The Epic v. Apple trial kicked off on Monday morning, and it’s already devolved into a giant, internet-fueled mess.
First, the court had issues getting both teleconference lines up and running, and even when they were humming along fine, everyone’s lines seemed to be unmuted. On the main line, one person chanted, “Epic Games! Epic Games!” Another chimed in, “I’m going to tell my mom, just don’t pick up the line,” while yet another offered this insightful commentary: “Tim Sweeney better know what he’s doing. If he messes up once, we won’t have iOS back. This call is live, by the way.”
The additional line suffered from the same audio issues as well. About 35 minutes into the hearing, while Epic’s legal team was still giving its opening statement, the audio suddenly cut out. Journalist Geoff Knightley’s livestream of the hearing buzzed with people typing “The audio went out” into the chat. But one audience member figured out he was unmuted.
“FORTNITE SUCKS,” that person yelled into the mic. “Yo, yo, yo, we can’t hear anything, bro. The audio died or some shit.”
The same audience member went on to question if anyone else could hear him. While everyone on the line was unmuted (another person listening in confirmed this), the same person continued his commentary: “Raise your hand if you think Sweeny is gay,” he said before adding “Man, I’m going to hell for this.”
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In August 2020, Epic Games purposefully violated its Apple App Store agreement by giving Fortnite players a direct payment method that bypassed the App Store. This is explicitly prohibited by Apple, as it prevents the company from receiving a 30% cut, which Apple takes from most app store transactions. But Epic didn’t just violate its agreement with Apple. It put on a showcase designed to put one of Apple’s business practices in a big, anti-trust spotlight.
Apple responded to Epic’s intentional rules violation by booting Fortnite from the App Store; in turn, Epic sued Apple, which brings us to today’s mess.
After about 10 minutes into the dead feed, the court got the audio working again. But it wasn’t long before the single-person peanut gallery chimed in again. “Please don’t free Fortnite!”
The lawyer continued on for a minute, but was quickly interrupted again by the same person breathing heavily into the mic and making what I can only describe as drunk train whistle noises before shouting, “Reddit, Reddit, Reddit.”
From there, a verbal tug of war happened. The second one of the lawyers started talking, the same person would scream incoherent babble into the mic, forcing the lawyer to stop. A second of sweet, sweet silence would ensue before the same person would start again.
As if this writing, it seems like the court finally figured out how to mute everyone. The court probably should have streamed this hearing on its YouTube page, like it’s been doing with other hearings, including others related to Epic v. Apple. Hopefully, they figure out these technical issues or decide to stream the audio to everyone for the rest of the hearing this week.
Otherwise, we’ll be treated to the same “insightful commentary” of audience members who sound like they should be in school instead of interrupting a court proceeding with animal noises.
Rumor has it the front page of the internet may be the latest online platform cooking up a social audio feature a la the voice-only chat app Clubhouse.
Reddit is quietly working on incorporating moderator-run voice chats onto the platform, a person familiar with the matter said in a Friday Mashable report. In an interview with the outlet, the source described the feature’s development as confidential and still in its early stages.
If this voice chat feature ever does see the light of day, odds are it’ll roll out under Reddit’s “power-ups” banner, an initiative the company launched last year to experiment with new subscription-based features specific to individual subreddits.
In its initial announcement, Reddit listed several examples of these features, called power-ups, such as the “ability to upload and stream up to HD quality video,” “video file limits doubled,” and “inline GIFs in comments,” among others. Subreddits can unlock these perks after enough of their members purchase monthly power-up subscriptions, with the minimum threshold for each community determined by its size.
At the time, Reddit made it crystal clear it wanted to hear from users for future suggestions.
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“The new experiment helps create a framework that allows us to add ‘nice to have’ features for subreddits,” Reddit said in its announcement in August. “We are starting with a few handpicked features and expect to add more as we get input from you and the communities that have opted into our early testing.”
Given all the buzz about social audio services these days, I suspect “voice chat” scored pretty high on the list of suggestions. Though I can understand why Reddit may want to keep things under wraps for now given how royally it screwed up trying to introduce chat rooms last year. TLDR: Reddit pushed out the feature with little forewarning and seemingly zero thought about moderation, as subreddit mods couldn’t opt-out of chats or control them. It was a disaster.
Reddit did not immediately respond to Gizmodo’s request for comment, but we’ll be sure to update this blog when they do.
Time will tell if this audio chat craze is a flash in the pan, but what is clear is that the landscape is quickly becoming crowded. Clubhouse has inspired several copycats since its launch in March 2020, with Twitter, LinkedIn, Slack, and TikTok’s parent company, Bytedance, all reportedly rushing to get in on the action with their own audio chat features. Facebook also began beta testing for its Clubhouse clone, a web-based Q&A platform that it’s calling Hotline, this week.
Dethroned 24-year-old influencer David Dobrik, who started out in the boozy man cave of YouTube and migrated to a more family-friendly neighborhood of D’Amelios, has now exited the photo-sharing app Dispo, which launched just three weeks ago.
Dispo, which Dobrik co-founded as “David’s Disposable,” has said that he’s left so as not to “distract from the company’s growth.” This follows a string of accusations of abuse against Dobrik and his “Vlog Squad,” including alleged sexual assault by one former member, and a subsequent sponsor exodus.
Dobrik, a 24-year-old Teen Choice Award winner, is known for stunts and shenanigans with a rotating cast of reality TV-style bros, which has reportedly earned him a $9.5 million mansion with a Hawaiian punch fountain and, once, a namesake Chipotle burrito.
In addition to cutting ties with his own company after less than a month, Dobrik’s corporate partners, including EA Sports, DoorDash, and HelloFresh, also gave him the boot over the weekend.
Other influencers have pointed out a history of bullying, misogyny, and racism in earlier Vlog Squad videos. One woman, speaking to Business Insider, alleged sexual assault by former Vlog Squad member Dominykas Zeglaitis for the purposes of a 2018 video. The woman, who says she was a sophomore at the time, claims that Zeglaitis supplied her alcohol.
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In the video, which has since been set to private on YouTube, the line between reality and spoof is vanishingly thin. “My buddy’s girl’s over to have a fivesome, so hopefully we’ll have a fivesome tonight,” Zeglaitis tells the camera. As a large group of girls enters, one says, “I have to let you guys know, I don’t really know any of you.” One can be seen led into a bedroom, while the group gathers outside the door to listen. At the end of the video, Dobrik tells the camera: “Dom just had a threesome, and I think we’re all…[laughs]…going to jail.” According to Business Insider, Dobrik removed the video at the request of the alleged victim but not before it had been viewed over 5 million times.
Last summer, former Vlog Squad member and influencer Seth Francois compiled a series of clips in which Dobrik’s crew treat racism as a joke—for example, using blackface and watermelon as punchlines. Dobrik remained silent after the video’s release. Francois later told the influencer-focused YouTube podcast, H3, that he’d been forced to perform non-consensual contact with an older comedian in a now-deleted 2017 video titled “HE THOUGHT HE WAS KISSING HER!! (SUPER CRINGEY).”
Also on the H3 podcast, former Vlog Squad member Nik Keswani also said that he felt that Dobrik exploited his rare form of dwarfism for comedy. He said Dobrik agreed when asked to stop, but Keswani added, “I knew that by saying that, I wasn’t going to be in the content anymore.”
After months of brushing off or ignoring calls for accountability, Dobrik issued a video last week titled “Let’s Talk,” less apology than an entreaty for followers not to abandon him. “Consent is something that’s super super important to me,” he says, in front of a Nickelodeon Kids’ Choice Award, adding that he always makes sure he has “approval” from people in his videos and that there are times “when a person can change their mind.” Referring to the “Seth situation,” a series of racist remarks and pranks, Dobrik says, “I missed the mark with that one.” He adds that he’s grown. “I don’t agree with some of the videos I’ve posted,” he says.
“David has chosen to step down from the board and leave the company to not distract from the company’s growth,” Dispo told Gizmodo via email. “Dispo’s team, product, and most importantly- our community- stand for building a diverse, inclusive, and empowering world.” Earlier this month, CNBC described “buzzy” Dispo as “the invite-only picture sharing app everyone’s talking about.” The idea is to replicate the disposable camera by removing editing functions and delaying “developing” time so that users can’t see photos until the following morning. Last year, the app received $4 million from Reddit co-founder Alexis Ohanian, who praised Dobrik as a “motivated visionary.”
Venture capital firm Six Seven Six, which led the seed round of investment for Dispo, said in a statement published on Twitter, “The recent allegations against David Dobrik are extremely troubling and are directly at odds with Seven Seven Six’s core values.” The firm said it is “in full support” of Dispo’s “decision to part ways with David.”
Soon after Business Insider published assault allegations against Zeglaitis, the venture capital firm Spark Capital announced that it was cutting off Dispo. HelloFresh, Dollar Shave Club, and EA Sports followed. Dobrik stepped down from the board before bowing out entirely.
A seemingly rogue MoviePass website bearing the same styling of the now-defunct movie subscription service generated speculation earlier this week that the company may be making a comeback. Or, it was an extremely silly prank.
It appears now that the latter is most likely the case.
While the site bears the same style and appearance of the original MoviePass logo, its domain name, “moviepass.ventures,” was registered only last month and seemed to be separate from a handful of domains previously known to be associated with MoviePass before it went under, including “moviepass.com.” Verified Facebook and Twitter accounts associated with the company last posted in 2019.
On top of that, nobody attached to MoviePass seemed to be affiliated with the zombie site, which currently only displays a countdown to a March 22 event and an email contact that did not respond to multiple requests for comment. Neither of the MoviePass co-founders contacted by Gizmodo immediately responded, the National Association of Theatre Owners did not seem to know what the site was about, and Unrealistic Ideas, the production company that’s working on a docuseries about MoviePass, told Gizmodo in an email, “Nothing to do with us!”
Tipsters who contacted Gizmodo after initial coverage of the mysterious website shared multiple theories about who could be behind the site. One observation noted by a reader and verified by Gizmodo is that the website’s background image is titled “i.moviepass.ventures/hero-fandor.png,” leading this reader to speculate that the streaming service Fandor might be behind it. The Fandor website also currently displays a message that it’s working on a “reimagined Fandor experience you’ll love.”
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Reached for comment, Fandor’s president Phil Hopkins responded that the company was “no longer affiliated with MoviePass, however we are excited about relaunching Fandor.” Cinedigm acquired Fandor earlier this year, and a revamp of the service was said at the time to be part of the company’s roadmap.
Several other tipsters floated theories about the “moviepass.ventures” website, but the most compelling evidence that the site was a hoax surfaced Thursday when a Twitter user with the handle @StonkGodCapital shared screenshots of what appeared to be a Discord exchange between users of the MoviePass subreddit—which describes itself as “dedicated to the discussion of all Movie Theater Subscription Services”—plotting a fake “MoviePass 2.0 relaunch” to boost community membership and tied to April Fools’ Day.
We’ve reached out to Redditor Merubokkusu and will update if we receive a response.
The same messages were captured in an unlisted YouTube video of the exchange shared with Gizmodo by someone who asked to be identified as “a concerned trader that did some actual due diligence on the situation.” Gizmodo viewed discussions about the plans to launch “moviepass.ventures” on the Discord channel that had several mentions of HMNY, or the stock symbol for MoviePass parent Helios and Matheson Analytics, including one comment that read, “HMNY to da moon.” A Reddit thread by a MoviePass subreddit moderator with a similar username as one of the Discord users behind the hoax conversation is full of chatter about HMNY as well.
It’s difficult to know whether commenters in these threads were hoping for a stock rally a la GameStop in earnest. Helios and Matheson Analytics filed for Chapter 7 bankruptcy last year, allowing a bankruptcy court trustee to liquidate remaining assets. HMNY hasn’t been worth anything since 2019 but did see a brief uptick in activity—though its stock traded still well below $1—around the time that the site surfaced. Speaking with Gizmodo over Hangouts, StonkGodCapital speculated that much of the commentary around HMNY was a joke, as no actual company functionally exists.
In other words, all indications point to a frankly elaborate hoax by a community of Redditors who hoped to grow the population of their active Discord channel about cinema. Ironically, that Discord is no longer allowing invite sharing, and the link on the MoviePass subreddit to join the channel does not work. StonkGodCapital theorized while “hilariously counter-intuitive,” members of the group may have gotten scared after discourse turned to taking “HMNY to the moon.” He said that some of the messages that were part of the initial conversation in his screenshots had since been deleted.
So unless some other, unforeseen development unfurls in the time between now and that March 22 countdown on the “moviepass.ventures” website—which is probably entirely possible given how silly this has all become—we are not getting a resurrected MoviePass. And thank god for that.
The WallStreetBets subreddit has helped drive $383,000 in donations to a gorilla conservation organization this week. The preceding sentence would have been barely intelligible even just last December, and yet here we are.
To quickly recap: In January, folks on the subreddit r/WallStreetBets captured headlines for buying up shares in GameStop’s stock as well as other oft-memed firms like AMC Theaters. A number of hedge funds had shorted GameStop, banking on the price of its stock plunging, which would, perversely, allow them to make money. The surge of Redditors buying Gamestop and others who wanted in on the investing frenzy caused stock prices to soar, though, screwing over the hedge funds shorting the company while also allowing some Redditors and individual investors to get very rich. (Some everyday people were also left very screwed.)
WallStreetBets folks have long referred to themselves as “apes”—it’s a kind of inside joke based on the memeification of Harambe, the gorilla who was shot to death in 2016 at the Cincinnati Zoo after a kid fell into his enclosure. Always ones to commit to a bit, they’ve been donating to efforts to save other apes.
Many have been donating to the Dian Fossey Gorilla Fund, an international charity devoted to funding the conservation, protection, and study of gorillas in Africa. The organization usually receives 20 donations in an average weekend from people looking to symbolically adopt gorillas, but since this past Saturday, it said it’s received thousands of adoption donations totaling more than $383,000. Many of the adoptions were made using fake names made to throw shade at hedgefund managers: A thread on the subreddit called “This MFer is probably is richer than me right now” shows certificates made out to “Jim Cramer’s Tears” and “Fuck Melvin Capital.” Yeah, this isn’t the systemic change we need to save endangered species, but it’s kind of tight considering gorillas are on the decline due to habitat degradation by industry, poaching, industry, and climate change.
This was such a big deal for the charity that its president and CEO Tara Stoinski (more like Stonksy, am I right?) recorded a video message specifically for the Redditors. The group also shouted them out on their webpage by adding the hashtag #ApesTogetherStrong and making a limited edition line of merch featuring it along the symbols for diamond hands. The slogan is curbed from a meme based on the movie Rise of the Planet of the Apes, but WallStreetBets members use to describe their collective action to outsmart rich hedge funders.
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The WallStreetBets Redditors have been donating to other animal conservation organizations, too. The Sheldrick Wildlife Trust saw a $10,000 spike in donations last weekend, including the adoption of an orphaned elephant in Kenya. Members have also sent money to the Orangutan Project and othercharities.
“Fucking love this community,” one WallStreetBets user wrote. “I mean, honestly, can you ever possibly imagine that somewhere on Wall Street or in Chicago they even have a tiny scrap of a post-it dedicated to anything more than just their own fucking money?”
As praises from celebrity investors and movie deals rained on the subreddit/memestock trading floor WallStreetBets, its two contingents of its moderators went to war, each accusing the other of profiteering off the community’s newfound fame. Now, those beaten in the squabble intend to start a competing community which will act like a “decentralized hedge fund.”
The bitter he said-he said started last month when a group of primarily-newer moderators (most visible among them, zjz, who joined last year) accused the veteran mods (who include only1parkjisung, who joined as a moderator around 2014) of coming back from dormancy to “cash in” on WallStreetBets’ sudden newsworthiness. Zjz wrote on February 5th that wsb had been “taken hostage” by the old mods who referred to themselves as the “board of directors”:
We’ve been taken hostage by the top mods. They left for years and came back when they smelled money. They’ve been busy creating private email addresses to funnel all the press correspondence away for their own gain, talking shit about all of the active mods, and scrambling to get paid from some movie deal.
“We had not left the group at all,” one former WallStreetBets moderator, positionsorban, told Gizmodo via Reddit chat. Positionsorban said that while the now-ousted group “did let zjz and his bots take over more and more of the day to day moderating,” they still “discussed wsb related issues daily,” posted, and awarded flair. Some, they said, “did things behind the scenes like organize AMAs with people like Benn Eifert and Mark Cuban.”
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Modwars aside, the defectors’ project “WallStreetBets 2.0,” is being pitched—with memes, naturally—as a blockchain-based DAO (decentralized autonomous organization), to allow WSB 2.0 users to pool tokens and split the profits of a collective bet. They write:
It’s time to build a new version of WSB. A decentralized version powered by smart contracts, where no one – not the mods, not Reddit – owns the platform. A place where you are financially incentivized to share your ideas and your memes. A place where you don’t need to trust anyone because you can view the public, audited, and immutable code. A place where millions of individuals can pool their money together to have more power and influence in the market than the largest hedge funds […] it’s time to stop betting against the house and become the new house
“Smart contracts” refer to self-executing contracts that are permanently traceable, with terms written in code and distributed across a blockchain network.They don’t say what the specifics of this contract might be, but we’re imaging users would vote on stock with DAO-issued tokens and decide when to exit their position, rather than relying on, for example, rocket ship emojis to sustain investor perseverance. Only1parkjisung told Gizmodo that they’re still working out details like potential fundraising, but say that at least half a dozen people, mostly “og mods,” are involved.
The idea isn’t new; in 2016, the original DAO raised over $160 million, but just days later, a hacker stole $50 million of DAO tokens (ether). As Stephan Tual, the COO of Slock.it which created the DAO pointed out to Wired at the time, it’s almost impossible to sell purloined DAO tokens on the cryptocurrency market, since all contracts are permanently recorded. But cryptocurrency exchanges delisted the DAO token nonetheless. To this day there are only a handful of companies in the space, and it seems clear there are more than few kinks to iron out.
The WSB 2.0 site refers to a tweet from former Coinbase CTO Balaji Srinivasan explaining how the concept would safeguard people from “bag holding” and further point to the ramblings of Mark Cuban, embedded in a YouTube video:
Just imagine if Wall Street Bets…instead of being just a forum was a blockchain-based forum where everybody put up one Ethereum, and everybody…took a half of it, you over-collateralized, and everybody contributed, and you looked to see how many participants you had on WallStreetBets blockchain. And then everybody voted on what stock to invest in. Everybody got a token to pick which one they invest in. And then…everyone agreed how often they would review that investment. Is it by the minute? Is it by the hour? By the day? And then you can put a council together where people can assign their voting because some people don’t want to deal with it every minute of every day. Now all of the sudden, that WallStreetBets forum is organized with blockchain-based governance, decentralized governance where the users get to vote? Oof.
“Without knowing the details, which they clearly haven’t filled in for us yet, it’s hard to tell whether their plan is likely to turn out well or not,” Andrew Miller, an associate director of the Initiative for CryptoCurrencies and Contracts (IC3), told Gizmodo via email. “But, could it be feasible? Sure!”
The premise isn’t actually that complicated, he claims. “The basic mechanism of a smart-contract based DAO is straightforward – the smart contract will define rules for how to vote on buy/sell decisions, how to collect funding contributions from participants, how to divide up control and voting rights among the founders and early adopters.’ But Miller added that a new team would be more likely to stumble over regulatory risks and buggy software—and that there’s no direct way to link smart contracts to the stock market yet.
WSB 2.0 would also need to overcome the hurdle of migrating the 9 million or so subreddit users from Reddit (a massive, popular, largely functional website) to their new, untested one—something several grievance-basedprojects have attempted with varying levels of success.
It might not help their case that the exiled mods have devoted part of their launch page to relitigating drama with their rivals (i.e. that another mod was monetizing WSB through t-shirt sales.) That said, they do provide evidence to support their claim that zjz misrepresented their intentions for what to do with any Hollywood money: the site includes both the cropped version of a Discord chat apparently used by zjz, as well as a more complete version indicating the money was earmarked for charity from the get-go. The charity assertion is also backed by text message screenshots obtained New York Times journalist Nathaniel Popper.
“Unfortunately, we have no comment at this time,” current WallStreetBets mods wrote to Gizmodo via DM. “We have a duty to the readers of r/wallstreetbets to to keep the subreddit clean and stable, and that means moving past the grievances of our countless detractors.”
We’ll leave the screenwriters to figure out the protagonists, I suppose.
The s0-called GameStonks saga had some help from automated bots hyping up “meme” stocks on Facebook, Instagram, Twitter, and YouTube, according to an analysis by the cybersecurity firm PiiQ Media reviewed by Reuters.
Users on the Reddit forum r/WallStreetBets teamed up last month to trigger a massive short squeeze of GameStop stock in a coordinated attempt to screw over hedge funds that bet the video game retailer’s stock would tank. After sending GameStop stock soaring 400% in a week, Reddit users set their sights on other beleaguered companies such as AMC Entertainment, Nokia, and BlackBerry to drive up the value of these so-called “meme” stocks.
U.S. regulators have since launched an investigation into short selling and online trading platforms, including Robinhood, the stock trading app at the center of a class-action lawsuit after it temporarily blocked users from purchasing “meme” stocks amid the buying frenzy.
In his testimony before Congress, Reddit CEO Steve Huffman said that, based on an internal analysis, bots and foreign actors did not play a “significant role” in the GameStop-related traffic on WallStreetBets, CNBC reports. However, an analysis by PiiQ Media, a startup that studies social media risks, found that bots on YouTube, Twitter, Instagram, and Facebook helped fuel the buying frenzy, although the scope of their influence remains unclear.
The firm studied patterns of keywords related to the GameStonks saga across posts and profiles from January through Feb. 18. These keywords included “GME,” the ticker symbol for GameStop stock, and “Hold the Line,” a viral call for investors not to dump their GameStop shares as prices began to come down from their historic heights.
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PiiQ Media found similar “start and stop patterns” among GameStop-related posts, with activity spiking at the beginning and end of each trading day—a pattern that’s indicative of bots, the firm’s co-founder and chief technology officer, Aaron Barr, told Reuters.
“We saw clear patterns of artificial behavior across the other four social media platforms. When you think of organic content, it’s variable in the day, variable day-to-day. It doesn’t have the exact same pattern every day for a month,” he said.
PiiQ Media estimates that tens of thousands of bot accounts participated in the campaign to hype up GameStop and other “meme” stocks. While the firm didn’t include Reddit posts in its analysis, Barr told Reuters he would expect to see similar patterns of bot-like activity on the platform.
When asked about the study, a Twitter spokesperson said “bots” have become an umbrella term for a range of online activity and pointed us to a company blog post debunking a few common misconceptions about bots and platform manipulation. They also shared the following statement:
“People often refer to bots when describing everything from automated account activity to individuals who would prefer to be anonymous for personal or safety reasons, or avoid a photo because they’ve got strong privacy concerns. The term is used to mischaracterize accounts with numerical usernames that are auto-generated when your preference is taken, and more worryingly, as a tool by those in positions of political power to tarnish the views of people who may disagree with them or online public opinion that’s not favorable.”
YouTube and Facebook did not immediately respond to Gizmodo’s requests for comment. We’ll update this blog if we hear back.
The U.S. Securities and Exchange Commission is also reportedly looking into the GameStonks saga for signs of illicit market manipulation and fraud. On Friday, the agency temporarily blocked trading in 15 companies over concerns that their stock prices were being artificially inflated, per a Bloomberg report.
“We proactively monitor for suspicious trading activity tied to stock promotions on social media, and act quickly to stop that trading when appropriate to safeguard the public interest,” Melissa Hodgman, acting director of the SEC’s enforcement division, said in a statement to the outlet.
It’s entirely plausible that retail investors or other interested parties tried to capitalize on the GameStop fervor with automated campaigns. But since the scope of their influence remains unclear, it’s anyone’s guess if these campaigns were a driving force behind the glorious fiasco or just another drop in the bucket.
Keith Gill, also known as “Roaring Kitty” on Twitter/YouTube and “DeepFuckingValue” on Reddit, is facing a proposed class action lawsuit for his role in the massive GameStop short squeeze orchestrated by Reddit’s r/WallStreetBets board, Bloomberg reported on Wednesday.
According to Bloomberg, the suit was filed by Hagens Berman Sobol Shapiro, a securities class action firm, on behalf of Washington state’s Christian Iovin, who sold $200,000 in call options on GameStop stock when it was worth below $100 a share. This proved to be a very bad bet, as users on r/WallStreetBet launched an organized effort to pump GameStop and other poorly-performing stocks, like AMC and BlackBerry, with nostalgia value that ultimately was quite successful. As major Wall Street sharks quickly got clued into and joined the Reddit-driven effort, shares in GameStop spiked to $483, spelling disaster for traders short-selling the company’s stock. Iovin was forced to buy back his calls at inflated rates as a result, according to the suit. GameStop now stands at $46 per share, still significantly higher at the beginning of 2021, when it was trading in the $19 range.
Gill was one of the leading proponents of the rush on GameStop on his social media accounts, and according to CNBC, posted to Reddit that he made at least $7.8 million on the company’s stock. The suit accuses him of not being some layman, but a licensed securities broker that deliberately manipulated the price of the company’s stock to get rich quick.
“Gill’s deceitful and manipulative conduct not only violated numerous industry regulations and rules, but also various securities laws by undermining the integrity of the market for GameStop shares,” the class action proposal said, according to Bloomberg. “He caused enormous losses not only to those who bought option contracts, but also to those who fell for Gill’s act and bought GameStop stock during the market frenzy at greatly inflated prices.”
According to the New York Times, the class action proposal cites Gill’s multiple broker licenses and also names MassMutual’s brokerage arm—where Gill worked until a few weeks ago, and which the plaintiffs claim failed to properly rein in his market activities. Times also noted that securities regulators in the state of Massachusetts are looking into whether his posts potentially violated the law or industry rules. (The Securities and Exchange Commission has issued vague threats to everyone involved involved in the speculative frenzy, including stock-trading app Robinhood, but hasn’t actually carried them out.)
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Gill is strenuously fighting claims he was trying to manipulate the market to his own benefit. The short squeeze was only possible because hedge funds like Melvin Capital had taken out greedily large short positions on GameStop, presenting an opportunity for investors to make big money if the stock rose while the hedge funds lost their shirts. The House Financial Services Committee is holding a hearing on Thursday over the whole r/WallStreetBets fiasco, with Gill scheduled to testify. Others scheduled to speak include Robinhood co-CEO Vlad Tenev, Reddit CEO and co-founder Steve Huffman, and Melvin Capital CEO Gabriel Plotkin.
In his prepared remarks to the House, Gill claimed that his position as Director of Financial Wellness Education at MassMutual had been totally unconnected to his side gig as a stock market commentator and that he had genuinely believed GameStop had “the potential to reinvent itself as the ultimate destination for gamers within the thriving $200 billion gaming industry.” Gill added that as of just a few months ago in December 2020, his YouTube and Twitter accounts had just a few hundred followers each and he did not believe he had the capability to sway markets.
“The idea that I used social media to promote GameStop stock to unwitting investors is preposterous,” Gill wrote. “I was abundantly clear that my channel was for educational purposes only, and that my aggressive style of investing was unlikely to be suitable for most folks checking out the channel. Whether other individual investors bought the stock was irrelevant to my thesis—my focus was on the fundamentals of the business.”
Gill added that “others will have to explain” exactly what happened with GameStop.
“Here’s the thing: I’ve had a bit of experience and even I barely understand these matters,” he wrote. “It’s alarming how little we know about the inner-workings of the market, and I am thankful that this Committee is examining what happened.”
Gill’s attorney, William Taylor, declined to comment to the Times, while MassMutual told the paper it is looking into the matter.
The House Financial Services Committee will hold a virtual hearing on Feb. 18 as part of its investigation into the coordinated effort by Reddit’s stock-trading community to drive up the price of GameStop stocks as a big middle finger to hedge fund managers.
The witness list includes some of the key players involved in theGameStonks saga, including Robinhood co-CEO Vlad Tenev, Reddit CEO and co-founder Steve Huffman, Melvin Capital CEO Gabriel Plotkin, and Keith Gill (aka Roaring Kitty), a Reddit user and YouTuber who reportedly helped kick off the buying frenzy, per a Friday press release from House Financial Services Committee Chair Rep. Maxine Waters. Additional witnesses may still be named, the press release states.
Last month, small-time investors on the WallStreetBets subreddit banded together to buy up GameStop stock in part to screw over hedge funds that made significant bets against the beleaguered game retailer. Their plan worked, and the value of GameStop’s stock skyrocketed by at least 500% while short sellers like Melvin bled out billions in estimated losses. According to the New York Times, Gill played a central role in getting the campaign off the ground by frequently tweeting and making videos about his investment in GameStop stock. At one point, his original investment of $53,000 in 2019 was reportedly worth roughly $48 million.
Gill and his fellow Reddit users flocked to the free online trading platform Robinhood to buy up GameStop stock before turning their sights onto other floundering companies favored by WallStreetBets. Robinhood is staring down severallawsuits and accusations of stock market manipulation after it abruptly blocked users from buying so-called “YOLO stocks” during the height of the social media-fueled stock market frenzy.
In January, Waters said the House hearing will “examine the recent activity around GameStop (GME) stock and other impacted stocks with a focus on short selling, online trading platforms, gamification and their systemic impact on our capital markets and retail investors.”
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The Senate Committee on Banking has also announced plans to hold a hearing “on the current state of the stock market” in the wake of the GameStonks saga. You can catch the House hearing live on its website beginning at 12 p.m. ET on Feb. 18.
GameStop’s stock has fallen back to something like a reasonable price and Barstool Sports founder Dave Portnoy claims he lost about $700,000, but the future of meme stocks is not yet written. And at least one New York-based quantitative fund seems to think there’s still a glimmer of gold to be found in the brain trust of r/WallStreetBets.
Cindicator Capital is the kind of investment fund that relies on software and algorithms to model investment strategies based on any number of disparate factors. In the wake of the WallStreetBets subreddit throwing hedge funds into chaos and driving stock prices to non-sensical extremes, Cindicator has posted a job listing on LinkedIn hoping to hire one of the Redditors to conjure up some unintuitive data points.
The listing, for a Sentiment Trader, limits its search to applicants who have at least a year’s active membership on WallStreetBets and at least 1,000 of Reddit’s goodwill karma points. Job seekers should understand probabilities, but “higher education in economics or finance” is disqualifying. “In-depth knowledge” of the language of the finance world and its mechanisms is required.
The rest of the listing gets more esoteric, saying prospects should display “unbiased thinking that defies authority,” and they will spend most of their time “on Reddit, Discord chats, and Twitter to feel the pulse of the tens of millions of retail traders.” Additionally, “a refined taste for memes and a sense of humour” is essential.
While it sounds like a joke or an example of trend-chasing that some recruiter will regret in the near future, the listing does make a certain amount of sense. The salary is $200,000 plus bonuses, which is a lot of money to me but not outrageous in the world of finance. A meme translator with an understanding of internet communities could easily contribute $200k worth of valuable intel when working with the right data scientists.
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If you’ve put in the work on Reddit and Robinhood and think you’re ready for the big leagues, Cindicator promises parties in Korea and a place to say at Burning Man when the pandemic’s over. But if you’re just a casual trader trying to get in on the next hot meme stock, take note that the masters of the universe don’t intend to get caught with their pants down again.