All three of the big recent debutantes are, in their way, AI plays, none more so than chip designer Arm, which raised nearly $5 billion in the biggest stock-market debut since late 2021.

Machine-learning madness hasn’t just revived interest in tech IPOs, which have been on ice for two years, but new listings generally — perhaps, anyway.

Less welcome is the taxman’s investment in AI, with the Internal Revenue Service planning to sic its fancy new computers on partnerships, using them to pick 75 unlucky hedge funds, real-estate partnerships, and law firms, among others, for some unwanted extra scrutiny.

That comes as AI’s brain trust spent a few days in Washington promising to brush their teeth and eat their vegetables, while also trying to mold the coming regulatory crackdown to their liking, even as generative AI arrives on Wall Street and on lawyers’ desks.

Subscribe to Finance Docket to read this week’s full newsletter.

It includes our detailed look at the IPO frenzy, along with our deep dive on the war between AMC Entertainment’s APEs and apes, and of course our coverage of all things AI.

This article is featured in the Finance Docket newsletter, a partnership between Breaking Media publications Above the Law and Dealbreaker. Sign up now for the latest in litigation, regulation, transactions and trends in the financial services industry.

Two weeks ago, those people got to enjoy one of their rare but occasional moments of smug satisfaction when GME announced an actual loss during the holiday season—you know, the time when more videogames and videogame accessories are sold than at any other time during the year—and it’s stock consequently suffered, over and above the 60% drop it had already experienced since November.

“If they can’t make money in the holiday quarter, they’re doomed,” [Wedbush Securities analyst Michael Pachter] said.

To which Cohen replied, “seems cheap,” and ensured that the most recent holiday for GME bears would be as brief as they are rare.

Shares of GameStop Corp. rose 16% in after-hours trading after the videogame retailer’s chairman disclosed his firm bought 100,000 shares of the company’s stock on Tuesday…. GameStop’s stock closed Tuesday at $123.14, up 31% for the day.

This undoubtedly got the Cohen and GameStop fanboys on Reddit all lathered up, cheering the latest humiliation of the GME skeptics. But less than two weeks after this latest triumph, diamond hands are proving few and far between.

Both GameStop and AMC Entertainment, names that defined last year's meme-stock phenomenon, were halted in early Tuesday trading amid heighted volatility and larger-than-usual pre-market volumes.

GameStop dropped as much as 14% with over 17 million shares traded through afternoon trading, more than doubling its 30-day average full-day volume of 4.6 million…. The reason for the moves were not immediately clear, but both stocks are up big this month amid a broader comeback rally on Wall Street so some investors could be using that pop to take profits in the volatile shares….

There were some large block trades of GameStop in early trading on the NYSE. Outside of the open there were two trades of more than 20,000 shares apiece, according to FactSet data.

Meme stocks GameStop and AMC swing wildly Tuesday on heavy trading volume [CNBC]
GameStop Stock Halted On NYSE, Extends Slide With AMC As Trading Resumes [TheStreet]

RenTech, founded by the former NSA codebreaker and MIT math professor Jim Simons, held about 516,000 AMC shares at the end of March this year. It raised its bet on the cinema chain - a firm favorite of meme-stock traders - to 1.8 million shares last quarter, regulatory filings show.

The value of RenTech's AMC stake ballooned almost 20-fold to $103 million in the three months to June 30. That reflected the fund's share purchases, as well as the movie-theater group's stock price jumping almost 500% to $57.

We guess the machines just like CEOs who participate in conference calls.

It cut its position in Elon Musk's electric-vehicle company from about 827,000 shares to 204,000 shares, reducing the value of its stake from $553 million to $138 million.

Jim Simons' RenTech fund tripled its AMC stake last quarter - and slashed its Tesla holdings by 75% [BI]

Over the more than hourlong call, Mr. Aron took questions from nearly a dozen retail investors—and one from a Wall Street analyst. The questions ranged from the viability of drive-in theaters (“a bad economic idea”) to whether the company would ever partner with fellow meme-stock company GameStop to bring gaming entertainment to AMC auditoriums (“We’re on the case.”)…. Mr. Aron also announced the company would start accepting bitcoin at U.S. locations by the end of the year, citing the investor community’s enthusiasm for cryptocurrency....

“In short, AMC crushed it,” Mr. Aron said....

Mr. Aron has embraced the meme crowd, often engaging with social-media users and sharing memes of Reddit in-jokes, and has used that rapport to help AMC emerge from a pandemic hole. On his conference call Monday, Mr. Aron cited his personal Twitter feed’s metrics and said he enjoys reading messages from the investors sent over the platform.

And it seems that, and the pervasive fraudulence that infect cryptocurrencies, is just a small price to pay to keep the Redditor hordes happy.

An unregulated cryptocurrency exchange whose employees said they wanted to be aggressive about trading digital assets, even though their legal status was uncertain, has agreed to pay $10 million to settle a regulatory investigation…. “Poloniex chose increased profits over compliance with the federal securities laws by including digital asset securities on its unregistered exchange,” said Kristina Littman, chief of the SEC enforcement division’s cyber unit.

AMC Talks Bitcoin, GameStop With Its Reddit Followers [WSJ]
Crypto Exchange Poloniex to Pay $10 Million to Settle SEC Probe [WSJ]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

When Robinhood shares start trading at the end of this month, employees will be able to sell 15% of their holdings immediately, rather than after the traditional six-month lockup period, according to a regulatory filing. Three months later, they can sell another 15%.

And you can understand why they might be so eager.

Robinhood is seen as particularly subject to volatility, according to traders and bankers. The stock-trading app soared in popularity during the pandemic as amateur investors bought up shares of so-called meme stocks on its platform, helping send GameStop Corp., AMC Entertainment Holdings Inc. and others rocketing skyward.

Or, you know, the opposite.

[AMC Entertainment] stock tumbled 15% to $33.43 apiece on Wednesday, less than half of its all-time high of $72.62 in early June. The decline brought its month-to-date losses to 41%. GameStop, the original meme stock king, has fallen more than 21% this month, while newcomers Clover Health and Clean Energy Fuels have plunged 34.8% and 22.6% in July, respectively.

Robinhood, Others Upend Rules for Early IPO Trading [WSJ]
AMC share price gets cut in half as reality sets in for meme stock investors [CNBC]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

I do not see how these guys ever get to 5% operating profit, ever…. I read the tweets just like you guys do. I see the gif from "Ted" where the teddy bear is smoking a bong. And I go, are they gonna sell cannabis? You know, I see the McDonald's soft serve ice cream. And I go, are they gonna sell ice cream? I see the pets.com sock puppet. Are they gonna sell pet-- pet supplies? I don't know what they plan.

I personally think Ryan Cohen is a goofball. I think Elon Musk is a goofball. And they have fun on Twitter. God bless them. That's what Twitter is for. But I think retail investors are trying to read into something. And I'm not sure there's anything there yet.

Not having fun? Why, it’s our old friend Gabe Plotkin, and lots of his peers besides.

Melvin, the highest-profile casualty of this year’s meme stock rally, lost another 4 per cent last month, people familiar with its performance said.

That takes the fund’s losses this year to about 44.7 per cent…. Hedge fund losses from betting against five popular meme stocks — GameStop, Bed Bath & Beyond, AMC, BlackBerry and Clover Health — total about $6bn since the start of May, according to the data firm Ortex Analytics. Peter Hillerberg, Ortex’s co-founder, said funds had recently reduced their short positions in meme stocks but that short interest remained “at very high levels”….

Others that have lost money include Light Street Capital, set up by Glen Kacher, a so-called Tiger Cub…. Its flagship fund lost a further 3 per cent in May and is now down 20.1 per cent this year…. The fund’s losses in the first quarter were predominantly driven by losses on shorting….

Those losses may have been the result of bad shorts on bad jokes, but the rallies? They’ve got a new source of fuel.

The data suggests that investors like hedge funds aren’t crowding into trades betting on the prices of meme stocks falling.

Analysts say what is likely driving the market more this time around are call options…. Instead of trapping bearish investors, rising call options activity pushes market makers such as banks to buy the stock to hedge their positions…. Investors like hedge funds could be buying certain stocks to try to trigger this phenomenon, which is known as a gamma squeeze….

Anyway, there may be nothing fundamental at all behind certain stocks 2,230% surges (because, we mean, could there really ever be such a thing?), but the money those surges allow certain companies to raise to pay down their debt, etc., is very, very real.

Analysts at S&P Global Ratings say [AMC Entertainment] is less likely to default after it took advantage of the meme-stock rally to raise cash in equity markets.

US hedge funds Melvin Capital and Light Street suffer further losses [FT]
Meme Stocks’ Latest Frenzy Isn’t About a Short Squeeze [WSJ]
AMC Just Got a Credit Upgrade. Being a Meme Stock Is Paying Off. [Barron’s]
Ryan Cohen, Elon Musk are goofballs: GME Analyst [Yahoo! Finance]

Perhaps mindful of this precedent, and mindful of being sued for selling something at prices the company itself maybe didn’t quite believe in, when GameStop shares skyrocketed for no particular reason understood to investing man, it demurred.

Both of these moves proved a mistake. Hertz’s shares were not worthless at all and may even have somehow been underpriced. And by the time GameStop worked up the courage of others’ convictions, its share price had dived to about a quarter of what it once changed hands for—but still less than half its present level.

Unlike its predecessor meme stocks, AMC Entertainment has neither shown reticence, nor had it imposed upon it. Nor has it been punished for this hubris in any meaningful way; instead, it is the doubters who have been burned. When AMC sold 8.5 million new shares to hedge fund Murdick Capital on Tuesday, the sort of dilutive move that generally dings a stock, particularly one trading nowhere near its fundamentals, whatever those are anymore, nothing happened.

Well, actually, three things happened: First, Murdick dumped all 8.5 million of those shares for a quick profit and, second, trashed the stock as overvalued—two things that, like diluting existing shareholders, tend to weigh on price. The third thing that happened was that, in spite of the above things, AMC shares doubled in value. And unlike, its fellow meme stocks unmoored from the things that used to matter, AMC isn’t shy about pressing its luck while, for legal reasons, pretending that those things might still matter.

AMC… filed with regulators to sell more than 11 million shares and warned against investing in its stock…. said, “Our current market prices reflect market and trading dynamics unrelated to our underlying business.”

It added that its share price might continue to experience extreme volatility that could cause losses for investors who buy the stock.

AMC’s filing drew comparisons with Hertz Global Holdings Inc.’s plan to sell as much as $500 million in shares last summer.

AMC and its shareholders should be so lucky, and so far, pretty much have.

AMC shares dropped as much as 40%, then later recovered all of those losses before sliding again.

AMC Shares Sink on Stock Sale Plan and Warning to Buyers [WSJ]
AMC stock nearly doubles—but hedge fund has ‘no regrets’ about selling [N.Y. Post]
The End of Stock Market Fundamentals? [DealBook]

Speaking at a legal conference Wednesday, Securities and Exchange Commission official John Coates said there are “some significant and yet undiscovered issues” with SPACs…. Those issues are “not something that’s going to stop them by any means, but they are relatively as yet incompletely worked through mechanisms, despite the fact they have been around for a while,” said Mr. Coates, who is acting director of the SEC’s Corporation Finance division…. “Their current surge is bringing the level of attention by many more participants in the market than previously had been involved, and that is turning up some questions that have to be thought through more carefully,” said Mr. Coates, who spoke at a legal conference sponsored by the Practising Law Institute.

Coates didn’t elaborate on those issues or questions or what prompted them, but we can’t help thinking that a trading card company mumbling something or other about NFTs taking advantage of the SPAC route at the moment at which both the SPAC craze and bored hunger for spending your money on crap abate as the pandemic subsides and people are mercifully able to do something else with their lives might have something to do with it.

Topps, which is best known for its baseball cards and Bazooka candy line, has agreed to go public through a merger with Mudrick Capital Acquisition Corporation II, a special purpose acquisition company, that values Topps at $1.3 billion…. While Topps is best known for its sports trading cards, it has branched out into interactive mobile apps to connect collectors and recently expanded into nonfungible tokens…./“This is the icing on the cake, going digital completely, with the analog still in place,” [Topps Chairman Michael] Eisner said.

A more perfect nutshelling of this deal than that perfectly meaningless and self-contradictory statement we certainly can’t imagine. It must be nearly impossible for the folks at Patreon to hold themselves from taking advantage of these rubes while they still can.

And speaking of getting in a little late, Jim Cramer thinks it’s a great idea for at least two companies.

“If you care about the future of either company or the long-term trajectory of their stocks, issuing shares up here is the right move,” Cramer said. “But the ‘hold the line’ crowd they hate these offerings … and they despise anyone who defends them….”

“AMC and GameStop need money,” Cramer said. “Raising capital is good for both companies and over the long haul, what’s good for the company should be good for the stock.”

For now, let’s give the last word to Carson Block, who ties these storylines together quite nicely.

"You've got the companies that are really deserving of being shorted, and then you've got the companies that you actually can short from a technical perspective. A lot of the intersection right now is SPACs."

Topps to go public through SPAC deal as baseball card company ventures into NFTs [CNBC]
SEC Official Warns on Growth of Blank-Check Firms [WSJ]
Patreon’s Valuation Triples to $4 Billion as Platform Draws Creators, Fans [WSJ]
Cramer says AMC, GameStop plans to sell more shares will be good in the long term [CNBC]
Short-seller Carson Block discussed GameStop, SPACs, and Archegos in a recent interview. Here are the 10 best quotes. [BI]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

It is also a publicly-listed company that sells video games at brick-and-mortar locations in malls, strip and otherwise, during a pandemic when visiting such places has become much more difficult if not impossible. As such, it must comply with the rules and regulations governing such companies, incredible as that is. This is why it did not take full advantage of its once-nearly $500 share price to sell an unlimited number of the same, and also why this week it will go through the motions of issuing quarterly earnings, and why those who analyze such things will weigh in on them, as if the fundamentals that govern other publicly-listed apply to it.

Wedbush Securities analyst Michael Pachter said it isn’t possible for GameStop’s results to reflect its roughly $14 billion valuation given the issues it is facing…. Analysts expect the retailer to post its strongest quarterly revenue and profit in two years, bolstered by a winter holiday shopping season that included the release of next-generation gaming consoles from Microsoft Corp. and Sony Corp. But some also say the company’s performance should reflect challenges created by the pandemic and long-term industry changes that it has failed to insulate itself against.

“The fourth quarter is generally their moneymaking quarter,” said Telsey Advisory Group analyst Joe Feldman. Still, he said it isn’t a good sign that the company previously disclosed that sales fell 3.1% for the nine-week period ended Jan. 2.

Very good. Now that we’ve play-acted real company, let’s talk about what actually matters to GME: Those $1,400 checks finding their way (however slowly) into the Robinhood accounts of the very bored.

Analysts at Deutsche Bank recently estimated that as much as $170 billion from the latest round of stimulus payments could flow into the stock market. They conducted a survey of retail traders in which respondents said they planned to put roughly 40 percent of any payment they received — or $2 of every $5 — into the stock market. Traders between the ages of 25 and 34 said they expected to put half of their stimulus check into stocks.

“That could lead to a bit more mania, speculation in the market,” said Patrick Fruzzetti, managing director and partner at Hightower Advisors, an investment firm. The “stimmies,” he said — using a popular online term for stimulus checks — will go into people’s trading accounts, and “they will trade.”

Anyway, speaking of religions cosplaying as public companies, the Technoking of Tesla has to pretend to be a normal executive for a minute to assuage concerns that his exploding cars might also be instruments of the NSA.

"There's a very strong incentive for us to be very confidential with any information," Mr Musk told an influential Chinese business forum via video link. "If Tesla used cars to spy in China or anywhere, we will get shut down…."

He sought to downplay concerns over companies sharing sensitive data with their home governments, referencing the case of the Chinese-owned video platform TikTok…. "Even if there was spying, what would the other country learn and would it actually matter?," Mr Musk said.

We don’t know, Elon. We don’t know what “actually matters” anymore. Because you, the chief executive officer of a number of prominent public companies, turned from the above relatively measured and reasonable comments to respond to criticism of your ever-growing wealth like this.

I am accumulating resources to help make life multiplanetary & extend the light of consciousness to the stars

— Elon Musk (@elonmusk) March 21, 2021

Well, Elon, not every rich guy is as forward-thinking and anti-materialist as you. So here’s what they’re doing with their own expanding bank accounts.

They are one-upping each other in online auctions for jewelry, watches, furniture, sports cards, vintage cars, limited-edition Nikes and crypto art…. “All I do is go through watch porn,” he said. “I’m selling watches, I’m buying watches. It’s crazy. I have no reason right now to buy a watch. I’m at home all day at a computer. Time is staring me right in the face. What reason do I have to look at my wrist? But I want a tangible sign of something, so I’m looking at watches….”

A pair of Conoid lounge chairs from the famed woodworker George Nakashima, which in 2019 commanded around $10,000, sold in October 2020 for $23,750 through the Chicago auction house Wright. A Mesa coffee table by T.H. Robsjohn Gibbings, a British architect whose name is barely known outside of the furniture world, brought in $237,500 in December

Of course, you don’t have to be actually rich to get in on the fun. Instead of spending all of your stimmies on options on a movie-theater chain that’s been closed for more than a year, or a vintage smartphone producer, why not buy a little piece of a watch you’ll never get to actually hold in your hands?

Rally, an Android and iPhone app that sells fractional shares in everything from Rolex GMTs to dinosaur remains, had 100,000 users at the start of the pandemic and oversaw $12 million in inventory. Rob Petrozzo, its chief product officer and co-founder, said in an interview that the company now oversees $30 million of merchandise and has over 200,000 users. According to the company, the average age of a user is 28, and most are male…. “The equities space and the cryptocurrency space over the last couple years created really savvy investors who understand the dynamics of the market, so it’s a complement to their Coinbase accounts and their Robinhood accounts,” Mr. Petrozzo said.

We, as a species, are doomed.

GameStop to Release First Earnings Report Since Reddit-Fueled Stock Rally [WSJ]
Recast as ‘Stimmies,’ Federal Relief Checks Drive a Stock Buying Spree [NYT]
Elon Musk denies Tesla cars are used for spying in China [BBC]
Elon Musk spars with Bernie Sanders over his massive fortune [N.Y. Post]
Here’s How Bored Rich People Are Spending Their Extra Cash [NYT]

Silver futures were up more than 9% by midday Monday, and many news outlets linked the sharp uptick to the Reddit page r/wallstreetbets that has been shaking up Wall Street over the past week…. The hashtag #silversqueeze was trending on Twitter Monday morning…. Shares for AMC Theaters, another favorite of r/wallstreetbets, climbed nearly 6%.

Digital-currency exchange website Coinbase Global Inc. said it was investigating an outage Friday that prevented customers from trading on its web and mobile apps. Another exchange, Bittrex Global GmbH, said an increase in traffic created technical problems on its platform…. Robinhood Markets Inc., which is under fire for suspending trading of popular stocks, also curbed activity in its cryptocurrency platform…. Some digital-currency proponents think investors unable to trade their favorite stocks moved to crypto instead.

Day traders are even putting money into SPACs before they have revealed what company they are buying…. “I would just have a bad case of FOMO if I wasn’t in SPACs,” said Marco Prieto, a 23-year-old real-estate agent living in Tucson, Ariz., referring to the fear of missing out that is driving many individuals to put money into markets…. In another sign blank-check firms are now frequently traded by individuals, several SPACs and companies that have merged with them recently joined GameStop and AMC on a list of stocks that had position limits on Robinhood Markets Inc., a popular brokerage for day traders.

None of this is sitting well with those currently aboard the sputtering rocket called GameStop.

Some of the top posts on the Reddit forum, however, said that this was false and urged members of the community not to buy silver but to focus on stocks such as GameStock and AMC.

And what of the Redditor most credited with the events of the last week? He’s not getting judgmental. At least not on the record with a Wall Street Journal reporter.

“This story is so much bigger than me,” [Keith] Gill told The Wall Street Journal in his first interview since the unboxing this week of a volatile new stock-market game. “I support these retail investors, their ability to make a statement….”

“I’m not out for anybody,” Mr. Gill said. “Roaring Kitty was an educational channel where I was showcasing my investment philosophy.”

This is perhaps news to Steve Cohen and Andrew Left. And also maybe to Robinhood, which is definitely being gone after by at least some of Gill’s acolytes (although not Gill himself; as any peruser of r/WSB can tell you, Gill himself is an E*Trade man). And also maybe by the SEC, too.

Securities regulators said Friday they plan to closely review the actions of some brokerage firms that restricted investors’ ability to trade volatile stocks such as GameStop Corp. this week.

So it looks like one day soon, Vlad Tenev is going to have some questions to answer from Gary Gensler (and Elizabeth Warren and AOC and Ted Cruz and Ken Paxton and an as-yet-undetermined number of plaintiffs’ attorneys). But first, he’s got to prostrate himself before he who really matters on Wall Street. That is, just as soon as said power finishes sparking another trading frenzy on Twitter.

Billionaire Elon Musk said on Monday bitcoin was “on the verge” of being more widely accepted among investors as he expressed his support for the cryptocurrency in a chat on social media app Clubhouse that drew thousands of listeners.

The comments followed his use of the “#bitcoin” tag on his Twitter profile on Friday, which pushed the crytocurrency up 14%.... “I am a supporter of bitcoin,” he said.

Anyway, on to the matter at hand.

Wild moves in the value of those stocks and options prompted clearinghouses that process and settle trades to demand increased cash collateral to insulate themselves from possible losses.

“The request was around $3 billion, which is, you know, about an order of magnitude more than what it typically is,” Robinhood Chief Executive Vlad Tenev said. He spoke Sunday night in an interview alongside Tesla boss Elon Musk on a live stream of Clubhouse, an invitation-only social networking app popular in Silicon Valley….

In the online interview, Mr. Musk, questioned the motive behind Robinhood retail trading limits, asking whether hedge funds had pressured the company or wielded influence at the DTCC.

“I don’t have any reason to believe that, then you’re getting into conspiracy theories,” Mr. Tenev responded.

Silver surges, AMC ticks up and GameStop falls as retail investors shake up markets [ABC News]
Cryptocurrency Platforms Struggle With Demand From WallStreetBets Fervor [WSJ]
GameStop Day Traders Are Moving Into SPACs [WSJ]
SEC to Review Brokers’ Restrictions on GameStop, AMC Trading [WSJ]
Gensler Faces Big Challenge in Tackling GameStop’s Wild Ride [NYT]
Tesla’s Elon Musk Speaks With Robinhood Boss About GameStop Stock Trading [WSJ]
Elon Musk says bitcoin “on the verge” of being more widely accepted [Reuters]
Keith Gill Drove the GameStop Reddit Mania. He Talked to the Journal. [WSJ]

A real estate salesman in Valparaiso, Ind. A former line cook from the Bronx. An evangelical pastor and his wife in Huntington Beach, Calif. A high school student in the Milwaukee suburbs.

Meanwhile, “Wall Street is losing its mind” and Steve Cohen is losing a whole lot of money and a whole slew of other seeming hopeless companies are seeing their share prices rocket hundreds of percent. At this point in the Great GameStop Game—after it looked briefly like the professionals had taken back control, only to see r/WallStreetBets’ degenerates retake the offensive—it seems fair to ask, “What the hell is going on?” And everyone is.

It is tempting to see GameStop as merely clownish behavior in a chat room having some amusing effects on a stock few care about. That would be a mistake…. GameStop’s soaring stock—and similar moves in BlackBerry, Nokia and others—is a bubble in microcosm, with lessons for those of us worrying about froth elsewhere in the market…. The absence of emotional stability on r/WSB is obvious and has worked out beautifully for buyers of GameStop so far. But when the stock is weighed, many will be found wanting, as they always are in bubbles.

If your theory of GameStop’s stock is that it is a market plaything utterly disconnected from any fundamental information about GameStop the company, a way “to use easter eggs in the mechanical infrastructure of the market to make money,” a pure token for YOLO gambling—that doesn’t have to just mean Reddit gambling…. Surely a lot of professional investors are white-knuckling this thing, buying it as a trade and hoping they can get out before the redditors do…. WallStreetBets started this but anyone can jump in now.

Judging by volumes, everyone has. Yesterday Bloomberg’s Eric Balchunas pointed out that GameStop was “the most traded equity on the planet,” with $20 billion of volume. Tesla was No. 2. GameStop closed yesterday at $147.98, for a market capitalization of about $10 billion, up 93% from the day before, up 641% from two weeks ago. That was before Musk tweeted.

Also, it can’t just be r/WallStreetBets, because, well, you know….

A message on the forum’s landing page initially said WallStreetBets had been taken private by its moderators because of technical difficulties on an “unprecedented scale as a result of the newfound interest in WSB.”/About an hour later, the forum was made available to the public again….

Separately, chat service Discord banned WallStreetBets’ server late Wednesday…. A Discord spokeswoman said the WallStreetBets server had been on the platform’s radar for some time “due to the occasional content” that violates community guidelines, including “hate speech, glorifying violence, and spreading misinformation.”

TD Ameritrade said it placed restrictions on certain types of trading activity on the companies “in the interest of mitigating risk for our company and clients….” Charles Schwab said shares of GameStop could no longer be traded on margin, meaning trades cannot be placed with money borrowed from the company. And Robinhood, the trading app that has made it easier for inexperienced traders to enter the market, said it wouldn’t allow margin trading of shares of both GameStop and AMC.

Anyway, back to the broader whys and hows and wherefores.

The frenzy of activity is stirring regulatory and legal concerns, as well as the attention of the Biden administration. The White House press secretary said on Wednesday that its economic team, including Treasury Secretary Janet Yellen, is monitoring the situation.

The newbie investors are gathering on platforms such as Reddit, Discord, Facebook and Twitter. They are encouraging each other to pile into stocks, bragging about their gains and, at times, intentionally banding together to intensify losses among professional traders, who protest that social-media hordes are conspiring to move stock prices….

“I think the big takeaway is, fundamentals do not apply to retail traders,” said [Noah] Williams. “It’s all about sentiment. The only reason why Tesla is worth what it is is because people believe in that company.”

What an apt comparison, Noah. How is the original GameStop doing?

Tesla Inc. reported fourth quarter sales of $10.7 billion and earnings of 24 cents a share on Wednesday, its fifth straight quarter of profits…. The stock changed hands at 1,371 times trailing earnings as of Wednesday. Even that cartoonishly large multiple provides false comfort: In the fourth quarter, Tesla earned $270 million in net income but sold $401 million in regulatory credits to other auto makers needing to meet emissions mandates, primarily in Europe. Before tax, those revenues carry 100% profit margins. Tesla’s credit sales have significantly outpaced net income for five consecutive quarters, and those credits might become less valuable over time, as more manufacturers step up electric car production.

But, seriously: What the fuck is going on? As befits what historians will no doubt refer to as the “Long 2020,” everything and nothing and who the hell knows? Certainly, not the people who inadvertently helped make it happen, whatever it is.

The traders’ motivations vary widely. Some reason that GameStop’s shares are a good value. Others are just riding the wave. And others want to squeeze Melvin Capital, a hedge fund that was shorting GameStop. They’re the ones quoting Heath Ledger’s Joker character from “The Dark Knight”: “It’s not about money; it’s about sending a message.”

But the aggressive maneuvers against the shorts aren’t necessarily limited to the amateurs. Wall Street’s big players know a good opportunity when they see it.

“It’s a little like watching one of those horror films where you can see the bad guy slowly going up the stairs,” [r/WallStreetBets creator] Jaime Rogozinski said. “You see this train wreck happening in real time….”

When an online mob goes after an investor’s kids or spouse—that crosses the line, he said.

“It’s no longer what it used to be,” he said.

GameStop Mania Reveals Power Shift on Wall Street—and the Pros Are Reeling [WSJ]
‘Dumb Money’ Is on GameStop, and It’s Beating Wall Street at Its Own Game [NYT]
GameStop Is a Bubble in Its Purest Form [WSJ]
GameStonk Rocket Rocket Rocket [Matt/Bloomberg]
Tesla’s Stock Is the Original GameStop [WSJ]
4 Things to Know About the GameStop Insanity [NYT]
Wall Street is ‘losing its mind’ as small investors are ‘taking down the billionaires’: Charles Payne [Fox Business]
AMC’s Pandemic Survival Gets Boost From Trading Mania [WSJ]
Reddit’s WallStreetBets Forum Briefly Goes Dark [WSJ]
Trading platforms are limiting trades of GameStop and other companies. [NYT]
‘This is a drastic shift’ – Reddit founder Alexis Ohanian on WallStreetBets short squeeze [CNBC]
WallStreetBets Founder Reckons With Legacy Amid Stock-Market Frenzy [WSJ]
Mark Cuban says his 11-yearold son ‘made trades’ in AMC, BlackBerry with Reddit’s WallStreetBets: ‘He hasn’t made money yet’ [CNBC]