There was at least an initial logic to the first Gamestop bubble. If successfully executed, it is possible to make a great deal of money out of a short squeeze. This time, however, we are in pure delusional money territory.
“It’s a marathon, not a sprint. Whatever happens resist the urge to sell. The longer we hold the higher it goes,” said @catchme1fyoucan, an Italy-based user of retail trading platform eToro, in a discussion on GameStop.
For many, perhaps most, of the investors this time around, the lesson of the first bubble was exactly the wrong one. They believe they drove the stock up because of the rightness of their cause and the power of their will, and the only reason it went back down was a loss of faith.
The details of this surge don't do much to help clear things up for us non-believers.
One explanation was a tweet from activist investor Ryan Cohen, who is a major shareholder in GameStop and was appointed as a board member as part of an attempt to reverse the company’s ailing fortunes.
Mr Cohen is known as “Papa Cohen” on the Reddit forum, and is known to have a significant holding in the company. That means that his tweets have a particular pull for those who follow the stock – even if they might be largely incomprehensible to others.
One such tweet was posted by Mr Cohen on Wednesday evening. It showed a McDonald’s ice cream cone and was accompanied by a frog emoji.
Soon after that post, the shares began to surge. It is impossible to say definitively whether there is any connection between the stock price and Mr Cohen’s tweet, but it at least focused new attention on the GME shares.
In case you were wondering if the description leaves something out...
While we don't want to push the analogy too far, we live in a time of movements based on finding hidden messages in cryptic tweets. By the QAnon standard, buying Gamestop at $265 hardly seems crazy at all.
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