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Reddit Admins Intervene After Old WallStreetBets Mods Get Accused of Staging “Coup” for Movie Deal

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  • On Friday, Reddit administrators appeared to resolve what had been described as a “coup” on the WallStreetBets subreddit.
  • The situation began earlier in the week when a group of retired moderators resurfaced on the message board and began purging newer, active mods.
  • According to leaked screenshots from “active” mods, the “inactive” mods had been secretly discussing efforts to land a movie deal through WSB’s newfound attention.
  • “We’ve been taken hostage by the top mods,” WSB moderator zjz said. “They left for years and came back when they smelled money.”

WallStreetBets Movie Drama

The subreddit WallStreetBets, which has largely been credited with driving last week’s volatility in the stock market, faced a battle of ownership this week.

“Big drama going down in WallStreetBets right now,”  The New York Times reporter Taylor Lorenz tweeted Thursday. “Retired old mods have come out of inactivity and kicked the current mods out now that there’s movie deals/media attn.”

The situation seemingly began Wednesday when a WSB moderator posted a series of screenshots on Discord showing that other moderators had begun secretly discussing efforts to land a movie deal. 

“What’s our cut?” one of the moderators asked in the leaked images. 

The situation escalated the following morning when moderators trying to land that deal began stripping mod powers from those who had challenged them for trying to profit off of the platform’s newfound attention.

“We’ve been taken hostage by the top mods,” WSB moderator zjz said in a now-deleted thread on the subreddit. “They left for years and came back when they smelled money.” 

“They’ve been busy creating private email addresses to funnel all the press correspondence away for their own gain, talking shit about all of the active mods, and scrambling to get paid from some movie deal.”

After posting this message, zjz was stripped of their mod powers. Supporters of zjz then created a new subreddit, WallStreetBetsTests, as part of a petition to have WSB ownership transferred to “active” mods. 

By Friday morning, Kotaku reported that Reddit administrators restored control of WSB to the “active” mods, effectively ending what had been described as a “coup.”

Currently, zjz has not had their mod powers reinstated, but the message board’s mods have reportedly been working to unban users who were silenced for challenging the “inactive” mods. 

Despite GameStop stock only surging last week, reports have already indicated that movie rights for a yet unpublished book about the situation have been sold. Additionally, Netflix is also reportedly trying to lock down the details of a Noah Centineo-led film about last week’s events. 

Robinhood Lifts All Restrictions 

In other stock-related news, on Friday, the embattled free-to-trade app Robinhood lifted all restrictions on how many shares its users can purchase of recently-volatile stocks such as GameStop and AMC.

Last Thursday, Robinhood blocked users from purchasing new shares of either stock, but it still allowed them to sell their existing shares. 

While co-CEO Vlad Tenev said blocking all forms of trade would have been even worse for users, the move seemed to benefit Wall Street hedge funds that were being targeted by enraged investors. The move is now also the subject of two congressional investigations, and Tenev is expected to testify before a House committee later this month.

Robinhood’s lifting of restrictions comes as share prices for both AMC and GameStop have plummeted following unprecedented gains.

What Actions Could the Government Take?

Treasury Secretary Janet Yellen reportedly spoke to financial regulators Thursday to discuss how to prevent another GameStop situation from happening again.

Among other measures, the government could potentially institute a financial transactions tax, meaning that investors would be taxed each time they trade stocks.

It’s also possible the government may abolish what’s known as payment for order flow. Notably, that is one of the main mechanisms for how apps like Robinhood are able to allow their users to trade without any commission fees. 

See what others are saying: (Kotaku) (The New York Times) (Axios)

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Doctors Urge People Not Skip Johnson & Johnson’s COVID-19 Vaccine for Moderna or Pfizer’s

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  • The FDA and CDC approved Johnson & Johnson’s COVID-19 vaccine over the weekend, allowing the company to begin shipping doses Monday for use later this week.
  • Unlike Pfizer and Moderna’s vaccines, Johnson & Johnson’s can be stored at higher temperatures for longer and only requires a single shot. 
  • Still, experts are worried people may try to skip the vaccine for either Pfizer or Moderna’s version since they have higher efficacy rates.
  • Because of this, health officials have stressed that Johnson & Johnson’s vaccine is still highly effective and necessary to keep the U.S. from seeing another rise in daily case rates.

CDC Recommends Johnson & Johnson Vaccine

The Centers for Disease Control and Prevention recommended Johnson & Johnson’s COVID-19 vaccine on Sunday for Americans 18 and older. With that, the first doses of the vaccine began shipping out Monday, and vaccinations are expected to begin sometime this week.

The CDC’s recommendation came one day after the Food and Drug Administration authorized the vaccine for emergency use.

Johnson & Johnson is expected to ship 3.9 million doses this week. By the end of March, it hopes to have shipped a total of 20 million doses.

Johnson & Johnson’s vaccine is also notable for two reasons. First, it doesn’t need to be kept frozen like the Pfizer vaccine and can be kept in a fridge for much longer than the Moderna vaccine. Second, it only needs to be administered once — not twice. 

The approval and recommendation of this vaccine come at a potentially pivotal juncture. Since mid-January, the rate of new COVID-19 infections has been steadily falling; however, for the last week, daily infection rates have begun to plateau.

While it’s undoubtedly good news that the U.S. isn’t once again seeing a rise in cases, as CDC Director Rochelle Walensky explained, this is “a very concerning shift in the trajectory.” 

That’s because it very likely could result in a rise in cases. 

For example, experts worry that the public, as well as state and local officials, may be starting to let their guards down after hearing the news of falling infection rates. Still, those experts have reminded people that Monday marks one year since the announcement of the first coronavirus death in the U.S.

Since then, the U.S. alone has logged more than half a million deaths from this virus.

Johnson & Johnson Vaccine Efficacy 

The addition of the Johnson & Johnson vaccine has the capacity to help keep infection rates from climbing once more, but that doesn’t mean there won’t be some challenges. 

In fact, a major concern now seems to be around the effectiveness of the vaccine.

Notably, in late-stage trials, it was 85% effective against severe cases of COVID-19, with no deaths or hospitalizations being reported in the month after participants received the vaccine. It was also found to be around 72% effective at preventing moderate infections. 

Still, that’s less than the 94% and 95% efficacy rates for the Moderna and Pfizer vaccines, respectively. 

Because of that discrepancy, some health officials have begun to worry that people will try to skip the Johnson & Johnson vaccine in favor of the other two. 

As a result, experts are assuring the public that Johnson & Johnson’s vaccine is still highly effective. They’ve also noted that the studies for the three different vaccines happened at different stages of the pandemic and in different environments. 

“They were compared under different circumstances,” Dr. Anthony Fauci, director of the NIAID, said. “All three of them are really quite good, and people should take the one that’s most available to them… people need to get vaccinated as quickly and as expeditiously as possible.”

See what others are saying: (The Washington Post) (Reuters) (CNN)

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Short-Sellers Lost $1.9 Billion From Second GameStop Squeeze

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  • Short-sellers betting against GameStop’s success lost $664 million Wednesday, followed by $1.19 billion on Thursday.
  • The losses come as share prices for the video game retailer surged for the second time this year. 
  • Short-sellers have lost $10.75 billion in GameStop stock year-to-date. 

Short-Sellers Lose $1.9 Billion

Short-sellers have lost $1.85 billion in GameStop stock following the second buying surge of the video game retailer. 

The outcome is similar to what happened in January when investors caused short-sellers to lose billions by driving up GameStop’s share price. At the time, it even resulted in one short-selling hedge fund receiving a nearly $3 billion bailout.

The reason why short-sellers keep losing money when GameStop’s share price soars is that the entire process of short-selling requires them to bet against a company’s success. 

That can be done for any number of reasons, but usually, people short-sell a stock because they believe a company will fail or that its share price will go down. If either of those two outcomes occurs, the short-seller makes money; however, if the share price goes up, the seller is left with a climbing bill that, in theory, has no limit. 

In the later hours of trading on Wednesday, GameStop’s stock began to surge for the second time this year (thanks in part to the image of a McDonald’s ice cream cone). In fact, it jumped from around $50 a share to $90 a share in just 90 minutes.

That same day, short-sellers posted $664 million in losses, according to the analytics firm S3 Partners. By Thursday, S3 said they posted another $1.19 billion in losses. 

Friday afternoon marked the first time since Thursday that share prices for GameStop have fallen below $100.

Short-sellers have lost $10.75 billion in GameStop stock year-to-date. 

Can Investors Save GameStop?

It’s no secret that GameStop has been failing for years. 

GameStop, along with other former brick-and-mortar giants, has faltered to the behemoth that has become online shopping. While other companies have been able to adapt, that’s proved more challenging for GameStop, in part because gamers can now buy titles directly from their consoles.

That said, some see GameStop’s recent situation in the stock market as a golden opportunity for the company to rebrand itself. Many investors poured money into GameStop to inflict substantial wounds on hedge fund short-sellers and others simply shelled out cash in the hopes of getting rich quickly, but many also found themselves contributing to GameStop out of love for the company. 

Investors on the subReddit WallStreetBets, which has largely been credited with driving GameStop’s volatility this year, affectionately refer to investor and newly-minted GameStop board member Ryan Cohen as “Papa Cohen.” In fact, many on the message board believe he has the vision to save the retailer.

Notable short-seller Citron Research even suggested Thursday that GameStop should buy online the gambling firm Esports Entertainment Group.

In a tweet, Citron Research said such a move “is obvious and easy to justify stock price.”

See what others are saying: (Insider) (RT) (Reuters)

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GameStop Shares Surge Again After Investor Posts Image of McDonald’s Ice Cream Cone

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  • GameStop share prices surged from around $50 midday Wednesday to $170 Thursday morning in pre-market trading, marking the company’s second massive share spike in 2020.
  • Some attributed the recent spike to an image of a McDonald’s ice cream cone tweeted by GameStop investor and board member Ryan Cohen.
  • Many have interpreted the image as a cryptic call to action since it seems connected to the “meme stocks” frenzy that first drove GameStop’s stock rise last month.
  • While it’s unclear how much of an effect this image actually had on investors, other factors have also been attributed to the rise, including the alleged forced resignation of GameStop’s Chief Financial Officer.

GameStock’s Second Wave

Game Stop is seeing yet another major surge in its stock prices this year. During the last few hours of trading Wednesday evening, share prices for the video game retailer jumped from under $50 to above $90. 

That price soared as high as $170 in pre-market trading Thursday morning. 

Stocks like AMC and Koss have also seen notable spikes over the past 24 hours, though both have been much smaller in scale.

The Ice Cream Cone

Details about what exactly is driving this latest stock price increase are unclear, though different speculations are already circulating.

Outlets like CNBC have partially attributed the spike to the reported forced resignation of GameStop’s Chief Financial Officer, Jim Bell. 

Others have attributed the surge to a photo of a McDonald’s ice cream cone, of all things. While such an explanation may seem out-of-left-field, it’s heavily connected to the “meme stocks” frenzy that first drove GameStop’s meteoric rise last month. 

In January, GameStop share prices soared to unprecedented highs as a group of Redditors on the message board WallStreetBets encouraged each other to stuff their money into the stock. 

Though GameStop as a business has been failing for years, that was precisely why those Redditors were so keen on the stock. Many wanted to support the company simply because they like it and have a nostalgic attachment to it. Others also wanted to make certain Wall Street hedge funds pay for betting on GameStop’s failure. 

Notably, the ice cream photo was shared by Ryan Cohen, a GameStop investor who — as of the start of this year — also sits on the company’s board of directors. 

A number of people on WallStreetBets refer to him as “Papa Cohen,” and many hold the belief that he has the vision to transform GameStop into a profitable online business. As a result, many have interpreted this tweet as a cryptic call-to-action.

As a reporter for The Verge noted, a number of factors are likely playing a role here, including Bell’s ousting, Cohen’s ice cream tweet, and a Congressional testimony last week from Reddit user Roaring Kitty.

Kitty, whose real name is Keith Gill, is an investor who’s largely been credited with helping to drive the meme-stock frenzy. In fact, this past Friday, Gill also bought an additional 50,000 shares of GameStop.

Criticism Against Free-To-Trade Apps

On Wednesday, American investor Charlie Munger blamed free-to-trade apps like Robinhood for the current meme stock frenzy, calling it “a culture which encourages as much gambling in stocks by people who have the mindset of racetrack bettors… It’s a dirty way of making money.”

In a statement made on Thursday, a Robinhood spokesperson refuted Munger’s characterization, saying, “To suggest that new investors have a ‘mindset of racetrack bettors’ is disappointing and elitist.”

See what others are saying: (Kotaku) (The Verge) (CNBC)

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