>>> AN ARMY OF USERS OF SOCIAL
MEDIA PLATFORM REDDIT IS TURNING
THE STOCK MARKET ON ITS HEAD IN
WHAT "THE VERGE" IS CALLING ON
ONLINE TUG OF WAR.
REGULAR FOLKS ALLOWING THEM TO
MAKE TRADES WITHOUT GOING
THROUGH A FINANCIAL ADVISER ARE
PUMPING CASH IN COMPANIES WALL
STREET USUALLY BETS AGAINST.
THEY SHORT.
AND THEY’RE WINNING.
NORMALLY CHEAP STOCKS LIKE
GAMESTOP HAVE SOARED NEARLY 700%
IN THE PAST 2 WEEKS.
JOINING ME NOW IS "NEW YORK
TIMES" COLUMNIST AND CO-ANCHOR
OF CNBC’S "SQUAWK BOX" ANDREW
ROSS SORKIN.
SO I THINK I’M UNDERSTANDING
WHAT’S GOING ON, BUT BREAK IT
DOWN FOR US.
>> THIS IS OCCUPY WALL STREET
BUT PLAYING WITH MONEY.
SO, A GROUP OF FOLKS, STARTED
OUT AS A GROUP OF FOLKS ON
REDDIT DECIDED THEY WERE GOING
TO TAKE DOWN HEDGE FUNDS THAT
HAD BEEN BETTING AGAINST THE
STOCK, FOR EXAMPLE, OF GAMESTOP.
AND THEY EFFECTIVELY HAVE BID UP
THE SHARES BY USING THE OPTIONS
MARKET AND THEY HAVE WON.
THEY HAVE WAIL CREATED BILLIONS
OF DOLLARS OF LOSSES FOR HEDGE
FUNDS.
AND IN THE PROCESS, THEY HAVE
TURNED A COMPANY THAT HAD A $3
STOCK WITHIN THE PAST YEAR INTO
SOMETHING THAT IS NOW AT ABOUT
$300.
ABOUT -- NOW, THEY TURNED THIS
COMPANY WHICH IS A MONEY-LOSING
COMPANY INTO A COMPANY THAT’S
WORTH OVER $22 BILLION, BILLION
WITH A "B" AND I WILL TELL YOU
I’VE NEVER SEEN ANYTHING LIKE
IT.
I’M CONCERNED ACT EDED ABOUT IT
BECAUSE SOMEBODY, WHEN THE MUSIC
STOPS, SOMEBODY’S GOING TO BE
LEFT WITHOUT A SEAT AND THE
LIKELY LOSER IS ACTUALLY NOT
GOING TO BE THE HEDGE FUNDS,
IT’S ACTUALLY GOING TO BE,
QUOTE/UNQUOTE, THE PROTESTERS IN
THIS CASE. >> SO, EXPLAIN THAT BECAUSE WHAT
>> SO, EXPLAIN THAT BECAUSE WHAT
I CAN GATHER FROM MY RUDIMENTARY
READING --
>> RIGHT.
>> -- ON THIS IS THE INTENTION
IS TO TAKE DOWN THE HEDGE
FUNDERS, THEY WANT TO MAKE THEM
LOSE SO MUCH MONEY THEY CAN’T
OPERATE ANY LONGER.
>> RIGHT.
>> THAT THEY FEEL THE PAIN.
WHEN THE MUSIC STOPS AS YOU
SAID, AND SAY THERE’S A REDDIT
USER THAT’S STILL HOLDING ON TO
A TON OF GAMESTOP STOCK, PRICED
AT A NUMBER THAT IS NUMBER
REFLECTIVE OF THE MARKET VALUE,
WHAT HAPPENS TO THEM?
>> THEY’RE GOING TO BE THE LOSER
AND THAT’S THE ISSUE.
THIS STOCK IS TRADING NOW AT
ABOUT $300 A SHARE.
YOU KNOW, WE COULD ARGUE WHAT
IT’S REALLY WORTH.
MAYBE IT’S WORTH $10.
$20.
$30.
MAYBE $40 EVEN.
BUT IT’S CLEARLY NOT WORTH WHERE
IT IS TODAY BY A SQUARE MILE.
AND THE QUESTION IS, WHO’S GOING
TO GET HURT WHEN THOSE SHARES
BEGIN TO TUMBLE?
WE’RE ALREADY SEEING SOME OF THE
BIG BROKERAGE FIRMS EFFECTIVELY
LIMIT THE ABILITY FOR RETAIL
INVESTORS TO JUMP IN AND
CONTINUE TO BID UP THESE SHARES
USING THE OPTIONS MARKET.
I SHOULD ALSO MENTION THAT THERE
HAVE BEEN A NUMBER OF
PROFESSIONAL OPPORTUNISTS, IF
YOU WILL, STARTING TO PLAY THIS
MOMENTUM AS WELL, SO THEY MAY
LOSE, BUT YOU’RE SEEING BIG
NAMES LIKE ELON MUSK TAKE TO
TWITTER AND THE WRINKLEVOS TWINS
REALLY FANNING THE FLAMES AND
THERE’S A REAL QUESTION AS TO
WHERE THE REGULATORS ARE IN ALL
OF THIS, BUT IT’S A VERY
INTERESTING ALMOST PHILOSOPHICAL
ISSUE AT THE MOMENT BECAUSE THIS
IS -- IT STARTED WITH A GROUP OF
PEOPLE WHO REALLY DID WANT TO
STICK IT TO THE MAN.
THEY WANTED TO SAY, WALL STREET,
YOU’VE BEEN STICKING IT TO US,
YOU’VE BEEN MANIPULATING US,
WE’RE GOING TO MANIPULATE YOU
BACK.
THE QUESTION IS HOW DOES IT END?
>> YEAH, IT’S INTERESTING THE
FED CHAIR WAS ASKED ABOUT IT.
JEN PSAKI WAS ASKED ABOUT IT AT
THE WHITE HOUSE NEWS CONFERENCE.
I GUESS THE BIGGER QUESTION IS
WE HAVE NO TIME LEFT FOR IT, BUT
I’LL ASK IT, HOW DISRUPTIVE CAN
THIS BE IN THE LONG RUN?
>> I THINK IT CAN BE VERY
DISRUPTIVE.
THE QUESTION IS WHETHER ACTUALLY
YOU FIND MORE GROUPS GO TO
ENCRYPTED -- ENCRYPTED CHANNELS
TO TRY TO TAKE ON STOCKS IN ALL
SORTS OF WAYS AND WHAT
REGULATORS DO ABOUT IT.
I THINK THAT’S THE BIG NEXT
QUESTION IS IS THIS LIMITED TO A
GAMESTOP?
YOU MENTIONED A COUPLE OTHER
STOCKS WHERE THIS IS STARTING TO
HAPPEN.
HOW BROAD IS THIS?
AND IS THIS A SIGN OF A TOP IN
TERMS OF THE MARKET?
ARE -- IS THERE SO MUCH MONEY
FLOATING AROUND, TOO MUCH MONEY,
THAT THE MARKET IS -- IS -- HAS
GOTTEN TOO FROTHY.
THAT’S THE OTHER BIG QUESTION I
THINK IS BEING ASKED.
>> OVERBLOWN.
YEAH.
I LIKE THE WAY YOU PUT IT.