The last gasp of the meme-stock era

ago the stockmarket was in the grip of speculative mania. Shares in GameStop, a struggling video-game retailer, hit an all-time intraday high of $483 on January 28th 2021, up from around $5 at the beginning of the month. Retail traders co-ordinated in a Reddit forum and snapped up shares using brokerage apps like Robinhood. Empowered by technology, newcomers piled into GameStop, ostensibly because the beleaguered chain was one Wall Street had heavily sold short (ie, bet that the firm’s shares would fall in price). Short-sellers were the villains. When GameStop spiked they lost their shirts. What could be better?The question at the time was how much of this would endure. Manias are as old as the hills, but this one seemed different: it was enabled by new technology that wasn’t going anywhere. For a time, the GameStop crew were unstoppable. They pumped up prices for companies that had attracted interest from short-sellers, such as , a cinema chain, and Bed, Bath & Beyond, a home-goods retailer. Battle-hardened short-sellers, including Andrew Left of Citron, a research firm, threw in the towel. Melvin Capital, a firm that had shorted GameStop, which the Reddit hordes made the cartoon villain of the saga, decided to close its doors in May 2022.