The Dark Side of The Meme
It's all fun and games until someone gets hurt…...
All the mockery, taking it to the hedgies and sticking it to the man took a turn for the worse in the latest saga of a market gone mad as speculators have tried to recreate the magic of the GameStop phenomena in spring of 2020.
The subject of the latest meme trade, Bed Bath & Beyond’s stock has been on a wild ride in recent weeks. The saga hit a new phase when CFO Gustavo Arnal, was found having sustained mortal injuries that appeared to be from “falling from an elevated position” at the base of a 57-story skyscraper known by locals as the “Jenga” tower, according to Reuters. The building gained the nickname due to a stacked appearance that resembles the popular game.
Per CNBC and USA Today, the New York City Medical Examiner’s Office said he had died by suicide and did not leave behind a note. In mid-August, Arnal sold 55,013 shares in the company for about $1.4 million, according to Reuters.
Arnal was the focus of a lawsuit that accused him and GameStop chairman Ryan Cohen, Chewy founder and hero of the GameStop drama; of participating in a scheme to artificially inflate the price of Bed Bath & Beyond’s stock, CNN reported. Filed Aug. 23 in the United States District Court for the District of Columbia, the suit alleged Arnal made misleading statements when discussing the company, per CNN and Reuters.
Whether true or not, this all would never have happened without the get-rich-quick mentality and high trading volume brought on by Redit groups, TikToks, Influencers, and even reputable investors and celebrities “jumping into the fun.”
It’s not just meme stocks in my opinion, pump and dump nft and useless crypto tokens, high frequency trading, margin buying, and options have all added to the current casino element to markets.
I will probably not gain many fans by criticizing the “apes” and stressing boring fundamentals and long-term thinking and that's not really my point. I am simply making a call to a generation that always is complaining about financial woes to stop “aping” and yolo’ing” their money and feeding a frenzy that can really only lead to madness, us vs them competition, and as it seems, the ultimate cost, lives.
Many stocks this year have tanked 40–70% off pandemic highs, Ponzi-scheme like flipping in NFTs has crashed with a 99% drop in NFT values and plummets to dismal Open Sea volumes and markets are realigning to a new regime. Companies, platforms, influencers and others egging more young investors into the furnace for their financial gains will eventually see a revolt when they’ve bled their followers dry, and they look for someone to blame. The ones leading the charge are the ones securing their bag and quietly dispersing when it all crumbles down.
I don’t have all the answers, but I want my generation to build wealth and quit looking for lottery tickets and jackpots. Passive income rarely exists beyond good stocks compounding growth and/or dividends. This is why I started a podcast and why I want to produce good content. I like crypto and high growth tech, but you must do your research, know what you are buying into and understand macroeconomics, so you don't get washed out.
CNBC and other media outlets add fuel to the fire by treating it all with amusement and acting like meme stocks are a new classification of investment and devoting whole segments and significant talk time to the pumps. They are not, while interesting and dramatic, it is an age-old phenomenon from tulip bulbs to dot coms. Nothing new under the sun. Let's move on and not give it too much oxygen. I don’t know the solution, but I am on the Reddit side in that big money has been playing these games since forever and now the little guy wants in. I think the stock market needs to be fixed and many of the gambling elements removed and investing needs to be incentivized over short term gains.
Lastly, you really must understand the risk you can reasonably take on. It's called risk management and the older you get the less blows you can afford to take with your hard-earned money. When you're young, by all means take risk, invest in tech you believe in, start a business etc., but quit incinerating capital.
The lesson in all this should be don't be greedy. Life is long and this was the downfall of a man with a wife and children who had it all. Learn from these tragedies and educate yourself.
Again, I seek to produce quality content and tell you all the people I see out there producing good information you can learn from. Don’t take advice from your friends, buy stuff that is trending and over concentrate your money in things you don’t truly understand.
I got burned on a crypto called Luna earlier this year when it collapsed and went literally to 0. These things happen and luckily, I followed my own advice in being diversified and only having what I could lose in there. I lost $400 and that's never fun, but in the end, I kept being able to pay my bills and I wasn’t in debt. Never make a decision that could make you go to a really dark place to hurt yourself or cross over into illegal activity out of desperation. Plan and have fun. Life is long you don’t want to lose your shirt when things inevitably go south.
-by Mike Satoshi
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