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Elite Hedge Fund RenTech Sold Nvidia and Tesla, Bought GameStop in Q3 - Business Insider

GameStop (GME) stock fell more than 14% after the company's latest quarterly financial release fell short of Wall Street's expectations.

Stock market today: Nasdaq, S&P 500 surge as Nvidia leads bounce back from post-CPI sell-off

Top Stock Movers Now: Trump Media, First Solar, GameStop, and More

In fact, GameStop Corp.(NYSE:GME) ... translates into anything real—like earnings-per-share growth. It’s time for the company to reveal a long-term business plan, or the quarter will just land with a thud again.”...

Jim Cramer on GameStop Corp. (GME): ‘It’s Time For The Company To Reveal A Long-Term Business Plan’

Get the latest stock market, financial and business news from MarketWatch.

GameStop’s stock on pace for its best month since 2021

The video game retailer gained a new, potentially important ally when the presidential candidate announced he bought GameStop stock.

Why Following RFK Jr.'s GameStop Stock Play Is a Losing Strategy | InvestorPlace

Let&#x27;s dive into what to make of GameStop&#x27;s recent price action, and whether this meme stock is a buy, sell or hold right now.

Why GameStop Stock Could Be the Safest Short Play in the Market Right Now | InvestorPlace

GameStop CEO Ryan Cohen remains the largest shareholder of GME stock through his investment vehicle, RC Ventures.

5 Investors Betting Big on GameStop (GME) Stock in Q1 | InvestorPlace

Robinhood has settled with investors that sued it over its 2021 meme stock trading halt saga.

Robinhood nears settlement on GameStop, meme stocks suit

GameStop

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The world is bursting with talks of new, exciting technologies. Blockchain, Cryptocurrencies, NFTs, DAOs, DeFi, Metaverse… all manners of concepts have seemingly sprouted from our collective digital imagination. Alone, they are naught but fun diversions. Together, they make up the key components of Web3. Despite forceful push-back from many corners of the internet, this latest web iteration is gathering steam. Not least because of the billions being poured into it by large corporations. It is also vindicated by millions of rabid devotees eager to destroy the current world order. Opening any news site, who could blame them? The promise of a decentralized model wherein anonymity, fairness and freedom are the operating word does sound appealing in 2022. And that is what Web3 promises. There is however a lot to ask before blindly accepting a system as a system. new better Web2.0, with its penchant for apps and user-generated content, has created as many social, economic, and political issues as it has solved. Who could have foreseen in 2006 that Facebook would weaponize elections? In 2010, that Instagram would be a key contributing factor to teenage suicide? That the creation of Uber would bring about a new era of serfdom? Two decades ago, we were just learning to set up profile pictures. CEOs and technologists preyed on the public naivety by  shrouding their inventions in complex technical gibberish. Impaired by lack of knowledge, we were fooled, and went along, with the results we know and see today. History may not repeat itself, but it does rhyme. Web3 technologies are more complex than we know today, but the people pushing it are the same. As are their intentions. To create a better digital world, and avoid traps past, all must take part in the discourse this time. We have a duty to ourselves, to our peers and to our children to understand the new systems proposed and shape them without blindly accepting them. Technology is neither inevitable, nor inexorable. Much like Web2.0, Web3 is being born out of social and financial pain. . Logically, then, we must first know where we’re coming from to understand where we’re going. The circumstance of their birth matters more to shape technologies than the intent behind their creations The 2007-2008 Financial Crisis The world economy functionally collapsed in 2008. The crash is simple to understand. Banks issue loans. Groups of loans are worth a lot as financial instruments called bonds. Banks issued loans even when they shouldn’t have because a bad loan as part of a bond was worth more to them than a good loan that wasn’t part of a bond. People couldn’t repay loans as they came due after a short grace period created to promote sales. Bonds on which the economy was based became worthless overnight. The whole system came crashing down. This has made a lot of people very angry and has been widely regarded as a bad move. As with technocrats, financiers like to hide behind fake technical complexity. At the end of the day, it came down to this : people were out of work because insiders got greedy. Most never got punished. But an entire generation is yet to recover from the financial scars of the subprime crisis. This created an anti-elite sentiment which is yet to subside. The fact that many mocked the Occupy Wall Street movement should haunt us as we consider that, had we heeded them, we might not be trying to monetize the concept of color today. But we’re getting ahead of ourselves. The five-percenters in Silicon Valley saw this revolt as a way to finally stick it to the one-percenters who had never respected them. Airbnb was born a few days after The Housing and Economic Recovery Act of 2008 was enacted ( ). Uber was created a year after the crash. Others had already been around for a few years, but saw their revenues grow exponentially as the unemployed tried to make ends meet by putting their cars, houses and bodies on the market for richer people to use. ; meet the new boss, same as the old boss. Web2 was around before 2008 but became inevitable after the financial crisis. oh the irony Ad novum ducem, eadem cum veteri duce What few realize is that Web3 was also born at the same time. Bitcoin was invented in 2009, for the same reason as the gig economy : “the elites cannot be trusted, and we want to be our own leaders." See it as a fork in the system : while Silicon valley proposed decentralization-as-a-platform, the creator of Bitcoin proposed complete decentralization. For its creators, this was the only way to avoid an unhealthy aggregation of power. The world was not yet ready for Web3, but the seeds were sown. It would have to get worse for them to sprout. Much worse. The Election of Donal Trump Donald Trump took office in 2017. 2017 was a year of political upheaval, intensified by technological platforms. Facebook was being used to influence politics, from the United States to Myanmar. Britain had triggered article 50 following a farcical misinformation campaign. France barely avoided a far-right government. #MeToo went viral on Twitter. Fake news entered our collective lexicon. Terror in Las Vegas. In Manchester. In Charlottesville. On the London Bridge. In Barcelona. All with their share of misinformation and virality. This has made a lot of people very angry and has been widely regarded as a bad move. It is no surprise, then, that a technology promising a new, better deal would come to the forefront. Young people needed hope. They found cryptocurrencies. In December 2017, Bitcoin skyrockets for the first time. Prices went from 1,000$ to 20,000$ per Bitcoin in a matter of weeks. A few months later, “cryptocurrency,” “blockchain” and “initial coin offerings” were added to Merriam-Webster’s dictionary. It looked like gambling. But what else was there to do? We can’t afford homes. The world is burning. We live on platforms that thrive on anger and discontent. Corporations post memes on Twitter as they enslave children abroad. We wish upon shooting stars that are actually billionaires going to space for fun. We laugh at cows wearing VR headsets, while letting Netflix automatically play the next episode. There is nothing to do except gamble. literally Bitcoin was most people’s first introduction to Web3. The physical world was, at the time, steadily being digested by digital. Then came the pandemic. The COVID-19 Pandemic In 2020, COVID-19 closed the world. . We’ve had to be fired, work jobs that felt unsafe, or commit to what feels like a lifetime of Zoom. We’ve had to ask everyone how they’re doing, all the time. We’ve had to home-school our children and check on our parents. We’ve had to keep up with the news, because what else was there to do. We’ve lived, laughed, loved, and we’ve died, cried, mourned. And all the while, we continued to be both audience and entertainer in the highly performative show that social media has given us a platform to create. This has made a lot of people very angry and has been widely regarded as a bad move This hit young people hard. Especially young men, who weren’t doing so well before the pandemic to start with. Many retreated online, to Reddit and Discord, where anonymity is both a great equalizer and a great dehumanizer. Indeed, it’s easy to hurt someone you don’t see or know. They retreated to Joe Rogan, where they could be told the problem wasn’t them, but others. Many have since become overly confident that they know better, and believe they can function fine without the system / the establishment holding them back. It’s particularly disheartening to see crypto/DeFi take off in popularity during a global pandemic, when the message “we’re all in this together” could not be more plain. Crypto is, to some degrees, an outright refusal of that. The social contracts that link us seem to have become more tenuous, we’re all seeing it. In 2020, digital ate the world. The economy leaped forward 7 years in terms of digitization, compared to expected trends. And that’s only in relation to commerce. Millions of people discovered digital dates, digital school, mobile banking, online workshops, remote voting. And it was… fine. We were finally ready to accept the idea of digital finances, digital organizations, and even a whole digital universe. We were ready for Web3. The Gamestop Short Squeeze In January 2021,  GameStop shares soared 1,700 percent as millions of small investors employed a classic Wall Street tactic to put the squeeze — on Wall Street. . A short squeeze is easy to grasp. A trader borrows a share of a company. That share is worth 10$. The trader sells that share. The trader hopes the company will do badly. If that does happen, he buys the share again, for 7$ this time. He then gives back the share to its original owner. Mathematically, he’s made 3$. If, instead of going down, prices go up, the trader needs to buy the share at a higher price to give back. If nobody wants to sell because a bunch of Redditors banded together, he will need to make higher and higher offers. This can very quickly become ruinous. This has made a lot of people very angry and has been widely regarded as a bad move The 2021 short squeeze happened for a few reasons. Greed, obviously. But also boredom, and access to disposable income (or government stimulus checks) that had not been spent in 2020 because of the pandemic. The last two ingredients came straight out of 2008: determination to teach Wall Street a lesson, and an endless flow of get-rich-quick hype and ideas delivered via social media. Investments in “meme stocks” was a gamble. A stupid one, too, for a majority of the people involved. If you made a Venn Diagram of the people who bought Bitcoin in 2017 and GameStop stocks on RobinHood in 2021, you’d most likely just make a circle. But this turn of events went further than the Bitcoin 2017 hype, exposing the elements that would go on to feed the NFT boom one year later. There were talks of community. Of belonging. Of meaning. Of revolution. All things many young people had been seeking for a year at least, and all their lives at most. Loneliness created in part social media coalesced into streams of consciousness other social medias such as Reddit or Discord. A language was created, as a way to show loyalty to an in-group versus an out-group. On r/WSB, you say “gm” when you wake up. You “hodl” with your “diamond hands” to make it “to the moon”. “WAGMI”, unless you “FUD”. If that’s the case, “HFSP”, you’re “NGMI”. by on Some of those small-time investors did make money… And some on Wall Street fared poorly… When the smoke cleared, though, the popular image of tables being turned on America’s financiers wasn’t entirely accurate. Individual investors who bought GameStop this time a year ago and never sold are sitting on hefty losses. Buyers of so-called meme stocks like GameStop and AMC viewed their investments as an opportunity to fight against a financial system rigged in favor of the wealthy. For a large number of individual investors, the stock market has become the battleground on which they join forces to right perceived wrongs and fight the powerful. This is when Web3 went from obscurity to obnoxious ubiquity. You Are Here In 2021, NFTs became the new big thing following THAT Beeple sale. This didn’t make anyone angry. We were too tired. The fact that the sale was at least a bit fraudulent seems to have bothered no one at the time. Or since. Millions were asking for a movement. Silicon Valley rushed to provide it. Angry at the bankers? Have some Cryptocurrency and DeFi. Tired of giving your data to big tech? Have some blockchain. Sick of Art being the realm of insiders? Have some NFTs. Mad at the government? Form a DAO and buy a copy of the Constitution. Exhausted by the real world? Have some Metaverse. little The people pushing these technologies and their fans don’t just want them to be the change they’re envisioning. They it to be real. Why else, then, would they have spent millions in technologies that never should have left the proof-of-concept stage? What was the point of it all? We’re in too deep to go back now. need When large groups of people can join forces and channel their money towards goals they care about, the old distinction between market and market is no longer valid. And once enough people partake in market manipulation, all other market participants must respond in kind. participation manipulation always remember that none of these technologies happen without the Goldilocks zone created by the march of history. Over time, seemingly unplanned, unrelated, chaotic actions give rise to something that seems like it has been designed. We needed a financial crisis to create the app-led world that isolated us and primed us for anger at elites. We needed a world in crisis to envy a new system. We needed COVID to digitalize the world. Without these events, the technologies being presented to us today would be radically different. But Now… we know where it’s coming from. Where is it going?

How the Financial Crisis, Trump, Covid19 and GameStop Created Web3

In December 2020, a $20 stock degraded as “the next Blockbuster” by venture capitalists was rapidly garnering the enthusiasm of retail investors. Normal people invested their savings behind GameStop, betting that it would go the opposite direction that financial big guns were saying. The now infamous subreddit r/wallstreetbets was awash with ‘due diligence’ posts, advising readers of the potential for a huge short squeeze. Within a month, $GME went up 24-fold before broker intervention put it back down again. One year on, the same community is pushing for another GameStop boom, and it’s all thanks to NFTs. The January 2021 short squeeze quickly gathered the world’s attention as it made headlines across the globe. Those who had never cared about stocks before were getting involved as $GME left the confines of business sections for front pages. Hedge funds like Melvin Capital had bet the brick-and-mortar company would soon go bankrupt, putting millions of dollars into short selling to the extent that 140 percent of $GME’s public float had been sold short. The narrative soon became one of the underdogs fighting back against the powers above, with many on Reddit sharing stories of financial loss during the 2008 crisis as a motive for revenge. The theory was that the short sellers would soon have to cover their positions, with r/wallstreetbets posters claiming that the stock’s price would reach four figures and Wall Street would be in flames. Fresh out of a New Year’s Resolution to learn more about finance, I stumbled across the GameStop hype and bought a few shares around the $20 mark. But the mainstream narrative that it was nothing more than a ‘meme stock’ undervalues the analysis that members of the subreddit put in. There is a reason that the stock has fluctuated around $150-200 even since the hype died down. The boom was driven by a will to prove the obstinate venture capitalists wrong, but what was underreported was the impact of new Chairman Ryan Cohen. The 35-year-old first made his mark as CEO of Chewy, an e-commerce business specialising in pet food which he co-founded in 2011. After six years, Chewy was bought by PetSmart for $3.35 billion – the largest ever e-commerce acquisition at the time. As Cohen turned his sights to investing, his involvement in GameStop started to turn heads. Rumours that he would lead the brick-and-mortar business to transition to e-commerce were also much spoken about. Keith Gill, who goes by Roaring Kitty on YouTube or u/DeepF***ingValue on WallStreetBets, was the most prominent success story to come out of the short squeeze. He first invested in GameStop when it was just $5, proposing that it was wildly undervalued. Some may have seen it as nothing more than a meme – see Elon Musk’s “Gamestonk” tweet – but others had done rigorous research before choosing to get involved. As Gill told The Wall Street Journal: “I wasn't a rabble-rouser out to take on the establishment, just someone who believes investors can find value in unloved stocks.” In more recent weeks, r/WallStreetBets has been alight with memes imagining a second boom as GameStop is linked with plans to develop an NFT marketplace. The short squeeze faltered when brokerage Robinhood stopped investors from trading GameStop shares, so it makes sense that those who felt betrayed by the commission-free system would turn to the blockchain in hopes of avoiding the undue influence of vast financial powers. The app makes almost half its revenue from payment for order flow – receiving compensation from a market maker for routing trades through them. One such market maker in Robinhood’s case was Citadel, who also have a vested interest in Melvin Capital – the target of much WallStreetBets ire during the squeeze. Payment for order flow is a system controversially endorsed by one Bernie Madoff, and is highly regulated in Europe while banned in Canada and the United Kingdom. The congressional hearing has not led to any action against alleged market manipulation, and the blockchain may provide a hopeful alternative because it is decentralised. NFTs have so far proven wildly popular yet also controversial – GameStop went up 17 percent when its involvement was first announced, but any idea of a second boom is missing. Optimism for the underdog was rife during the short squeeze, and it was a highly exciting thing to be a part of as a stock I gambled on later made front pages across the world. But as it faltered and allegations of market manipulation reached government voices, it became apparent that the hedge funds would always win. Decentralised currencies and NFTs may appear a hopeful alternative, but it seems unlikely GameStop can capitalise.

WallStreetBets are Hoping for Another GameStop Boom and it's All Down to NFTs

The potential of the GameStop (GME) stock was first discovered on in the fall of 2020, and soon the GME market price started to rise, creating more hype on social media, and eventually culminating in a short squeeze of Melvin Capital’s position, which lost them about $13 billion. r/WallStreetBets Since this happened, I’ve talked with the founders of blockchain projects operating in this climate and asked them what they think about DeFi and the fintech market in general. Some of the founders suggested that now may be a great time for decentralized finance to finally hit the mass market. Others disagreed, and we separated their opinions into three distinct groups, which you can find in this article below. GameStop timeline GameStop mania truly started to pick up steam late January 2021, when r/WallStreetBets started hyping GME, the stock of the embattled game retailer. GameStop, which saw its revenues severely impacted by the COVID-19 pandemic, was also targeted by Melvin Capital, which bet on GME shares hitting rock bottom. Melvin Capital had been shorting GME , while increasing its short position until it exceeded the free float of stocks, a discrepancy noticed by Reddit traders back in October 2020. since 2014 A surfaced on the Reddit board, which suggested traders could organize a short squeeze for Melvin Capital. The conversations and hype increased, which brought the price of GME to a record high. Melvin Capital had to close its short position, ending up with a $13B loss. GME itself went through a wild price swing, starting off at below $5 just six months ago. video During the peak hype on social media, spiked on two occasions to a record of $347.51 and a lower peak at $325, when Melvin Capital was forced to buy and cover its short position. The short squeeze turned into a social media competition to break the logic of markets, as traders swore to give up profits just to make a point. GME GameStop: The Repercussions Despite the social media buzz, one name stood out; a user known as Keith Gill, who used the moniker RoaringKitty for his YouTube persona. Gill went through a before the US House Financial Services Committee with the goal of clarifying unpredictable market effects, trading stops, and a concerted effort for a short squeeze. hearing Gill’s testimony that he only used publicly available information on the for GME. Despite his participation on Reddit and highly influential persona, Gill claimed he was not trying to create a mass movement of investors. held the position short interest The community of r/WallStreetBets is still alive and well, and it still works to amplify stock selection signals. The signature profanity and apparent mindless risk-taking also hasn’t slowed down in the slightest. While this swarm behavior of investors was noted, in the end, it was Robinhood who took the brunt of the criticism for stopping orders. The rules of a short squeeze would have raised GME prices even higher if the Robinhood app had to order more shares. allowed more new buyers The hearing centered on the role of Robinhood in essentially manipulating the market, with most of the questions aimed at Vlad Tenev, one of the co-founders of the trading app. But the hearing also set the floor for potential repercussions for retail traders using social media. So far, US lawmakers have not started tackling these trends in earnest, with only tangential rules such as the act potentially holding social media companies responsible for some of the content within. Section 230 What the r/WallStreetBets case exposed was a form of investor swarm behavior. The stock selections are often driven by memes and popularity, creating a market force to be reckoned with. As of February 2021, it is still unclear how US or international authorities will handle the potential for groups of traders deciding on a specific stock or a strategy. Repercussions for the fintech industry The GameStop saga happened at a time when fintech was expanding, and expecting multiple investment markets to open for retail. Fintech first tackled banks, allowing relatively high international money transfers at a lower cost. Later, apps appeared for investing in various assets. The process also coincided with the rise of cryptocurrencies, where wallets immediately opened the opportunity to buy highly volatile assets. In general, fintech-based investment remains a free-for-all in 2021. There are indications that regulators are more concerned about the proper liquidity and capitalization of large-scale market participants, which is also easier to measure. But the potential for so-called behaviors also opens the door to closer observations for social media content. “social contagion” One of the growing markets for risky assets, known as crypto-based decentralized finance, is a hotspot for social contagion behavior. DeFi projects often expose themselves to social media, attempting to with the promise of high yields. The problem with newcomers, however, is that it is possible to sway the price of an asset, but when the driver of group behavior slows down, this may lead to deep losses in the personal finance level. draw in newcomers There were also personal consequences for Keith Gill, who will now face a for misrepresenting his persona, and acting as an amateur investor when he actually had a deep knowledge of finance and accounting. lawsuit For now, almost all Reddit personas remain anonymous and there are still no barriers to sharing stock tips on social media. The US Department of Justice followed the Congress hearing with its own , but the outcome of that is still to be determined. Due to social media amplification, the reliance on may also have to evolve and reflect unexpected events and even illogical trades. criminal investigation algorithmic trading What do the founders of blockchain startups think? DeFi Pessimists Matthew Niemerg, President of the Aleph Zero Foundation - Aleph Zero is a high-throughput, enterprise-grade public blockchain platform powered by a state-of-the-art, DAG-based consensus protocol that is designed from mathematical principles. Ian Campbell, DeFi Product Manager SUKU - SUKU is the link between decentralized finance, transparency, and traceability in supply chains. Infrastructural Players’ Opinions -  GateHub is the largest wallet provider on the XRP Ledger, your digital asset wallet for the Internet of Value. Eric Polo, Head of Product, GateHub - This is a digital assets management solutions company helping businesses transit from conventional technology platforms to DeFi systems. Vikram R. Singh, CEO, Antier Solutions - An open application platform powered by a peer-to-peer computing protocol and a decentralized licensing system. Tom Trowbridge, co-founder Fluence Labs - One SDK for passwordless, WebAuthn, and social login. Sean Li, CEO Magic - A fast and open blockchain for scaling Ethereum applications and cross-chain finance. Stephen Tse, Harmony CEO, Harmony DeFi Believers - AlphaPoint is a white-label software company powering crypto exchanges worldwide. Igor Telyatnikov, CEO & Co-Founder, AlphaPoint -  An Australian-based blockchain startup. The company has been offering fiat on/off ramp solutions to the DeFi platforms. Charlie Karaboga, CEO & Co-Founder of RelayPay -  Interplanetary Crypto Token Exchange. Alexander Kaplin, CEO of ICTE Founder of - A merchant system and online marketplace with a unique marketing model. World Token - LATOKEN Exchange is the easiest way to access money and assets worldwide. Valentin Preobrazhenskiy, CEO of LATOKEN — Donut is a mobile app providing the easiest way to earn high APY on your money through the power of DeFi. Neel Popat, CEO of Donut - A mobile shopping and investment app. Brian Goldberg, Blockchain Advisor at PAYMYNT Financial - A revolutionary payment system that drives the Dream Channel economy. Jonny Peters, Founder & CEO, Gazecoin Igor Telyatnikov, CEO & Co-Founder, AlphaPoint As a white-label exchange software provider serving a global client base, we stay tuned to the regulatory changes that may affect client compliance requirements worldwide, and we’re continuing to see regulatory clarity and acceptance. The Office of the Comptroller of the Currency (OCC) in the US recently clarified that national banks and federal savings associations can provide cryptocurrency custodial services for customers. The OCC sees banks providing crypto custody services as a modern form of traditional bank activities related to custody services. Never in our almost eight-year history have we seen higher demand to launch digital asset exchanges and offer access to cryptocurrencies, and we believe this is fueled by the positive regulatory stance and corporate interest in this new asset class. While DeFi has introduced new decentralized offerings to the market such as lending, borrowing, and on-chain insurance, we also see the demand for these same services integrated with crypto as the underlying assets from CeFi institutions booming. Charlie Karaboga, CEO & Co-Founder of RelayPay Within the last few years, we’ve seen how we can reimagine borrowing/lending without the centralized intermediaries. DeFi lending projects are going for mainstream adoption with their increasing abilities and applications. Similar to lending, stock trading also has unnecessary intermediaries and the majority of the world's population cannot access popular stock markets due to these inefficient gatekeepers. Robinhood meant to democratize trading for the masses, but GameStop's case and a trading halt once more justified the importance of DeFi. Until corporations tokenize their stocks, we’re unfortunately a bit limited. However, I believe DeFi can act as an “L2” for stock trading in the near future. Alexander Kaplin, CEO of -  Interplanetary Crypto Token Exchange ICTE We at ICTE are certain that DeFi blockchain technology is advanced and mature enough to support the requirements of all sectors of the global financial market, like high-frequency trading, trusted composition data, and trading strategy transparency at reduced overhead costs. DeFi ensures that you have full control of your assets and no one else can access, use, freeze, or take your assets without your permission. You are also free to find other providers and venues to exchange your assets with. All your actions are associated with your trading address and your positioning in the market is transparent. This is very beneficial for personal security because your address is the only identity you would have on the market, and you are otherwise anonymous as a trader. The personal control of your assets, anonymity, and transparency are the most important values that DeFi would bring to the financial world, especially in cases like GameStop. The blockchain would show the movement of assets from lenders to investors to the open market, and short-selling would be more easily identifiable -- even if a single trader utilizes multiple addresses to execute their strategies. Now is definitely the time for DeFi to be fully adopted. Founder of World Token DeFi has created balancer pools, vaults, yield farming, algorithmic stablecoins, and these developers are just getting started. Network fees have been outrageous but it has not stopped further adoption of new and innovative protocols. Trustless protocols are far safer than anything we currently have in traditional finance and the GameStop fiasco proves that. A group of internet strangers can short squeeze billions of dollars from hedge funds and the government starts to step in to protect the funds from losing too much from their own behavior. There's no meddling in DeFi as code is law and autonomous immutable protocols will take over. Valentin Preobrazhenskiy, CEO of LATOKEN DeFi is like a "clubhouse" of finance. Money and assets are way simpler to access, and simplicity means new use cases, such as startups' "global IPO" crypto exchange listings , aka IEOs, or asset tokenization. DeFi reminds me of a clubhouse because it is driven by communities. GameStop's coordinated short squeeze highlights the growth of communities with social networks as LATOKEN reviews . Communities are strong in crypto, and their willpower can become a self-fulfilling prophecy, especially if it is about adopting a better currency. While GameStop and crypto are very different assets, I think some hedge fund managers would be less likely to short-sell crypto after this case of community power. Don't get me wrong, short-selling is necessary to prevent bubbles, and institutional and retail investor rights must be protected. Neel Popat, CEO of Donut The GameStop craze proves that the current financial system remains broken for everyday investors. Whether it's the monetary system or market-shifting hedge funds, the status quo is built for insiders. DeFi shifts the paradigm, giving the everyday individual access to a better and inclusive suite of financial products. It’s only just starting to reshape financial services, from high-yield savings to borrowing, but DeFi is actively providing a much needed catalyst for change. Brian Goldberg, Blockchain Advisor at PAYMYNT Financial The GameStop fiasco has not only exposed the fragility of our financial system, it highlighted the fact that access to investments is an issue faced even in the most advanced economies. DeFi will rise this decade as a way to empower individuals to invest how and when they want - with minimal intervention. Jonny Peters, Founder & CEO, Gazecoin The future of feature film funding is an NFT/DEFI  model that allows investors to buy and trade characters in a movie!  We are about to release a model that allows investors  to buy and stake “film character” NFTs to receive a film token, a token that can be zapped into film royalties. Matthew Niemerg, President of the Aleph Zero Foundation While DeFi has seen a recent surge of interest, I do not think it is ready for mainstream adoption, even after the enhanced attention the GameStop stock received within the WallStreetBets Reddit community. Several factors come into play, but they almost all boil down to user experience. Most participants in DeFi are still “power users” and many lack the requisite skill set to audit smart contract code or to manage private keys appropriately.  This level of increased risk and uncertainty is a large barrier for mainstream adopters. Retail investors will most likely come to DeFi through centralized on-ramp/off-ramp service providers who will not only vet the quality of the DeFi projects but provide a simpler (and more traditional) portal for accessing these innovative products. I think we are seeing this being built out in various CeDeFi products, particularly by centralized exchanges as they begin adopting new business models to compensate against loss revenue as power users migrate to DEXs. Ian Campbell, DeFi Product Manager SUKU What happened with r/WallStreetBets, Gamestop shares, and brokers like Robinhood is just one indicator that DeFi is NOT a solution in search of a problem. The problem is very real. The DeFi value proposition is that, due to its decentralized nature, there are no third-party intermediaries who can halt trading or shut down the exchange. However, adoption of any new technology requires a slow, deliberate transition. When email first launched, sending messages required knowledge of coding languages and pretty significant technical savvy. Only after a few years were user-friendly interfaces added to make email simple for everyone. Interacting with and using DeFi protocols is evolving at a rapid pace, but I don’t believe that it’s ready for mainstream use. With that said, more and more traditional traders are finding themselves “falling down the rabbit hole.” The more traders who join DeFi, the more investment is made into infrastructure to make it mass-market user friendly.  It may take a few years, but I believe that DeFi will inevitably cross the chasm on the adoption curve and become mainstream. Tom Trowbridge, co-founder Fluence Labs GameStop demonstrated the urgent need for both DeFi and tokenization; the danger of a single, for-profit company determining when/how over 20 million investors can trade became clear as did the totally antiqued, legacy exchange infrastructure with multi-day (!) settlements, which tokenization eliminates. But what the DeFi innovation explosion has really demonstrated so far is the power of composability, which makes it so simple to build.  What if we can bring that same composability to the entire web – imagine being able to take any existing application, fork it as easily as a DeFi service, quickly add some features, and launch it without having to rebuild backends or pay for infrastructure.  This is possible with a decentralized peer-to-peer hosting service and a blockchain based economic layer that compensates authors based on the use of their code by sharing in hosting revenue. This is the future, and it is possible right now. Sean Li, CEO Magic DeFi has been gearing up for mainstream adoption since 2018. Many talented developers and well-funded startups have poured an incredible amount of work into fundamental infrastructures powering blockchain applications, such as layer 2, identity and key management, smart contract tooling, node infrastructure, and fiat on-ramps, etc. Through the thick and thin of the market, the culmination of all of these persistent efforts have made it possible to build DeFi applications that are indistinguishable from the Web 2.0 experience - mainstream adoption is already here. Stephen Tse, Harmony CEO, Harmony Now is the time for DeFi to start going mainstream. As we saw with GameStop and other stocks recently, the centralized financial system has reached its breaking point with many challenges. In centralized finance, brokers and companies can decide to stop trading, but in DeFi, individuals can freely manage their funds for investing, trading, and lending. The centralized financial system relies on two-day settlements, which is why the entire system froze waiting for capital to settle. Harmony enables two-second settlements for transactions as demonstrated by our cross-chain Uniswap port on the mainnet. We envision the mass migration of global finance markets coming on-chain in the next few years. Eric Polo, Head of Product, GateHub The GameStop fiasco is the latest large-scale exposé on why many are reluctant to enter the traditional financial markets. Most notably, it left many thinking that markets don't actually evolve organically but rather just do what they were created to do. In DeFi, the markets are (or at least should be) fully controlled by transparent and auditable code, creating a level playing field. In the past few months we have seen moves by institutions and regulators that were aimed at “protecting investors,” but they mostly achieved just the opposite. DeFi is only in its infancy, but with time it will evolve and there will be a large uptick in users, giving everyone the opportunity to truly own their money and the responsibility that comes with it. Vikram.R.Singh, CEO, Antier Solutions The explosive rise of GME is a testimony to the overhauling impact of decentralized finance and the crumbling legacy finance. In the pre-DeFi era, those in power could easily delist assets or block opportunities for potential business cases. With DeFi , it is a truly democratic stage that bestows the credit to those who deserve to be in power. I won’t be surprised to see a lineup of more consumer services embracing P2P payment alternatives.

Is it Time for DeFi to Go Mainstream After the GameStop Craze? 

This Slack discussion by Kien Dao and Hang occurred in slogging's official #introductions channel, and has been edited for readability. After a few scans on Twitter and Reddit, I kinda understand the basic definitions and terminologies, with short squeezes and all that. My question is: Do you think there should be a law, or a requirement of some kind when comes to stock trading? I mean for all we know, hedge funds have been doing this “pump and dump” strategy since forever, but the moment a group of individual retailers is doing it, it becomes a problem? It ain’t fair that the hedge funds have the power to pressure platforms like Robinhood to limit their users. Kien Dao Feb 8, 2021, 2:52 PM : a strategy executed to manipulate the stock market. Fraudsters will buy up shares of lightly traded companies, spread rumors or false news about its prospects, and then sell them at a higer price to investors who were tricked by the news. Kien Dao Feb 8, 2021, 2:52 PM *Pump and dump I am mixed actually, this is certainly new to both the regulators and the people who run the platform. Hang Feb 8, 2021, 2:54 PM I mean it’s interesting that this is only the first time someone is screwing big guys over like this. It’s unprecedented. Considering the whole situation and the fact that “stock trading has always been for the rich”, I can understand why people are mad at Robinhood and other platforms. Kien Dao Feb 8, 2021, 2:55 PM Okay, so I think there should be a law to keep people informed before jumping into short squeeze/options in general - that kind of stuff. I remember back in the summer a student committed suicide after playing around with options on Robinhood  (which is totally free and accessible) without understanding it properly. He ended up losing a lot - and we are talking 5 figures here, for a college student with debts and financial dependency. We don’t want the same thing to happen to people who short on GME and/or jumping into the ships without any fundamental finance and stock markets knowledge. People are mad at Robinhood but the truth is, they’re forced to do such actions. I don’t think this is Robinhood or any other platforms' fault. Hang Feb 8, 2021, 2:56 PM I myself have account in both Robinhood and Charles Schwab and their response to this issue is familiar. Imagine you have a business, working for it so hard and finally have some success, to find yourself in the middle of the war between the people and the regulators. Big oof. Looking back, we understand that the finance industry was what made America today. They rise on capitalism and will protect it at all cost, although it's messed up. I have watched some movies, documentaries and read a bit about the global crisis in 2008-2009 - to learn that they will always get bailed out in one way or another. And I repeat, always. Hang Feb 8, 2021, 2:57 PM So, as someone who has been in this game for a while, do you think that it is necessary for platforms like Robinhood to take this kind of action (limiting the ability to buy and trade) towards their users, considering many of them, especially the most recent users, don’t acquire enough knowledge of stock trading? Do you think more of what’s going on may lead to the fall of Wall Street? Kien Dao Feb 8, 2021, 2:59 PM I think trading and options should be limited because not everyone is informed or educated enough on that matter. Remember that trading and investing are not the same thing. Trading is more risky, short-time, and requires a lot of technical analysis knowledge. Not everyone knows about it. Also, fuck Wall Street, lol. Hang Feb 8, 2021, 3:00 PM Now that you mention it, I agree that it’s important for people to be educated on a certain level to be in this game. And yeah, Wall Street definitely has it coming, lol! Kien Dao Feb 8, 2021, 3:02 PM However, if people are educated enough to go for options, let them be. But they have to be careful, the lost on option, shorting to be exact, can be limitless. Think millions. That's a lot of money for normal people like us. Hang Feb 8, 2021, 3:02 PM Now that Robinhood just announced that they’ll open again (some time tomorrow), what do you think is going to happen? Do you think the same situation will be repeated, or perhaps Robinhood themselves have come up with a solution/system? Kien Dao Feb 8, 2021, 3:04 PM People will go for it, people are aggressive, lol. The rich here, a majority of them, boil the people's blood. We are talking about people of all backgrounds, occupations, and educations. They just dump a ton of money on it without factoring in both fundamental and technical analysis. That's their action against the big finance guys. They try to boo the rich, betting their money in sinking stocks to drive them forward and fuck all who bet against these tickers. Some are even losing their savings. They just hate the rich that much. There is no way in hell GameStop can thrive in such a short time. The factors for a turnover, new member on board, or renovation in services are not enough to drive a stock to the moon overnight. Especially GameStop. The system sucks. The UX UI sucks. Can't even pay online with my credit card. But they are authorized to sell Sony PS5, lol 😂 Hang Feb 8, 2021, 3:04 PM Wow, so far the whole thing seems very Hunger-Games like, with the rebellion against the rich in the Capitol and all. I wonder if there’s going to be some kind of war 😂 Kien Dao Feb 8, 2021, 3:07 PM I mean, look at this: Hang Feb 8, 2021, 3:08 PM Idk 😂 hopefully not. But people will be angry for a while and there will be a stock markets war between Redditors (some of them are knowledgeable) and the hedge funds (backed by the government, duh). Even if they restrict on GME, they will find another stock with potential turnarounds (even very lightly) to bet on. Robinhood can’t just go after them forbidding one by one. I know one thing - it will be bad for Biden, who just took office for several days and probably is not tech-savvy enough to use and understand Robinhood thoroughly (hopefully his staff will help him out). And for Robinhood too, it plans to go IPO this year. Hang Feb 8, 2021, 3:08 PM That’s right, I also read an article saying that the citadel and White House are also behind this. If that’s the case, it’s definitely not looking good for Biden. Kien Dao Feb 8, 2021, 3:09 PM Yes, that's a lot of pressure. And it's true that there is news about the citadel and White House behind the whole Robinhood restricting GME and other stocks thingy, but nothing is confirmed yet (and it's not like they will confirm it, lol). Biden can't make all the decisions by himself. Hang Feb 8, 2021, 3:09 PM Go for Crypto 🤷‍♀️ but Utsav told me to wait, lmao Hang Feb 8, 2021, 3:10 PM Bruh, I’m too dumb to be in this game 🤣 Kien Dao Feb 8, 2021, 3:10 PM Just wait, lol. Price is too high 💸 Anw, have you watched Too Big To Fail? You will see a point: once a huge company falls (ie Melvin, pretty huge, but not failed yet), some other companies will fall like dominos. Hang Feb 8, 2021, 3:11 PM No, I haven’t, but I do understand the reverse: once a big guy does it, everyone else is following. Take Apple, for example, people ridicule them, first for removing the 3.5mm headphone jack and then for getting rid of the charging brick. But here were are not 3 months later, Samsung is following with their most recent Samsung Galaxy product release. It’s just going to be a matter of time before the other guys do it, too! Kien Dao Feb 8, 2021, 3:12 PM Aight. So long story short: back then when they let Lehman Brothers go bankrupt, leading to the almost failure of AIG (the biggest insurance company at the time) - the last time I check, it's still here, just not as thriving. That’s one side. On the other side, Lehman’s accounts went frozen, people lost their whole savings, companies lost partners (and people who lend them money). It affects other banks too - as people started withdrawing their money all at once and some banks were not liquidated enough for it. Led to a whole disaster 👀 Hang Feb 8, 2021, 3:13 PM Yes, so when the giants do something (even fail), others follow suit. Idk if my POV is correct or logical enough, and I may got laughed out as a piece of shit by Wall Street, but that’s how I look at this. I find it hilarious, btw, mostly 'cause I’m staying out and watching. It's cool to see most are like this: Hang Feb 8, 2021, 3:13 PM Cool, thanks for the great discussion! Excited to see what’s coming next though I’m not even in the game xD Kien Dao Feb 8, 2021, 3:16 PM Lol, same. Happy to discuss. However, things seem to have cooled down a bit 🤷‍♀️ Guess people are finding drama in Covid time! Hang Feb 8, 2021, 3:16 PM

Robinhood x Gamestop for Dummies - A Conversation Between 2 GenZ

I’m Andrew Levine the CEO of Koinos Group a startup financial technology company where we’re trying to build systems that prevent some of the shenanigans that we’re seeing at play so in the video below I take a big step back and try to give you a 10,000 foot view of the whole GameStop, RobinHood, WallStreetBets situation and why I think this is far from over. A Brief History of Financialized Capitalism But to understand everything that’s going on now we really need to go back to the 1970s which is when America shifted from an economy that manufactured goods that other countries bought, to an economy that financed manufacturing in other countries. This was a really fundamental change to the very nature of capitalism. It was a shift from industrialized capitalism, to financialized capitalism. America had become so wealthy that we no longer had cheap labor and other poorer countries were catching up with our manufacturing capabilities. Before the 1970s other countries needed our goods and so they also needed to get US dollars which they needed to buy those goods, but in the 1970s that dynamic flipped. After decades of manufacturing, political, and economic dominance, that created unprecedented demand for a single currency, the US dollar had become an indispensable part of the global economy. With our manufacturing capabilities on the decline, our strongest export became the dollar itself. All of the countries that were developing competing manufacturing capabilities were too small, too young, and too untrustworthy to supply a currency that everyone could trust to oil the gears of this new global capitalism. Besides, the dollar, backed by the military and economic might of the world’s first superpower, had already been playing this role for decades. Policymakers saw the writing on the wall and decided to lean in to the trend. They used our so-called exorbitant privilege to flip the script and make the US even more critical to the global economy not by trying to compete as a manufacturer, but by manufacturing more dollars and using those dollars to fund more growth outside of the United States. Enter Wall Street But this scheme would only work if all of that money came back to the US to fuel more growth here. Which is where Wall Street comes in. We had succeeded in making the dollar the lifeblood of global trade--something every country used to buy and sell goods with one another. When they made these deals their profits would be in dollars not their own currency. They could sell those dollars to get their own currency, but we didn’t want them to sell, we wanted them to reinvest those profits in America. And so it became Wall Street’s job to provide these foreign companies and nations with such attractive returns that they’d have to be idiots not to send their profits back to us so that they could make even more money. Unshackling the Bull But how was Wall Street going to deliver such massive returns? The first step was removing the regulations that were holding back financial firms from effectively printing money. Unlike the banks most of us are familiar with who can already create 9 dollars for every 1 dollar they hold, financial firms like the hedge funds we’re hearing about in the news would be able to create all kinds of exotic instruments that take some underlying asset like a mortgage or shares in a company and use that to create some new asset worth 100 times, 1,000 times more. This enabled them to generate those profits that motivated more money to flow back into the US and into their firms which they could use to create even more exotic instruments. Yes, a lot of the money coming back to the US went into our companies and our treasury bonds, but Wall Street was the vacuum pump that sucked in that money with force based on its promise of massive returns. This caused our companies to transform in a way that mirrored our currency. Their product flipped from being the goods they produced for a profit, into the shares themselves and the goods or services they offered were more about constructing a narrative that justified creating shares that Wall Street could then gamble on and use to construct their magical instruments that created money from money. This whole thing probably sounds extremely risky and prone to collapse given how everything is built on top of creating money out of thin air through financial engineering, which is precisely why we have had so many financial crises over the same period of time. These are effectively pyramid schemes and so when one gets too big it collapses and the government has resigned itself to the role of ensuring that either the schemes don’t get so big that they can take down the whole system with them or if they do get too big--too big to fail--they are bailed out. Of course, all of this gives incredible power to Wall Street while also creating perverse incentives to make their schemes so big that, when they do fail, they are protected. People often wonder why the government continues to put up with this and now that should be clear. Without Wall Street we’re just a has been superpower. China’s economy is already bigger than the US economy and it’s still growing so it’s only a matter of time before their currency becomes more valuable to the rest of the world than ours. People don’t need our produce, our oil, or our machinery. We’ve just become the world’s casino and Wall Street firms are the dealers. The Great Financial Crisis of 2008 But everything changed in 2008, even if it doesn’t seem like it. The game ended. The capacity for Wall Street to print enough money to fuel the perpetual motion machine came to an end. Policymakers saw it and said outright that they feared it was the end of capitalism. It was this fear that led them to respond with unprecedented measures. For the first time in American history the federal government had to step in and take the place of Wall Street by creating more US dollars out of thin air, though they used the more palatable term, “quantitative easing.” This money printing got the gears of financialized capitalism moving again but in a zombified manner. There was no real growth, just more money chasing every diminishing returns. It was a band-aid, not a long-term solution. Enter Crypto But another group saw what was happening too. People outside of the financial system who wanted to see a genuine fix. They saw the problem as the system itself and wanted a better one. The problem wasn’t that the system needed to be tweaked. The problem was that we, the people, had no control over it or insight into it. It was imposed on us and we had no way of understanding it or impacting it. And we had no ability to opt out of one system and into another. We wanted a system that was open, transparent and impossible to manipulate. Which is why software engineers released the first prototype of such a system in Bitcoin. Bitcoin created a digital currency that no one owned or controlled, that was open and totally transparent, and was easy to understand having properties similar to gold. But Bitcoin was just one new asset that was slow and expensive to send and receive. So Ethereum was released next and it was similar to Bitcoin, but was also a PLATFORM that anyone could use to produce all kinds of digital assets like Bitcoin but with whatever properties they wanted. While a bit faster, Ethereum was still slow, expensive, and difficult to use. It was nowhere near ready for mass adoption and so while the game of musical chairs had stopped in 2008, the economy was forced to limp along with the help of record low interest rates from the Federal Reserve. And then the pandemic hit. Many think that the pandemic caused the economic crisis, but the reality is far worse. Things had been bad since 2008 and they were rapidly deteriorating as we entered into 2020. This left us vulnerable to the virus which then became a not-so-convenient excuse for our worsening economic situation. #Gamestonks Which brings us to the current events. WallStreetBets, RobinHood, GameStop, it all seems so complicated, but it’s really not because it’s the same old story. Remember, the American economy has become the world’s casino. With the real economy shut down the government has again been forced to go into money printing mode to an even greater degree than it did in 2008 and with most of that money going into corporate shares driving up their prices which is only encouraging people to gamble even more. Meanwhile with everyone stuck at home they have nothing better to do than to play the game while Wall Street firms are doing what they’ve always done which is use some underlying asset to create even more money out of thin air. WallStreetBets, a community on Reddit, simply uncovered their latest pyramid scheme. Though it’s certainly not new it’s now become a systemic threat to the economy, which is why I said at the beginning of this video that this is far from over. This scheme involves exploiting a loophole in the regulations that actually dates back to a time when people traded paper shares which could take weeks to arrive by horse and buggy. To grease the wheels of the financial system, always a priority in a capitalist economy (whether right or wrong), a financial instrument was created that enabled people to trade shares that they didn’t own. Shorting Stonks Eventually people realized, after the fact, that this instrument could be used to effectively bet AGAINST a stock or “short” it. Remember, the original purpose of shares in a company was to simply track ownership over an organization that produced something of value. While there may be some cases where shorting a stock is justified to send a market signal that a company is bad, the problem with shorting stocks is that when people with enough money target a single company by betting against it, it becomes a self fulfilling prophecy. This creates yet another perverse incentive to an industry already rife with perverse incentives. A Wall Street firm could make a guaranteed profit by betting against a company and then CAUSING it to fail. Now GameStop might have not appeared to be a thriving company, but 97% of its stores were profitable and the people running the business were obviously aware of its challenges and trying to turn it around, but they were facing an uphill battle as a result of the massive short positions that were working against it. But even that isn’t the story. The real shocking revelation from all of this is not that Wall Street was manipulating the system to make more money by destroying a company, that’s old news right? What’s been discovered from all of this is that Wall Street firms had apparently found yet another loophole. Due to poor oversight and a lack of transparency it was apparently possible for them to bet against the company using more of the company’s shares than actually existed! It’s as simple as that! A hedge fund exploited an ancient instrument that enables it to sell shares it didn’t own, to sell more shares (that it didn’t own), than even existed! Yes, this is math that only adds up on one street, in one city, in the world; Wall Street. But should we really be surprised? Wall Street firms are, after all, masters at creating money from nothing. So now the picture should be clearer. RobinHood is in a precarious position. It sees itself as an empowering platform but it is only empowering more people to play in the casino with the same old dealers. How Deep is the Rot? We don’t know how many firms are doing this and to what extent. Given Wall Street’s track record we can’t assume that having been given a blank check book they haven’t written countless checks. Precisely the opposite. And this is why this story seems to never end. We have no idea how deep the rot goes. If deep enough, that rot could collapse the very foundation of an economy that was already weak before getting hit by a pandemic that is still ravaging us. This financial system is clearly not working and whether it’s now or later, the house of cards will crumble. The question is whether we will have anything there to replace it. As I mentioned before, projects like Bitcoin and Ethereum, technologies like blockchain and smart contracts, were leaps in the right direction, but they haven’t been able to break into the mainstream because they are too slow, too difficult to use, and because they charge people fees for every little thing they do. Enter Koinos We’re building Koinos to solve those problems. It will be open, transparent, and decentralized like Bitcoin and Ethereum, but it will also be fast, easy to use, and most importantly, it will have no fees. We believe this is the key to building financial systems that spread wealth, instead of creating poverty. Establishing regulatory bodies and institutions that are open instead of closed, and build systems that are transparent instead of secretive. Despite the current circumstances, we are optimists who see a better future ahead of us that is bottom-up and people-powered instead of top-down with all the power concentrated in the hands of a small number of people working behind closed. In other words, a more decentralized future. We hope you’ll join us in our effort to turn that vision into reality. Also published on Peakd .

The 10,000 Foot View of WallStreetBets, Gamestop, Robinhood and Crypto

The GameStop incident is an anecdote of a larger phenomenon that will be more common in the future. There have been events like GameStop before but not in the capital markets, not at the same scale. Although the short squeeze is a common phenomenon in capital markets, the cause and effect of this particular short squeeze are unique. In a way, the tiff between PewDiePie and T-Series to become the largest YouTube channel was a predecessor to the GameStop event. Both events have a common throughline. They are both driven by massive crowds rallying towards a single goal, motivated by few influencers, and are connected through the network called the Internet. The phenomenon has been developing for a while and manifested in multiple ways on the internet in recent years. Be it QAnon, GameStop, or T-Series the underlying forces are the same. They are driven by the followers of a belief, a belief initially led by a few with some reasoning, followed by the many. The phenomenon is common in religions but it took religions hundreds of years to spread the gospel, not 6–9 months. Religions didn’t have access to networks that enable the spread of data within seconds to every follower or future follower, and networks were not embedded with tools to vote for the beliefs of the gospel. Patreon allows a YouTube channel follower to pay for their content creator, Robinhood allows one to vote with their dollars and choose their favorite SPAC salesman & twitter allows it with a heart-shaped button. Connected networks with data reaching millions in seconds combined with tools to vote on the beliefs of these networks are giving rise to these “Egalitarian Forces”. Almost all industries are going to see these forces in different forms Hollywood saw this in the form of YouTube stars $25 Million per year, and even starting their own restaurant chains overnight. Capital Markets saw this with Game stop, AMC, and even with Tesla. In Tesla’s case, the phenomenon played out over 5 years. Universities are facing this with the rise of Cohort based courses. These new forces are not necessarily good or bad, they are not even about “sticking up to the man”. There will good, bad, and mostly gray movements. They will be about the profit of all kinds. If this was Game of Thrones instead of 7 Kingdoms which have been holding the oligopoly on leverage and power for the longest, we will now have 1000 Kingdoms diluting the oligopoly power of the 7 Kingdoms. It is a pivotal point in the journey to the future. This post was originally posted on The Startup Project Podcast blog.

The GameStop Incident is Only The Beginning

The GameStop story is a story of David vs. Goliath. It ignites something in me that I can’t explain. Who would have thought that a couple of small traders could shed light on the rigged global financial system? I know it’s a huge topic to comprehend, so I’ll try to explain it in a way that is simple to grasp. First, let's start with some context. We, independent investors, are sick of hedge funds. Let’s face it, who likes hedge funds? Hedge funds don’t add any value to society. They only exist to enrich their investors at the expense of an average person. Large hedge funds often bet money that specific stock will decline in value. It’s called short-selling. This strategy has no apparent value to the real economy, and it exists for one purpose only. To enrich the people that do it. It is the way for the larger investor to manipulate the market. Besides, through the illegal practice called hedge funds can sell more shares of the company than its tradable shares. naked shorting, And even though the SEC banned the practice in 2008, no one does anything about it. I watched stocks being crashed to zero by these strategies, and no one said anything. It is an intentional market manipulation tactic, and it hurts companies, employees, and entire economies. Regulators turn a blind eye, and mainstream media clap like seals when they see hedge funds profit from destroying the companies. Retail investors fight back The question is, who’s going to fight them? It turns out a bunch of millennial investors on the internet will. They were the only ones to push back against the wealth destroying hedge funds. A group of young independent traders on Reddit, called , learned that hedge funds plan to short the video gaming retail company called . In general, when many people join together and invest in one stock, the price goes up. So these guys started buying the shares of GameStop. And the stock price went through the roof. At one point it soared more than 1000%. The hedge fund didn’t expect that at all, and they lost billions as a result of it. Wallstreetbets GameStop One hedge fund even had to get a 2.75 billion bailout from their friends on Wall Street. On the other hand, the bunch of amateur investors on Reddit made a ton of money at the fatcats’ expense. As a result, small retail investors beat the large hedge funds at their own game. More censorship In general, if you're going to short 140% of the stock to manipulate the price down and small investors stop you from doing that. You have to accept that you lost that game. But the hedge funds are sleazy. Instead, they use power. They called their politicians, and they immediately changed the rules of the game. Even the President of the U.S. is now involved. As a result, Wallstreetbets got banned for “hate speech.” This is a time-tested tactic by politicians. If they don’t like something and their donors are getting hurt by outsiders, they investigate, attack and censor. Robinhood became the Sherrif of Nottingham Moreover, Robinhood, one of the largest online brokerages globally, decided to stop people from buying GameStop shares. Ironically, they banned retail investors from buying the stock, but they didn’t stop hedge funds from selling them. They did that under pressure from the hedge funds, who really control them. This equates to the referee at the football match taking the ball out as it is midair because he didn’t like where it was headed. It is , and Robinhood’s business should go up in flames for this behavior. the most extreme example of market manipulation Why are the elites afraid? It turns out what elites hate is if somebody makes money betting against them. And the government fears that if they can unwind the hedge fund manipulation, they could crash the entire financial system. These smart retail investors can fight the hedge funds, government, and the central banks. Yet, the Reddit guys were doing the same thing as the hedge funds, only on the other side. The only difference was that they were winning, and the hedge funds were losing. It’s shocking! In 25 years of being in the markets, I have seen anything like that. So, where do we go from here? This story is about sending a message. It’s about everyday people coming together fighting the corrupt bankers. We need to take their power away. And nothing does it better than attacking their money. There is a movement that makes politicians and oligarchs all over the world shutter. It’s called . decentralization First, the internet has given rise to decentralized communities all over the world. Later came Bitcoin and cryptocurrencies, which helped create the new inclusive financial system. And the latest shot fired against the centralized financial system is GameStop. It’s a form of economic protest. I already cast my vote.

GameStop Is a Financial Protest Against the Global Financial System

Will The Game Stop with Gamestop Or Is This Just The Beginning?

Isaac Asimov Predicted the Psychohistory GameStop Phenomenon

Studying the corporate reaction to the COVID-19 pandemic can be viewed as an exercise in clear messaging when talking to your community. GameStop had the chance to show some leadership in the face of a crisis, to lead the way in supporting digital downloads and provide much-needed entertainment during this time of social distancing -- but they chose to support their brick-and-mortar stores instead, instructing employees to keep the retail outlets open even if police come to shut them down. So why did GameStop get it so very wrong? And what will it mean for the company in the long run? Remaining Consistently Behind the Curve It’s understandable that GameStop saw the outbreak as an opportunity. During lockdowns, stay-at-home orders, and social distancing the virtual worlds of a game like the new Animal Crossings: New Horizons seems like the -- and a much-needed escape for gamers stuck at home. We can expect corporations to look for ways to make money, even during a crisis -- if they can do so honestly and safely. perfect break from reality On March 13, GameStop spokespeople announced that customers are their top priority and they are complying with the WHO to keep customers and associates safe. On March 19, Jason Schreier of reported:  “The struggling video game retail chain GameStop told all of its stores this afternoon to stay open even in the event of state or city lockdowns to protect against the COVID-19 pandemic, emphasizing that it is “essential retail” alongside groceries and pharmacies and should, therefore, be exempt from enforced closures. Essential Retail? Kotaku Comments on Twitter demonstrated the outrage of the public -- if GameStop was hoping for a groundswell of customers saying the stores are essential because they NEED their video games in this time of isolation, it just didn’t happen. In fact, 4,200 people responded to the tweet and the overall tone of comments was less than supportive. But wasn’t just banking on the strength of new upcoming titles. YouTuber Camelot331 that leaked internal memos sent to him by GameStop employees indicating that company leadership planned to capitalize on the advantage of still being open for business during the pandemic while competitors have closed. GameStop published a video on March 17 On March 19, GameStop revised its position with more specifics: Unfortunately, Twitter user remained unimpressed: The power of bad faith Meanwhile, Camelot331 and other YouTube commentators such as Cody Johnston from and Mutahar from began to pick up on statements of concern -- and outrage -- from GameStop employees. SomeMoreNews SomeOrdinaryGamers I often advise clients that messaging needs to be based on facts. It usually gets a laugh, but I think it’s important to bear in mind. I believe it’s bad business to make promises, like stating that you will provide new disinfecting measures for your retail stores, when, in fact, you have no plan for following through. And the backlash wasn’t just born from leaked memos. Concerned store managers and employees spoke out on social media. And whatever you see on Twitter is likely to be worse on Reddit. Like this post that appeared on , which read in part: “District manager here... I can tell you this company is NOT taking the situation seriously. March 17 Our regional call today was about taking more tech trades and "taking advantage" of the situation... They will not shut down a store if they can avoid it. Even if an associate has come down with the virus, which has happened by the way. They expect associates from another location to come in, clean the location and re-open. This is mind-boggling.” Tweets and posts from GameStop employees have confirmed that GameStop had no effective plan to keep stores clean and left finding neeed supplies up to the store managers. Kotaku anonymous GameStop employees who echoed these concerns; interviewed anonymous GameStop employees One employee said, “My colleagues and I are sharing a small bottle of hand sanitizer that was purchased through our own pockets as well as making as much usage out of a depleting bottle of All Purpose Cleaner. We were only just given permission to turn off console demos yesterday and my cleaning supplies have been back ordered for two months. As far as more immediate measures go, the stores in my area have received nothing.” On March 22, GameStop relented, that they were closing their stores to the public and moving to a curbside pickup and offering two weeks of paid vacation for employees impacted by the virus. making an announcement Will GameStop respawn its reputation? If GameStop has made a miscalculation that has hurt their public image and made lots of very vocal people on social media angry, it hasn’t hurt their bottom line -- yet. stated: “Shares of GameStop Corp. GME increased roughly 10% during the after-market trading session on March 26. This upside can be attributed to the company’s positive earnings surprise during the fourth-quarter fiscal 2019, which follows a miss in the preceding two quarters. Further, management’s commentary that it is experiencing a positive impact on its business due to the coronavirus outbreak contributed to the stock’s upside.” Zack’s Equity Research It remains to be seen if GameStop will suffer from long-term backlash in public opinion. It closed and is already going the direction of -- an old business model being replaced by on-demand digital downloads and made obsolete. GameStop reportedly announced last week during its earnings call that it would be permanently in 2020. 321 stores last year Blockbuster closing over 300 stores But what strikes me, from over 20 years of doing PR, is the lost opportunity here for this already troubled brand. According to its : “Total global sales from continuing operations decreased 7.6% (decreased 6.2% in constant currency) to $3.1 billion, resulting in a consolidated comparable store sales increase of 1.4% (3.4% increase in the U.S. and 2.9% decrease internationally).” However, digital receipts increased 4.7% to $432.5 million recent financial report If GameStop had embraced its digital model at the beginning of the pandemic, closed stores and focused on safety in a sincere way, it could have reinforced the part of its business that is growing and sent a clear message to customers that games are an important part of their “socially distanced” lifestyle and GameStop as an enterprise cares about helping people play responsibly.

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