Wall Street Experts Claim Gamestock Pheneoma Could Never Happen Again – This is Why They’re Wrong

By: Ben Campbell | Published: Dec 14, 2023

The GameStop stock phenomena took the world by storm in 2020 when everyday gamers and citizens stuck it to Wall Street by vastly inflating the stock price of the popular video game chain.

It caught the stock market off guard and shook the world of finance to its core. While it only lasted momentarily, it gave the impression that such an event could happen again in the future. 

A Spark Leads to a Vast Fire

The GameStop event inspired the new Hollywood film, ‘Dumb Money,’ based on the 2021 book The Antisocial Network by Ben Mezrich. 

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Actor Paul Dano attends a special screening of "Dumb Money" hosted by the Motion Picture Association and Sony Pictures

Source: Shannon Finney/Getty Images

Rebecca Angelo, one of the writers involved in the film, said, “This story is like a spark, and a spark is very easy to extinguish, but also, under the right circumstances, it can start a bigger fire.”

Assembling the Perfect Cast

The blockbuster film was released this past September and boasts a cast of well-respected actors. 

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Seth Rogen stars as Gabe Plotkin in the recent movie Dumb Money

Source: IGN/YouTube

Among the better-known names is Paul Dano, Pete Davidson, Vincent D’Onofrio, America Ferrera, Nick Offerman, Anthony Ramos, Sebastian Stan, Shailene Woodley, and Seth Rogen.

The People Have the Last Laugh

The story was a beautiful reminder of the power contained within the hands of everyday people. “This is a story of a lot of people discovering the power of the collective,” said Angelo.

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A Group of young people work together at a table

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Angelo continued, “But once you know your power, it never goes away, and a group of people who used to be invisible are visible now, and there’s no undoing that the cat is out of the bag.”

Amateurs Take on the Sharks

The entire GameStop saga revolved around amateur stock traders buying and selling shares in the company. 

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Man sits in a dark room and stares at various stock market graphs on a computer screen

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Wall Street pros refer to these amateur retail traders, who buy and sell stock using their own money, as “Dumb Money,” hence the title of the movie. 

The Power of Social Media

According to the experts, GameStop was a failing brick-and-mortar store. Yet, amateur retail traders began buying stocks due to a tip-off. 

A sign is posted on the exterior of a GameStop store

Source: Justin Sullivan/Getty Images

They were alerted to the stock’s potential thanks to some savvy investors who shared the tip with users on social media platforms like Reddit. 

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Significant Drop for GameStop During Pandemic

Unfortunately for many businesses such as GameStop, the COVID-19 pandemic halted the world, and hedge fund managers began to “short” their stock in anticipation of its demise. 

Man is stopped during a COVID-19 check at the height of the pandemic

Source: Freepik

Shorting refers to the practice of betting the value of a company’s stock will fall by borrowing the shares and selling them at market value, hoping they will eventually repurchase them at a lower cost.

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Saved By the Dumb Money

However, when the “dumb money” traders jumped on the bandwagon to buy up the GameStop shares, its price increased dramatically, causing the fund managers to lose a lot of money. 

A Group of young stock traders discuss goals during a meeting

Source: Freepik

It was a remarkable point in history, as, for once, the people ruled part of the stock market. In a very 21st-century fashion, the amateur traders created an entire community using emojis, GIFs, and videos to bond over their recently acquired stocks. 

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One of the Greatest Stories in Wall Street History

Angelo and her long-time writing partner, Lauren Schuker Blum, both of whom are former Washington Post reporters, began writing the film as the event unfolded. 

Woman sits at her wooden desk as she writes and looks over notes

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Reflecting on the entire event, she said, “We realized really quickly that this wasn’t a narrow, ultra-specific story about the market so much as it was a cultural story.”

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Could it Ever Happen Again?

Whether the exact events that occurred during the GameStop phenomenon could happen again is highly debated, yet most experts say no. 

Stock expert looks over recent reports at his desk and offers advice

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“The short answer is no. While a market event like GameStop could well happen again, it is important to recognize that the clearing and settlement framework worked perfectly in this case and, what is more important, through all the pandemic,” wrote Javier Hernani for stock market news publication The Trade.

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The Perfect Storm

Dumb Money’s screenwriters agree that it was the “perfect storm” that led to the GameStop saga. But, it would be a great disservice to ignore the factors which led to the historic event. 

Young professional works from his desk at home

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“All the trends pointed in this direction, of increasing isolation, the wane of institutions that used to be the center of communal life, and pushing more and more people to finding a community online, said Angelo.

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Hope for the Future

While the experts disagree with the idea that the GameStop saga could happen again in the future, others aren’t so sure. Schuker Blum suggests that anything is possible if people come together just like they did during the pandemic. 

Group of young friends pose together for a photo

Source: Freepik

“People are longing to be part of something bigger than themselves.” And while the GameStop saga was a “form of social protest against the haves and have-nots,” it was also a way to be “part of something bigger than our everyday existence alone, trapped alone at home, and a way to find connection,” said Blum.

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