Biden administration Press Secretary Jen Psaki responded to questions about whether the White House was monitoring an ongoing, social media-driven stock surge by focusing on the Treasury Secretary’s gender.
As The Daily Wire reported Wednesday, the Reddit forum “r/wallstreetbets — the subreddit Wall Street Bets — seems to be the driving factor” in an “explosive stock market growth” for the video games retailer. “As members buy more stock, originally priced at under $5 just a few weeks ago, the stock price continues to increase, with ‘no signs of that collective action stopping anytime soon.’”
“GameStop, hedge funds’ most-hated stock, was targeted by an army of retail investors who marshaled forces against short sellers in online chat rooms. In the Reddit forum ‘wallstreetbets’ with more than 2 million subscribers, rookie investors encouraged each other to pile into GameStop’s shares and call options, creating massive short squeezes in the stock,” CNBC reported.
The effect has been immediate and dramatic, and The New York Times reports, has spread to other companies.
“Millions of amateur stock traders collectively are taking on some of Wall Street’s most sophisticated investors. They’ve piled into trades around companies that other investors had written off, pushing stock prices to stratospheric levels,” the outlet noted. “The main focus is GameStop, the troubled video game retailer. Its stock is up 1,600 percent so far this month, including Wednesday’s climb of 120 percent. AMC Entertainment was up 225 percent on Wednesday, and BlackBerry is up more than 250 percent this month.”
The battle between Wall Street bigwigs and recreational stock buyers has fueled concern in the financial sector, particularly given that Melvin Capital, the hedge fund trader targeted in the GameStop surge, had to beg for a $3 billion bailout from other investors in order “to shore up its finances.” At one point, rumors suggested Melvin Capital might even file for bankruptcy.
At her daily White House press conference Wednesday afternoon, Psaki responded to questions over whether the administration might get involved in the ongoing stock surge by noting that they’d just hired Janet Yellen as Treasury Secretary.
“Is the White House concerned about the stock market activity we’re seeing around GameStop and now some other stocks as well?” one reporter asked Psaki. “Have there been any conversations with the SEC about how to proceed?”
“Well, I’m also happy to repeat that we have the first female Treasury secretary and a team that’s surrounding her and often questions about markets,” Psaki replied.
She continued by noting that the White House would send reporters to the Treasury for comment, “but our team is, of course, our economic team, including Secretary Yellen and others, are monitoring the situation.”
When asked about the steep stock Dow decline, Psaki responded with a confusing excuse.
“It is a good reminder that the stock market is not the only measure of the health of our economy,” she said, “and it does not reflect how working and middle-class families are doing.”
The GameStop stock surge, of course, appears to be built on the day-to-day financial dealings of non-professional traders.