GameStop Shock
The Briefing Room
BBC
4.8 • 731 Ratings
🗓️ 4 February 2021
⏱️ 29 minutes
🧾️ Download transcript
Summary
There was pandemonium on the US stock market when shares in a chain of video game shops went through the roof. At one point GameStop’s stock, which averaged just seven dollars last year, was valued at more than 480 dollars. The frenzy was fuelled by cheerleaders on Reddit.
Investors were being encouraged to buy the stock even as it became clear that they would probably lose most of their investment. There was a mood of rebellion online and clear hostility to millionaire hedge fund managers.
Then one of the platforms that offered small investors free access to the market said it would temporarily no longer allow new purchases of GameStop stock. This prompted furious claims of unfairness; accusations that Wall Street had shut out the little guy; that there was one rule for the big investor and another for the amateur.
So what did actually happen?
Was this truly a battle between the Davids and the Goliaths of the financial world? What will happen next? And why does it matter?
Contributors:
Elizabeth Lopatto, The Verge
Sebastian Mallaby, The Council on Foreign Relations and Washington Post
Philip Coggan, The Economist
Susannah Streeter, Hargreaves Lansdown
Producers: Tim Mansel, Sally Abrahams, Kirsteen Knight Editor: Jasper Corbett
Transcript
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| 0:00.0 | BBC Sounds, Music, radio, podcasts. |
| 0:06.9 | Welcome to the briefing room with me, David Geronovich, |
| 0:09.8 | where you, me and the top experts gather together in a room for 28 minutes |
| 0:13.6 | to understand one of the big issues of the day. |
| 0:17.1 | Today, the GameStop Revolution, hedge funds and retail investors. What's going on and why does it matter? |
| 0:28.5 | Until last week, GameStop was a chain of shops in the US selling video game consoles and consumer |
| 0:39.1 | electronics. Representing old technology, its shares knocked along at about $7 each. Last week, |
| 0:46.9 | at its peak, that became nearly $500. GameStop became an online co-celebrbe, and people started talking about a stock market revolution. |
| 0:57.0 | What happened? And how has it changed our world? |
| 1:00.0 | Step into the briefing room and together we'll find out. |
| 1:06.0 | First, we need some very recent history. |
| 1:09.0 | Elizabeth Lepato is the deputy editor of a tech news website in California called The Verge. |
| 1:15.1 | We asked her to explain what's been going on. |
| 1:19.4 | This has been completely a wild ride. |
| 1:23.0 | It's a brand new trick that the internet has learned. |
| 1:25.5 | And as far as I can tell, there doesn't seem to be any |
| 1:28.1 | underlying immunity to it in the financial markets. So this wild ride may not be the only wild |
| 1:35.3 | ride that we go on. I think the moment it came to everybody's attention was on January 22nd, |
| 1:43.4 | when there was a trading halt on GameStop because |
| 1:46.8 | it had gone up 69%. And at that point, I think most of the rest of us noticed something weird |
| 1:52.5 | was happening. |
| 1:57.1 | GameStop has been a relatively reliable place for hedge funds to make money on short selling. |
... |
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