Eat the Rich: The GameStop Saga (2022): Season 1, Episode 2 - To The Moon - full transcript

You and I had talked about
if I made some more music

you would consider
maybe using it in the docuseries,

which I really appreciate.

And so, you know, not being lazy,

we kind of wrote some fire shit.

- You know what I mean?
- Yeah.

We would love to do it for you,
if you got the time.

You want to do it
in this position? You good?

Can we do it standing?

Can we actually stand up for it?
Is that cool?

I like the stock.



Wait, what stock? GameStop?

♪ We about to go ape
Like Dr. Burry did in '08 ♪

♪ I'm never paper handing, no way ♪

♪ I'm bullish, bad at olé! ♪

♪ Suing Vlad like I'm O'Shea ♪

♪ I'm not a cat, okay? ♪

♪ I like the stock! ♪

♪ I like the stock
I like the stock ♪

♪ I just did a 900 like I'm Tony Hawk ♪

♪ Go kick flip! ♪

♪ I'm talking about
How many shares I bought ♪

♪ A lot of cost leveraging
Waiting for a price drop ♪

♪ Pay for a service
Bitch, you don't deserve it ♪

♪ WSB GME to the moon ♪



♪ I like the stock! ♪

♪ He like it ♪

♪ I like the stock! ♪

This story is the story of when
information doesn't make a difference.

This is the gamification of the markets.

Stocks used to follow the truth.

GameStop misses earnings, stocks go lower.

It's how the stock market's always worked.

If you found the truth,
you could find the stock price.

The reason why we're here right now

is because what happens when…
…they become detached,

the truth and the stock?

How do you get the squeeze?
How do you get it?

There's not enough buyers of the shares,
not enough interest, which is crazy.

What could be announced
that gets it going?

You need people to want the stock.

Start getting a lot of folks on-board,

this shit could get out of hand quick.

Look at my hat.
That looks kind of sparkly, doesn't it?

Has it been doing this the whole time?

It takes is a little buying pressure,
and this thing's going to the moon.

I like scale. I like disruption,

and ultimately, I love opportunities
where we can delight a customer.

By the end of August of 2020,

investor Ryan Cohen had purchased
more than 6 million shares of GameStop.

Three months later, he sent
an open letter to the GameStop board,

promoting a new vision for the company.

And he wasn't done yet.

On January 8th,
Ryan Cohen tweets,

"How you know
it's going to be a fun ride."

There's no way to know
what he's talking about.

Ryan Cohen's very cryptic.

And the only way he communicates with us
is through cryptic memes.

But us investors
knew something was brewing.

On January 11th,

news was announced Ryan Cohen would
get three seats on the GameStop board.

And I bought.
I threw in the rest of my savings,

I was like, "I'm in.
Short squeeze is gonna happen."

Shortly after Cohen
got his three board seats,

the stock price started
to go up faster than ever before.

It just took off.
Mad dash. Stock was flying up.

Happy Wednesday.

Happy GME 30, let's go!

Look at this shit.
Look at this shit. 60%!

We knew Ryan Cohen could
have this impact. Shit, Ryan Cohen…

Ryan Cohen, you badass mother!

We bought it about $9 a share,
and now the price was flying up.

We were in the 30s.

You had more and more people
on WallStreetBets

buying up shares of GameStop.

Today was an indication
there could be some problems.

It's the first time you've seen it
where it's like, "Oh wait."

It's got like this squeezy-type feel.

Has it begun?

The answer to that question
was a resounding yes.

Prior to Ryan Cohen's board seats,

the stock traded around
seven million shares a day.

Afterwards,
that number jumped to 144 million.

The squeeze was on.

Most day traders,
retail traders, don't make money.

I think that's proven.

And so as a hedge fund manager,

you're probably feeling okay
about your position still.

It's day two and three when you continue
to have outsized statistical moves,

that things get complicated.

Many of us have been asking for months,

"Can the outsized short position
be closed in a systematic manner?"

I'm not so sure.

So that short position
was getting increasingly risky.

And as the price of GameStop
kept climbing,

the short sellers were sweating bullets.

There was a tweet from Citron Research

saying the price will be
back down to 20 in no time.

Citron, they've been
a nemesis to WallStreetBets, haven't they?

Yeah.

Yeah. "Shitron Research."

Andrew Left of Citron was like,

"Okay, I'm going to put this
GameStop thing down once and for all."

Like, "I know short squeeze
better than you guys."

Andrew Left was polarizing
within the WallStreetBets community.

He wasn't a hedge fund manager,
even though he seemed like one.

In fact, he started out as
kind of a hero to many retail traders.

He blew the whistle on fraudulent
companies that deserved to be called out,

and then became wealthy
by actively shorting them.

Twenty years ago, I created Citron.

I put stock info on the Internet
where people could read it

that's not Wall Street info.

Before Reddit,
before Facebook, before MySpace,

there was me.

The irony of the whole GameStop story is

I got caught on the side
of what's considered "Wall Street,"

and historically,
I've been the "anti" -Wall Street person.

I put my money where my mouth is.

So I was short GameStop,

and if I'm short GameStop,

I'm gonna tell you the reasons why.

I don't know
how this was arranged,

but we have a special guest.

Do we have a drum roll
before we bring him out?

- How was that?
- That was good.

- All right. You want to talk GME?
- Sure. We'll start with GME.

You might have loved
the setup on GME when it was $14

because of the high short interest.
There's high short interest for a reason.

Because pretty much
their business is in terminal decline.

He really tried to put
the short squeeze on pause for a minute,

but I think he had never
gone up against meme warfare before.

And he really got taken down.

You have an army of thousands of people

that have nothing
better to do on the Internet

than to chime in to this YouTube stream.

Numbers don't lie.
People lie.

I know, everyone on Twitter
never has a losing trade.

Everyone on Reddit is a market genius.

I hear it all the time.

People were saying,
"GME! GME! GME to the moon!"

Me personally who is short the stock,

I have no problem
selling the stock higher.

You're not going to change the underlying
fundamentals of this company.

Just to be clear,
Andrew Left's thesis was entirely logical.

GameStop was getting less foot traffic.

They were $216 million in debt
and had an anemic online presence.

But none of that mattered because now

he was up against the Internet.

People were ordering pizzas to my house
or signing me up for Tinder

or doing all those cute things,

trying to hack my Twitter account,
call me every name,

the model just does not work.

Cautious investing to everyone.

Right after
Andrew Left got off,

the host bought GameStop.

He bought shares.
He was against Andrew's reasons.

The next day, GameStop just went nuclear.

It's not just
the Americas. Ain't in this by ourselves.

Europe and Asia, Australia,
don't think we forgot about you.

The Canadians quietly run this stream.

How much of a headache is this
causing the hedge funds of the world?

Obsessed is probably an understatement.

Shout-out to Mexico. Hola! Hola, amigo!

I have not studied Japanese.

The WallStreetBets people,
they have big swagger.

There's a new sheriff in town.
The market broke. We're the new market.

Brazil. India. France.
Good morning, Denmark!

What's going on in GameStop right now

conceivably could
take a couple of hedge funds out.

Cuba, Italy, Singapore, Scotland.
That's the first Scotland!

Freedom!

We were sitting around,

waiting to see
who was going to be the first one to fall.

The hedge funds are suffering.

They've got
really overexposed short positions.

They were planning
on this thing to go bankrupt

and all of a sudden, it's not.

Even a small short position

can balloon out of control
in a situation like this.

If you're a hedge fund manager,
and you're down 20%

because you're short GameStop.

Guess what.

Unless someone rescues you,
you're out of business. You're done.

But here's the thing,

if hedge funds go under,

that could bring down
the entire financial system.

If you want to see
what that looks like,

all you've got to do
is dial back to the 1990s,

to this hedge fund called
Long-Term Capital Management.

Very catchy name.

Long-Term Capital Management
was a hedge fund in the late '90s

that imploded

and almost took
all of Wall Street down with it.

The Federal Reserve
had to orchestrate a $3.6 billion bailout

by the fund's 14 banks.

It required a lot
of the heads of the investment banks

to meet at the New York Fed

and get together and kick in money
to save this hedge fund,

which literally was going to,
you know, bring down Wall Street.

The relationship between
hedge funds and banks

introduces a certain amount
of fragility into the system.

Banks act as brokers to hedge funds.

The bank will loan them money,

and that means that if things go south,

suddenly the bank can wake up and say,

"Oh, I don't have any money left."

And now everybody says,

"I don't know if my checking account
is safe there."

If some of our largest banks fail,

those linkages would take down
the core of the financial system.

And now everybody is insolvent.

That's when you have a panic.

And when that happens,
we end up in deep recession.

Epic. Epic day. Just huge.

It's been a huge run-up,
gigantic run-up, right?

This is incredible,
a move like this in a stock.

And there's been
no major news out of the company.

If this is a stock moving
detached to fundamentals right now,

what continues to push it?

This GameStop situation, we will never
encounter a setup like this again.

Soon may the Tendieman come, y'all know?

You already know. Let me just start.

Let me just dip.
I gotta just dip. Let me just dip.

Just one dip. Just one quick dip.

It's completely driven
by influencer culture,

and it wasn't just big voices
of the WallStreetBets community

that started to talk about it.

It was people on Instagram,
it was big TikTokers,

it was big YouTubers getting involved.

When that was happening,
the numbers went crazy.

"I gotta live-stream this throughout
the day. Talk about what's going on."

I will be discussing three stocks

that I'm watching very closely,
and you should be too.

And I was a person who went from like,
a couple thousand views,

and I think in one day
I had over half a million views.

It was just… it's a whirlwind.

And it wasn't just Redditors
making big waves.

The message began to spread outward,
creating a tsunami of interest.

This morning I woke up after spending
all last night on WallStreetBets.

I think that what you're seeing

is a pushback against the establishment
in a really important way.

Chamath Palihapitiya
is the CEO of Social Capital.

Thanks for being here.

Chamath was well-known
in the online financial world,

and certainly a friend of the apes.

He had made a killing
working for Facebook in the early days,

but eventually left and invested wisely

until he crossed the threshold
into billionaire status.

But most importantly,

he had a reputation
of sticking up for retail investors.

Chamath put out a tweet,

"Looking for something
to throw a few hundred G's at."

Everyone responded,
"GameStop. GameStop. GameStop."

The emotional connection
of the Reddit community to that stock

flies right in the face of every single
standard measure of finance,

and, you know, facts themselves?

We don't necessarily
care about those things.

Then you had Cameron Winklevoss tweeting,

"Thinking about going long GameStop."

I don't think of the market as a game,
but that's really what this has become.

I like so and so.
They seem to be successful.

I'm going to like them,
I'm going to follow them.

And when they post,
I'll do what they tell me.

We were trying to break
that $150 wall,

but we were just pinned there,

and then Elon tweets out "Gamestonk!"

Elon's the big papa,
he's the big daddy, you know?

Everyone loves Elon.

I love Elon. I don't know why,
but I love him.

Tesla, here's your example right there,
to see what you can do.

The amount of capital they raised thus far
is because of Elon Musk,

and because of the story he was telling,
and the stoke incentive.

I mean, the guy's… he's the reason.

He's the reason. He's the guy.

I'm the guy? He's the guy.

Elon has an audience of millions
that do whatever he wants.

I remember Abbe shouts at me,
"Elon tweeted! Elon tweeted!"

I look at my Robinhood balance,
and I see I have some money there.

I'm like, "Oh, throw it in!"
And the price flies.

I got involved in GameStop
straight-up because of Elon, dude.

Elon posted "Gamestonk!"

I was reading all this stuff. I was like,

"Well, Elon's a genius.
Gotta jump into this, right?"

My whole plan is to make a TikTok house.

I just want to do TikToks all day
in a big mansion with pretty girls.

That's it.

So, my whole gig was gambling.

I don't even know the last job I had.

There's been points
where I'm staying at the Wynn,

and I have like 1.4 million in cash,

and I'm just looking at it like,
"What's there to do now?"

But then all the casinos shut down
because of Covid,

so my whole thing is gone.

I stumbled upon Robinhood,

and then that's when
I started going heavy.

I quit gambling.

It's on your phone, right on your couch,

and you can play with
hundreds of thousands of dollars.

Krispy is what we call
"late to the party."

He wasn't up on
Roaring Kitty or Ryan Cohen,

he just heard there was easy money
to be made with GameStop.

And there were tons
of little unassuming Krispys out there

driving the price up to new heights.

I heard about GameStop
through my husband's co-worker.

He's very active on Reddit,
and he told us, "Hey, it's gonna go up."

I didn't know anything about GameStop.

I just pass by it when I go to the mall,
in front of Victoria's Secret.

That's about it.

Things were moving
very quickly.

Before, it took months or weeks
for the stock price to move.

Now, every morning, no one had any idea
what they were waking up to.

Big influencers will talk about
anything viral on the Internet.

They want to hop on whatever trend.

And once it started to get traction,

it was something people had an opinion on,

basically something
people can make content about,

and the more content on something,

the more it spreads.

The term "meme"
was coined by Richard Dawkins.

It was his name for a thought virus.

Any idea which passes from brain to brain

and says, "Copy me," is like a virus.

A virus is something that spreads,
because it spreads because it spreads.

The price was jumping hour
to hour, minute to minute,

and because of that,
the story broke free from the Internet

and made itself known to mass media.

It looked like everyone
was getting in on it,

even the state of Alaska,

even the Church of Jesus Christ
of Latter-day Saints.

Once the media wrote about it,
that's when it went really mainstream.

That's when you had, like,
my parents asking about it.

It was a different level of viral
at that point,

and I think that's what
mainstream media can do.

Looking at the
WallStreetBets forum on Reddit…

When you say Reddit,
people think WallStreetBets…

WallStreetBets.

It was happening in real time,

and at the same time,
how the media was representing it

was forcing everyone's emotions
to get involved.

You could feel when the sentiment,

when the media was almost behind them.

- David versus Goliath battle…
- David and Goliath trade war…

David versus Goliath story…

It's the ultimate David
and Goliath story.

David conquered Goliath.

- Who's the Goliath?
- You.

That's cute. I'm David.

I might be a bigger David
than the next one, but I'm still David.

Let's be real.

No matter how dangerous
the situation could have become,

no one's ever gonna root for Goliath.

Regular people beating
Wall Street giants at their own game.

Hedge fund big shots are losing billions,
that's pleasant.

Leaving some on the verge of bankruptcy,
even more delightful.

Some of the biggest hedge funds
in the world are taking it on the chin.

At this point in time,
the losses for short sellers

are tens of billions of dollars.

When something moves
well outside the bounds of a bad day,

all of the emotions are compounded.

Tension's high,
you're losing a lot of money.

It's an all-hands-on-deck situation.

We knew individual investors
were trading more than ever,

but I have never seen anything like this
come together so quickly

and lead to such
an insane rise in a stock price.

The magnitude of the price change
caught everybody completely off-guard.

It was just something
that hadn't really happened before.

Holy fucking shit.

The news to bring you right now
is that Melvin Capital Management,

this is the hedge fund
that had shorted this company,

Melvin Capital is now out of the stock.

After he finally
closed out his short position,

Gabe Plotkin's Melvin Capital Management
was down 6.8 billion.

So Melvin was out of the stock,

and other hedge funds
were now following suit,

which meant they'd have
to buy back the stock

pushing the price up even further.

By the end of January,

GameStop short sellers
had lost nearly 20 billion.

The sentiment
was exactly one of revenge.

Not only did people make money
on the ride up,

but finally,
we made hedge fund Wall Street pay.

A lot of these people
that bought GameStop stock,

they watched their parents' whole savings
or retirement funds

just go to, like, nothing basically,

'cause of the subprime mortgages,

so it's like, getting back
at the hedge funds.

There's little doubt
it's been a rough 2021 for Melvin Capital,

but the firm at the center
of that GameStop saga…

That was a huge position for them,

and I believe in the first quarter,
it was a 50% loss for the hedge fund.

In this market right now,
do you kind of just

sit back, get some popcorn,
and kind of watch what's going on,

and not participate?
Because it's a little wild out there.

We're seeing
that retail investors have real power.

They felt like, "We might really
be able to tear this whole thing down,

start from the beginning,
teach these people a lesson."

Of course, it has the danger
of destroying our markets.

But here's the thing,
if a market collapsed,

I think a lot of people feel,
"How bad would that be?"

This morning,
the financial world in a frenzy.

President Biden's team
even asked about it.

The first three weeks
of Biden's presidency,

there was more news stories
on GameStop than Biden. Not even close.

Of course, our economic team,
including Secretary Yellen and others,

are monitoring the situation.

Here we go! Here we go!

Usually, you have a short squeeze,
and it goes up,

but this one keeps going.

But why some say the moon?

Why choose this as our goal?

We choose to go to the moon

because that challenge is one
we are unwilling to postpone,

and one we intend to win.

There was a hype around it,

and I was getting kind of hyphy,
like a little, a little too much.

Too much. I was very scared.

- Yeah.
- It was a scary time.

When you're winning a lot at the casino,

you get the feeling of invincibility.

That's what I had.

It's a total game that's played.

The retail people decided to go ahead
and play it a little different.

In 30 seconds,
the price would change by 20, 30 dollars.

The activity levels
are absolutely extraordinary.

No one had ever modeled
for a wave of retail buying

that didn't care about
value, fundamentals, or price.

There is a hole in the system
that we immediately have to stop.

I woke up and then within an hour or so,

I was making like 50 grand.

This is unchartered territory.

History's first manned flight to
the vicinity of another celestial body.

It's become a Ponzi scheme

that has
gotten more than a bit out of control.

"We like the stock! We like the stock!"

I wake up and saw 90,000 on my portfolio.

My eyes are about to fall out

because I've never seen
that much lump sum of money

all at once in front of me.

It was up to like $650,000.

GameStop should not be at 400.

And people should sell.

This continues this morning
in a crazy way.

Fifty grand in GameStop at this price.
I don't give a fuck if I lose it.

Once it becomes irrational, you get out.

Is the retail investor jumping in
on this squeeze about to get burned?

It was just skyrocketing.
I'll do 100 grand.

Houston, we have a problem.

That morning,
I got on Robinhood,

I was gonna put another
like five or six grand in,

and I was like,
"Wait a minute, where's the buy button?"

We're seeing reports that Robinhood

is restricting purchases
of some of these stocks,

including GameStop.

Robinhood got rid of the buy button,

like you couldn't buy it.

You could sell it,
but you couldn't buy it,

everybody's like, "What's going on?"

If you can't buy,
the price isn't going up.

It's only going to go down.
Everybody started freaking out.

At that time, I was getting
bombarded by messages.

"Should I sell?"

I was like, "I have no clue."

This seems so wildly illegal.

Okay, so say I want to search GameStop…

They straight-up
took it out of the search bar.

Them delisting GameStop

is just the most blatant
market manipulation shit I've ever seen.

GameStop was a majority
of my portfolio,

and then it just went straight down,
and I didn't even have time to react.

It felt like a scam, right?

I was livid.

People will never get that moment back.

That was the most vulnerable time
for this squeeze to happen.

There's something bigger here.
Something that a lot of people

are still trying
to wrap their heads around.

I know there's a story
that it was retail vs. hedge funds,

but we don't know who was doing what.

We have a lot of information
about who lost money,

but we don't have as much
information, I think,

about who was trading when,

and who gained by pumping up GameStop.

Who's the puppet master in this?

There's something bigger
going on here, in my opinion.

Surprise.

GameStop's up about 5x from when
I uploaded those videos over the summer.

So right now
I need to step away from streaming,

spend some time with my family for a bit.

I'll be back. I don't know when.
I'm kind of unplugging completely.

Again, thank you to everybody.
I hope you've had a fun time,

and I'll see you around.

No one is financially incentivized
to tell the truth.

Let's find out
what's really going on here.

Investors who had lost big
on GameStop

were looking for someone to blame,

and Roaring Kitty
was starting to look suspicious.