To Prevent Future GameStops, Promote Stock Futures
There’s a way to keep the link between bettors and true investors loose and indirect so chaos in one doesn’t spill over to the other.
The stock market looks more like a casino these days.
Photographer: Bloomberg
It’s the biggest betting event of the year. Yes, I’m referring to the Super Bowl this Sunday but I could just as easily be talking about GameStop Corp. After all, the amounts bet are roughly the same—probably high single-digit billions of dollars—and the news coverage is similar in its intensity.
Shares of the retailer soared in recent weeks, rising from around $10 a share to almost $500 on Jan. 28, before collapsing to around $54 yesterday – all without any meaningful change in the company’s fundamentals or outlook. Large packs of small investors are believed to be behind the moves. Some people are concerned about the welfare of these investors, saying they are foolishly “betting” in the stock market and putting their financial health in jeopardy.