GameStop Is Just a Game

Of course the chart of GameStop Corp.’s stock price from yesterday is nuts. It closed on Friday at $65.01, opened yesterday at $96.73, got as high as $159.18 and as low as $61.13, and closed at $76.79. Almost 178 million shares traded, worth almost $17 billion. GameStop’s 10-day realized volatility is 308%. I am typing these words before the market opens on Tuesday, but by the time I send them the stock will have been trading for hours, and I am sure that it will have touched $4 and $4,000 and every number in between. It seems meaningless to talk about the price of GameStop stock, as though a single number could represent such an elusive concept. GameStop stock has all the prices at once.

Maybe the craziest thing in the chart is not the wild spikes up and down, but the flat lulls when no one was trading because the stock exchange wouldn’t let them. “The stock surged as much as 145% to $159.18 on Monday,” reports Bloomberg News, “triggering at least nine trading halts.” The theory behind a trading halt is basically that the stock has moved around too much, too quickly, for people to really mean it. The stock has gapped up or down because people aren’t paying attention: It is “really” worth $100 or whatever, and lots of people in the world would happily buy it for $100 and lots of other people would happily sell it at $100, but they’re all out at lunch and there are just a few algorithms trading the stock and they have accidentally pushed it down to $90. (Or up to $110.) So the exchange halts trading for five or ten minutes, so that everyone who wants to buy or sell has time to get back to their desks and put in orders. “This stock is trading at $90, that’s a steal,” people will think, if they have five minutes to think about it, and they’ll put in buy orders and push the stock back to its natural price when it reopens.