Another Explanation of the GameStop Phenomenon

If your friends and family are wondering why you’re buying $GME @ $300, maybe you can explain it to them like this:

There’s a rich kid in town. Let’s call him Melvin. He thinks he’s really smart. He finds a coupon for $5 off the new Nintendo Switch during the holidays with no limit on number of units. This is easy. I’ll go ahead and sell the Switch now for $200 and then buy it for $195 with the coupon. Easiest $5 I’ll ever make. He goes and tells all his parents’ friends at the Citadel Country Club that he can get them the new Nintendo Switch for their kids. He collects $200 each from 200 parents. He now has $40K and will use that money to purchase Nintendo Switches for $39K. He’ll have earned $1K in just a few hours. His parents will be so proud.

There’s another kid watching Melvin this entire time. Let’s call him Keith. Keith doesn’t like Melvin. Keith is good friends with the guys over at Gamestop. He finds out that there are were only 100 new Switches shipped to the entire country. Keith and his 99 friends buy all 100 Nintendo Switches on the spot.

Later in the day, Melvin goes to Gamestop with his $5 off coupon and says, “I’ll take 200 Nintendo Switches please.” Gamestop guy looks at him and says, “Sorry, we’re all sold out.” Melvin goes to the next Gamestop. Same story. All sold out. He goes to all the Gamestops in the city and can’t find a single Switch. He won’t be able to fulfill the orders.

Meanwhile, Keith is telling all his friends about what Melvin promised the members at the Country Club. Nobody sell him the Nintendo Switch that you bought, no matter how much he offers you. Nobody likes Melvin, so everybody holds on to their Nintendo Switch.

Melvin is in trouble. His parents rich friends are all asking when they are getting their Nintendo Switch. Melvins parents are angry, but they don’t want to lose their standing in the Citadel Country Club. They have to help Melvin gets 200 Nintendo Switches.

The price of Nintendo Switches in the city skyrockets. Melvin’s parents were able to get a few units from Keith’s friends, but they had to pay really inflated prices for them, first $1,000, then $2,000, now $3,000. It’s nearing Christmas, and every rich parent at the Country Club is desperate for the Nintendo Switch they promised their kids. They can’t trust that Melvin will be able to get them one. They all start bidding against each other for Switches. Everybody in town is in on the action now. Everybody wants to get a Nintendo Switch to sell at the country club for $10,000. Meanwhile, Keith and his friends are just hanging out and playing Animal Crossing.

20 Replies to “Another Explanation of the GameStop Phenomenon

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  3. How blatant does Wall Street corruption have to be before anything gets done? Is there even anything anyone can do at this point?

    1. In general, political change requires one or more individuals with the backbone and reach to convince others to do so. In our current situation, such is difficult to find. So many of those in power are driven by their own selfish greed. Others are gutless ninnies. If the people rise up and keep such behavior alive, maybe we can get those “in charge” to move. But don’t hold your breath.
      Rich people (most of them) got that way because they were greedy.

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