To give the simplest answer to that question: GameStop is a video game retailer founded in 1984 and headquartered in a Dallas suburb. The company enjoyed a heyday between 2004 and 2016, growing to more than 5,000 stores around the world. It then went into decline when video games shifted to online sales.
GameStop’s plummeting stock price became the subject of a great deal of Wall Street speculation. And this is what led to last week’s uproar. Essentially, a significant number of establishment investors wagered that GameStop’s stock would drop even further — a common strategy called “short selling,” or “shorting” (for short). In the case of GameStop’s stock last week, however, this common strategy was undone by others who had carefully crafted a plan.
The plan was so audacious that its success hinged on a perfect correlation of factors. But this was of little concern to the small group of social media users who began plotting nearly two years ago to accomplish what no lone small-time investor could before. They congregated on the Reddit social media platform, which bills itself as “the front page of the Internet.” The group even attracted members who wanted to bring down the entire Wall Street system.
It didn’t take more than a few minutes last week. By the time it was over, they had burst into headlines around the globe, with governments vowing investigations, brokerages halting trading, investors venting pent-up anger, and millions of people wondering where this was all leading to.
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