GameStop stock value is soaring once again. The media is either begging people to stop buying or is blaming “social media bots” for the rise.
It seems that the value of Gamestop stock is soaring once again. As of this writing, the value has gone up past 110 per share. While this is not as high as the peak of the original surge, that is still two and a half times the value it was at back on February 19th. On March 2nd of last year, the value of the value was measured at 3.83.
Members of the media are unimpressed by this development. Some are resorting to begging people to stop buying Gamestop stock. Today, the Motley Fool ran a headline that reads “Stop Speculating on GameStop (NYSE:GME): Buy These Undervalued TSX Stocks Instead”. The article starts off with this:
It can be fun to check up on the WallStreetBets (WSB) crowd and their views on GameStop (NYSE:GME) stock, which has since started to pick up traction again. But betting alongside the retail army at WSB can be tremendously harmful to your wealth if you’re caught holding the bag.
Hopes of quick riches and the contagious euphoria of YOLO (you only live once) bet posts on Reddit’s popular WSB channel have never made it easier (or more fun) to follow the herd. Add thoughts of bringing the squeeze to big-league hedge funds into the equation, and it suddenly seems more justifiable to put a bit of money down on a couple of GME shares or even a few call options on GameStop stock.
The article goes on to say you shouldn’t put money in the stock and, calling it “gambling”. It’s an odd statement since, technically, the whole stock market is gambling anyway. Still, the article urged readers to buy completely different stocks instead.
Redditors on WallStreetBets called the article “desperate“.
It’s worth noting that, yesterday, the outlet ran a second article with a similar headline while calling the GameStop stock a “fluke” and “of no real use to investors”.
Meanwhile, Yahoo! News Canada ran two articles saying that the rise in the value is just “social media bots”. An article published yesterday reads as follows:
The GameStop stock frenzy appears to largely have been the product of Reddit users and trading apps like Robinhood, but some of its contributors might not have been human. According to Reuters, cybersecurity firm PiiQ Media has determined that people were using social media bots to promote GameStop, Dogecoin and other “meme” investments. Posts on Facebook, Instagram, Twitter and YouTube hopped on trading keywords like GME (GameStop’s stock symbol) and “hold the line,” starting around the opening of trading and surging toward the end.
There are tens of thousands such accounts, PiiQ said.
It’s not certain who’s behind the bots, or how effective they’ve been. Reddit chief Steve Huffman told Congress at a hearing that he didn’t think bots played a “significant role” in the stock buying spree, although his ability to track bots outside of Reddit is limited.
The new findings may raise concerns all the same. While the Reddit activity appears to have been aimed at punishing short sellers and otherwise riding a wave of hype (much to the chagrin of some investors), the bots raise the possibility that malicious actors either piggybacked on the GameStop campaign or could manipulate the market in the future. Social sites might have to step up their efforts to remove bots going forward.
The article republishes comments made in a Reuters report just a few days earlier. The article was republished on Yahoo! News:
Bots on major social media platforms have been hyping up GameStop Corp and other “meme” stocks, according to an analysis by Massachusetts-based cyber security company PiiQ Media, suggesting organized economic or foreign actors may have played a role in the Reddit-driven trading frenzy.
Shares of GameStop soared last month after Reddit users banded together to squeeze hedge funds that had bet against the video game retailer and other companies. Reddit Chief Executive Steve Huffman told Congress this month that bots, artificial or fake accounts with automated content, had not played a “significant role” in GameStop Reddit message traffic.
PiiQ Media’s analysis of Twitter Inc, Facebook Inc, Instagram and YouTube posts, however, found that bots used the platforms to push GameStop and other “meme” stocks, although it is unclear how influential they were in the overall saga.
Forbes calls the rising value of GameStop stock a “trap”. From their report:
GameStop Stock (GME) Price Rise Is Enticing, But Misleading – Don’t Get Trapped
GameStop’s GME 150% stock price rise last week is a “gotcha” jump. GameStop (GME) lacks the fundamental support to break through the $150 upside barrier in earnest. Its brief foray Thursday failed within minutes.
Why? Because, without fundamental support, the action is totally dependent on day traders watching one another’s actions, while examining the latest stock chart picture. And that’s where the $150 share price barrier gets its strength.
A quick browsing of WallStreetBets today shows loads of “YOLO” posts with posts of screenshots of people buying the stock.
What is striking in all of this is how the media has been speculating that the surge is all over right after the drop to about 40 per share. On February 2nd, media outlets ran articles saying that the surge is over and the every day person was left holding the bag. A week later, we took a quick look at the headlines and articles about everyday people being bag holders and how the surge is over continued to dominate the feeds. That as Redditors were urging each other to hold the line.
You can’t help but get this sense that media outlets are doing what they can to undermine these efforts. If the value drops down a bit after, you can’t help but wonder if those outlets will jump on that and continue to recycle the “bag holders” messaging they were pushing the first time around. At any rate, this isn’t exactly the greatest look on media outlets these days.
Drew Wilson on Twitter: @icecube85 and Facebook.
