JJ Can't Spell

Cyberpunk without commentary on capitalism’s efforts to buy the world out from under us is not cyberpunk.

Solarpunk without commentary on how to grow a brighter future for everyone instead of submitting to gloom is not solarpunk.

I wanna expand on that for a moment. I’ve talked to a lot of trauma survivors about their backgrounds. And two things that are damn near universally true?

This isn’t a game dev thing, but it is interesting and I thought it would make for some interesting reading (and also probably serve as a warning - you really probably shouldn’t buy gamestop stock right now). If you read and enjoyed my [Gamer’s Primer for Financial Literacy], this might be amusing for you as well.

First, I’ll explain the game mechanics. There’s a mechanic in investing called Short Selling, where an investor hopes to make money off of a stock (e.g. Gamestop) that they believe will go down in value. That investor borrows shares of the stock from another investor and is legally bound to return those shares at some future date. The investor can then sell the shares today, wait for the stock price to drop, buy the shares back at a lower price, and return the shares to the lender while pocketing the difference. In our example, Desmal borrows five of my shares of AAGDCo and sells them today for $100 apiece, promising to return them (Desmal gains $500). In a week, AAGDCo has a scandal and the price drops to $80 a share. Desmal buys the five shares of AAGDCo back for $80 apiece (total cost: $400), returns them to me, and gets to keep the difference ($100 profit).

Under certain circumstances, the lender can enforce a margin call - a way for the lender (me) to (legally) force the borrower (Desmal) to pay back the shares she borrowed. This stops borrowers from borrowing forever if they’re in the hole (e.g. if AAGDCo actually went up in value after Desmal borrowed the shares and sold them). If there’s a margin call, Desmal must buy the stock shares and return them to me. If the AAGDCo price has gone up, Desmal must eat the difference in cost and possibly take a loss. Risk to reward here.

So what does this have to with Gamestop? Gamestop, as you may know, has been having a really rough time over the past several years. Their business is failing and doing quite badly. Physical retail stores are taking a beating thanks to Covid, and digital game distribution and sales have been exploding, leaving them behind. This meant a lot of investors thought that short selling Gamestop stock was a good idea - they think the stock price will continue to fall, so they borrow shares, sell them immediately, and then will pay those shares back at a later date when the stock price has fallen even more.

But… here’s the trick. So many investors shorted Gamestop stock that more than 100% of their stock had been short sold. These short sold investors are legally bound to buy back shares of Gamestop at whatever price once the margin call comes. This means that, if the stock price jumped up dramatically, margin calls would be made and these investors couldn’t avoid buying back the shares at the high price. So the trolls at /r/wallstreetbets decided to see if they could do it. They started buying up Gamestop stock. 

At some point, when enough people buy something, the supply is gone and you can’t find it at the original price anymore (e.g. the PS5 and XSX consoles), so your only option is to raise the price you’re willing to pay in order to buy the thing you want. When enough people buy something, it naturally drives the price up. So… when /r/wallstreetbets collectively bought up all of the floating Gamestop stock, it drove the price up further and further. When this happened, the margin calls started coming in for the short sold investors, and they were forced to buy Gamestop stock at the much higher price in order to pay back the people they originally borrowed the shares from. This wave of forced buying triggered another wave of margin calls, which triggered another wave of forced buying, each round of forced buying driving the price up further. Gamestop stock being worth over $250 a share is the result of this.

Basically, too many investors had waaaay overextended themselves by short selling Gamestop stock and got burned for it. The same thing is starting to happen with other over-shorted stocks as well - Blackberry, AMC, and Express are all seeing similar things happen as well. A bunch of redditors with some money creatively used the game mechanics to grief a bunch of institutional investors who were way overextended. 

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I can’t stop laughing at Carrie being told “NO” by Mark. Also, Harrison Always Knows Best.

Also, some preferred terms for things will change and evolve, and terms we prefer now might eventually be considered gauche or even offensive, and that doesn’t mean you were a bigot at the time for using them. It means we evolved as a society and chose new terminology to reflect that change.

middle earth isn’t saved because no one faltered or came close to despairing or who sank to their knees in weary defeat. it’s not saved by pride or conviction or even strength. it’s saved because enough people do what they have to do even if they have to do it in the darkness. in the dust. with the ashes of hopelessness and bitterness in their mouths. because enough people took another step. Frodo, Sam, Gandalf, Aragorn, Theoden, Boromir, Faramir, Merry, Pippin. And many don’t. For every hero there is someone who gives into the “reasonableness” of despair—Saruman, Denethor, Grima, even Gollum—but enough. Enough people said “it doesn’t matter if we lose, I will keep fighting” and then they do.

And that GETS me. It is the most hopeful thing about the lord of the rings to me. There is so much that sums up its spirit, so many beautiful quotes and moments, but to me it’s never been the most famous of the quotes about hope and love that hit me hardest but a line from the films. Before the battle for minas tirith, one of the soldiers says “we cannot defeat the armies of Mordor” and Theoden answers “no. but we will meet them in battle nonetheless.”