The Ringer - Everything You Need to Know About the GameStop Story2021-03-01T06:30:00-05:00http://www.theringer.com/rss/stream/220494302021-03-01T06:30:00-05:002021-03-01T06:30:00-05:00How Neopets Predicted the Future of the Social Internet
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<figcaption><a class="ql-link" href="https://alyceaill.com/" target="_blank">Alycea Tinoyan</a></figcaption>
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<p>Twenty years before Reddit users waged war against Wall Street, Neopets users led their own stock market revolution. It wasn’t the only way in which the site offered a glimpse of our online experience to come.</p> <p class="p--has-dropcap" id="3XebWc">Lindsey DeSilvio was 11 years old when she realized that the stock market might be rigged.</p>
<p id="o9zXHd">No, not that one. The one on the website Neopets, where in the heady days of 2000 trouble had broken out on the Neodaq stock exchange.</p>
<p id="liWkUj">Neopets, the then-fledgling digital pet website, had rapidly become a hit following its 1999 launch: Just two years later, the site was celebrating 14 million accounts; by 2005, that number had climbed to <a href="https://electronics.howstuffworks.com/neopet.htm#pt3">92 million</a>. In the site’s early years, <em>The Guardian</em> dubbed it “<a href="https://www.theguardian.com/technology/2002/oct/31/games.onlinesupplement">an online hybrid of Pokémon and Tamagotchi</a>,” which made sense: Like its fellow ’90s sensations with similarly youthful fan bases, its central conceit was that a player would adopt and care for digital pets. But with its emphasis on forums, direct messages, and friend lists, Neopets was an inherently chatty, communal place—in other words, a social network, and a massive one at that.</p>
<p id="y8wd0x">By 2000, Neopets was dotted with guilds—small, private groups that users could join to chat about shared interests. With 40 percent of users under the age of 13 and another 40 percent between 13 and 18, many of those early-aughts passions were what you might expect: <em>The Lord of the Rings</em> and Britney Spears were common themes; one guild called “In the middle (school that is)!!!!!” described itself thusly, “Need a help line? One for homework, school, dating, sports, and other stuff as well (even parents)??? Well then, this is the guild for you!” Some players swapped tips about the site’s beloved Flash games and how to make personal pages colorful and expressive. And there was plenty of discussion about a most untweenly obsession: how to become a millionaire. </p>
<div class="c-float-left c-float-hang"><aside id="BMY8Xs"><div data-anthem-component="readmore" data-anthem-component-data='{"stories":[{"title":"How ‘Animal Crossing’ May Have Informed the GameStop Stock Rush","url":"https://www.theringer.com/2021/2/9/22271651/gamestop-stock-amc-animal-crossing-wall-street-bets"},{"title":"The GameStop Stock Market Saga Explainer Dictionary","url":"https://www.theringer.com/2021/1/28/22255294/game-stop-stock-market-saga-robinhood-wall-street-bets-reddit"}]}'></div></aside></div>
<p id="t10f6F">If you once considered yourself a Neopian, it’s likely the games that you remember best: the <em>Snake</em>-esque thrill of <em>Meerca Chase</em>, the falling cones of <em>Ice Cream Machine</em>, the conspicuously branded corporate partnerships like <em>McDonald’s: Meal Hunt</em>, which at the time raised eyebrows for the use of then-novel immersive advertising—a phrase that Neopets trademarked. But many of the games weren’t exactly <em>games</em>, at least not in the sense of being something that you might find pre-installed in a school computer lab. Alongside the match-three and pseudo-<em>Tetris</em> options, there were contests dependent on chance and built around gambling with the site’s in-game currency, neopoints. There were wheels you could pay to spin for the slim chance of winning a jackpot, plus slot machine and tombola giveaways. (Following parental outcry, the site “<a href="https://www.wired.com/2005/12/neopets/">limited access to its roulette, blackjack, and slots to players 13 and over</a>,” according to a 2005 story in <em>Wired</em>.)</p>
<p id="eGTwLc">If it was a <em>really</em> big payday you were after, there was no better place to turn than that ultimate adult playground: the stock market, where players could buy shares of companies like Balthazar’s Faerie Bottling Inc., Cybun Electromatics, and Unis Beauty Salon, whose value rose and fell over time. </p>
<p id="bwtMgj">“As a fifth-grader, I had set up extensive spreadsheets in Excel to track Neodaq stock market prices daily so that I could pick up on stock patterns, and buy low, sell high,” says Neelou Etesami, a 29-year-old former Neopets player who is now studying biomedical science at graduate school. “I ended up becoming a neomillionaire fairly quickly this way, and my friends saw me as some sort of neopoint baron.”</p>
<p id="Jn4Qwj">For some, merely becoming a neomillionaire wasn’t enough. Enter the guilds. Twenty years on, specifics are hard to come by, but everybody interviewed for this story agrees on this: The system Neopets used to determine the stock prices each day was initially tied to player activity in some way. According to Jellyneo, a Neopets fan site, the original market generated prices <a href="https://www.jellyneo.net/?go=neopian_stock_market">fairly linearly</a>: “Years ago, the Stock Market was actually influenced by how well certain Neopian businesses did; for example, Hubert’s Hot Dogs stocks went up and down in value depending on how many items the shop of the same name sold.” </p>
<p id="23BdbH">Somewhere along the way, an enterprising guild member figured out the system and began rallying fellow guild and message board members to join in on the quest. Stock prices soared. Timely investors got rich. The Hubert’s Hot Dogs of the world—not to mention Neopets administrators, Neopia’s stand-in Securities and Exchange Commission—were left scratching their heads. In other words: Two decades before Redditors <a href="https://www.theringer.com/2021/1/28/22255294/game-stop-stock-market-saga-robinhood-wall-street-bets-reddit">waged war on Wall Street</a> through the unlikely vessel of GameStop stock, the kids of Neopets happened upon a similar strategy.</p>
<p id="lEi2ZX">In 2002, a player who went by webman88 <a href="http://www.neopets.com/newnt/index.phtml?section=4314&week=29">wrote lovingly</a> of the Wild West days that followed this Neodaq stock market discovery. “People would artificially inflate stocks as a guild making everyone millionaires, even some billionaires,” he wrote. “If you asked someone rich, they would probably buy you anything. Everyone was happy because Neopia was a better place back then. I would label this time period as the Prosperous Era.”</p>
<p id="92KhUF">Plenty of players found themselves brushing up against the Neopets Gilded Age. While DeSilvio says she wasn’t involved in the market shenanigans herself—again, she was 11—she was aware of rumors that concerned Neopets staff members had begun to monitor some of the site’s trade message boards, where shadowy schemes had started to take off. In a bid to outsmart the monitors, ne’er-do-well Neopian traders began to migrate to less obvious places—like the roleplaying board where DeSilvio spent much of her time. “This was back in the day so typing st0cks or st**o**cks was enough to get past the screen,” DeSilvio says. “So I was a child trying to roleplay my Shoyru”—a baby dragon of sorts—“hanging out in a forest and British grown-ups would come on to scheme some insider trading.”</p>
<p id="gDDZir">Neopets is now a punch line for adult millennials, many of whom got their online sea legs by dressing up their Aishas or hunting for bottled Faeries. Yet however unlikely it may have seemed at the time, Neopets predicted the financial saga that would dominate the news cycle two decades later. And the stock market wasn’t the only way in which Neopets offered a glimpse of the future.</p>
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<p class="p--has-dropcap" id="V6fd59">A stock market might seem like an unusual feature for a game like Neopets, but it was always part of the plan. The site’s creators—the now-married British duo of Adam Powell and Donna Williams—designed Neopets as a self-contained world, dependent on exploration and, yes, commerce.</p>
<p id="GnzAWT">Central to the game is its economy. Users gradually accrue neopoints as they play: They win neopoints for getting high scores on games, stumble across treasure troves while traversing in-game lands like the Haunted Woods and the Lost Desert, and find items they can then sell for neopoints in their personal shops. Neopoints, in turn, can be exchanged for coveted items and features: special paint brushes that transform pets into unusual colors; larger, fancier “neohomes” for pets to live in; and rare collectibles like stamps and coins that completionist users spend exorbitant sums to acquire. (The Inverted Space Faerie Stamp, for example, currently goes for 15 million neopoints. This is a fortune likely years in the making—Neopia’s answer to a Jeff Koons Balloon Dog for the website’s elite to display in a place of honor.) The goal isn’t to get rich, per se, but nearly everything in Neopets connects to neopoints and the broader site economy. </p>
<p id="9jjcI5">Introducing a stock market, then, made sense. The market debuted in August 2000, less than a year after the site itself launched, with its very own Neodaq Index measuring aggregate performance.</p>
<p id="AFAwTg">“I think Adam and Donna in particular had a very natural tendency to do stuff they thought would be cool, without any kind of calculation as to whether players would like it,” says Matt Waggoner, who joined Neopets as a developer in 2000, by which point the company had grown to nearly 100 employees and moved from England to Glendale, California. “You always have to be careful in situations like that not to give too much weight to individual player feedback; players aren’t game developers.”</p>
<div class="c-float-right c-float-hang"><aside id="37IoUP"><q>“I was a child trying to roleplay my Shoyru hanging out in a forest and British grown-ups would come on to scheme some insider trading.” —Lindsey DeSilvio</q></aside></div>
<p id="USg0sf">In those early days, Neopets leadership had a tendency to steer into whims—some driven by an outside world of which its youthful players had little understanding. Doug Dohring led the group that purchased the site in 2000, and later recalled intentionally messing with the game’s stock market. “Around the time of the Enron scandal, we bankrupted three of those companies just for the hell of it,” Dohring <a href="https://www.wired.com/2005/12/neopets/">said in 2005, shortly after selling the company</a> to Viacom for $160 million. “They were saying, ‘This is no fair!’ But, hey, stuff happens in the world.”</p>
<p id="qElgfX">This ethos also made Neopets a world all its own. Users were encouraged to enter their pets in sitewide beauty and caption contests, submit articles to the ad hoc newspaper (<em>The Neopian Times</em>), and pitch ideas for new pet species. (A young Chrissy Teigen <a href="https://twitter.com/chrissyteigen/status/987029254444531712">was among the contest winners</a>.) Early games often featured animated popups of Neopets employees to offer bonuses, and one of the site’s first major plotted quests led players through a murder mystery in which the site’s staff members were being offed one by one. Most of the people at Neopets were avid players themselves; in the same way that developers working on today’s games might drop in to play as they test and tinker with features and story lines, so too did the creators of Neopets. Users weren’t just playing the devs’ game. Much of the time, they were playing alongside them.</p>
<p id="njVgpg">Some users managed to make their way onto the staff. In 2001, a then–14-year-old Claire Hummel cold-emailed jobs@neopets.com. She was, she says, a devoted player, and as a <a href="https://www.clairehummel.com/">budding digital artist</a>, insisted that she could make better art than what was featured on some parts of the site. Williams and Powell invited her for an interview; she bluffed and said that she knew Flash, leading to a summer artist job at Neopets for each of the next seven years before she graduated from college and took a job at Xbox. “It was an absolute dream job for me as a kid, and while it would have been <em>completely</em> illegal, I’m sure I would have paid them to let me work there,” Hummel says. “It obviously dramatically shifted my relationship with the site—suddenly being able to log in to the admin and change my pets’ colors using a dropdown menu instead of having to scrimp and save for paint brushes robbed it of some of the magic.” </p>
<div class="c-float-left c-float-hang"><aside id="ljGYZs"><div data-anthem-component="readmore" data-anthem-component-data='{"stories":[{"title":"The Beach Bum Who Beat Wall Street and Made Millions on GameStop","url":"https://www.theringer.com/2021/2/16/22284786/gamestop-stock-wall-street-short-squeeze-beach-volleyball-referee"},{"title":"How GameStop Became the Next Hollywood Bubble","url":"https://www.theringer.com/pop-culture/2021/2/24/22297808/gamestop-tv-shows-movies-documentaries-adaptations"}]}'></div></aside></div>
<p id="PHbsmO">But it remained a vaunted place. As more players sought to customize shop and guild pages, Neopets published a <a href="http://www.neopets.com/help/html1.phtml">guide to the markup language HTML</a>. For Hummel and many others, early experiments with rudimentary Neopets code <a href="https://www.facebook.com/hackersofny/photos/a.461600183940567.1073741827.453343841432868/493741274059791/?type=1">led</a> <a href="https://www.businessinsider.com/personal-finance/woman-learned-to-code-neopets-and-made-137000-in-a-year-freelancing-2018-6">to</a> <a href="https://www.reddit.com/r/neopets/comments/25nmni/how_many_people_started_coding_because_of_neopets/">careers</a> <a href="https://girlknowstech.com/beginning-coding-career-neopets/">in</a> <a href="https://www.gamasutra.com/view/news/324436/How_Neopets_has_influenced_a_generation_of_game_developers.php">web</a> <a href="https://medium.com/@courtney.brandabur_97170/i-first-learned-to-code-from-neopets-7ef1c166adec">and</a> <a href="https://jaxenter.com/unconventional-coding-beginnings-152671.html">game</a> <a href="https://variety.com/2017/gaming/features/neopets-internet-girl-culture-1202897761/">design</a>. </p>
<p id="pnCr98">“I think the visibility of the staff back then was also pretty remarkable, in a way I don’t think you’d see today,” Hummel says. “We were all active users, everybody knew our staff handles and avatars, and we didn’t really have any internal rules, for better or for worse, in terms of going out and interacting with players.”</p>
<p id="BxNJ5k">Williams and Powell launched a public, biweekly <a href="http://www.neopets.com/nf.phtml?type=oldnews">news log</a>, on which they detailed new additions to Neopia and laid out what the team was working on. These updates were considered a vital part of the Neopets mission; at one point, a team of translators worked to translate the latest posts into 10 different languages. Modern devs, like <a href="https://www.stardewvalley.net/blog/">those at Stardew Valley</a>, maintain detailed logs of patch updates and bug fixes. At Neopets, the posts were more conversational. They were filled with smiley faces and Britishisms, giving the feeling that the site’s programmers were popping into your family room and grumbling at your laggy dialup connection right alongside you. “New Pet Animations have been added for the following pets,” offered one 2001 post. “We didn’t realise that they were so large again, the file sizes are MUCH less now :) Click on the Neopet to see the animation …”</p>
<p id="G5q3Nd">Neopets, like so much of the early internet, was a sandbox—for good and for bad. Almost from the outset, Neopets developers found themselves playing Whac-A-Mole with rabid users willing to bend the rules for their own gain. Between 2000 and 2002, the news log reads like missives from a war against pirates. Enterprising thieves rigged votes in the beauty contest, posted scam chain letters, and uploaded Flash movies into their shops to dupe overly trusting—or just plain young—players into handing over their neopoints for items that would never arrive. Others created bots to assail the tech backbone of the site, automatically maxing out winnings in games and using scripts called autobuyers to instantly snap up just-released rare items from shops—a feat as infuriating then as it is on Ticketmaster today. The site creaked beneath the weight of players creating duplicate accounts to snatch up giveaways, an offense developers took particularly seriously because of the drain it had on the site’s limited database and the resulting lag it caused. As eBay grew in popularity, the auction site became such a hotbed of illicit Neopian goods that eventually Neopets products were banned entirely.</p>
<p id="FfQTJJ">“It is unfair to people who play by the rules, and heavily scorned upon by the Neopets Team,” the site warned of creating multiple accounts. “Please don’t do it, and when your accounts are frozen please don’t email us asking for them back, because they will never be unfrozen.”</p>
<p id="Aii9tI">The infractions grew so frequent that the site’s administrators took to competing over how many ill-gotten neopoints they could seize. By April 2002, Williams was up to 800 million forfeited neopoints. Powell? A cool 5 billion. “Cheaters beware!” they wrote alongside the announcement.</p>
<p id="BhDiTM">Snarkie, who joined Neopets in 2002 as a PHP programmer and became the site’s longtime game director before departing in 2014, remembers the push and pull. (She prefers to be identified by her longstanding Neopets nickname, which is sometimes written with a lowercase <em>s</em>; she says she has no capitalization preference.) “It was cat and mouse for sure,” Snarkie says, “some of it kinda fun, like clever devils figuring out how to legitimately game a system, and some of it incredibly frustrating, [like] actual cheaters and scammers.”</p>
<div class="c-float-right c-float-hang"><aside id="60yBra"><q>“I actually often get asked a question about some game doing A or B now and I’ll go, oh, yeah, we did that back in 2003.” —Snarkie</q></aside></div>
<p id="NJyRT6">During Snarkie’s tenure, the infractions ran the gamut from a Javascript exploit that let wily users swipe unsuspecting players’ login information to what Neopians took to calling Dupe Day: a 2005 coding glitch that allowed users to replicate items at will.</p>
<p id="nC4ozM">“We were actually happy when we found someone had found a proper exploit,” Williams, who married Powell in 2008, wrote in a <a href="https://www.reddit.com/r/neopets/comments/26fwhh/i_am_donna_one_of_the_founders_of_neopets_ask_me/chqslwo/">2014 Reddit AMA</a>. “It was good though, helped us make the site stronger.”</p>
<p id="yj1Nr9">With the rise of the social internet, new, more serious problems arose, like compliance with the Children’s Online Privacy Protection Act (COPPA). By the mid-2000s, Neopets had spun out a department specifically devoted to safety and security “to catch people doing wicked things and work with us to figure out how they were doing it and what we could do to outright prevent or catch them better in the future,” Snarkie says. “Not just scamming and cheating, but grooming and other nefarious things that people do on the internet.” </p>
<p id="9J5l5n">Some problems were more mundane. On the message boards, swear words were banned. Others that might lead to conversations deemed inappropriate for youngsters were programmed to change: The word “sexy,” for example, automatically switched to “stupid.”</p>
<p id="jyOvn0">Today, Neopets’ openness with users feels like an anachronism—but much about how the site worked to meet the needs of a booming and evolving user base still rings true. “It didn’t feel super exceptional then; it felt more like common sense,” Snarkie says. “I actually often get asked a question about some game doing A or B now and I’ll go, oh, yeah, we did that back in 2003.”</p>
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<p class="p--has-dropcap" id="3PEdyv">When the Reddit sub r/WallStreetBets helped carry out the GameStop short squeeze this winter, more than a few Neopets alums saw a parallel to what had happened in Neopia. In January 2001, a notice appeared in one of the site’s news logs. “IMPORTANT NEODAQ WARNING,” it began. “We have discovered that guilds have been set up for express purpose of influencing the Stock Market. Artificially inflating the stocks in this matter is not allowed, so we have removed the guilds and will freeze any people that are caught doing it in the future.”</p>
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<p id="HeEWCG"><br>“I remember helping do it, but was in elementary school at the time and those memories are super fuzzy,” a onetime Neopian recently told me via Twitter DM. “It’s way funnier looking back, because I don’t think any of us realized that we were gaming the system in a way the creators didn’t want, even though they designed it that way.”</p>
<p id="Ftdn0H">Neopets’ solution was simple, and one decidedly not in the actual SEC’s toolkit: Stock prices were randomized, and the days of guild manipulation at last came to an end. The jig was up.</p>
<p id="iA14o4">With the ruse exposed, the Neopets staff could only tip their caps to the players who’d figured it out. “Stuff like the guild stock market thing is less serious and just a side effect of building a game where skill and cleverness are rewarded,” Snarkie says. “Those types of players will min/max your systems and try to find weaknesses. It’s kind of the point!”</p>
<p id="uW6XDd">For Neopets, identifying cheaters was a pivotal mission. But it was less about stopping users from unfairly filling their coffers or cartoon stamp albums, and more about preserving the underlying structure of the game.</p>
<p id="IJscBL">“When making any kind of game, you want to set an even playing field,” Snarkie says. “Cheaters and scammers ruin that, so it was very important that we prevent it as much as we could for the happiness of players and health of the game.”</p>
<p id="JXOHKa">The Neopets economy was a real and delicate thing—one whose well-being had implications for the health of the site itself. Any large-scale game with its own universe and currency—particularly one in which players set prices for items they sell to one another—is bound to run into economic questions. <em>EVE Online</em>, for example, <a href="https://blogs.wsj.com/economics/2010/06/21/real-economist-takes-lessons-from-virtual-world/">had an in-house economist</a> keep an eye on the game’s financial health; in 2018, it and <em>World of Warcraft</em> were <a href="https://www.bbc.com/news/business-43960998">cited by the Bank of England’s chief economist</a> as models for the real world.</p>
<div class="c-float-right c-float-hang"><aside id="qa2H26"><div data-anthem-component="newsletter" data-anthem-component-data='{"slug":"ringer_newsletter"}'></div></aside></div>
<p id="uqqOye">Neopets went through several bouts of extreme inflation in its early years, with the cost of items skyrocketing and then crashing. The fundamental problem was less the scammers than the fact that the introduction of more players meant more neopoints would enter the game, with nowhere for the currency to go. “There’s no Neopian Federal Reserve or limited NP pool, for example,” Snarkie says. “It’s just created on the fly as it’s earned.” To account for the perpetual influx of players, the Neopets team added “money sinks”—expensive add-ons that would suck some money back into the ether, like collectible avatars or, yes, stamps. During a particularly bad rash of inflation in the late 2000s spurred by promotional giveaways without corresponding money sinks, Neopets took to increasing the supply of ultra-rare items, which were sold off in dev-controlled auctions and shops. The neopoints were removed from circulation once the items had sold. </p>
<p id="kOK3mR">As in the real world, solutions could be slow to take effect: There was a nudge, then a wait to see how things changed, then another nudge, then another wait. Serious economic turbulence could take years to stabilize. “Virtual economies are a bunch of levers you’re always trying to tweak very slightly to make sure you’re staying relatively in balance,” Snarkie says. “Any sudden moves can do more harm than good.”</p>
<p id="Uxc3EF">She adds: “There’s a balance between a real economy and making sure the game is healthy and players are happy. Basically, you will never get it right. You always have to keep on it. And that’s fine.”</p>
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<p class="p--has-dropcap" id="3NMxb9">Neopets lives on. These days, its user base is a fraction of what it once was, with CNET estimating in 2019 that it had <a href="https://www.cnet.com/news/neopets-friendships-still-thrive-20-years-later/">100,000 daily active users</a>. Viacom sold the company to JumpStart Games in 2014, which in turn was acquired by the Chinese gaming company NetDragon; nearly all the staff who worked on the site in its aughts heyday has since departed, including Williams and Powell. Modern efforts to monetize the site—most recently by inventing a <em>second</em> in-game currency that could be purchased with actual, real-world money and exchanged for actual, real-world stuffed animals, as well as flashy Neopian items—have sputtered, as have attempts to make the site more mobile-friendly. Flash, the platform upon which that vast library of quirky games was built, was officially sunsetted at the end of 2020, rendering the near-entirety of the arcade and many other site features inaccessible. Neopets says that it is <a href="https://www.facebook.com/348470121004/videos/304726204240403">working to convert more games away from Flash</a>, but at present, just seven games are playable. </p>
<p id="HXQO8W">But the Neopets meta-game goes on, as savvy Neopets users continue trying to exploit holes in the site’s system, now more likely to swap tips on Discord or Reddit—ahem—than in a guild. (“Is this the real stock market?” one user asked on the Neopets Discord as GameStop’s stock skyrocketed in January. “Yes,” replied another. “Real money is involved. Real investors are crying real tears.”) </p>
<p id="g68tLZ">Below-board autobuyer scripts still exist; one charges $5 a month for access. The stock market, where on Sunday Hubert’s Hot Dogs shares were going for just six neopoints a piece, remains a target: In 2015, after a move to a new server, players discovered that they could set their accounts to Portuguese and access a version of the site that held certain high-value stocks at artificially low prices, which they could buy, return to English, and then sell for substantial profits. It took two months before the problem was fixed, during which time some users managed to rake in neomillions.</p>
<p id="yHdnVz">“Hopefully one day I’ll be able to let it go and give my account to a kid and say do whatever you want,” one player lamented on a Neopets message board of the endless pursuit of more neopoints. “Then I’ll be free of all this madness.”</p>
<p id="HjxGhX">Neopets still maintains an official stock market message board. In late January, it lit up with activity. “Can’t find GME stocks,” one user wrote. “I heard AMC is the way to go on Neo,” another replied.</p>
<p class="c-end-para" id="lzGfHt">Said a third: “CYBU”—Cybun Electromatics—“to the moon.” </p>
https://www.theringer.com/features/2021/3/1/22301181/neopets-stock-market-gamestop-social-network-futureClaire McNear2021-02-24T09:10:26-05:002021-02-24T09:10:26-05:00The Story Behind the Beach Bum Who Struck Gold on GameStop
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<p>In a special episode of ‘Gamblers,’ we dive into the tale of Mike McCaskill, an amateur stock trader from Louisville who spent years swinging for the fences—and beat Wall Street in the GameStop saga for the ages </p> <p id="IYqvas">On February 16, <em>The Ringer</em> published a story titled “<a href="https://www.theringer.com/2021/2/16/22284786/gamestop-stock-wall-street-short-squeeze-beach-volleyball-referee">The Beach Bum Who Beat Wall Street and Made Millions on GameStop</a>,” in which author Dave Hill explained how a beach bum from Louisville, Kentucky, made millions by helping spark the mother of all short squeezes. Now, hear how it all went down. Mike McCaskill tells Hill how he found the trade of a lifetime—and how his years of betting on long shots led to that.</p>
<div id="mWuMcj"><iframe src="https://open.spotify.com/embed-podcast/episode/3zzEkQVyk6u3nuNa7Q8zjM" style="border: 0; width: 100%; height: 232px;" allowfullscreen="" allow="encrypted-media"></iframe></div>
<p id="SFwg4r"><br>The GameStop stock saga is often framed as being about Reddit. McCaskill’s experience shows that’s not entirely the case. It’s also a tale about how Wall Street went wrong, and how those who picked up on it were able to find a rare and remarkable opportunity to cash in. </p>
<p id="9SW6y7">For more on the GameStop story, read <a href="https://www.theringer.com/2021/1/28/22255294/game-stop-stock-market-saga-robinhood-wall-street-bets-reddit">Katie Baker’s explainer</a>, Ben Lindbergh’s feature on <a href="https://www.theringer.com/pop-culture/2021/2/24/22297808/gamestop-tv-shows-movies-documentaries-adaptations">Hollywood’s race to cover the saga</a>, and <a href="https://www.theringer.com/pop-culture/2021/2/16/22285389/everything-you-need-to-know-about-the-gamestop-story">more</a>.</p>
https://www.theringer.com/2021/2/24/22295971/gamestop-story-mike-mccaskill-beach-bum-wall-streetDavid Hill2021-02-24T06:30:00-05:002021-02-24T06:30:00-05:00How GameStop Became the Next Hollywood Bubble
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<img alt="" src="https://cdn.vox-cdn.com/thumbor/pAnihmtFVaOOmXeLf-rre6CXQ84=/168x0:1033x649/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/68866480/ben_gamestop_IP_rush_1.0.jpg" />
<figcaption>Ringer illustration</figcaption>
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<p>There are at least nine documentaries and dramatizations in the works about the GameStop stock short squeeze that consumed the nation in January and February. How does that happen? And what does Hollywood’s long history of dueling, ripped-from-the-headlines adaptations tell us about what to expect?</p> <p class="p--has-dropcap" id="5ap4vL">Not long after bargain-hunting, hedge-fund-hating Redditors began buying shares of floundering retail chain GameStop, Hollywood began buying their story. It didn’t matter that the much-ballyhooed bounce in GameStop’s stock lasted for less than a week, that the role of Reddit in the meme-stock saga remains hazy, or that the long-term ramifications of the battle between short sellers and app-powered retail investors—which prompted a White House <a href="https://www.reuters.com/article/us-gamestop-white-house/white-house-monitoring-situation-involving-gamestop-other-firms-idUSKBN29W2I1">statement</a>, an <a href="https://apnews.com/article/gamestop-reddit-updates-biden-f8499aec8cf76221ffe917cb04b0f89d">SEC</a> <a href="https://www.bloomberg.com/news/articles/2021-02-03/sec-hunts-for-fraud-in-social-media-posts-that-drove-up-gamestop">probe</a>, and a Congressional <a href="https://www.npr.org/2021/02/18/968829355/gamestop-hearing-today-roaring-kitty-along-with-ceos-to-appear-before-congress">hearing</a>—are still uncertain. The WallStreetBets uprising was sticky, sensational, and of interest to boomers and Zoomers alike. Hollywood wanted in.</p>
<p id="G6ZJTy">As soon as GameStop’s share price spiked in late January, not-so-stock-savvy Americans started scouring <a href="https://www.theringer.com/2021/1/28/22255294/game-stop-stock-market-saga-robinhood-wall-street-bets-reddit">explainers</a>, marveling at GameStop <a href="https://www.theringer.com/2021/2/16/22284786/gamestop-stock-wall-street-short-squeeze-beach-volleyball-referee">millionaires</a> and dogecoin <a href="https://www.wsj.com/articles/dogecoin-has-a-top-dog-worth-2-1-billion-11613559022">billionaires</a> (and <a href="https://www.wsj.com/articles/gamestop-investors-who-bet-bigand-lost-big-11613385002">less-lucky</a> late adopters), and reckoning with the apparent reality that—as Numlock News author Walt Hickey <a href="https://numlock.substack.com/p/numlock-news-february-18-2021-daytona">joked</a>—“the economy has been turned into a freemium mobile game by bored people.” Authors, screenwriters, and producers were paying attention too, and some of them saw (or were willing to spin) the story as a sweeping fable about the fallout from the Great Recession and a populist revolt against Wall Street’s entrenched and heretofore untouchable interests.</p>
<p id="Ss69In">“There’s an inescapable David and Goliath underpinning to the GameStop story that seems to have caught the public imagination,” <a href="https://www.sps.nyu.edu/professional-pathways/faculty/3530-mark-degasperi.html">Mark DeGasperi</a>, a writer, script doctor, and story analyst who has scouted movie material for major production companies, says via email. <a href="https://ninasadowsky.com/about">Nina Sadowsky</a>, an entertainment lawyer, novelist, and longtime TV and film writer and producer, adds that “Right now, when everyone is feeling scared at home and alone, and there’s a lot of economic uncertainty, I think that kind of rags-to-riches kind of story has a great appeal.” </p>
<div class="c-float-left c-float-hang"><aside id="1Zd1RW"><div data-anthem-component="readmore" data-anthem-component-data='{"stories":[{"title":"The Beach Bum Who Beat Wall Street and Made Millions on GameStop","url":"https://www.theringer.com/2021/2/16/22284786/gamestop-stock-wall-street-short-squeeze-beach-volleyball-referee"},{"title":"How ‘Animal Crossing’ May Have Informed the GameStop Stock Rush","url":"https://www.theringer.com/2021/2/9/22271651/gamestop-stock-amc-animal-crossing-wall-street-bets"},{"title":"How Hollywood Is Beating Its Final Boss: Video Game Adaptations","url":"https://www.theringer.com/2021/2/23/22296698/video-game-ip-halo-tlou-mortal-kombat-uncharted"}]}'></div></aside></div>
<p id="yhGKYm">Hollywood has had nonfiction feeding frenzies before, but few (if any) real-life events have garnered as much immediate interest from writers, producers, and distributors as the GameStop-stock soap opera. The resulting proliferation of projects, which currently encompasses plans for four feature films, four documentaries, and one TV series, “may be unprecedented,” says intellectual property agent Steve Fisher, a partner at talent agency APA.</p>
<p id="lYg7TJ">Let’s lay out the list of dramatizations and documentaries, covering the features first:</p>
<ul>
<li id="iJug2S">A <a href="https://deadline.com/2021/01/mgm-ben-mezrichs-the-antisocial-network-wall-street-1234684378/">feature</a> from MGM, based on a still-unsold proposal for an as-yet-unwritten book by <em>Bringing Down the House</em>, <em>The Accidental Billionaires</em>, and <em>Bitcoin Billionaires</em> author Ben Mezrich (tentatively titled <em>The Antisocial Network</em>)</li>
<li id="iCCcA2">A <a href="https://deadline.com/2021/02/netflix-gamestop-stock-movie-screenwriter-mark-boal-noah-centineo-scott-galloway-makeready-1234684568/">feature</a> from Netflix, written by Oscar-winning screenwriter Mark Boal (<em>The Hurt Locker, Zero Dark Thirty</em>),<em> </em>with the streaming service’s teen-movie titan Noah Centineo attached to star</li>
<li id="iwbsP1">A <a href="https://deadline.com/2021/02/hbo-gamestop-saga-scripted-series-development-with-jason-blum-andrew-ross-sorkin-len-amato-1234688634/">feature</a> from HBO, executive produced by Blumhouse founder Jason Blum, <em>Billions </em>cocreator Andrew Ross Sorkin, and former HBO Films, Miniseries, and Cinemax president Len Amato</li>
<li id="YKQrO7">A <a href="https://www.hollywoodreporter.com/news/wallstreetbets-founder-sells-life-rights-to-ratpac-entertainment">feature</a> based on the <a href="https://www.wsj.com/articles/reddits-wallstreetbets-founder-sells-life-story-to-movie-producer-ratpac-entertainment-11612440001">life story rights</a> of exiled WallStreetBets founder Jaime Rogozinski and the rights to his 2020 book, from RatPac, the production company of director/producer Brett Ratner, whom multiple people have said <a href="https://www.latimes.com/business/hollywood/la-fi-ct-brett-ratner-allegations-20171101-htmlstory.html">sexually harassed or assaulted them</a>
</li>
<li id="ZhnD6B">A <a href="https://deadline.com/2021/02/netflix-gamestop-documentary-series-liz-garbus-dan-cogan-story-syndicate-1234692300/">documentary series</a> from Netflix produced by Story Syndicate, the company cofounded by Emmy- and Oscar-winning husband-and-wife producer-director duo Dan Cogan and Liz Garbus</li>
<li id="LXTH8D">A feature-length <a href="https://deadline.com/2021/02/gamestop-feature-doc-chris-temple-zach-ingrasci-xtr-1234688002/">documentary</a> from XTR (<a href="https://www.theringer.com/movies/2020/3/20/21187586/david-arquette-wrestling-interview-documentary"><em>You Cannot Kill David Arquette</em></a><em> </em>and <em>Bloody Nose, Empty Pockets</em>) and directors Chris Temple and Zach Ingrasci, who head up the doc production company Optimist </li>
<li id="SEJgJS">A feature-length <a href="https://deadline.com/2021/02/jonah-tulis-gamestop-documentary-submarine-1234687991/">documentary</a> from Oscar-winning-doc sellers Submarine Entertainment and the <a href="https://www.theringer.com/2020/9/23/21452340/console-wars-documentary-cbs-all-access-review-sega-nintendo"><em>Console Wars</em></a> creative team (directors Jonah Tulis and Blake J. Harris and producer Julian Rosenberg)</li>
<li id="uDECvI">A feature-length <a href="https://deadline.com/2021/02/propagate-wall-street-journal-gamestop-feature-doc-baby-god-hannah-olson-1234689648/">documentary</a> called <em>This Is Not Financial Advice</em>, produced by Propagate (Hulu’s <em>Hillary</em>) and the <em>Wall Street Journal</em> and directed by <em>Baby God</em>’s Hannah Olson</li>
<li id="oCON4J">A <a href="https://deadline.com/2021/02/pinky-promise-limited-series-to-the-moon-1234684845/">limited series</a> titled <em>To the Moon</em>, from feature-film producers Matthew Cooper and Jessamine Burgum, who <a href="https://deadline.com/2021/01/pinky-promise-matthew-cooper-jessamine-burgum-1234674142/">launched</a> a production company called Pinky Promise last month </li>
</ul>
<p id="4tDC8j">All of those projects went public between January 31—when GameStop’s price was still significantly inflated—and February 11, by which time GME had come crashing back down. And the thirst for IP may not be quite quenched: <em>Ringer</em> contributor David Hill, who <a href="https://www.theringer.com/2021/2/16/22284786/gamestop-stock-wall-street-short-squeeze-beach-volleyball-referee">wrote about</a> GameStop millionaire Mike McCaskill last week, says that he and McCaskill quickly received feelers from producers or screenwriters who are still sniffing for a fresh angle, undeterred by the big fish swimming in the same waters.</p>
<p id="u9hJEy">All of that jockeying for pole position in the GameStop sweepstakes has caused a stir even among insiders familiar with Hollywood’s ways. “I think everyone’s taken notice of this,” Fisher says. Sadowsky adds, “It was just so funny, because I started looking and going, ‘What, another one? Another one?<strong>’ </strong>Like, what is going on?”</p>
<p id="h4DiVq">With nine contenders (and counting) declared, the race for the first, best, and most lucrative screen versions of the GameStop story is on. But for some of those who have followed the kerfuffle from afar, the flurry of announcements sparked questions about the mechanics of the unique competition between would-be bards of WallStreetBets. How does one pitch, sell, and make a movie or series based on news that’s still developing and partly opaque? (“Even I barely understand these matters,” WallStreetBets trendsetter Keith Gill <a href="https://www.pcgamer.com/man-credited-with-gamestop-stock-surge-tells-congress-even-i-barely-understand-these-matters/">told</a> Congress last week.) How do producers and distributors assess the risks of supporting and scheduling rival projects, and how do writers and directors differentiate their takes on the same (or similar) material? What legal considerations come into play?</p>
<p id="hmZQVq">In the case of a logjam like this one, selling an option or convincing a producer to pony up is just the start of an extended, complex process. Congrats, assorted scribes and screen impresarios: You succeeded in selling or financing a GameStop story. Now what?</p>
<p id="Sfkk5h"></p>
<p class="p--has-dropcap" id="EkjdDd">Although there may not be a perfect comp for this cat o’ nine tails of meme-stock stories, pileups of ripped-from-the-headlines scripts have produced this sort of situation before. The outcome of one previous sprint for screen supremacy may help us preview how the coming months could unfold for today’s GameStop storytellers.</p>
<p id="xG8NDA">On May 19, 1992, 17-year-old Amy Fisher shot Mary Jo Buttafuoco, wife of Long Island body shop owner Joey Buttafuoco. Joey had been conducting a sexual relationship with Fisher since the previous summer, when she was still 16. The violent triangle of Fisher (who eventually served seven years in prison), Mary Jo (who survived a .25 caliber bullet to the face), and Joey (who eventually pled guilty to third-degree rape and served some jail time himself) made mainstream national news and became a staple subject for tabloids, talk shows, and <em>Saturday Night Live</em>.</p>
<p id="5Mm6pp">Naturally, networks were clamoring for dramatized versions of the already-dramatic tale. Less than eight months after the shooting, NBC, CBS, and ABC released the results: <a href="https://www.esquire.com/entertainment/tv/a45043/the-amy-fisher-made-for-tv-movies/">three</a> TV movies, all of which aired in a span of one week, and two of which aired in the same time slot on the same night. </p>
<div class="c-float-right c-float-hang"><aside id="b10zof"><q>“It was just so funny, because I started looking and going, ‘What, another one? Another one?’ Like, what is going on?” —Nina Sadowsky</q></aside></div>
<p id="aD2g3P">Screenwriter Janet Brownell wrote and received a producer credit for the best-reviewed entry in the Buttafuoco TV trifecta: ABC’s <a href="https://www.imdb.com/title/tt0106267/"><em>The Amy Fisher Story</em></a>, which starred Drew Barrymore (fresh off of playing a seductive teen in <em>Poison Ivy</em>) as Fisher and was directed by Andy Tennant, who hadn’t yet transitioned from TV to film. Almost 30 years later, Brownell recounts how her rush to the screen started. “ABC came to me and said, ‘Look, CBS and NBC are doing Amy Fisher’s story,’” she says. “‘One of them has Joey’s rights, one of them has Mary Jo’s rights, and … we have nobody’s rights. Would you be interested?’”</p>
<p id="T5Cq2y">Despite that less-than-appealing pitch, Brownell accepted the assignment and decided to cover Fisher’s trial and use the court transcripts to structure the story. That plan was scuttled when Fisher, who had been charged with attempted murder, bypassed a trial, accepted a plea bargain, and pled guilty to first-degree assault that September. “At that point, all three networks were off to the races,” Brownell says. “It was like, who could get this written and on the air first?”</p>
<p id="wyWVh5">Brownell recalls writing the script in little more than a week and revising it as the production ramped up in Vancouver. “Because the scripts were all done at the same time, the casting frenzy then went on,” she says. “It was really about, who’s going to get the best Amy Fisher?” Barrymore, the top target, read all three scripts and picked Brownell’s, a coup for ABC. (NBC went with Noelle Parker for <a href="https://www.imdb.com/title/tt0103682/"><em>Amy Fisher: My Story</em></a>, and CBS cast Alyssa Milano in <a href="https://www.imdb.com/title/tt0106527/"><em>Casualties of Love: The Long Island Lolita Story</em></a>.)</p>
<p id="v74W36">Because ABC didn’t own the rights to anyone’s exclusive story, Brownell presented her narrative from <a href="https://www.paleycenter.org/collection/item/?q=news&p=34&item=T:28366">multiple perspectives</a> and didn’t delve deeply into any individual’s psyche. “We didn’t want to get sued by CBS saying, ‘You’re showing Joey and we have the rights and you have no right to show that,’” she says. In a case as well-publicized as the Buttafuoco/Fisher feud, though, exclusivity was overrated. Brownell relied on details in the public domain and cooperation with <em>New York Post</em> reporter Amy Pagnozzi, who had covered the case and appeared as a character in Brownell’s script. “If Joey says something in the paper, I can use that as dialogue,” Brownell says. “So it didn’t really restrict me in any way.” Better yet, it freed her from any pressure to whitewash an unsavory character. “When you sell the rights of someone who might be indicted later, you have to show them as kind of an OK guy,” Brownell says. “And [Buttafuoco] wasn’t an OK guy.”</p>
<p id="ffsjVs">If producers on different projects could coordinate their plans—<em>I’ll show you my script if you show me yours</em>—they might be able to ensure that their projects are distinct and that they aren’t eyeing the same debut date. But for legal reasons, they have to stay within their own siloes, gleaning tidbits about competitors’ approaches and progress from public information or industry gossip but not from comparing notes.</p>
<div class="c-float-left c-float-hang"><aside id="Bp9UHi"><div data-anthem-component="newsletter" data-anthem-component-data='{"slug":"ringer_newsletter"}'></div></aside></div>
<p id="4QxIfM">“No one would do that because A, they would consider it proprietary, and it is,” Sadowsky says. “And B, it would muddy the waters in terms of credit, because if there’s a Writers Guild arbitration, one of the things that might determine credit would be if you had access to someone else’s material.” <a href="https://www.mmileslaw.com/">Maria Miles</a>, the founding partner of an entertainment law firm, explains that copyright law provides protection over <em>expressions </em>of ideas, not ideas themselves, which is why <em>West Side Story</em>, <em>The Notebook</em>, and <em>Step Up</em> could all legally riff on <em>Romeo and Juliet </em>without infringing on each other. (Even if Shakespeare had lived in the age of copyright law, he couldn’t have copyrighted the concept of ill-fated lovers.) To successfully sue for copyright infringement, a plaintiff must prove that the defendant saw a screenplay, communicated with someone on the opposing production team who shared private details, or obtained protected info via some other means, so it’s safer for the two (or three, or nine) sides not to talk.</p>
<p id="SRYIKQ">To make matters more complicated in the case of the dueling dramatizations of Fisher’s story, ABC executive Ian Valentine, who handled <em>The Amy Fisher Story </em>in his role as the VP of longform productions, was married to Ruthe Benton, who had recently been <a href="https://variety.com/1992/scene/people-news/exec-shuffle-32-100067/">promoted</a> to codirector of motion pictures for TV at CBS and was responsible for overseeing <em>Casualties of Love</em>. “I can’t even imagine the conversations that went on at their house,” Brownell says. “And I was really good friends with Ruthe. And so it was a little complex in terms of what we could talk about and not talk about.”</p>
<p id="NyLwHM">Thanks to that fog of Hollywood war, Brownell and her colleagues couldn’t predict precisely what their rivals’ movies would look like. Compressed production schedules also obscured when they would be broadcast. “I don’t think anyone anticipated that they would all be airing the same week,” Brownell says. “That part was sort of stunning.” <em>The Amy Fisher Story</em> was still tied up in post-production when ABC learned that NBC was about to beat both it and CBS to the punch by premiering on December 28, 1992, and that the latter two networks would be pitting their projects against each other on January 3, 1993. “They were on at exactly the same time, and that’s why we thought we were completely fucked,” Brownell says. “It was like, ‘Oh my God.’ Because the other one got on first, and we’re splitting, basically, the rest of the audience. Who <em>hasn’t</em> seen the Amy Fisher story?”</p>
<div id="w51fbs"><iframe src="https://open.spotify.com/embed-podcast/episode/3zzEkQVyk6u3nuNa7Q8zjM" style="border: 0; width: 100%; height: 232px;" allowfullscreen="" allow="encrypted-media"></iframe></div>
<p id="toedz9"><br>For Brownell—unlike Fisher and the Buttafuocos—the story had a happy ending: <em>The Amy Fisher Story </em>won the ratings battle, which Brownell attributes primarily to the celebrity of Barrymore. Brownell watched part of <em>Casualties of Love</em> live, but she couldn’t force herself to sit through the whole thing. “I had been so immersed in this for just like three months,” she says. “It was like, ‘Ugh, enough of the Amy Fisher story.’” After being bombarded with three prime-time retellings in one week, audiences may have been saying the same.</p>
<p id="r3is1v">The proximity of that trio of TV movies made the Fisher story an extreme example of creative convergence; as Fisher says, “the chances that you and your competing project will have casted, put the right director behind the camera, and gotten the script where it needs to be within more or less the same time frame, it’s probably unlikely.” But plenty of rhyming movie duos dot Hollywood’s history, just as short squeezes <a href="https://junto.investments/short-squeezes-and-market-corners/">periodically</a> <a href="https://arktimes.com/arkansas-blog/2021/01/28/gamestop-piggly-wiggly-and-the-age-old-quest-to-beat-wall-street">revisit</a> Wall Street: <em>Volcano </em>and <em>Dante’s Peak</em>; <em>Armageddon </em>and <em>Deep Impact</em>; <em>Friends With Benefits </em>and <em>No Strings Attached</em>; <em>Capote</em> (2005) and <em>Infamous </em>(2006). Documentaries have gone up against other docs or dramatizations: <em>Prefontaine </em>and <em>Without Limits</em>; <em>The People v. O.J. Simpson</em> and <a href="https://www.theringer.com/2016/6/10/16047120/ezra-edelmans-extraordinary-oj-made-in-america-1b6882d12a86"><em>O.J.: Made in America</em></a>; 2017’s <em>All the Money in the World </em>and 2018’s <em>Trust</em> (both about the kidnapping of J. Paul Getty III);<em> </em>2019’s fightin’ <a href="http://fyre">Fyre</a> <a href="https://www.theringer.com/tv/2019/1/14/18182477/hulu-fyre-festival-documentary-released-netflix-copy">Fest</a> docs; last year’s <a href="https://www.theringer.com/tv/2020/11/2/21545168/the-vow-vs-seduce-nxivm-documentaries-keith-raniere">dueling documentaries</a> about NXIVM. There are two <em>Tiger King</em>–inspired <a href="https://deadline.com/2019/11/kate-mckinnon-star-joe-exotic-limited-series-in-works-ucp-based-on-podcast-1202778138/">scripted</a> <a href="https://www.hollywoodreporter.com/live-feed/nicolas-cage-play-joe-exotic-tiger-king-scripted-series-1293128">series</a> in the small-screen pipeline. </p>
<p id="OdrDrI">The past decade also has seen multiple passes at the 2010 rescue of Chilean miners, the 2018 Tham Luang cave rescue, and <a href="https://sfist.com/2015/01/26/hatching_twitter_writer_sells_movie/">the</a> <a href="https://www.engadget.com/2016-10-15-coen-brothers-dark-web-silk-road-movie.html">Silk</a> <a href="https://deadline.com/2019/01/jason-clarke-nick-robinson-silk-road-darknet-ross-ulbricht-1202545336/">Road</a>. The ever-lengthening list of <a href="https://en.wikipedia.org/wiki/Twin_films">twin films</a> grows both by coincidence and in response to cultural trends or, as many a movie’s opening text teases, “actual events.” As Sadowsky says, “there is a little bit of herd mentality in Hollywood,” exacerbated by “the insular quality of Hollywood where six ideas get talked about.” And then “there’s that ego thing, that no one wants to back down.”</p>
<p id="bHKg6n">In that highly networked world, secrets are scarce. Those on the receiving end of the pitch process make it their business to be aware of what’s out there. “We have a closed universe that we pitch in,” Miles says. “So sales agents pitch to the same people, and they’re like, ‘Wait, didn’t I just hear this yesterday?’”<strong> </strong><a href="http://jeannevb.com/about-2">Jeanne Veillette Bowerman</a>, a screenwriter and media executive and the former editor-in-chief of <em>Script </em>magazine, once pitched a TV show idea to HBO, only to be denied because ABC had just bought an analogous project. Her idea wasn’t different enough. “‘It’s the same, but different’ is the thing you hear all the time when you’re pitching,” she says.</p>
<p id="5BB3Lf">Even though the GameStop pitching happened in one big burst, Bowerman suspects that the financial backers “all know what each other is buying and they’re OK with buying the same thing as long as there’s a different spin. … There could be conceivably seven completely different stories about this subject that could all be equally compelling.” But few viewers would have the appetite for seven versions of the GameStop story, given that most of the projects will probably look to <em>The Big Short</em> as a lodestar and reach related conclusions about their subject’s societal significance, even if the characters’ names (and usernames) vary. “They’re going to have to be very mindful about telling it differently,” Bowerman continues. “And they’ll probably hope that some news gets slipped out about how one company is doing it compared to another company so that they know what to avoid.”</p>
<p id="ibDBnh">Some quality features get bodied at the box office by buzzier projects. The makers of <em>Infamous</em> postponed the movie’s release date and adjusted its marketing strategy because it came out after the Oscar-winning <em>Capote</em>, to which it was <a href="https://en.wikipedia.org/wiki/Infamous_(2006_film)#Critical_reception">constantly compared</a>. Despite positive reviews, famous faces in its cast, and <a href="https://www.nytimes.com/2006/10/16/business/media/16adcol.html">attempts</a> to capitalize on <em>Capote</em>’s cachet while emphasizing the differences between the two biopics, <em>Infamous </em><a href="https://www.boxofficemojo.com/release/rl2153481729/">flopped</a> at the box office.</p>
<div class="c-float-right c-float-hang"><aside id="LiXlNk"><q>“I had been so immersed in this for months. It was like, ‘Ugh, enough of the Amy Fisher story.’” —Janet Brownell</q></aside></div>
<p id="VOpxkt">But because scripted content is in growing demand and the modern TV and movie markets are increasingly segmented, the producers of existing projects may have a harder time keeping prime narrative territory to themselves. “I think we’re seeing greater activity and more of a reluctance to say, ‘All right, you’ve got this story,’ because of all the new buyers out there,” Fisher says. If audiences are fascinated by a story—as they seem to be by the recent series of short squeezes—they may be willing to watch more than one dramatization, or adaptation, or documentary. That’s especially true today, Fisher says, because “there’s no stakes, no inconvenience, if it’s something they can see on a streamer.”</p>
<p id="KHSmJu">Both Fyre Festival docs garnered positive reviews, and their rapid-fire releases seemed to intensify the interest generated by their shared, schadenfreude-inducing subject. The fact that there were <em>two</em> Fyre Festival docs coming out at the same time became a cross-promotional story in and of itself, as debates about which had “won” directed attention to both. That kind of competition can also have a clarifying effect during production. “When you have another team going after the same people it helps you focus on what matters to the story,” Jenner Furst, who codirected Hulu’s <em>Fyre Fraud</em>, says via email. “The urgency makes us diligent about getting people locked in—getting them quickly—and getting them exclusively.” Furst has <a href="https://www.theringer.com/movies/2019/1/15/18183308/fyre-festival-documentary-netflix-hulu-billy-mcfarland-pay">acknowledged</a> paying Fyre Fest founder/charlatan Billy McFarland to be in his film, which rival director Chris Smith reportedly declined to do for his Netflix doc. As Furst notes, though, a figure who might seem essential to one project may be optional for another: “Two films can have completely different casts and tell completely different stories about the same event, and both be great.” </p>
<p id="iApMGf">That’s easy to say from the sidelines or after the production dust settles, but in the thick of an <em>Amy Fisher Story</em>–style struggle, the advantage is coveted. (Hence Hulu <a href="https://deadline.com/2019/01/hulu-leapfrogs-netflix-in-race-for-first-take-on-fyre-festival-1202534973/">releasing</a> <em>Fyre Fraud </em>without warning four days before Smith’s <em>Fyre</em> was due to drop.) “That kind of arms race extends to gathering as much weight behind your project [as you can] in the hope that it’s going to scare off your competitors,” Fisher says. That might mean announcing as quickly as possible, touting a big-name writer, producer, or distributor, or snapping up life rights to send a signal and stake a claim. “Everyone hopes that their project will develop an aura around it—that <em>that</em> is the definitive telling of that story,” Fisher adds.</p>
<p id="RScmkO"></p>
<p class="p--has-dropcap" id="tY6M1Y">The first salvo fired in the GameStop story skirmish was the team-up of MGM and Mezrich, which was announced on January 31. Although it’s not unusual for a nonfiction book proposal to be optioned, the pace was still surprising. “I think that was a case of, ‘We know this is going to be a really interesting story. We want to beat others to the punch with a big author and a piece of IP,’” Fisher says. A preexisting professional or personal relationship can help grease the wheels: MGM motion picture group chairman Michael De Luca produced <em>The Social Network</em>, which was based on Mezrich’s book about the founding of Facebook.</p>
<p id="3WbkzU">Jonah Tulis, the director of <em>Console Wars </em>and Submarine’s still-untitled GameStop doc, says he had a hookup too, having worked with Submarine before. “I basically emailed Submarine and was like, ‘Hey, I got something for you tomorrow on the GameStop thing. I’ve been in the middle of this for a couple of weeks now,’” he says. “And I sent them materials. We had a call later that day. Then we forged a plan and maybe it was announced a week after that. … It was one of those things where you typically wouldn’t announce something like that, but we did want to announce, like, ‘Listen, we’ve got some really key players in this.’”</p>
<div class="c-float-left c-float-hang"><aside id="GOauOq"><q>“Two films can have completely different casts and tell completely different stories about the same event, and both be great.” —Jenner Furst</q></aside></div>
<p id="epKRm7">For Furst, the first task when turning a news story into a narrative project is to elevate the tick-tock into “something archetypal, systemic—something emblematic of the zeitgeist, of the human condition. … If we can’t answer those questions and the piece is just an extension of the news or social media chatter, we don’t pursue it.”</p>
<p id="fGO4TU">Tulis thinks he can answer those questions. He came across the burgeoning story slightly before it blew up, through friends who had introduced him to people who were active in the short-squeeze community separate from Reddit dating back to 2019. That lead time allowed him to cultivate relationships, line up potential interview subjects, and observe their reactions in real time as GameStop started to make mainstream headlines. The other point in Tulis’s favor is that the market for his medium of choice is strong. “Documentaries are enjoying this revival through streaming,” Sadowsky says. “Really, it’s given them access to a much larger audience than they’ve ever had.” Less fortunately for Tulis, there are three others in the works about the same subject. “I’ve never been in a situation like this before,” Tulis says. “It’s pretty bananas.”</p>
<p id="j1ExGM">When he was working on <em>Console Wars</em>, Tulis was exhuming well-chronicled and decades-old events. Now he’s watching the narrative twist whenever he turns on the TV. “We’re going to keep learning and keep figuring out what the story is as we go,” he says. He’s planning to start shooting (and editing concurrently) in a couple of weeks, an accelerated schedule that’s partly a product of pressure from rival projects. “It ramps up the timeline,” he says. “I don’t think it’ll affect the quality. I think it just affects the amount of work on a daily basis.”</p>
<p id="rcDxr7">Although he doesn’t know how his documentary will end, Tulis says his subjects have already given him more than enough material. According to <em>Deadline</em>, those sources include “a Midwestern father of two whose contrarian research helped propel the big bet against Wall Street, and an amateur investor who put her life savings on the line riding GameStop stock to the moon.”<em> </em>Tulis thinks he can count on his exclusive commits not to two-time him with other directors, although he concedes, “You’d be crazy if you weren’t stressed about that.”</p>
<p id="arEfnu">Whichever meme-stock screen projects survive the Darwinian winnowing to come will likely arrive in multiple waves. Even if Mezrich (who declined an interview request for this piece) works with a screenwriter to prepare a script for MGM in concert with his almost inevitable bestseller, the research and writing, followed by the feature-film production process, will still require a much longer lead time than (for instance) Tulis’s take. “I think the people that are looking at those prestige projects are betting that these prestige creators will be able to create something that will resonate down the line,” Sadowsky says. “And with the docs, they’ll tap into this immediate interest.” Tulis expects that early 2022 is when the first completed projects will appear, although he says “there’s a possibility for us to do sooner.”</p>
<p id="HpwOma">Producer/director Lane Shefter Bishop, the CEO of book-to-screen adaptation company <a href="http://vast-entertainment.com/main/?page_id=14">Vast Entertainment</a>, observes that “Hollywood loves to piggyback on things that did well.” Thus, the reception to any early-bird documentaries—and the inevitable narrative podcasts—may allow producers on the film side to gauge the growth potential of the GameStop cinematic universe. “Is it going to be something that they can feed off of, or is it going to be something that saturates the marketplace?” Miles says. Perhaps the story won’t have the staying power that its blanket coverage suggested, and the public’s interest level will dip as quickly as GME’s share price. “If there isn’t much interest in the documentaries, where we see the first one out, get all the attention, and then it wanes, I wonder what that’ll mean for the narratives,” Miles adds.</p>
<p id="myel2r">Behemoths like MGM and Netflix, Bowerman notes, “can green-light anything.” But with so many productions from smaller entities in the mix, she says, “it’s just not feasible that all of them would end up getting made.” Thanks to pandemic-depleted portfolios, some projects that otherwise wouldn’t still be standing at the end of the development gauntlet may enjoy a longer leash. “A lot of people didn’t shoot anything last year,” Bishop says. “People are dying for content, and I think that’s part of the reason why there’s nine of them.” Even so, some distributors may pull out, intimidated by deeper-pocketed competitors. Some creators may fall too far behind their rivals, or find that there aren’t enough unique, compelling characters to go around. In the conceptual stage, expenses are low, so time will determine which producers are serious. “The real cost of making a feature comes at the point where you have to pull the trigger and actually make it,” Sadowsky says.</p>
<p id="2SsCAf">The hard drives and desks of screenwriters are stuffed with scripts for films that lost out to earlier, luckier, or better doppelgängers. “In the 2000s, I know there were dueling Alexander the Great biopics, and a couple of versions of the Spartans’ stand at Thermopylae, one of which became <em>300</em>,” DeGasperi says. “And while <em>The Good Shepherd</em> was in the works, there was a like-minded project at another studio called <em>Wilderness of Mirrors</em> (which never saw the light of day). I know there have been a couple of Ford-Ferrari movies in development at the same time too, before the <a href="https://www.theringer.com/movies/2019/11/18/20970387/ford-v-ferrari-exit-survey">most recent one</a> came out.” We remember the movies that get made, not the ones that die in development. And even the GameStop story probably doesn’t have nine lives.</p>
<p class="c-end-para" id="uMJfsI">“You have huge people behind some of the Hollywood stuff … but who knows what’s going to happen here?” Tulis says. “It’s one of those things where they better have different angles, or else they’re just going to be another one of those movies.” </p>
https://www.theringer.com/pop-culture/2021/2/24/22297808/gamestop-tv-shows-movies-documentaries-adaptationsBen Lindbergh2021-02-16T06:30:00-05:002021-02-16T06:30:00-05:00The Beach Bum Who Beat Wall Street and Made Millions on GameStop
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<p>Mike McCaskill spent years scouring the stock market and betting on long shots. Then he found the opportunity that changed his life—and helped spark the mother of all short squeezes. </p> <p class="p--has-dropcap" id="Uf2Q48">Jim Cramer, the normally amped-up host of CNBC’s <em>Mad Money</em>, a stock market show complete with sound effects and wacky props and flashy graphics, looked subdued and serious during his January 14 broadcast. “I want to talk about some very important shortages that are going on in the market that you probably don’t know about,” Cramer said. He looked directly into the camera and explained a short squeeze—<a href="https://www.theringer.com/2021/1/28/22255294/game-stop-stock-market-saga-robinhood-wall-street-bets-reddit">a concept everyone in America now seems to understand</a> but that was still fairly obscure just a couple of weeks ago. “I don’t normally discuss these issues. … It’s a nightmare.” </p>
<p id="lo1uaW">Cramer described his own experience losing money in a short squeeze 30 years ago during the savings and loan crisis. His tone was concerned, quiet. “When you short a stock you are always on the hook to your broker and sometimes that blows up right in your face. And right now, it is blowing up in somebody’s face big time.”</p>
<p id="jOqpi1">Then Cramer ran over to his giant soundboard covered in large plastic buttons. “Shorting GameStop had been like shooting fish in a barrel!” He banged on one of the buttons. A sound effect of machine gun fire blared while Cramer grinned maniacally. “Right now an astounding 144 percent of GameStop stock shares have been sold short. That’s far more than there is! That’s not right! When you can’t find shares to borrow your broker will close out your short position. Which is how something like GameStop could tack on 27 percent … today?” </p>
<p id="cSutzn">Over the next two weeks, not only would GameStop tack on 27 percent, it would watch its share price skyrocket from $38 to $483. It would become the most talked-about stock—and story—in the country. But before January 14, when Cramer told his audience about it, there were few people who had been paying attention to GameStop and the circumstances that would cause the “Mother of All Short Squeezes (#MOASS).” The ones who had would soon find their lives upended, their worlds changed, their wealth and power immense. And Wall Street would soon find itself pulling out all the stops to hold them back. </p>
<p id="L20tu1">Later that day, on CNBC’s <em>Squawk on the Street</em>, Cramer continued to talk about the storm he saw brewing. “We know who is powerful on the street. It’s Reddit first, [Barstool Sports founder Dave] Portnoy second, I don’t know, the guy who’s got GameStop, the short squeeze third.” But who <em>was</em> the guy who got GameStop? </p>
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<p class="p--has-dropcap" id="Txxzlr">Three days after Cramer’s broadcast telling the world about the potential for a GameStop short squeeze, 45-year-old self-described “beach bum” Michael McCaskill was officiating the finals of a youth beach volleyball tournament in Louisville, Kentucky. “I know it’s Louisville, Kentucky, it sounds weird,” McCaskill says when he detects my surprise at there being beach <em>anything</em> in Louisville. The host venue, King Louie’s, is a sprawling sports complex with a large indoor arena and several sand volleyball courts. McCaskill runs the volleyball programs there. He says working his way up from volleyball referee to sports league director has been the only “real job” he’s held for many years. “I mean, working for my parents was a real job, but it was working for my parents. I’ve worked at some restaurants as a server when I was really young, but I’ve never had a real job. So when I started getting poor, I started refereeing.” </p>
<div class="c-float-left c-float-hang"> <figure class="e-image">
<img alt=" " data-mask-text="false" src="https://cdn.vox-cdn.com/thumbor/aFVK3oRg1FgBzdzxK-oM-0dHcyY=/800x0/filters:no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22306640/IMG_5836.jpeg">
<cite>Courtesy of Mike McCaskill</cite>
<figcaption>Mike McCaskill</figcaption>
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<p id="2PPEjO">McCaskill once dreamed of being more than just a beach bum in a town with no beaches. He attended the University of Kentucky to study finance, but dropped out in 1994 after a semester. He then enrolled at the University of Louisville, but didn’t make it past three years. “School was never for me,” he says. “It wasn’t that I was a bad student, it was that I don’t necessarily work great, let’s say, with others.” He ended up working for his parents at their furniture store, where he was surrounded by amateur stock-pickers. “My stepfather traded stocks,” says Brian Delling, McCaskill’s younger half-brother. “Mike kind of picked up on it and ran with it.” In addition to his stepfather, one of McCaskill’s coworkers seemed to be making money on the side by investing in silver on the commodities market. McCaskill peppered him with questions, which led him to stock trading message boards and chat rooms on the internet. </p>
<p id="ucuAfe">On forums like RagingBull and HotStockMarket.com, he learned the ins and outs of a strange corner of the financial sector: the over-the-counter market. This is where distressed companies are traded in a decentralized market without any disclosure requirements. Shares of companies traded on the OTC markets are commonly referred to as “penny stocks,” but the truth is some companies have shares that trade for fractions of even that. “A stock could trade down to as little as a hundredth of a cent. At a hundredth of a cent, you can buy a million shares of stock for a hundred dollars,” McCaskill says. “It’s a wild, generally unregulated type of industry that’s just a free-for-all. And in the early 2000s, it was a complete free-for-all.” </p>
<div id="4Gt9nw"><iframe src="https://open.spotify.com/embed-podcast/episode/3zzEkQVyk6u3nuNa7Q8zjM" style="border: 0; width: 100%; height: 232px;" allowfullscreen="" allow="encrypted-media"></iframe></div>
<p id="OE5lmp"><br>After teaching himself how to trade penny stocks, McCaskill found a company that he thought looked like a good play. The ticker symbol was QBID, which stood for Q Television, a company that hoped to create the first LGBTQ television network. In 2005, the stock was trading at a hundredth of a cent. But McCaskill saw there was a serious PR effort behind this company’s plan. At such a small price, he figured, why not take a chance? He bought 3 million shares. “Well, the PR machine kept rolling and that stock ended up making the nuts at three cents, and that three cents, that turned into $90,000,” he says. “And I was, I don’t know, 25? I thought I was going to rule the world after I hit that.” McCaskill went out partying with his friends to celebrate his big score. When he returned, he checked the stock, and it had ticked back down to a penny. “So I didn’t make my big 90,000, but I still made 30.”</p>
<div class="c-float-right c-float-hang"><aside id="kfILZk"><q>“Well, the PR machine kept rolling and that stock ended up making the nuts at three cents, and that three cents, that turned into $90,000. And I was, I don’t know, 25? I thought I was going to rule the world after I hit that.” — Mike McCaskill</q></aside></div>
<p id="a7c0jV">In 2007, the family furniture store fell into bankruptcy and closed, and McCaskill was left without any day job to fall back on. He decided he could turn his stock-picking hobby into his full-time gig. He sold his car and bought an inexpensive truck, then put the balance of the money—around $10,000—into his trading account. Within a year he had built it to $160,000 by trading penny stocks. Roy Kortick, a visual artist who was living in a Brooklyn loft and trading penny stocks on the side, befriended McCaskill during this time. They both posted regularly on the same stock message boards. “We were drawn to similar types of situations. I could tell he was a trustworthy person,” Kortick says. In addition to sharing similar progressive worldviews, the two had an eye for the same kinds of companies to invest in, and they shared stock plays with each other. “He’s really great at spotting, at building momentum.” </p>
<p id="f1BqFR">McCaskill also developed a keen eye for identifying red flags when researching a company—a skill that was essential in the OTC markets, which were rife with fraud, financial crimes, and all sorts of outright shenanigans. “I mean, it’s a shady world,” McCaskill says. “I can look at something very quick and I can tell you if it’s a scam.” </p>
<p id="zXoQ46">By 2007, McCaskill’s Spidey sense was tingling in a big way. Something was amiss in the OTC markets. “The penny market just stopped and people were pulling liquidity out of the market. … And then along came 2008.” The financial crisis wiped out a lot of big players on Wall Street, but McCaskill says one aspect of it caught his attention. The volatility caused by the crash got him interested in “big board” stocks, the stocks listed on the New York Stock Exchange, for the first time in his life. “If something dies down to $5 that was $20 and it’s going to bounce back up, that’s the things I get interested in,” he says. </p>
<p id="NCTvKB">McCaskill saw opportunity in the chaos, but to profit from it he would have to develop new skills. “Even though I had no idea almost what I was doing,” he says, “talk about the time of your life to learn how to trade options.”</p>
<p id="j54HH9">Options are a way to trade stocks with a smaller risk relative to the potentially high reward. Essentially, they are contracts to buy (call) or sell (put) a stock at a certain price during a fixed period of time. They are complicated, but the gist is that instead of buying a share of a stock for, say, $100, you buy a call option that allows you to buy a share of that stock for $100 at a later date. If the price of the stock goes up, you still get it at the discounted price of $100 no matter how high it climbs. If the price goes down, you don’t have to exercise your option, and can throw the contract away and pay a predetermined premium. Options are about timing the market and calculating probabilities. A trader like McCaskill, who had made his bones monitoring some of the most volatile stocks available through the OTC markets, seemed to be well-primed for the newly volatile stocks on the major exchanges. </p>
<p id="C51psu">He figured his ability to find real financial red flags would prove useful. After all, as the 2008 financial crisis ripped through the economy, fraud was being exposed everywhere he looked, even in the unlikeliest of places. Some of the most venerated financial institutions in the United States—Bank of America, Bear Stearns, Lehman Brothers—were crumbling beneath the weight of the housing fallout. “When you’re sitting there trading in it and it’s absolute carnage, there’s a reason why they’re going under,” McCaskill says. “You know that there is. So you become pretty pessimistic and negative.” </p>
<p id="Lvwno3">But McCaskill’s foray into the big board stocks wasn’t met with the same early success he found in penny stocks. There was a steep learning curve. “I remember making $60,000 one day and not being aware that my puts expired the next day,” he says. “And the next day it was all gone.”</p>
<div class="c-float-left c-float-hang"><aside id="TyMXad"><q>“I remember making $60,000 one day and not being aware that my puts expired the next day. And the next day it was all gone.” — McCaskill</q></aside></div>
<p id="qilb4R">McCaskill saw huge fluctuations in his trading account during this period. He was betting short-term options—options that expired within one week—on extremely volatile stocks, essentially risking as little as possible to try to hit a long shot and make a bundle. “It’s more than likely, 95 times out of 100, it’s not going to work,” he says. “I’m betting on that one time out of 100 that it’s going to work.” McCaskill knew that if he kept betting on huge long shots, his day would eventually come. He just needed that day to come before he went broke.</p>
<p id="Bh8uve">As the government tried to figure out how to save the American economy from collapse, McCaskill made bets that the newly elected Obama administration would be good for the market. He figured that things were already at rock bottom and had nowhere to go but up. And America was swollen with optimism and enthusiasm about the new president. But it turned out that the economy had a little bit further to slide. “I remember Bank of America just almost going under right when January started and it’s like, ‘Oh, you got to be kidding me.’” </p>
<p id="1lNKsr">He got wiped out. “I mean, zero, my account was zero.”</p>
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<p class="p--has-dropcap" id="GFlZRZ">McCaskill grew cynical after that experience, and set out to uncover which domino would fall next. He switched from betting on the Obama administration’s success to betting on its failure. And then the bailouts came. In early 2009, the federal government began to buy back many of the toxic assets financial institutions had on their books in order to save them from failure and to encourage them to start lending money again. In all, the government spent $700 billion. The program was met with anger and skepticism by many Americans, including McCaskill, who structured his investments in anticipation of stocks continuing to decline. “At that time, very few people understood how well [the bailout] would work,” he says. The infusion of cash into the big players on Wall Street lubricated the markets and got stocks moving up again—once again wiping McCaskill’s accounts clean. Every which way he turned, he was getting killed. He could not seem to make sense of the madness happening in the markets. So he took a break. He went to play some volleyball. And he figured out how to scrape together a living on the courts. </p>
<p id="9y4WCo">For the next decade McCaskill would live the life of a beach bum, and every time he’d scrape together an extra $500 he’d stick it in his investment account and swing for the fences. “Like, let’s find the 100-to-1 shot,” he says. “Once in a while you really hit one good and then you try to do it again. You try to parlay it. Yeah, and then that never worked.” </p>
<div class="c-float-right c-float-hang"><aside id="KYyCMT"><q>“Like, let’s find the 100-to-1 shot. Once in a while you really hit one good and then you try to do it again. You try to parlay it. Yeah, and then that never worked.” — McCaskill </q></aside></div>
<p id="2EPPMs">None of McCaskill’s moonshots landed, but he never stopped paying attention to the markets. One day in 2019, an old friend from his penny stock days reached out to him with a tip. The ticker symbol was SOLI, for a company named Solei Systems. It was a “gray sheet” stock, meaning the Securities and Exchange Commission had suspended it from official trading for one reason or another. But when McCaskill looked at it, he saw someone building an interesting telehealth company in the shell of this failed venture. Intrigued, he bought 700,000 shares. “I bought it pretty heavily for the amount of money that I had at that time.” The stock rose from a penny to five cents. McCaskill got excited and started telling his friends and family about the stock. And the price kept going up. He was finally doing it. And his friends and family were along for the ride. “We were surprised, it was kind of the find of a lifetime,” he says. </p>
<p id="5sfv6K">Over the next eight months, the stock went all the way up to $1.30 a share. “And the big dream for a grinder, I’ll say like me, was always to get your bank account to a million dollars,” he says. “I got right up to that $955,000. I remember, I got a picture of it. I’m up to 955, I’m almost to my million, I’m doing my dance. I’m like, ‘I’ve done it, hi-ya!’</p>
<p id="VObAuN">“Then it crashes back down.” </p>
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<img alt=" " data-mask-text="false" src="https://cdn.vox-cdn.com/thumbor/Yxle8ZjZgcgQ7dyUg_r7SZFIQEQ=/800x0/filters:no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22306252/Screen_Shot_2021_02_03_at_8.03.31_AM.png">
<cite>Courtesy of Mike McCaskill</cite>
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<p id="CECTRD">The stock plummeted all the way to 20 cents. “We’ve always told him, just get out you’ve made some money,” says Ken Hayden, McCaskill’s uncle who worked as an account manager at UPS in Louisville. “But Mikey has always strived for a larger hit. He’d have done a lot better over time if he didn’t hold on to things as long as he had.” Kortick echoes that sentiment. “Mike was more of a gambler,” he says. “I’ve seen him blow up a few accounts.” </p>
<p id="oisEUZ">McCaskill wasn’t ready to let his fortune flutter away. He started buying options to try to make back the money, but those failed, and he busted again. “I was like, ‘Man, no more pennies.’” Determined to get his mojo back and capture the riches that eluded him, he rolled up his sleeves and turned to trading options on the big board stocks. </p>
<p id="okPvGn">The volatility that originally drew him into trading options back in 2008 wasn’t there to the same extent in 2019. But that isn’t to say there wasn’t any. McCaskill knew that the right kind of stock for the right kind of trade—low investment, high reward—was out there. So he scavenged. And he found a website called highshortinterest.com that kept a daily updated list of stocks that had high short interest.</p>
<p id="M8WqDx">Short selling happens when someone thinks a stock’s price will go down, and they borrow a number of shares from a lender for a set period and agree to return it with an interest payment later. Short interest is the percentage of a company’s shares that are loaned out to short sellers but haven’t yet been returned. If a company has high short interest, that means there are so many shares loaned out to short sellers that it’s hard to find shares on the open market to buy and return to the original owners. In these situations, one of two things can happen. If there’s no interest in buying the stock, the price will continue to go down, and the short sellers will clean up. If there is a sudden demand for shares, however, the limited supply of shares not already loaned out to short sellers can cause the price to quickly skyrocket. “Those stocks if they get the right news can go way up, or if they get even worse news, they can go way down,” McCaskill says. “They’ve got great volatility.”</p>
<p id="XZEbS5">McCaskill was looking for a company that had an abnormally high short interest percentage, perhaps with 50 or 60 percent of its shares being sold short. The company at the top of the list he found was a strip-mall video game retail chain called GameStop—yes, the one widely known for haggling with gamers over the price of their used copies of <em>Mario Kart</em>. GameStop’s short interest was an astounding 90 percent. That got McCaskill’s attention. He wanted to know why the number was so high, so he did some research. </p>
<div class="c-float-left c-float-hang"> <figure class="e-image">
<img alt=" " data-mask-text="false" src="https://cdn.vox-cdn.com/thumbor/9sm2Ctzhi2LoA_qKueVjA7Xhfbw=/800x0/filters:no_upscale()/cdn.vox-cdn.com/uploads/chorus_asset/file/22306647/McCaskill_research.jpg">
<cite>Courtesy of Mike McCaskill</cite>
<figcaption>Mike McCaskill</figcaption>
</figure>
</div>
<p id="wcdVAq">What he discovered was that GameStop traded around $20 in 2018, before the shorting began. The company was in bad shape, sure, but that was mostly because the retail landscape was changing—not just for GameStop but for everybody. Still, a short interest of 90 percent suggested that the market believed this company was literally going out of business, and McCaskill just didn’t see it that way. GameStop was slimming down. It had money, so it wasn’t on the brink of bankruptcy. And it was going to generate revenue when new video-game consoles like the PlayStation 5 came out in 2020. But the hedge funds shorting GameStop compared the business to Sears or K-Mart. Barron’s put GameStop on a list of “‘<a href="https://www.barrons.com/articles/beware-gamestop-jcpenney-stock-51562367723?mod=article_inline">Radio Shack’ Stocks</a>.” “GME is the Blockbuster of video games,” <a href="https://www.forbes.com/sites/brettowens/2019/03/07/forget-kraft-heinz-these-are-the-next-big-dividends-to-collapse/?sh=2562725cfd00">wrote Brett Owens at <em>Forbes</em></a> in 2019, “and it’s at real risk of running out of lives as gamers go online to get their fix.” The near-consensus was this business was on its way to pasture. The stock was shorted down to $5 a share. </p>
<p id="5fi7Pm">One person who wasn’t shorting GameStop back in 2019 was the investor Michael Burry, who was famously portrayed by Christian Bale in the film <em>The Big Short</em>. Burry’s fund, Scion Asset Management, owned 3 million shares of GameStop, about 3 percent of the company. In an effort to revive the stock price, Burry wrote a letter to management in August 2019 calling for it to spend some of GameStop’s cash on hand to buy back existing stock “<a href="https://www.businesswire.com/news/home/20190819005633/en/Scion-Asset-Management-Urges-GameStop-Buy-238?mod=article_inline">at once and with urgency</a>.” Burry argued that “such a repurchase would increase earnings per share dramatically—far more than any other possible action on a per share basis.” Management listened, and by December had spent about $178 million buying back about a third of the outstanding shares. Then management “retired” those shares, thereby decreasing the number available on the market. Ordinarily, a move like this would push the price of the stock higher. If a company like Apple bought back a third of its shares, the price would go through the roof. But nothing happened. The price didn’t budge. And the short percentage grew even higher. </p>
<p id="qvREG3">“So when I’m researching this on why the company ended up on the high short interest list, it’s because these maniacs, this hedge fund or group of hedge funds, literally shorted everything that GameStop bought back,” McCaskill says. “I was fascinated because I’ve never seen anything so boldly stupid in my life if a company’s not going to go under.” </p>
<div class="c-float-left c-float-hang"><aside id="Q8roVu"><q>“These maniacs, this hedge fund or group of hedge funds, literally shorted everything that GameStop bought back. I was fascinated because I’ve never seen anything so boldly stupid in my life if a company’s not going to go under.” —McCaskill</q></aside></div>
<p id="cJi8S1">McCaskill realized that GameStop presented a rare opportunity. After the stock buybacks, the bet was simple: You either believed GameStop would stay solvent or thought it would go out of business. If it went out of business, the shorts would make a killing. If it managed to stay afloat, the price had virtually nowhere to go but up. And now that there were even fewer shares on the market, the short interest raised to an eye-popping 110 percent. </p>
<p id="kb6LK5">Now you may be wondering how that’s possible. How can there be a short interest of 110 percent? How can there be 110 percent of anything? “Basically all the stock got borrowed up,” says Tom Gladd, a retired quantitative analyst who has worked for Citi and Morgan Stanley. “That would be 100 percent of the stock being shorted. Those people would then sell the stock in the market to other people, who were then long in the stock and they could loan it out. So the same stock gets loaned out more than once.” </p>
<p id="IKlYnU">This means that short sellers were borrowing GameStop stock from shareholders (probably from those shareholders’ brokers, without the shareholders’ knowledge) and then immediately selling the stock into the open market, with the intention of buying the shares back later at a lower price. However, the people they sold the shares to were also short sellers, who also intended to sell the shares into the open market and buy them back later. It’s like holding up a mirror to a mirror, an M.C. Escher drawing of a stock trade. The fact that it’s all legal simply beggars belief.</p>
<p id="cTDF9f">But it was legal, unlike “naked short selling,” which is against the law. Naked short selling is when you sell shares that you can’t confirm actually exist—essentially selling a promise you’ll get the shares from … <em>someone</em>. According to Sammy Azzouz, president of Heritage Financial Services and author of <em>Beyond the Basics: Maximizing, Allocating, and Protecting Your Capital</em>, this used to be fairly common. “The SEC banned the practice in 2008 as a result of the financial crisis and run on financial-related stocks that some say sharpened the market turmoil,” Azzouz says. “The problem is that naked short selling can cause the short bet against a company to be larger than the shares available in the market. It facilitates manipulation in stock prices since the short bet is not connected to the amount of shares available.” </p>
<div class="c-float-right c-float-hang"><div id="DDLQ0c"><iframe src="https://open.spotify.com/embed-podcast/episode/0rR6MjqhVKcwtPJNSzTcVJ" style="border: 0; width: 100%; height: 232px;" allowfullscreen="" allow="encrypted-media"></iframe></div></div>
<p id="lroleC">If this sounds a lot like what was happening to GameStop, well, that’s because it is. To the SEC, though, there’s a distinction between selling a share you don’t own and selling the same share over and over. “The rules have some loopholes,” Azzouz says. </p>
<p id="X0h5Iy">“It’s a fabricated share, is the best thing that I can say,” McCaskill says of what he saw in the GameStop stock short interest. “I’ve asked a lot of people this question, I was like, ‘How can people continue to short? If there are no true shares trading, how did that happen?’ And it’s because shorts are built on top of shorts, on top of shorts, on top of shorts. It’s like a pyramid scheme. It’s like, ‘Oh, I’ll short these, I’ll loan them out, I’ll buy these.’ And it never ends. It’s like a never-ending cycle.”</p>
<p id="NGTWWw"></p>
<p class="p--has-dropcap" id="PKKiNf">McCaskill endlessly studied GameStop. He learned about its fundamentals. What he saw wasn’t a company trying to die. He saw a company with real fight in it to live. And he believed that there was a trade to make. A big one. “I knew that one day this would explode,” he says.</p>
<p id="9TRg3e">He started buying 1,000 call option contracts on GameStop every week, which meant that he was willing to pay a small premium on each contract in exchange for the right to buy the shares at the current prices if the stock price managed to go up within the week. “The contracts were maybe five, 10 cents. And I’d buy an assload of them,” he says. “And they would expire worthless every time, because the shorts sat on that stock. No matter what happened, it didn’t matter. They were defending that like it didn’t matter. And I lost my ass on calls, over and over.” </p>
<div class="c-float-left c-float-hang"><aside id="ySqOSZ"><q>“I was like, ‘How can people continue to short? If there are no true shares trading, how did that happen?’ And it’s because shorts are built on top of shorts, on top of shorts, on top of shorts. It’s like a pyramid scheme.” — McCaskill</q></aside></div>
<p id="aqu3qg">McCaskill wondered why the hedge funds that had shorted the stock weren’t covering their shorts. Surely, he thought, they would buy back the stock when it was below $4 and return it to wherever they borrowed it from. At some point, the shorts would <em>have</em> to cover. And when they did, the demand for the stock would tick the price back up. But it never happened. And then it occurred to McCaskill—the funds weren’t ever going to cover their short positions, because they couldn’t. They were trapped in what he calls “an irreversible trade.” Unless GameStop issued new shares, those who shorted the stock were running out of places to buy shares that they hadn’t already bought and sold. “They made it to where there are no real shares,” McCaskill says. “They were betting that this was going bankrupt and that it would never survive. And it was an interesting bet, but it was wrong.”</p>
<p id="UZGvDU">As McCaskill continued to lose money trying to time his options to an uptick that never came, he touted the stock to all of his friends and family once again. He convinced his uncle Ken, who was at this point had retired from UPS, to invest. “He’s always teased me because I’m pretty much still holding a significant share in UPS,” Hayden says. “He says, ‘You can’t make money on that old bear.’” But Hayden trusted McCaskill. He remembered the money they had made in SOLI. And he knew how hard McCaskill worked. “The guy gets up at 3 in the morning, way before most people, and he’s online most of the day,” Hayden says. “He’s not a goofball. He knows his shit.” Hayden bought about 6,000 shares. </p>
<p id="iiPqvR">McCaskill’s brother took more convincing. “I’m pretty risk-averse most of the time. I don’t really try to play these things,” Delling says. “He was always chasing the white whale. I’ve always told him, ‘Mike, you’ve been Captain Ahab for a long time. It’s time to stop chasing the white whale.’” </p>
<p id="TkRSHA">McCaskill really did seem to think GameStop was his white whale. And he would suffer like Ahab in pursuit of it. At that time, he believed it might triple or quadruple in value, so he invested in options that would pay him off exponentially higher rates of return. “To me, you’ve got to time this short squeeze because this thing could go to $50 and rip somebody’s head off,” he says. </p>
<div class="c-float-right c-float-hang"><aside id="37EDvA"><div data-anthem-component="readmore" data-anthem-component-data='{"stories":[{"title":"The GameStop Stock Market Saga Explainer Dictionary","url":"https://www.theringer.com/2021/1/28/22255294/game-stop-stock-market-saga-robinhood-wall-street-bets-reddit"},{"title":"Before Reddit Disrupted the Stock Market, It Cracked the Economy of ‘Animal Crossing’","url":"https://www.theringer.com/2021/2/9/22271651/gamestop-stock-amc-animal-crossing-wall-street-bets"}]}'></div></aside></div>
<p id="5cpNas">What McCaskill was waiting for—the short squeeze—was the moment when demand in the stock would outpace the supply not already being shorted. When that happened, the price would go up so much that the owners of the stock that had been loaned out to short sellers would call back in their shares. Those short sellers, who had already sold the stock in the hope that they could buy it back cheaper, would be forced to go find whatever stock they could, thereby creating more demand and inflating the price even more. The result would be a rapidly accelerating price (“to the moon!”). But the day never seemed to come. All through 2020, McCaskill banged his head against the wall buying short-term options, hoping for the short squeeze to begin. “It had maybe a 20 or 30 percent pop, and maybe I made a little money, but believe me, I lost it the next day trying to do it again.” Looking back, he says his strategy was “moronic.” Then, while searching for somebody, anybody, who was seeing what he saw in GameStop, he discovered <a href="https://www.youtube.com/channel/UC0patpmwYbhcEUap0bTX3JQ">Roaring Kitty’s YouTube channel</a>. </p>
<p id="miTSOP">Roaring Kitty is 34-year-old Keith Gill, who, unbeknownst to McCaskill or anyone else, was also posting on the popular Reddit sub r/WallStreetBets as “DeepFuckingValue.” Gill was trying to play GameStop options in 2019. By July 2020, Gill had started a YouTube channel on which he’d livestream himself talking about his stock plays and investing strategies. On July 27, when GameStop was still at about $4 a share, he made an hour-long video laying out his case for why the company was a good investment, and inviting viewers to help him figure out whether the assumptions he was making were wrong. </p>
<p id="PoSs97">When McCaskill discovered Gill’s channel, it was a revelation. Finally, someone else was talking about what McCaskill saw in the stock. But even though McCaskill was looking for validation in his thesis, he remained skeptical of the source. Gill wore loud, colorful clothing and spoke in the parlance of memes. He seemed to be broadcasting from his basement. “He was kind of crazy,” McCaskill says. “Sat there and talked about GameStop for four hours.” Still, everything Gill said tracked with McCaskill’s thinking. McCaskill watched the videos and chatted with Gill, and soon he realized what Gill was doing differently—he was buying options that expired in months instead of a week. Those options cost more than McCaskill’s options, but they gave GameStop a longer horizon to make its move. “He bought himself time,” McCaskill says. </p>
<p id="Gqog4y">McCaskill’s strategy had been to buy the cheapest options—sometimes ones that cost mere pennies—so he could purchase high volumes of them and make the biggest payoff if they hit. The problem was that in order for his big bets to work, the stock needed to soar quickly; an improbable, but not impossible, scenario. “I’m doing that, especially with GameStop, because I know that if one slice of news comes out that’s right, it would go insane,” McCaskill says of how he was operating. After watching Gill’s videos, he switched it up and shelled out more money for options that expired farther out. And then he sat back and waited for that one slice of news to come out. He didn’t have to wait long.</p>
<p id="u9b1qo">In August 2020, Ryan Cohen, the founder of Chewy.com, was <a href="https://news.gamestop.com/node/18181/html">forced to file an SEC report</a> because he had purchased so many shares of GameStop that he owned 10 percent of the company, making him subject to insider status. This was monumental news. Cohen, whose company was purchased by PetSmart in 2017 for $3.35 billion, was a respected leader in the tech industry. Cohen was an expert in e-commerce, and his interest in GameStop seemed to indicate that he believed he could help the company transition to online sales. </p>
<p id="6pbgLS">But more than all that, Cohen’s purchase of what amounted to 9 million shares of GameStop signaled that he saw the stock as being a valuable investment. After all, only a couple of months before the disclosure, Cohen had <a href="https://www.bloombergquint.com/businessweek/chewy-founder-plowed-3-35-billion-into-apple-and-wells-fargo">made waves on Wall Street</a> when he announced that he was investing the entirety of his fortune into only two stocks: Apple and Wells Fargo. GameStop was joining an elite and exclusive portfolio. </p>
<p id="8b1iTL">This was the break that McCaskill, Gill, Burry, and others needed to get the stock moving up. The short sellers had been able to keep the price low time and time again, backing up their positions with more shorts and keeping the bad news about GameStop flowing. If McCaskill was right, the shorts were now all out of ammo, and they were cornered. </p>
<p id="XbDscG">Slowly but surely, the stock started to move. In the next two months GameStop went from $4 to $10. But then the stock stalled. By November, Cohen was publicly feuding with GameStop CEO George Sherman over the company’s direction. Cohen wanted GameStop to dump real estate assets and transition to e-commerce to become the Amazon of gaming. Cohen pushed for multiple seats on the board of directors, even though <a href="https://www.cnbc.com/2020/11/20/former-chewy-ceo-ryan-cohen-urges-gamestop-to-become-the-amazon-of-video-games.html">nobody had any clue who could even participate in a shareholder vote</a>. The ridiculous level of short interest meant that most of GameStop’s shares were tied up in some kind of confusing and ambiguous state of ownership. </p>
<p id="qRC8TT">The battle between Cohen and Sherman continued through the holidays, culminating in a January 11 announcement that Cohen and two allies would be put on the board, giving him a majority and effective control of the company. “They put that press release out and I’m like, hallelujah, this is probably it,” McCaskill says. “I’m not screwing around anymore. I’m not going to miss this. I don’t give a shit.” </p>
<p id="Af5Fx1">McCaskill loaded up. He tipped off his uncle as well. “I bought 4,000 more [shares],” Hayden says. When he called his broker to tell him how much GameStop stock he wanted to buy, Hayden says his broker “thought I was nuts.” </p>
<div class="c-float-left c-float-hang"><aside id="88Y26J"><q>“They put that press release out and I’m like, hallelujah, this is probably it. I’m not screwing around anymore. I’m not going to miss this. I don’t give a shit.” — McCaskill </q></aside></div>
<p id="m4gqrh">The stock began to climb. It crept just shy of $20 by the closing bell on January 12. Frustrated by the pace, McCaskill logged on to Twitter early the next morning and noticed that Jim Cramer was up and tweeting. “I don’t really watch Cramer, but, you know, I’m smart enough to know he’s got a large audience,” McCaskill says. “All we need is some attention here and he has already commented negatively on it. He would do ‘Sell sell sell’ and ‘That’s brick and mortar! It’s garbage!’ and I’m like, you know, I’m going to ask him a question.” </p>
<p id="43naE7">McCaskill tweeted a screenshot of the high short interest stocks, showing GameStop at the top of the list with what had ballooned to an absurd 136 percent short interest, along with a breakdown of all of the shares, the short interest, and the market capitalization. </p>
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<p lang="en" dir="ltr"><a href="https://twitter.com/jimcramer?ref_src=twsrc%5Etfw">@jimcramer</a> please help explain this to me? Please tell me how this does not squeeze for a month with <a href="https://twitter.com/search?q=%24CHWY&src=ctag&ref_src=twsrc%5Etfw">$CHWY</a> management team now on the board? <a href="https://twitter.com/hashtag/Rebirth?src=hash&ref_src=twsrc%5Etfw">#Rebirth</a> <a href="https://twitter.com/hashtag/shortsqueeze?src=hash&ref_src=twsrc%5Etfw">#shortsqueeze</a> <a href="https://twitter.com/hashtag/MOASS?src=hash&ref_src=twsrc%5Etfw">#MOASS</a> <a href="https://twitter.com/ryancohen?ref_src=twsrc%5Etfw">@ryancohen</a> <a href="https://t.co/pD1JG4PA5g">pic.twitter.com/pD1JG4PA5g</a></p>— MWM (@MWM76) <a href="https://twitter.com/MWM76/status/1349308142753116160?ref_src=twsrc%5Etfw">January 13, 2021</a>
</blockquote>
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<p id="7VFqVw">Ten minutes later <a href="https://twitter.com/jimcramer/status/1349310644823207936">Cramer quote tweeted McCaskill</a>. “Excuse my ignorance: where did you get this list.. kind of interesting for me to focus on. thank you for bringing it to my attention.” The next morning, Cramer was on <em>Squawk on the Street</em> saying that “the guy who’s got GameStop” was likely one of the most powerful people on Wall Street. And later that afternoon Cramer did a deep dive on GameStop on his show. By the end of the day, the stock was trading at just under $40 a share. “I remember talking to my wife, you know, this is the point where people are going to pressure you to sell,” he says. “Like, ‘Oh my God, you’re up? How much? And you’re not selling? Are you nuts?’ And I’m like, ‘No, you don’t understand.’” </p>
<p id="gXPFvr">McCaskill didn’t want to sell. He believed in his thesis that the shorts were stuck and that the stock would keep going up. He felt confident that $40 was just the beginning, as confident as he’d ever been about anything. He could feel that he was on the verge of something major. He already had a sizable position, but he wanted more on the off chance that the stock made a really big move. On January 19, he made one more trade—the biggest of his life. He bought 750 short-term $60 call options. “He was willing to lose it all in order to take that chance to hit those way-out-of-the-money options,” Kortick says. “You only need it once. One play like that and you’re done. That’s everything.”</p>
<p id="DlfmA8"></p>
<p class="p--has-dropcap" id="eDA9MK">By January 25, GameStop was trading at nearly $80 a share. Nobody could deny the mother of all short squeezes was real anymore. It was here. One hedge fund that had heavily shorted the stock, Melvin Capital, was forced to close out of its position at a massive loss, and <a href="https://www.bloomberg.com/news/articles/2021-01-25/citadel-point72-to-invest-275-billion-in-melvin-capital">reportedly</a> needed an infusion of nearly $3 billion from other hedge funds, including $750 million from Mets owner Steve Cohen’s Point72. As shorts scrambled to buy more shares to cover their positions, the price of GameStop continued to soar. McCaskill’s friends and family were going nuts. They blew up his phone with texts and phone calls. <em>Should we sell?</em> McCaskill knew once the stock hit $40 that the infinite short squeeze was in play. He told every person he knew and loved, at great risk to his reputation and relationships, “Hold on, you haven’t seen anything yet.” </p>
<div class="c-float-right c-float-hang"><aside id="8ixSLz"><q>“He was willing to lose it all in order to take that chance to hit those way-out-of-the-money options. You only need it once. One play like that and you’re done. That’s everything.” — Kortick</q></aside></div>
<p id="tZoFLF">“To be honest it was the most stress I’ve ever felt in my entire life,” says Delling, who finally decided to invest in GameStop once it hit $40 a share. “My brother is better with the stress because he has weathered the storm. I have a new family so I had to take whatever I could get for my kids and my family and the pandemic, and I didn’t want to be stupid. You get news that it’s climbing and you watch the ticker and you’re like, ‘God, how high can this thing go?’ My whole body was the sweatiest I’ve ever been sitting still.” </p>
<p id="oylYcx">After January 26, when the billionaire Tesla CEO Elon Musk <a href="https://twitter.com/elonmusk/status/1354174279894642703">tweeted</a> out a single word, “Gamestonk!!” the stock took off to an absolutely mind-melting $347 a share. </p>
<p id="du4axa">McCaskill exited most of his position. Like the song says, you gotta know when to walk away. Despite still believing in GameStop’s value, and believing that we haven’t seen the end of the infinite squeeze, he simply couldn’t justify keeping that much money tied up in the trade. After all, $25 million is a lot of money for a beach bum to manage. His brother, uncle, and Kortick all sold and took profits. The two accounts McCaskill set up for his children, ages 4 and 6, with their Christmas money netted $1.5 million each. </p>
<p id="pe3wGb">“It’s a Cinderella story. Mike truly is Cinderella,” Hayden says. “The money Mike made was stupid money. But it didn’t happen to him overnight. He saw this and we were in it long before all this frenzy. But now he’s set for life.” </p>
<p id="SVLaCJ">McCaskill held on to about 2,500 shares of GameStop, because he wanted to be able to say he sold at $1,000. While selling the stock when he did was somewhat controversial among the Redditors of WallStreetBets, since many of them believed that the stock could climb much higher if those with long positions waited out the short sellers, McCaskill wasn’t looking to wage any crypto-political war with Wall Street. “I’m not part of this Reddit movement, nor have I ever been,” he says. McCaskill felt that most of the investors who had already made money in GameStop should have gone ahead and sold, particularly if the money could have made a difference in their lives. “When you start getting huge gains you have to take money off at some point.” Michael Burry took to his rarely used Twitter account to express support for those like McCaskill who chose to take their profits. “Hey, $GME is now a $stonk and may go >$1000, but if I made a life-altering amount in this stock, I’d punch out.” </p>
<div class="c-float-left c-float-hang"><aside id="G9juhG"><q>“You get news that it’s climbing and you watch the ticker and you’re like, ‘God, how high can this thing go?’ My whole body was the sweatiest I’ve ever been sitting still.” — Brian Delling</q></aside></div>
<p id="IztRVD">Kortick had also invested in GameStop early on, but he sold around $160, making himself a fraction of what McCaskill made by holding on. “I was kicking myself, but then again I made the most I’ve ever made on a stock, so I couldn’t be that unhappy,” he says. Delling, meanwhile, sold his stake in GameStop the day Musk tweeted “Gamestonk!!” because he feared that the SEC would take action against Musk for the tweet, <a href="https://www.pbs.org/newshour/economy/making-sense/why-elon-musks-tweets-matter-to-the-sec">as it had in 2018 over tweets Musk made about Tesla</a>. “I wish I had waited one more day,” Delling says. “I’m not one to normally praise my brother, but I’m super proud of Mike. I’ve told him that at least 12 times since I’ve sold out. I’ve told him thank you so much.</p>
<p id="JdgrY2">“He obviously finally got the white whale. I mean, even Ahab didn’t do that.” </p>
<p id="lmg8AM"></p>
<p class="p--has-dropcap" id="7tKC6H">In the days since McCaskill got (mostly) out of GameStop, Wall Street has pulled out every stop to push the price of the stock back down. From the popular trading app Robinhood drawing on lines of credit to stay afloat to a number of brokerages restricting the purchase of shares of GameStop, troubling signs abounded. This effort appears to be working. By the closing bell on February 2, GameStop’s stock price had dropped to $90 a share. By February 12, the stock was all the way down to $52.40. “The government will be slow to react to this, but once it does it could have serious implications,” says Gladd. “I’m almost certain the people who will get hurt are the people coming late to the game, reading the newspaper today and thinking, ‘Oh these guys got rich, I’ll max out my credit card.’ It’s the classic thing where you sell to a greater fool. These people just now coming into it are the greater fools.”</p>
<p id="ajATjv">Still, McCaskill believes in the stock. He <a href="https://twitter.com/MWM76/status/1359873577063972865?s=20">tweeted last week that he expects</a> the squeeze to continue and that the shorts “will pay the same as they did from $4.” Burry also seems to think that trouble may still lie ahead for those who are shorting the stock. Earlier in February, Burry warned investors that back in May 2020, when he tried to call in his GameStop shares, it took his broker weeks to find the shares. “‘I cannot even imagine the shitstorm in settlement now. They may have to extend delivery timelines,’” he tweeted. </p>
<div class="c-float-right c-float-hang"><aside id="ARb7YI"><q>“It’s a Cinderella story. Mike truly is Cinderella. The money Mike made was stupid money. But it didn’t happen to him overnight. He saw this and we were in it long before all this frenzy. But now he’s set for life.” — Ken Hayden</q></aside></div>
<p id="JdPwAd">As the GameStop saga drags on, it’s worth noting that the mother of all short squeezes isn’t a cataclysmic event. It’s a sideshow. While McCaskill and Roaring Kitty made millions, and Burry and Cohen made billions, most of the everyday GameStop investors who got in on the craze probably didn’t see their lives change dramatically. Maybe they bought too high and sold too low and lost a big chunk of what they deposited in their Robinhood account. Maybe they sold at precisely the right time and quadrupled their investment. Either way, they likely headed back to work Monday morning. </p>
<p id="qsH9nC">And for all that is made of the retail investors supposedly taking down Wall Street, the massive power of the stock market still weighs heavily on our backs. The hedge funds will keep hedging. The rich will stay rich. Meanwhile, GameStop is still a Fortune 500 company with over 50,000 employees, many of whom earn around $10 an hour. Of its 5,500 stores, it plans <a href="https://www.yahoo.com/now/legendary-chain-closing-over-1-121358189.html">to close more than 1,000</a> by March, and many of those employees will lose their jobs. All of this will happen regardless of whether GameStop’s stock is worth $5 or $500. It’s ironic how those on both sides of the GameStop bet want the same thing: for more stores to close, either as a sign that the company is failing or modernizing. This is the paradox of the “real” economy and the casino where gamblers bet on it. They hold their mirrors up to one another. They beggar belief. </p>
<div class="c-float-left c-float-hang"><aside id="5YcOct"><q>“He obviously finally got the white whale. I mean, even Ahab didn’t do that.” — Delling</q></aside></div>
<p id="0cTUHz">As I talked to McCaskill at the end of January, GameStop was at $325 a share, the whole world was obsessed with it, and his cup was about to runneth over. Yet the next day he planned to run a volleyball tournament at King Louie’s for $700. Here, too, was a paradox. McCaskill had no intention of letting his newfound fortune change him. If anything, the money afforded him the privilege to continue being exactly the same person he has always been. “I’m not going to go buy the Lambo and act like an imbecile,” he says. “I’m pretty minimalist. It’s more of just the satisfaction of, <em>I did that</em>.”</p>
<p class="c-end-para" id="q69VFx">Despite catching his white whale, the guy who got GameStop is still a Wall Street player without a college degree. A beach bum in a town with no beach.</p>
<p id="z8pfux"><em>David Hill’s book, </em>The Vapors: A Southern Family, the New York Mob, and the Rise and Fall of Hot Springs, America’s Forgotten Capital of Vice,<em> is out now. His website is </em><a href="http://davidhillonline.com/"><em>davidhillonline.com</em></a><em>.</em></p>
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https://www.theringer.com/2021/2/16/22284786/gamestop-stock-wall-street-short-squeeze-beach-volleyball-refereeDavid Hill2021-02-09T06:20:00-05:002021-02-09T06:20:00-05:00How ‘Animal Crossing’ May Have Informed the GameStop Stock Rush
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<img alt="" src="https://cdn.vox-cdn.com/thumbor/TKjo-bEszKBKavqi7Z7Ig5W_9Ss=/149x0:1014x649/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/68791524/animal_crossing_13.0.jpg" />
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<p>The rush on so-called “meme stocks” in January and early February may have had an unlikely forebear: the turnip market in the hit Nintendo game</p> <p class="p--has-dropcap" id="26CDCB">About a week before a failing chain of stores that sell video games became the stuff that several <a href="https://ew.com/movies/gamestop-movies-wallstreetbets/">movies</a> <a href="https://deadline.com/2021/02/hbo-gamestop-saga-scripted-series-development-with-jason-blum-andrew-ross-sorkin-len-amato-1234688634/">are</a> <a href="https://deadline.com/2021/02/jonah-tulis-gamestop-documentary-submarine-1234687991/">made</a> <a href="https://deadline.com/2021/02/gamestop-feature-doc-chris-temple-zach-ingrasci-xtr-1234688002/">of</a>, Angie Fung, a regular lurker on the WallStreetBets subreddit, learned that GameStop’s stock might be a buying opportunity. She purchased a share of GME on January 25, as the stock’s price started to spike, and gradually amassed more shares as it continued to climb. She also invested in a trio of other well-past-their-peaks “meme stocks” that the subreddit sent soaring: AMC, Nokia, and BlackBerry. She hitched a ride on the rusty rockets as they lifted off, and days later, she rode them down to earth as they ran out of Reddit fuel. </p>
<p id="S15ONS">For Fung, who says she neither gained nor lost the <a href="https://www.vice.com/en/article/g5b354/this-whole-thing-has-numbed-me-to-money-gamestop-investors-after-the-crash">riches</a> that other eager traders did, the short-squeeze showdown between the behemoth hedge funds that had heavily shorted the faltering stocks and the crusading, app-equipped retail traders that banded together to thwart them—to oversimplify the situation in a screen-ready way—was a landmark moment but barely a blip in her bank account. The 24-year-old Seattleite, who has a day job in property management, is a casual investor who doesn’t put more money in the stock market than she can comfortably afford to lose. “I’m definitely losing money on all these shares right now, but I’m pretty detached and I’m not too worried about them,” she says. “All I can do is hold with my <a href="https://www.theringer.com/2021/1/28/22255294/game-stop-stock-market-saga-robinhood-wall-street-bets-reddit">diamond hands</a>!”</p>
<div class="c-float-left c-float-hang"><aside id="l223Az"><div data-anthem-component="readmore" data-anthem-component-data='{"stories":[{"title":"The GameStop Stock Market Saga Explainer Dictionary","url":"https://www.theringer.com/2021/1/28/22255294/game-stop-stock-market-saga-robinhood-wall-street-bets-reddit"},{"title":"Escaping Into the Soothing Grind of ‘Animal Crossing: New Horizons’","url":"https://www.theringer.com/2020/4/2/21203824/animal-crossing-new-horizons-social-distancing-diaries"}]}'></div></aside></div>
<p id="Sb5Ny8">Fung’s investment mindset was forged by financial failure. “I think a lot of people don’t realize that my generation grew up during the 2008 financial crisis,” she says. “Unfortunately, many people are used to losing, and we definitely don’t mind losing toward a goal we believe in.” But her origin story as a stock trader began in a fairly forgiving market that made her a multimillionaire: the “stalk market” in Nintendo’s 2020 hit, <em>Animal Crossing: New Horizons</em>, a bustling in-game exchange centered on a single commodity—turnips. “I actually never invested anything prior to playing <em>Animal Crossing</em>,” Fung says. “I think the game was a great introduction to stocks, and it’s a great gateway to the real thing.”</p>
<p id="Ni3OM0">About 10 months before GameStop became a cause célèbre for a legion of extremely online investors who saw a chance to strike it rich and stick it to the fat cats, it was a <a href="https://www.cnn.com/2020/09/10/investing/gamestop-store-closures/index.html">shrinking</a> <a href="https://www.barrons.com/articles/gamestop-sales-take-a-dive-as-stores-closed-due-to-covid-19-51591747262">company</a> trying to keep its doors open during a pandemic. One incentive to stay open despite its workers’ <a href="https://www.wired.com/story/videogame-stores-gamestop-open-animal-crossing-doom/">safety concerns</a>: the prospect of profiting from Nintendo’s latest high-profile release. Although GameStop eventually <a href="https://kotaku.com/gamestop-cancels-midnight-release-events-for-animal-cro-1842379133">canceled</a> its scheduled midnight release events for the game because of COVID-19 (and later <a href="https://www.hollywoodreporter.com/news/gamestop-shuts-down-stores-coronavirus-pandemic-1285481">restricted</a> consumer access to its stores), the latest and greatest <em>Animal Crossing </em>was more than capable of becoming a global blockbuster without the brick-and-mortar boost. <em>New Horizons</em>—the fifth main game and third console installment of a series that started in 2001—was one of <a href="https://www.nme.com/en_asia/news/gaming-news/amazon-releases-best-selling-games-list-animal-crossing-new-horizons-takes-the-top-slot-2846554">the</a> <a href="https://venturebeat.com/2021/01/15/npd-reveals-the-best-selling-games-of-2020-in-the-u-s/">bestselling</a> <a href="https://mynintendonews.com/2021/01/12/japan-top-ten-best-selling-games-of-2020/">titles</a> of 2020. Nintendo <a href="https://www.nintendo.co.jp/ir/en/finance/software/index.html">reported</a> more than 31 million units sold worldwide between the game’s March 20 release date and December 31, a figure that helped propel the venerable game-maker and its compact Switch system to an <a href="https://kotaku.com/well-nintendo-is-still-doing-incredible-1846171331">extraordinarily lucrative</a> year.</p>
<p id="rBXXjS">The laid-back <a href="https://en.wikipedia.org/wiki/Social_simulation_game">social simulation</a>, which was nominated for Game of the Year at the Game Awards 2020 and took home the hardware for Best Family Game in December, was the perfect <a href="https://www.theringer.com/2020/4/2/21203824/animal-crossing-new-horizons-social-distancing-diaries">pandemic de-stressor</a>. Stuck in their homes and cut off from family and friends, players delighted in decorating and populating the deserted islands they purchased from tanuki tycoon Tom Nook. The low-stakes, slow-paced game gave millions of pandemic-distressed players control of their virtual surroundings, allowing them to clothe their characters, deck out their dwellings, invite villagers to settle on their islands, and create comforting communities of anthropomorphized animals.</p>
<p id="UBzwsv">That therapeutic collecting and crafting requires cash—or, as it’s called in <em>Animal Crossing</em>’s most common currency, bells. One way to acquire bells is to trade turnips. In <em>New Horizons</em>, which takes place in real time—the date and time in the game is the same as the date and time of the Switch system—players can purchase turnips every Sunday morning from snot-nosed boar Daisy Mae (a reference to <a href="https://en.wikipedia.org/wiki/Fannie_Mae">Fannie Mae</a>, much as her turnip-selling grandmother in earlier incarnations of <em>Animal Crossing</em>, Sow Joan, was a reference to the Dow Jones). On any other day, players can sell said turnips to Tom Nook’s twin apprentices, Timmy and Tommy, at all-purpose store Nook’s Cranny. The catch is that the apprentices’ prices fluctuate wildly from morning to evening and day to day, which means that players may make or lose money before their turnips expire at the end of the week. This is the stalk market—and like every market, virtual or otherwise, it begs to be exploited. “Last year’s craze was the stalk market,” says Matt “Jaku” Jakubowski, the CEO of Warp World, a gaming and streaming tool developer that created the popular stalk market trading site <a href="http://turnip.exchange/">Turnip Exchange</a>. “And now here we are, playing the real stock market.”</p>
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<p class="p--has-dropcap" id="tQ9XRH">A brief financial disclosure statement: <em>Animal Crossing</em> didn’t cause the recent series of short squeezes, as great a twist as that would be for the forthcoming screenplays. The advent of commission-free and fractional trading, the <a href="https://www.wsj.com/articles/tiktok-and-discord-are-the-new-wall-street-trading-desks-11610361004">prominence</a> of populist platforms like Reddit, TikTok, and Discord, the pandemic-driven deprivation of other entertainment options, and the robustness of the stock market after a mid-March free fall created and emboldened an <a href="https://www.wsj.com/articles/new-army-of-individual-investors-flexes-its-muscle-11609329600">army of individual investors</a>. But before GME made the mainstream aware of the new trading paradigm, <em>New Horizons</em> tapped into those trends, inspired an earlier financial frenzy, and foreshadowed further internet-organized action.</p>
<p id="1ezzUd">Keith Gill (a.k.a. “DeepFuckingValue”), who spearheaded the GameStop surge on r/WallStreetBets, isn’t much of a gamer; <a href="https://www.wsj.com/articles/keith-gill-drove-the-gamestop-reddit-mania-he-talked-to-the-journal-11611931696">according to</a> <em>The</em> <em>Wall Street Journal</em>, he “never played much besides <em>Super Mario</em> or <em>Donkey Kong</em>.” But some of the investors who flocked to Gill’s WallStreetBets banner were stalk market veterans who recognized the potential for another attempt at crowdsourced market manipulation. As Fung says, “WSB and the <em>Animal Crossing</em> community are similar in some ways. … With the turnip market in <em>Animal Crossing</em>, I think it only took a couple of weeks for people to break the algorithm and create software that will predict the turnip prices throughout the week. I think WSB channels the same type of energy and passion into stocks.”</p>
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<p lang="en" dir="ltr">In case you missed it, this was the Reddit ad that ran in nine of the top 10 US TV markets during the Super Bowl. <br><br>It was five seconds, which made many of those who caught it rewind and pause. <a href="https://t.co/yMDHovNK5i">pic.twitter.com/yMDHovNK5i</a></p>— Darren Rovell (@darrenrovell) <a href="https://twitter.com/darrenrovell/status/1358802829893337090?ref_src=twsrc%5Etfw">February 8, 2021</a>
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<p id="FeBMcI">In-game economies tied to virtual currencies date back <a href="https://www.washingtonpost.com/news/wonk/wp/2012/09/28/the-economics-of-video-games/">decades</a>, sometimes swelling to <a href="http://www.todayifoundout.com/index.php/2019/03/that-time-a-video-game-had-an-economy-almost-as-strong-as-russia/">massive proportions</a> in long-lived, massively multiplayer online games such as <em>EverQuest</em>,<em> RuneScape</em>,<em> Second Life</em>,<em> EVE Online</em>, and<em> World of Warcraft</em>. Those exchanges of artificial goods and services are just as susceptible to exploits, scams, and catastrophic <a href="https://www.nbcnews.com/id/wbna27846252">crashes</a> as the ones in our world. “Mass griefing of serious systems is really fun,” says Edward Castronova, a professor of media at Indiana University and the author of <a href="https://www.bloomsbury.com/uk/life-is-a-game-9781501359187/"><em>Life Is a Game</em></a><em> </em>and multiple books about virtual economies.</p>
<p id="fK5HoI"><em>Animal Crossing</em>’s economy isn’t among the most complex, but the pandemic-propelled popularity of <em>New Horizons</em>, paired with the networking capacity of a hyperconnected community, made the stalk market an immediate sensation. Turnip trading was a staple of previous <em>Animal Crossing </em>games, and turnip prices were also somewhat predictable in the predecessor to <em>New Horizons</em>, 2012 3DS game <em>Animal Crossing: New Leaf</em>, but the conditions almost a decade ago weren’t as conducive to an <em>Animal Crossing</em> economic cottage industry.<em> </em>“When <em>New Leaf</em> came out, I don’t think online communities were as connected as they are nowadays,” says “Indy,” an Australian man who moderates at Turnip Exchange. “I don’t think it had nearly as big a community around turnip trading.”</p>
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<p id="OpWvq5">Only 10 days after <em>New Horizons </em>came out, a software developer in Scotland, <a href="http://wuffs.org/">Ash Wolf</a>, revealed the reverse-engineered <a href="https://twitter.com/_Ninji/status/1244818665851289602">code</a> that governs the game’s turnip pricing. By the next day, a U.K. programmer named Mike Bryant had drawn on the data Wolf found to build a turnip-price-predicting tool, <a href="https://turnipprophet.io/">Turnip Prophet</a>, and <a href="https://www.reddit.com/r/acturnips/comments/fsi87m/sw_a_tool_to_predict_turnip_prices/">posted</a> it on the WallStreetBets of the stalk market, r/acturnips. “I’m definitely the sort of gamer who tries to take advantage of games,” Bryant says. “Sometimes I try and play through games without reading too much about it, but I’ll eventually end up just trying to figure out optimal ways of doing things.”</p>
<p id="bdbaes">In <em>New Horizons</em>, weekly turnip prices follow<em> </em>one of <a href="https://animalcrossing.fandom.com/wiki/White_turnip#Selling_2">four patterns</a>, which Turnip Prophet can help predict if players enter their past prices. “Within the first four to six prices—so, the first two, three days of the week—you’d be able to get quite a good idea of which pattern you’re in,” Bryant says. “You’d be able to see sort of upper and lower bounds of what you could expect.” Armed with that information, players could maximize their returns on their own islands or—in the event of an unfavorable pattern—visit friends’ or strangers’ islands in search of higher prices. Turnip Prophet quickly found favor with players who weren’t content to trust in the whims of Timmy and Tommy, and its functionality and polish improved as other programmers pitched in to tweak its open-source code. Its popularity peaked at 1.7 million unique users last May.</p>
<p id="7ALL9L">Other tools designed to streamline stalk market inefficiencies arose early in the game’s life cycle, Turnip Exchange chief among them. Before Jakubowski and a colleague built Turnip Exchange, the most convenient way to find other islands with attractive turnip prices was to browse r/acturnips, where players would post their current prices. But that system was a hassle for hosts, who would have to enter randomly generated <a href="https://animalcrossing.fandom.com/wiki/Dodo_Code">Dodo codes</a>—cousins of the Switch’s 12-digit friend codes, widely-loathed <a href="https://www.eurogamer.net/articles/2020-05-04-nintendo-chose-internet-friend-codes-because-using-real-names-was-not-simple-enough">relics</a> of Nintendo’s <a href="https://www.usgamer.net/articles/the-slow-stumbling-history-of-nintendo-online-support">halting</a>, <a href="https://nintendoeverything.com/nintendo-replacing-its-multiplayer-server-system-that-is-almost-two-decades-old/">archaic</a> <a href="https://www.thegamer.com/nintendo-switch-online-deal-worth-more-improve/">approach</a> to online play—one by one as people posted to ask for admission. Turnip Exchange automated much of that process via a more convenient, code-free queue, and 6 million monthly users frequented the site at the height of its traffic.</p>
<p id="L5EX7W">Not long after Turnip Exchange launched, a software developer named Devon Bernard, whose girlfriend had been frustrated by the obstacles to trading via Reddit, built an alternative to Turnip Exchange called <a href="https://apps.apple.com/us/app/acnh-exchange/id1506453425">ACNH Exchange</a>. Bernard’s app soon exploded in popularity too. Unlike Turnip Exchange, which sticks to turnips and doesn’t allow chatting, ACNH Exchange also allows its users to advertise and discover events and in-game hangouts. That social component soon became busier than the app’s purely transactional stalk market side, perhaps unsurprising given the game’s success as a virus-free <a href="https://www.theguardian.com/lifeandstyle/2020/may/09/animal-crossing-nintendo-game-coronavirus-pandemic">setting</a> for dates, sexual encounters, and talk shows. “I think part of that’s just due to COVID, people saying, ‘Hey, I can’t socialize in person, so might as well be creative and hang out with folks online,’” Bernard says. Players never knew when they might <a href="https://twitter.com/i/events/1253403724191391745">meet Elijah Wood</a>.</p>
<p id="Fm3Gzk">Bernard is usually more of a mutual or index fund investor than a stock-picker, but says he and his partner bought some shares of GME when the stock sat below $100 and quadrupled their money. “When you can see, ‘Hey, there seems to be a mechanical upside that’s predictable,’ OK, cool,” Bernard says. “And then sure, there’s part of the camaraderie of being in a community, feeling like you’re sticking it to somebody because of ’08, because all they got was a slap on the wrist.” That sentiment, too, has an <em>Animal Crossing </em>analogue: resentment toward accused (but <a href="https://www.washingtonpost.com/video-games/2020/04/09/tom-nook-animal-crossing-not-evil/">not condemned</a>) “<a href="https://www.vice.com/en/article/n7jyjd/tom-nook-ripping-you-off-animal-crossing-new-horizons-bells-to-usd">capitalist crook</a>” Tom Nook, to whom many new players are deeply in debt. “Are bells even a real currency?” Bernard asks. “Or is it just a thing Tom Nook uses to keep you broke and subservient to him?”</p>
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<p lang="en" dir="ltr">Tom Nook for the guillotine</p>— ☕netw3rk (@netw3rk) <a href="https://twitter.com/netw3rk/status/1242160602304237569?ref_src=twsrc%5Etfw">March 23, 2020</a>
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<p id="QcKe71">Jakubowski is happy to help players escape from under Tom’s thumb: “I’m excited to be able to help them with their mortgages,” he says. Indy sees that esprit de corps as the strongest link between <em>Animal Crossing</em> and the rapid rise of the meme stocks. “You could draw a parallel between the Turnip Exchange community and WallStreetBets in that regard, where everybody’s just trying to help everybody get richer,” he says. (Well, not <em>everybody</em>: WallStreetBets, <a href="https://www.businessinsider.com/wallstreetbets-fastest-growing-subreddit-hits-58-million-users-2021-1">overflowing</a> with edgelords and <a href="https://www.cbsnews.com/news/wallstreetbets-reddit-bot-activity/">bots</a>, finds itself in a <a href="https://www.wsj.com/articles/wallstreetbets-founder-reckons-with-legacy-amid-memes-loss-porn-and-online-threats-11611829800">civil</a> <a href="https://kotaku.com/wallstreetbets-mods-are-now-battling-for-control-over-t-1846200584">war</a>.)</p>
<p id="ZbpDil">But Jakubowski doesn’t think the ultra-efficient stalk market <em>New Horizons </em>players perfected through trading with strangers on Turnip Exchange follows the model Nintendo drew up. The scale of the intense trading was <a href="https://www.washingtonpost.com/graphics/2020/video-games/animal-crossing-power-players/">almost antithetical</a> to the game’s zen vibe. “I think [Nintendo] intended more for you to do it with your circle of friends,” he says. “But at the end of the day, the internet will do what it wants.” Or as Bernard puts it, “People always want to arbitrage things and get the most bang for their buck.” <em>The game is </em><a href="https://www.youtube.com/watch?v=mSXm4FUmE5g"><em>the</em></a><em> </em><a href="https://muse.jhu.edu/article/447305"><em>game</em></a><em>.</em></p>
<p id="5yEPKZ">In the real-life market, unlike the stalk market, each stock has a single price, which is sensitive to trading activity. Bernard compares <em>Animal Crossing</em>’s distributed market to cryptocurrency exchanges, which offer <a href="https://www.cnbc.com/2017/12/12/why-bitcoin-prices-are-different-on-each-exchange.html">different prices</a> that may yield arbitrage <a href="https://bitcoin.stackexchange.com/questions/9015/is-anyone-taking-advantage-of-different-prices-across-exchanges">opportunities</a>. But <em>Animal Crossing</em>’s most money-hungry players can engage in other exploits that wouldn’t work for WallStreetBets. For instance, <a href="https://www.ign.com/wikis/animal-crossing-new-horizons/Time_Travel_Guide">time travel</a>: By resetting the Switch’s system clock, players who hear about a lofty turnip price on another island can return to the previous Sunday, stock up on turnips, and then travel to that island repeatedly to rack up beaucoup bells. Alternatively, players can flash <em>forward </em>several decades to take advantage of earned interest or to bury bells in a particular place and then pluck the proceeds from a mature “<a href="https://www.dexerto.com/animal-crossing/make-millions-animal-crossing-money-trees-time-travel-1356388/">money tree</a>.” Some players have even hacked their Switches to enable various <a href="https://www.polygon.com/2020/5/21/21266279/animal-crossing-hack-mod-nintendo-switch-crafting-stacks-dialogue-items">cheats</a>, including one <a href="https://gbatemp.net/threads/acnh-bellionaire-hack-patched.577921/">trick</a> that can immediately make them bellionaires. (Well, almost: Technically, the maximum number of bells is 999,999,999.)</p>
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<p id="6saw4d"><br>The recent real-life disruption of the non-bell-based economy has already raised the <a href="https://www.reuters.com/article/us-gamestop-white-house/white-house-monitoring-situation-involving-gamestop-other-firms-idUSKBN29W2I1">specter</a> <a href="https://www.bloomberg.com/opinion/articles/2021-01-26/will-wallstreetbets-face-sec-scrutiny-after-gamestop-rally">of</a> <a href="https://lawandcrime.com/high-profile/law-prof-who-wrote-textbook-on-securities-regulation-explains-wallstreetbets-retail-investors-have-revolted-and-stormed-the-bastille/">a</a> <a href="https://www.washingtonpost.com/business/2021/02/03/gamestop-sec-regulation/">regulatory</a> <a href="https://www.ft.com/content/8a483767-6b55-40a2-b8a6-1439a2f56084">response</a>. In reaction to Reddit’s crush on nostalgia stocks, the commission-free trading app Robinhood <a href="https://www.cnbc.com/2021/02/05/gamestop-shares-robinhood-lifts-trading-restrictions.html">temporarily</a> imposed <a href="https://www.wired.com/story/robinhood-gamestop-stock/">restrictions</a> on multiple meme stocks, which Bernard says made him feel like the system was rigged in the hedge funds’ favor. That decision spurred some users to file a class-action <a href="https://www.courtlistener.com/recap/gov.uscourts.nysd.553175/gov.uscourts.nysd.553175.1.0.pdf">lawsuit</a> and drew <a href="https://techcrunch.com/2021/01/28/gamestop-robinhood-aoc-ted-cruz-tlaib-khanna-robinhood/">bipartisan</a> <a href="https://www.cnbc.com/2021/02/02/elizabeth-warren-asks-robinhood-to-explain-gamestop-trade-restrictions.html">side-eye</a> from Congress, which is preparing to <a href="https://kotaku.com/congress-wants-to-ask-deepfuckingvalue-some-deep-fuckin-1846197815">hold hearings</a> later this month and has called on Gill and Robinhood’s CEO to testify. </p>
<p id="MNlHNW">Aside from <a href="https://kotaku.com/nintendo-slashes-interest-rates-in-animal-crossing-new-1843019628">slashing interest rates</a> to reduce the payoff from fast-forwarding, Nintendo hasn’t taken any significant post-release steps to curtail time travel; <a href="https://en.wikipedia.org/wiki/Mr._Resetti">Mr. Resetti</a>, the ornery mole who in past games lectured players who reset their systems, is <a href="https://screenrant.com/animal-crossing-new-horizons-mr-resetti-statue/">almost absent</a> from <em>New Horizons</em>. Last March, the game’s director and producer <a href="https://www.washingtonpost.com/video-games/2020/03/23/nintendo-explains-philosophy-behind-animal-crossings-big-changes-like-gender-expression-terraforming/">said</a> that they don’t consider time travel cheating, although they don’t think it’s the ideal way to play. Nintendo has <a href="https://www.destructoid.com/stories/nintendo-says-it-will-start-going-after-people-who-buy-and-sell-villagers-and-other-animal-crossing-new-horizons-items-594358.phtml">condemned</a> real-money transactions for in-game items, but it hasn’t tried to make turnip trading less lucrative by altering the turnip-price algorithm, restricting remote turnip sales to friends’ islands only (which players could work around by exchanging Switch friend codes), or limiting the stalk market to local multiplayer (which would be a bad idea during a pandemic, when people can’t congregate safely).</p>
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<p id="MQ2VNt"><br>There’s no pressing need for Nintendo to mess with success: The game has sold better than the company could have hoped, and because <em>New Horizons</em> isn’t a competitive title, these exploits are victimless crimes. Tools such as Turnip Exchange and ACNH Exchange may break the game’s economy by making it almost impossible to lose bells, but they also give gamers great incentive to be social and explore islands other than their own.</p>
<p id="4FBFbA">The only obvious downside is that excessive wealth can be boring. “Even after the first week of using Turnip Exchange, I had already paid off all my house loan and bought those expensive clothing items,” Indy says. “So at that point I was kind of like, ‘Oh, I guess I can just get money for fun.’” It wasn’t fun for that long: Through turnip trading, time travel, and other shortcuts, he became a maxed-out bellionaire. With that much money, even an unlimited supply of <em>New Horizons</em>’ secondary currency, <a href="https://www.polygon.com/animal-crossing-new-horizons-switch-acnh-guide/2020/3/20/21166529/nook-miles-tickets-islands-mystery-island-tours">Nook Miles</a>—and the most <a href="https://www.polygon.com/2020/4/22/21229959/animal-crossing-new-horizons-black-market-villager-trading-raymond-nmt-bells-nintendo-switch-discord">coveted</a> <a href="https://www.nme.com/en_au/features/the-animal-crossing-black-market-villager-trade-has-exposed-an-ugly-side-to-a-wholesome-game-2669268">villagers</a> and items on black-market trading sites such as <a href="https://nookazon.com/">Nookazon</a> and <a href="https://nook.market/">nook.market</a>—are well within reach.</p>
<p id="UQogxa">At first, Indy’s vast wealth was kind of cool. “It is pretty satisfying to look down at your game and go, ‘Wow, that number cannot go any higher,’” he says. “You go into the ATM and it’s just like, ‘Yeah, that’s the most money.’” But once he had nothing to shoot for, he lost some of his lust for life on the island. “The satisfaction of playing the game also goes away a bit,” Indy says. “At that point, you can buy everything in the game a hundred times over and still have change. I guess much like real life, there’s really not much point in having that much money.” (Which doesn’t seem to stop most billionaires from trying to make more.)</p>
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<p id="LNgBst">Indy decided to give much of his wealth away—roughly 450 million bells so far—in a series of scheduled events in which new, impoverished players could visit his island and go away wealthy. “It wasn’t even ‘Sell your turnips,’” Jakubowski recalls. “It was just, ‘Come and grab bags of money and leave.’”</p>
<p id="Fee2QA">Initially, Indy repeatedly ran to and from the ATM, where he withdrew the maximum amount he could keep in his inventory, dropped a bulging bag of bells near his newest visitor, and went back to load up again. “After the first couple of times we did that, I ended up just spending a couple of hours laying out a big 100 x 100 area on my island, and then I would just go around and fill every single space with bells and be like, ‘All right, start the queue,’” Indy recalls. If only an actual island-owning billionaire would take a cue from the virtual philanthropist. “It would be nice, wouldn’t it?” he says.</p>
<p id="CZ2jqx">“It will be interesting to see, in another six years when the next <em>Animal Crossing</em> game comes out, if they do have some sort of stalk market regulations in it,” Jakubowski muses. But Indy doubts Nintendo will ever enforce austerity. “There’s not really, I think, a way to stop it in the future,” he says. “People are going to find a workaround for whatever they put in place.” <em>Game the same. Just got </em><a href="https://www.youtube.com/watch?v=YwogM2DL99o"><em>more fierce</em></a><em>.</em></p>
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<p class="p--has-dropcap" id="s1S4Dp">As meme-stock madness seized the internet late last month, <em>Animal Crossing </em>comps came fast and furious. Tweet after tweet likened the history of the stalk market to<em> </em>the GameStop stock rush, and <a href="https://comicbook.com/gaming/news/gamestop-stock-explode-nintendo-animal-crossing-turnip-jokes/#7">post</a> after <a href="https://www.denofgeek.com/games/animal-crossing-turnips-stalk-market-gamestop-stocks/">post</a> aggregated the tweets. Some jokingly cried <a href="https://twitter.com/ItsJustMarkNV/status/1354885044754550785">conspiracy</a>, noting that Nintendo of America’s former president sits on GameStop’s <a href="https://venturebeat.com/2020/03/09/reggie-fils-aime-gamestop/">board</a>. “Concerned for this sub,” said the subject line of a <a href="https://www.reddit.com/r/acturnips/comments/l70hf4/sw_concerned_for_this_sub/">post</a> on r/acturnips. The body text continued, “They’ve already taken down r/WallStreetBets, and we could be next.”</p>
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<p lang="en" dir="ltr">how did I learn to trade exactly one stock manipulated in the open by a loose collection of anonymous posters? animal crossing.</p>— ☕netw3rk (@netw3rk) <a href="https://twitter.com/netw3rk/status/1354508212091891712?ref_src=twsrc%5Etfw">January 27, 2021</a>
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<p lang="en" dir="ltr">this gamestop thing is like that part in "slumdog millionaire" where it flashbacks to his whole life's experience preparing him for this moment except it's just me playing animal crossing in 2020 and tom nook teaching me about buying and selling turnips</p>— Rick Wong (@fwong) <a href="https://twitter.com/fwong/status/1355398996043329538?ref_src=twsrc%5Etfw">January 30, 2021</a>
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<p lang="en" dir="ltr">Nintendo uses turnips to teach gamers about stocks and speculation and look what happens.</p>— Mike Minotti (@Tolkoto) <a href="https://twitter.com/Tolkoto/status/1354453576446304259?ref_src=twsrc%5Etfw">January 27, 2021</a>
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<p lang="en" dir="ltr">Drawing a straight line from the people that cornered the Animal Crossing turnip market to the GameStockers</p>— Brittani Nichols (@BisHilarious) <a href="https://twitter.com/BisHilarious/status/1354562189936324612?ref_src=twsrc%5Etfw">January 27, 2021</a>
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<p lang="en" dir="ltr">Animal Crossing turnips walked so GameStop stock could run</p>— Mike Hamilton ☃️ (@MtHamiltron) <a href="https://twitter.com/MtHamiltron/status/1354548788984074241?ref_src=twsrc%5Etfw">January 27, 2021</a>
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<p id="WkEZse">In a popular <a href="https://www.reddit.com/r/AnimalCrossing/comments/l7qlvs/nintendo_spent_an_entire_year_training_us_for/gl9e3zv/">post</a> on the main <em>Animal Crossing </em>subreddit, user “elpinko” wrote, “Nintendo spent an entire year training us for this moment,” accompanied by an animation of Tom Nook plotting to short turnips. “The idea of bedroom traders being trained by Tom Nook was too good to resist,” elpinko explains.</p>
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<p id="CBfmdD">When <em>New Horizons </em>blew up last spring, some players who were already well-versed in monetary matters gravitated <a href="https://mgold.io/2020/05/20/forecasting-turnip-prices.html">toward</a> <a href="https://www.betterment.com/resources/investing-animal-crossing-stalk-market/">the</a> <a href="https://www.theverge.com/2020/4/14/21213923/animal-crossing-new-horizons-turnip-prices-sell-exchange-profit">game</a> and found its finances familiar. For Fung and others who were exposed to trading for the first time, the game represented an <a href="https://www.bloomberg.com/news/articles/2020-10-07/stock-market-how-nintendo-game-animal-crossing-prepares-players-to-trade">opportunity to learn</a>. And when the recent talk of shorts and squeezes broke business noobs’ brains, <em>Animal Crossing </em>came in handy again. Reddit user “adaily,” a software developer who got into finance to support himself between jobs (and who says he made a 60 percent profit on GME), posted a well-received <a href="https://www.reddit.com/r/AnimalCrossing/comments/l7qlvs/nintendo_spent_an_entire_year_training_us_for/gl9e3zv/">explainer</a> on r/AnimalCrossing that laid out the latest activity terms of the game. So did Danielle Morgan in an even more popular <a href="https://www.reddit.com/r/AnimalCrossing/comments/l7ch4x/in_case_anyone_is_having_trouble_understanding/">post</a>, which relayed her husband Tate’s response to her request for an <em>Animal Crossing </em>analogy. “It was kind of a joke, but I also needed it in terms I could understand,” she says. “Once hedge fund managers, the Redditors participating, and stocks were replaced with Jolly Redd, Gullivarrr’s crew, and turnips, it suddenly made sense!”</p>
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<p lang="en" dir="ltr">In case anyone is having trouble understanding what’s going on with <a href="https://twitter.com/hashtag/GameStop?src=hash&ref_src=twsrc%5Etfw">#GameStop</a> right now, my husband put it in terms I could understand! The Animal Crossing Stalk Market! <a href="https://twitter.com/hashtag/AnimalCrossing?src=hash&ref_src=twsrc%5Etfw">#AnimalCrossing</a> <a href="https://twitter.com/hashtag/reddit?src=hash&ref_src=twsrc%5Etfw">#reddit</a> <a href="https://twitter.com/hashtag/StockMarket?src=hash&ref_src=twsrc%5Etfw">#StockMarket</a> # <a href="https://t.co/6TLoBNwrOx">pic.twitter.com/6TLoBNwrOx</a></p>— DnlMorg (@DnlMorg) <a href="https://twitter.com/DnlMorg/status/1354933183159169034?ref_src=twsrc%5Etfw">January 28, 2021</a>
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<p id="eBHe6q">Amanda McLoughlin, the CEO of podcast company Multitude Productions, made another contribution on Twitter to the “Could you translate that into <em>Animal Crossing</em>?” canon. “It’s hard to understand that most of what’s traded every day on global financial markets is insubstantial, two or three degrees removed from a tangible thing,” she says. “Comparing it to a physical thing that <em>Animal Crossing</em> players are used to buying and selling makes understanding everything a little easier.” She adds that <em>Animal Crossing </em>helps convey the concept that a company’s stock price is a function of demand, not of inherent value. “In <em>Animal Crossing</em>, the actual turnips you dumped in your side yard or on your beach aren’t any different on Tuesday when they’re worth 800 bells than on Wednesday when they’re worth 100,” she says. “It’s just the price that changed.” Similarly, GameStop stock’s sudden inflation wasn’t a sign that selling physical copies of games that <a href="https://www.polygon.com/2020/8/11/21363951/video-game-sales-digital-online-xbox-one-ps4-publisher-figures-ea-activision-2k-games">most players</a> purchase via digital download had become a better business model.</p>
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<p lang="en" dir="ltr">So some jerk on another island was like “Turnips are useless and I think the price will be like 20 bells next week, so I’m gonna promise to sell them to you super cheap. I’m so sure they’re going to be cheap that I’ll sign a contract promising to sell them to you at 22 bells.”</p>— Amanda McLoughlin (@shessomickey) <a href="https://twitter.com/shessomickey/status/1354583877168345091?ref_src=twsrc%5Etfw">January 28, 2021</a>
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<p id="zqMc3x">On January 27, Twitter user @I_nXIV made the most-shared mashup in the <em>New Horizons</em>/GameStop genre.</p>
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<p lang="und" dir="ltr"><a href="https://t.co/Iyid5YMd30">pic.twitter.com/Iyid5YMd30</a></p>— I5LAND (@I_nXIV) <a href="https://twitter.com/I_nXIV/status/1354547009596895234?ref_src=twsrc%5Etfw">January 27, 2021</a>
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<p id="kTA6FC">The takeaway from the funny juxtaposition, @I_nXIV say, is that “With enough people and the right tools (such as access to fractional stocks), we can influence the market in the real world too.” But they’re anxious about the short-term consequences: “I fear that many people are gonna lose money as the hype dies down. I even regret posting that meme. While being easy to digest, it does add to fear of missing out and inflates the value of GME.”</p>
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<p id="HxZY8s">Early investment activity tends to be beneficial later in life, but retail investors assume more risk than time-traveling turnip merchants, especially if they’re new to trading. “The internet hive mind is definitely attracted to this and is bringing in new people that might not have been interested until they saw the hype,” Jakubowski says. “And I think the same thing happened with <em>Animal Crossing</em>.” Castronova notes, “It’s all the same—crowd behavior, where the crowd is on the internet.” He continues, “If you’ve seen ‘the wave’ during a boring soccer game, you understand that crowds of people will do nutty things just for the heck of it.”</p>
<p class="c-end-para" id="lc1Eef">But with the dust still unsettled, it may be too soon to say whether it’s nutty—or, for that matter, to truly understand the intricacies and import of <a href="https://nplusonemag.com/online-only/online-only/out-of-options/">what went down</a>. In spite of her personal losses and the meme stocks’ swift retreat, Fung’s morale remains high. “I think with the participation of the retail investor, this is the beginning of a new age of trading,” she says. “With games like <em>Animal Crossing</em> and TikTok financial advice, kids and young adults are becoming way more financially literate. They’re learning how to play the game, and the GME short squeeze was just the beginning.” In <em>New Horizons</em>, the game never needs to be over. In the actual economy, regulators and time—but not time travel—will tell. </p>
https://www.theringer.com/2021/2/9/22271651/gamestop-stock-amc-animal-crossing-wall-street-betsBen Lindbergh2021-02-03T08:14:17-05:002021-02-03T08:14:17-05:00GameStop: A Millennial Concern?
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<figcaption>Photo Illustration by Rafael Henrique/SOPA Images/LightRocket via Getty Images</figcaption>
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<p>Micah Peters and Justin Charity weigh in on the ongoing GameStop saga and predict what impact GameStop’s demise will have on the future of the internet</p> <div id="UAADXl"><iframe src="https://open.spotify.com/embed-podcast/episode/1d12Oeak9HaqUy43Q1Lv6f" style="border: 0; width: 100%; height: 232px;" allowfullscreen="" allow="encrypted-media"></iframe></div>
<p id="dPFZcw"><br><a href="https://open.spotify.com/episode/1d12Oeak9HaqUy43Q1Lv6f">Justin Charity and Micah Peters weigh in on the ongoing GameStop saga</a>. They provide their takes on the events (0:35), discuss the dying culture of GameStop (11:50), and predict what the future of the internet could look like as a result of GameStop’s demise (23:15). </p>
<p id="ZaJLYN">For episode guides and further readings and recommendations, check out the <em>Sound Only</em> syllabus <a href="https://docs.google.com/document/d/1KPKujGyjm0w0Gni8zDNqtNTN-9xNUsNv4G_ZfUlRjEY/edit">here</a>.</p>
<p id="wNMwO6"><strong>Subscribe:</strong><a href="https://open.spotify.com/show/55oR3tZydonhADY1i9zFaX?si=q1njq6WzSwOIDK98h5N25g"> Spotify</a></p>
<aside id="uBA4NQ"><div data-anthem-component="readmore" data-anthem-component-data='{"stories":[{"title":"The GameStop Stock Market Saga Explainer Dictionary","url":"https://www.theringer.com/2021/1/28/22255294/game-stop-stock-market-saga-robinhood-wall-street-bets-reddit"}]}'></div></aside>
https://www.theringer.com/2021/2/3/22264001/gamestop-a-millennial-concernJustin CharityMicah Peters2021-02-01T18:42:15-05:002021-02-01T18:42:15-05:00GameStop Takes With Katie Baker. Plus: Super Bowl Hype!
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<figcaption>Photo Illustration by Jakub Porzycki/NurPhoto via Getty Images</figcaption>
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<p>Bryan, David, and Katie talk a crazy week for the stock market before previewing Super Bowl LV</p> <div id="NvdQ4W"><iframe src="https://open.spotify.com/embed-podcast/episode/0rR6MjqhVKcwtPJNSzTcVJ" style="border: 0; width: 100%; height: 232px;" allowfullscreen="" allow="encrypted-media"></iframe></div>
<p id="FrXrft"><br><a href="https://open.spotify.com/episode/0rR6MjqhVKcwtPJNSzTcVJ?si=IKR04MImTQKRooa6_HhCpA">Bryan Curtis and David Shoemaker are joined by Katie Baker</a> to help break down the stock market, GameStop, and the ongoing saga (3:00). Then they discuss what the Super Bowl could look like without all of the hype of past years (27:45). Plus, the Overworked Twitter Joke of the Week and David Shoemaker Guesses the Strained-Pun Headline.</p>
<p id="CPGPM1"><strong>Subscribe:</strong> <a href="https://open.spotify.com/show/4aBkZbDqL5q44JPnmNj6Hq?si=sbC9UQpORXmH7Y_zweXv-w">Spotify</a> / <a href="https://podcasts.apple.com/us/podcast/channel-33/id1058911614?mt=2">Apple Podcasts</a> / <a href="https://www.stitcher.com/podcast/the-ringer/channel-33">Stitcher</a> / <a href="http://feeds.feedburner.com/Channel33">RSS</a></p>
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https://www.theringer.com/2021/2/1/22261321/gamestop-takes-with-katie-baker-plus-super-bowl-hypeBryan CurtisDavid ShoemakerKatie Baker2021-01-29T01:07:32-05:002021-01-29T01:07:32-05:00Best Beal Trades, the GameStop Scandal, and Super Bowl Talk With Joe House, Andrew Ross Sorkin, and Jamal Adams
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<img alt="Wild Card Round - Los Angeles Rams v Seattle Seahawks" src="https://cdn.vox-cdn.com/thumbor/T29ZDM8W3wuNghrC28XGwIrh080=/111x0:2984x2155/1310x983/cdn.vox-cdn.com/uploads/chorus_image/image/68738578/1295581578.0.jpg" />
<figcaption>Photo by Abbie Parr/Getty Images</figcaption>
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<p>Discussing potential trades for Bradley Beal, GameStop’s surging stock prices, how defensive play has evolved with NFL rule changes, Super Bowl predictions, and much more</p> <div id="QYvkfs"><iframe src="https://open.spotify.com/embed-podcast/episode/5H3uOpasIaKIsOU8nM6J88" style="border: 0; width: 100%; height: 232px;" allowfullscreen="" allow="encrypted-media"></iframe></div>
<p id="KsQ7hm"><br><a href="https://open.spotify.com/show/07SjDmKb9iliEzpNcN2xGD?si=HvZ_mc5jQIOhTufIHYYRXg"><em>The Ringer</em>’s Bill Simmons is joined by Joe House</a> to discuss potential trades for Bradley Beal in the wake of what is shaping up to be a dismal season for the Washington Wizards (3:00). Then Bill is joined by Andrew Ross Sorkin of <em>The New York Times</em> and CNBC to discuss GameStop’s surging stock prices, Wall Street’s panic, trading freezes, and more (50:00). Finally Bill talks to Seattle Seahawks strong safety Jamal Adams about his NFL idols, how defensive play has evolved with NFL rule changes, playing for head coach Pete Carroll, dealing with injuries this season, Super Bowl predictions, and more (1:26:00).</p>
<p id="C6mxQD"><strong>Subscribe:</strong> <a href="https://open.spotify.com/show/07SjDmKb9iliEzpNcN2xGD?si=X1S_fYL7REi9NlCpheLw6g">Spotify</a> / <a href="https://podcasts.apple.com/us/podcast/the-bill-simmons-podcast/id1043699613?mt=2">Apple Podcasts</a> / <a href="https://www.stitcher.com/podcast/the-ringer/the-bill-simmons-podcast">Stitcher</a> / <a href="http://feeds.feedburner.com/thebillsimmonspodcast">RSS</a></p>
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https://www.theringer.com/the-bill-simmons-podcast/2021/1/29/22255768/best-beal-trades-the-gamestop-scandal-super-bowl-talk-with-joe-house-andrew-ross-sorkin-jamal-adamsBill SimmonsJoe House