Over the course of two weeks in January 2021, the stock price for GameStop – the brick-and-mortar video game retailer – rose by a shocking 1,500 percent. Suddenly, a handful of hedge funds who had shorted GameStop’s stock, betting that the stock price would go down, found themselves the victim of what’s called a short squeeze.

 

What made this wild ride on Wall Street different is that the short squeeze was organized and coordinated by retail traders, primarily on online chat forms like Reddit and Discord, and executed on retail, commission-free investing apps like RobinHood.

 

What actually happened in the GameStop short squeeze? Are there are identifiable heroes and villains in this story? In what way is this a financial manifestation of our populist political moment? And, how particularly should Christians think about this market rollercoaster?

 

In this episode, we talk with David Bahnsen – the founder, managing partner, and chief investment officer of The Bahnsen Group – to simply and clearly explain the GameStop story, and what is likely to come of it.

 

David Bahnsen – The Bahnsen Group

 

Dividend Cafe – The Bahnsen Group

 

Capital Record Podcast – David Bahnsen

 

Sirico & Bahnsen: Liberty & Morality in the Midst of Crisis – Acton Institute

 


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  1. colleenb Member
    colleenb
    @colleenb

    Thanks for this explanation. The book about the mortgage/housing collapse made me a believer in shorting as part of the free market. Do I still feel like a certain amount of activity by hedge funds and others is gambling – yes. However, the market has built up various mechanisms through the years that seem to work best. 

    • #1