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This week on the Pete the Planner Show, Pete and Damian talk about the GameStop (GME) CHAOS that blew up the stock market.
Remember: In the first six months of 2021, we’re going to make over five families’ financial lives, LIVE on the air! WE’RE GIVING AWAY FIVE FREE HEY MONEY, MEMBERSHIPS to walk with them across six months telling their stories about their struggles in personal finances.
No time to listen? BUMMER. Here’s some of what happened and when:
SO WHAT HAPPENED? THE TECHNICAL SIDE OF THE GME EXPLOSION: [5:40]
- It all begins with “short selling.”
- Wall Street bigwigs made bets that GME would go down, as its brick & mortar store-first business model would go down in value.
- The danger in this is, ‘What if it actually skyrocketed? What would happen to the people who had short positions?”.
ENTER, ROBINHOOD: [8:20]
- The trading service meant to democratize, ‘trading for everyone.’
- Pete: The marketing and user experience can get inexperienced users into a lot of trouble, as witnessed by numerous lawsuits, due to their misunderstanding of the platform.
- Please don’t deal in securities and financial risk without proper knowledge and/or guidance.
- Robinhood was forced to stop trading in several stocks because they lacked the required cash on hand as required by the SEC.
THE FIGHT BETWEEN FREE MARKETS & REGULATION: [13:24]
- What do we think about this fight?
- Pete: I’m a relatively free-market person, but I believe in the power and importance of regulation.
- Damian: I’m somewhere in the middle, closer to free-market.
- This happened …because of the SEC and Robinhood, as they exist. “Play stupid games, win stupid prizes.”
There’s so much more in the full show, including the laughs! — click PLAY below for the full show.
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Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.