others, it represents a new frontier. Here’s what you need to know about shorts, Reddit, Robinhood, and the New York Mets.
“The problem right now with the $GME story,” tweeted Yahoo Finance anchor and analyst Myles Udland in reference to the stock market ticker symbol for the video game retailer GameStop, “is it’s too long to summarize so you’re forced into an infinitely-expanding-brain take to get involved.”
It’s true: Over this past week, a great deal of the chatter taking place everywhere from a shellshocked CNBC to my giddy group texts has focused on essentially one topic. That would be the meteoric rise of GameStop stock, which cost just over $4 a year ago, reached $17 at the start of this month, and closed Thursday at $193.60—which is, somehow, way down from its high this week of $483!—thanks in part to the efforts and enthusiasm of a loosely organized but passionately collaborative Reddit community of trading (and chicken tender) enthusiasts.
What stands out about so much of this discussion is that it isn’t even actually about GameStop qua GameStop; it’s about all the other things in its orbit that have upended and enlivened the financial markets in equal measure. The company’s stock rise, as well as the similar trajectories of a few other stocks that have become contrarian online darlings, has highlighted the mainstreaming of absurdity, the power of scrappy community, and the banhammer of institutional heft. It has caused the abrupt and widespread shutdowns of e-tools originally designed to democratize participation in the stock market. It has captivated even those who don’t know or care what a share of stock is.
Past performance is not indicative of future results, as the cover-your-ass phrase in small print at the bottom of any investing material goes. That phrase is especially relevant now. This week has odd historical precedents in some ways, ranging from a global nutritional supplements pusher to a beloved German automobile brand. In other ways, it represents a new frontier. This market event has aligned the memelords with Senator Elizabeth Warren. It pits Beavis and Butt-Head–like chuckling over the numbers 420 and 69 against a $13 billion hedge fund on the brink of total collapse. The New York Mets, Charlotte Hornets, and Florida Panthers all have ownership ties to what has gone down. Other market participants bear usernames like “Thicc Dads Club” and “stonksflyingup,” or send tweets to their 3.4 million admirers about setting an alarm to wake up early for another day of that #EatTheRich lifestyle.
This story is both whimsical and super serious, funny and alarming. We are all GameStop, in some respect. Below is a glossary of terms, people, and organizations that have some relevance, from the core to the tangential, to the GameStop tale that, as I type this, is still being written.
activist shareholder (n.) — A participant in an age-old parlor game among the rich and/or influential in which one does not simply plunk money into the shares of publicly traded companies—one wields those shares like a weapon. This can involve buying up enough of a company’s stock to suddenly hold operational sway out of a genuine sense of passion for the turnaround business; it can also be a vengeful act of pettiness against an old rival.
AMC Entertainment (n.) — One of several companies—others include Nokia, BlackBerry, National Beverage (which has the satisfying ticker symbol FIZZ), Bed Bath & Beyond, and, of course, GameStop—whose stock have soared multifold since the start of 2021 due in large part to the whimsical sentiments of the stocklords on Reddit. On January 1, you could buy a share of AMC for $2; at market close on Thursday, it was trading at more than four times that. Like other companies that have garnered online attention of late, AMC is a nostalgic legacy brand. Its prospects are looked down upon—and largely bet against—by institutional “smart money.” And yet it does have some post-coronavirus-vaccine potential, and what’s more, its fortunes have been brightened by its stock’s recent moves. The company hopes to take advantage of its strange run to raise funds that could legitimately help it get back on track.
AMC Networks (n.) — A TV content creator and distributor that trades under the ticker symbol AMCX and, notably, is not the same company as AMC Entertainment, which trades under the ticker symbol AMC. That didn’t stop both stocks from getting swept up in the tides of this week’s frenetic market moves, a slapstick stock market situation that saw The Other AMC go from a price of $35 at the start of the year to as high as $64 earlier this week. (It’s since dropped to about $48.)
BlackBerry (n.) —That tiny totem of Wall Street past that became one of the ascendent retro-stocks wreaking havoc on the market’s present. Miss u, boo!
Burry, Dr. Michael (n.) — The former physician and current investing savant (and, in now-deleted tweets, recent stop-the-stealer) who was portrayed by Christian Bale in the film The Big Short for his correctly bearish call on the subprime mortgage market leading up to the late-aughts global financial crisis. In September 2019, Burry’s investment firm reported owning a 2.4 percent stake in GameStop, one of the earliest bits of momentum for the stock’s run. But on Tuesday, he told Bloomberg in an email that he was currently “neither long nor short” GameStop, and that “what is going on now—there should be legal and regulatory repercussions. This is unnatural, insane, and dangerous.”
bubble (n.) — Crazes. Mania. Frenzies. FOMO. All of these could prompt people to talk about bubbles—those fleeting, flying market phenomena in which everyone and their mothers elbow one another out of the way to get in on what’s suddenly good before it’s gone. Like their physical counterparts, market bubbles are tenuous and shining little spheres of influence, their growth fueled by a lot of hot air and their pop just a matter of time. From trade hoaxes in the 18th century to Beanie Babies and dotcom stocks in the 1990s, the logic behind market bubbles typically has more to do with what everyone else is doing than with any kind of rigorous analysis. They are the Fizzy Lifting Drinks of finance: delicious, soaring, and destructive.
BUYBUYBUY! (v.) — The clarion call of CNBC’s Jim Cramer, whose idiosyncratic, graphics-heavy, almost proto-TikTokifyouthinkaboutit, end-of-day TV show Mad Money debuted in 2005 and was in some ways the progenitor to the fantasy sports feel of modern investing. The program, designed to speak to a kind of manic everyman-from-home trader, is undeniably catchy, with its giant sound buttons—one says “mooo!” and another says “buybuybuy!”; both mean the same thing in “Cramerica”—and its enabler-on-your-shoulder vibe. When it comes to the recent market moves, Cramer has been walking a tricky line: On the one hand, he fashions himself as the voice of the small-fry. On the other, he has been a little quiet these past few days!
call option (n.) — A financial product that gives its owner the option (but not the obligation!) to buy shares of a specific asset (referred to as “the underlying”) at a specific price, usually by a specific date. For example, if you think a $20 stock is going to double in the next six months and you have $100 to spend, you could buy five shares of the stock outright and hold on. Alternately, you could buy an option contract for, just as an example, a dollar per share that would give you the right to buy 100 shares of the stock between now and that specified date at a price of, say, $30. If the stock price in this example rises beyond $30, you reap the gains. Many of the influential investors in the GameStop trade built their positions through call options with faraway expiration dates that were relatively cheap to acquire yet gave them the potential to participate in large positive movements in the stock. So when the price soared this week, well, so did their personal ledgers.
Chewy.com (n.) — The online pet products company founded and sold by Ryan Cohen to PetSmart to the tune of $3.35 billion dollars, giving the otherwise low-key entrepreneur the means through which to become an activist investor in a different, though not entirely dissimilar, company. Last August, Cohen began accumulating shares of GameStop until he was the second-largest shareholder; in November, he sent a letter to the board to share his ideas (and push for urgency) on how the business could turn around. A few weeks ago, he joined the company’s board, a job that has to feel an order of magnitude stranger today. Cohen’s involvement has been cited by some GameStop bulls as part of the fundamental positive scenario behind the company’s potential. No pressure, guy!
concern troll (v.) — To disingenuously offer intense worry on behalf of a population or person that you have never shown any previous interest in advocating for. This is a recent favorite crutch of CNBC anchors who suddenly begin every question with: I’m all for sticking it to the man, but—furrows brow, wipes single tear—won’t this leave the little guy holding the bag?
dank (adj.) — The blessed, moist state of today’s most brain-bending financial memes.
DeepFuckingValue (n.) — The Reddit username of an investment influencer who is also known as Roaring Kitty on Twitter and YouTube and who posts informative, forthright, spreadsheet-laden content about his ideas and trades with a legitimate seriousness that has been overlooked by a market establishment that dismisses Reddit users as unserious. One idea that /u/deepfuckingvalue began discussing around September 2019 was a long position on GameStop. At the time, he reported putting around 50 grand on long-dated call options for the stock. In the wake of the stock’s movement, that initial $55,000 investment and some subsequent infusions have snowballed into what was, at one point earlier this week, a $50 million on-paper sum. On Twitter this morning, he posted a photo of a stoned Elon Musk with the ticker symbol $GME.
diamond hands (n.) — Sort of like balls of steel, but more expensive; a phrase most often deployed in emoji form by r/WallStreetBets contributors. People who have diamond hands will remain unscratched in the face of sharp market turns, the mentality goes, whereas those who have the dreaded “paper hands” will get all cut up. This one has some great mainstream potential; it’s easy to imagine Jon Gruden going on about diamond hands and “game stoppers” at Raiders training camp next season.
$420.69 (n.) — A novelty price at which some cheeky investors enjoy entering limit orders with their brokers: basically, standing instructions to automatically sell (or buy, if you’re nasty!) a target stock should it happen to hit this magical level. As GameStop momentarily climbed past $420.69 Wednesday before ticking back down, some enthusiasts suggested a new and more ambitious numerical aim: $69,420.
The French Revolution (n.) — A bloody overthrow of the Ancien Régime in 19th-century France, and a corollary to this week’s market events, according to Anthony Scaramucci.
galaxy brain (n.) — A sublime state of supernova that can only be reached by ascending through cosmic layers of take after take, each more tightly wound and head-exploding than the last, from the normie to the nerdy to the conspiratorial to the, uh … horny?
gamma squeeze (n.) — I’m not Margot Robbie and I’m not in a bathtub, so I’ll let Nope, It’s Lily explain!
GameStop (n.) — The video game retailer headquartered in Grapevine, Texas, and also in our hearts. With more than 5,000 store locations where video games and other gamer paraphernalia are sold (and bought back, one by one, at a steep discount, as other customers wait interminably in line and eventually leave without buying anything) GameStop is a business with distant familial ties to both Ross Perot and Barnes & Noble. The company’s fortunes have suffered lately as video games have become increasingly digitally administered and malls have stopped being cool. The business’s CEO is George Sherman, who seems to have a type: His previous work stints have included being at the helm of “one of the largest authorized retailers for Verizon” and briefly running Advance Auto Parts. GameStop is but a humble—really humble—steed.
hedge fund (n.) — Back in the mid-aughts, as hedge funds were rising to the heights of their pre-financial-crisis prominence, The New York Times regularly described them with a phrase that is now burned into my brain: “loosely regulated pools of capital.” With hedge funds, those pools of capital are generally filled from the bank accounts of exclusively “accredited investors,” such as business entities or individuals with upward of either $200,000 in annual income or $1 million in net worth. And those loosened regulations enable the funds to use this money in ways that more traditional consumer offerings like mutual funds cannot. They can put money into illiquid, thinly traded, bespoke assets, like renewable energy infrastructure or cryptocurrency or land in Patagonia. They can dabble in bond or derivative markets, or create algorithmic, quantitative trading models. They can act like a classic activist investor. Or they can try to profit off the predicted implosion of companies like GameStop.
Herbalife (n.) — A multilevel-marketing nutraceutical company that serves as a good reminder that activist, market-bending, wild-ride events are nothing new, nor are they the provenance of mighty online hordes. Sometimes they’re slapfights between two white-haired men! In 2012, activist billionaire investor Bill Ackman took an enormous short position on Herbalife to the tune of a billion dollars, publicly laying out his bearish case for why the company was a “sophisticated pyramid scheme” that would ultimately become worthless. Within months, another activist moneybags, Carl Icahn—who was still nursing a grudge that dated back to a 2003 legal feud over a realty company—began amassing huge ownership in the stock, basically to fuck with his rival and drive the stock higher. This led to some excellent television; after years of financial combat, Ackman was forced to concede.
HOLD THE LINE (v.) — A mantra about staying strong in the face of market volatility; a sort of intersection of Game of Thrones’ Hodor and Bitcoin’s HODL; an affronted directive issued by a once-again bamboozled and hoodwinked Ja Rule on Thursday.
the invisible hand (n.) — A notion coined by Enlightenment philosopher and economist Adam Smith that attempts to capture, in a sense, the power of the self-interested. Smith sought to describe how each individual’s profit-seeking actions could accumulate and interact in a way that would (theoretically positively) impact the greater economy and society. I visualize it like hands on a Ouija board. Anyway, the phrase has come up a lot lately to describe the unseen forces of capitalism more broadly, usually in a manner alive with righteous disdain.
Left, Andrew (n.) — A vocal analyst at Citron Capital, a hedge fund that largely focuses on using short-selling and other tactics to profit off companies it thinks are overvalued and set to plunge. Last week, Left posted a video to YouTube explaining why he was shorting GameStop, then a $40 stock; he felt it was worth about half that. His video became something of a catalyst for the stock’s subsequent neener-neener rise. While he admitted this week that he had a rare cigarette out of the stress of watching the stock, Left stuck to his stance. “This is an old-school, failing-mall-based video retailer,” he told Reuters Tuesday. “And investors can’t change the perception of that.”
Levine, Matthew (n.) — The finance writer GOAT; the finest newsletter writer of our generation; a man who combines the accessibility of Michael Lewis with the verve of Choire Sicha and who has coined essential overarching concepts such as “everything is securities fraud.” He has been all over this GameStop stuff, because he is always all over everything. You should subscribe.
mall (n.) — An ancient hall for gathering, commerce, and Auntie Anne’s pretzels, once patronized by a now-collapsed civilization and now used for endeavors like vaccine distribution and unsettling apartment developments. GameStop’s ancestral home.
Melvin Capital (n.) — The once–$13 billion hedge fund helmed by 42-year-old Gabe Plotkin, who named the business after his grandfather when he founded it in 2014 and who later became a minority owner of the Charlotte Hornets by Michael Jordan five years after that. Melvin’s big bet against GameStop became a target after being sussed out by eagle-eyed investors last fall and has now put the entire fund’s existence at risk.
Musk, Elon (n.) — The PayPal and Tesla founder known for moving the markets with a tweet about homemade Marvin the Martian dog helmets; antagonizing the SEC; having a cultlike following of true believers; making literal moonshot claims; and outright despising anyone who isn’t unconditionally stoked about the growth prospects or profit streams of his businesses. On Tuesday night, a “Gamestonk!!” tweet from Musk led to a new surge of interest in $GME; by Thursday, he was back to his happy place: musing online that “shorting is a scam.”
The New York Mets (n.) — The Major League Baseball team about which there is always an angle, you know? The aforementioned Melvin Capital was a fund launched by a protégé of Steven A. Cohen, the billionaire new Mets owner who took over the team from a past ownership group whose financial woes—it had exposure to Ponzi schemes not once, but twice!—had long frustrated fans who wanted the owners to spend more lavishly on talent. When Melvin’s ship began sinking, a few hotshot trading firms, including Cohen’s fund Point72 and the mighty behemoth Citadel, infused $2.75 billion to help bail it out. Mets fans woke up nervous Wednesday, worried that GameStop’s continued rise might wipe out that bailout cash and threaten the state of the Mets roster. Their worries are certainly unfounded, and yet extremely understood: The team needs to lock in Francisco Lindor, after all!!!
overstock.com (n.) — The online low-price warehouse helmed by a man who has made it something of a personal mission to destroy any short-sellers who express even the slightest doubts about his life’s work. Honestly, even writing this blurb makes me nervous that a man on a Go-Ped scooter is about to ride up behind me.
Palihapitiya, Chamath (n.) — An early Facebook engineer who is now the outspoken and sometimes-contrarian CEO of the venture firm Social Capital and who was part of the run-up of $GME when he decided on Twitter to go large into the stock. (He exited out of it soon after, and said on TV that he donated the proceeds to a Barstool Sports fund supporting small businesses.) On Wednesday, Palihapitiya participated in a rip-roaring and eminently watchable exchange with CNBC’s Scott Wapner in which he railed against the rigged game of high finance, defended the intellect and rigor of online stock-market enthusiasts, and expanded upon his plan to run for governor of California should an attempted recall campaign against Gavin Newsom come to fruition.
Portnoy, David (n.) — The founder and ringleader of the Barstool Sports empire, who in the past year has shared his journeys in day trading and become one of the most visible and enthusiastic leaders of an amorphous and online investment army. He tweeted a GIF of Mel Gibson mouthing the word “HOLD” Thursday morning as GameStop stock dropped from its record levels, and he recorded numerous videos throughout the day railing against the decision by several trading platforms to halt transactions in the meme stocks du jour. (“Legitimate questions that deserve answers,” responded Cohen to Portnoy, just to truly complete this bizarre loop.)
pump and dump (n., v.): A term for the Boiler Room–style scheme of hyping up a position in a small, largely unknown stock with what are often fraudulent, hyper-exaggerated statements and intrusive marketing practices before getting rid of it all and leaving your marks holding the bag. Some see the GameStop saga as a pump-and-dump scenario; others argue that it’s what happens when investors, some rowdy and some earnest, play around with the power of DGAF collaboration.
retail (adj.) — A word describing both the troubled realm that GameStop operates in—that old, crumbling shopping mall paradigm, whose downfall was already in motion well before the pandemic—as well as the description high-finance types use to refer to ordinary, civilian, relatively small-scale “retail investors,” typically with performative worry at best and outright dismissiveness at worst.
Robinhood (n.) — A stock-trading app founded in 2013 that makes investing feel kind of like scrolling Instagram: Using it is at once easy (and oddly soothing?!) while also being jealousy-inducing and potentially destructive. Some of Robinhood’s most appealing and “democratic” features, from giving users the ability to buy stock shares by the fraction to charging no commissions, are possible because of its relationships with top-level businesses. The app makes a good deal of its revenue by operationally routing all its orders—and the market flow insights they carry—to high-frequency trading firms like Citadel Securities and Virtu Financial, in exchange for money. (Virtu is founded and chaired by Florida Panthers owner Vincent Viola.)
Robinhood’s ease of use helped introduce a younger generation to the stock market, but in the past week, it has been under enormous pressure to shoulder a crush of new interest and extreme volume. On Thursday morning, the app stopped allowing users to buy several hot stocks, including GameStop, AMC, Nokia, and BlackBerry, in a decision that will likely be the subject of long-lasting ramifications and debate. The lawsuits, congressional inquiries, and AOC tweets have already begun.
r/WallStreetBets (n.) — The boogeyman, the town square, the invisible hand, the hive mind, the bulletin board covered with string, the victory headquarters, the vibrant and now sprawling Reddit community of passionate market participants whose investment philosophies range from the deeply researched to the pure dopamine. A misunderstood miasma of the brilliant and the bored, the denizens of WallStreetBets may not ultimately be the David to Wall Street’s Goliath that they are made out to be; there are plenty of deeply pocketed intermediaries profitably and quietly interfering in the fight. Still, WallStreetBets is a genuine movement that demonstrates the organizing power of relatively small individuals, and a cat that isn’t going back in the bag anytime soon.
SEC (n.) — The U.S. Securities and Exchange Commission, the regulatory body for the financial markets whose response to all of this—bring the hammer down on the capabilities of small investors or crack down on the biggest institutional players in the market?—will be closely watched by everyone from Elizabeth Warren to r/WallStreetBets.
short (adj., v.) — A mechanism through which one attempts to make money off a stock by betting that its value will go down. Investors initiating a short position first borrow the stock from someone else, via a broker, and promise to get it back at some vague point in the future. Then they sell that borrowed stock at the current market price—in this case, say $100—and wait with tented fingers for the price to plunge. (At this point, they also have a tendency to start criticizing the business in public a lot.) If the stock plummets, say to $10, the investors can buy it back on the cheap, returning the stock to the lender and profiting from the difference ($90). Yet the tactic carries theoretically infinite risk, especially if there is a short squeeze.
short-shorts (n.) — In July 2020, Tesla launched a novelty campaign featuring a pair of tiny red satin short-shorts as a way to garner popular enthusiasm against short sellers of the electric car company’s stock. They cost $69.420 to buy.
short squeeze (n.) — In a weird way, a short squeeze has the same energy as a bunch of mobsters sidling into a bar, grabbing someone by the lapel, and remarking: “Nice place you got here. Be a shame if something happened to it.” Except in this case, the people making the threats really do think, on some level, that the place is nice! And they aren’t seeking to burn it down—after all, that’s what a short seller wants!—but to jack its value up. For a short seller who sold a borrowed stock and ultimately has to buy it back on the market to return it, “up” is a worst-case scenario. Because there’s no limit to how high a stock can soar, there’s also no limit to how screwed a short seller can get—particularly if a bank asks them to fork over evermore collateral to cover their mounting losses. If people start buying up a stock en masse, the price curves can escalate sharply and catastrophically for investors who shorted it. Short squeezes over the years have ranged from a battle over southern grocer Piggly Wiggly in the 1920s to the Herbalife catfight to a drag race between Porsche and Volkswagen.
stock jockeys (n.) — Stevie Cohen’s term of endearment for the zealous investors all up in his menchies.
stonks (n.) — STONKS!!!!!!!!!!!!!!!!!
tendies (n.) — Disclaimer: Trying to define this runs a real “hanging on the flippity-flop” risk. But I’ll forge ahead. Chicken tenders are a recurring visual and literal theme among the WallStreetBets community. They are dipped in champagne in celebration. They are lovingly referred to as tendies. This all makes sense, because really the celebratory foodstuff is no different than its cousin, legal tender. Both are a form of currency as well as a trophy all their own. IYKYK.
to the moon (prep. phrase) — The bullish, Buzz Lightyear–core rallying cry frequently seen on Reddit or Twitter, typically accompanied by between two and five rocket emojis. The thinking poster’s version of “BUYBUYBUY!”
Volkswagen (n.) — The carmaker and target of one of the biggest short squeezes in financial market history, a move orchestrated by the Porsche holding company in 2008 that led to a merger of sorts. See, it isn’t just retail investors who like to get aggro and wreak havoc!
The World Wide Robin Hood Society (n.) — A wholesome consortium of Nottingham-based enthusiasts who are thrilled to e-welcome you to Sherwood Forest but would also like to let you down gently that they are not “the Robin Hood App.”
Yellen, Janet (n.) — The U.S. secretary of the treasury, who is currently “monitoring the situation” around GameStop, according to the White House. Or is she?
YOLO (idiom) — An acronym. An ethos. A mission statement. An index of various let’s-take-it-to-the-moon stocks—which, as of this writing, remains up.
