Roundtable Discussion: GameStop

52 week low:   $     2.57
52 week high:  $ 483.00 (last Wednesday)
Monday close: $ 225.00
Tuesday close:$   90.00 (down 60%)

What is going on with GameStop’s stock? And how have Robinhood, Reddit and WallStreetBets become such a big deal in the midst? Is this truly “Main Street” (the 99%) finally getting revenge on “Wall Street” (the 1%)?

We discuss what happened and the implications.

Part I: What exactly happened?

Let’s break down the market and regulatory mechanics, separating fact from fiction…

  • Who are the players: “Robinhood”, “Reddit”, “wallstreetbets”, and the “Shorts”
  • Secondary roles of Michael Burry/Scion, Steve Cohen/Point72, Citadel, Melvin Capital, Ryan Cohen/Chewy
  • Regulation surrounding retail trading, margin requirements, options
  • Role of clearinghouses such as the DTC and depository reserve requirements
  • Math of exponential customer and trading volume growth
  • How has “democratization” of trading changed the game? How has it not?  
  • What is the “gamification” of investing?
  • Is “shorting” stock good or bad for the market?
  • Definition of market manipulation – is it illegal?
  • Is a short-squeeze illegal?
  • What is “pump and dump”?
  • Role of Fed Reserve easing, easy money chasing returns, Fed buying bonds of all stripes

Part II: Sensationalism of the Story

  • Is this truly a modern day David vs. Goliath? Robinhood? With righteous intent?
  • A “Storming of the Bastille” moment? Proletariat take down of the Bourgeoisie? A revolution?
  • Are the “Wall Street” fat cats reaping what they have sown?
  • Or is this just another form of greed with different actors?
  • Bernie Sanders keeps saying Wall Street is rigged. Is it?
  • Are Wall Street insiders innocent of these charges?
  • “Occupy Wall Street” redux?
  • Is it all a sign of a “market top”? Are we in a bubble, that’s about to burst? Again?
watch min 3:55 sec re “fear and greed cannot be legislated away”

Part III: Implications for Believers

What Would Jesus Do?

“Come out of her, My people, so that you will not share in her sins, so that you will not receive any of her plagues” – Rev 18:4

“So he called ten of his servants… and said to them, ‘Do business till I come.'” – Luke 19:13

“As long as it is day, we must do the works of Him who sent me. Night is coming, when no one can work.” – John 9:4

“Do not conform any longer to the pattern of this world, but be transformed by the renewing of your mind.” – Romans 12:2

“Wealth from get-rich-quick schemes quickly disappears; wealth from hard work grows over time.” – Proverbs 13:11 NLT

“Now listen, you who say, “Today or tomorrow we will go to this or that city, spend a year there, carry on business and make money.” Why, you do not even know what will happen tomorrow. What is your life? You are a mist that appears for a little while and then vanishes. Instead, you ought to say, “If it is the Lord’s will, we will live and do this or that.” As it is, you boast in your arrogant schemes. All such boasting is evil. If anyone, then, knows the good they ought to do and doesn’t do it, it is sin for them.” – James 4:13-17

“But mark this: There will be terrible times in the last days. People will be lovers of themselves, lovers of money, boastful, proud, abusive, disobedient to their parents, ungrateful, unholy, without love, unforgiving, slanderous, without self-control, brutal, not lovers of the good, treacherous, rash, conceited, lovers of pleasure rather than lovers of God— having a form of godliness but denying its power. Have nothing to do with such people. – 2 Tim 3:1-5

“As it was in the days of Noah, so it will be at the coming of the Son of Man.” – Matt 25:37… eating, drinking, giving in marriage – i.e., business as usual, ignorant of the times

“However, when the Son of Man comes, will he find faith on the earth?” – Luke 18:8… persistent prayer, proclaiming the gospel in the end-times, trusting in God not lifting our soul to another

Even so, come, Lord Jesus! – John the Revelator