Radio host Rush Limbaugh called the on-going GameStop story "the most fascinating thing" to happen in a long time because it mirrors politics with elites trying to prevent ordinary people from benefiting – just like the political establishment has tried to hold down average Americans.
Robinhood, TD Ameritrade and others restricted trading on Thursday and Wednesday, respectively, following an unexpected surge in trading volume of shares of GameStop, AMC Entertainment, Bed Bath & Beyond, BlackBerry and others. Limbaugh feels the move was made to protect hedge fund billionaires.
"Folks, it’s not just political now. The elites are bent out of shape that a bunch of average, ordinary users have figured out how to make themselves billionaires," Limbaugh said on Thursday. "I’ve been studying it all morning and the best thing I can tell you is… whatever you think is going on in politics, Washington establishment, the Deep State, what have you, it’s the same thing in finance."
Limbaugh said there are "those who are allowed to make a lot of money" and those who can’t.
"If you figure out how to make a lot of money, and if you’re like Donald Trump and you figure out how to get elected, you figure out how to beat the Deep State, they’re gonna come and they’re gonna wipe you out," he said. "They’re gonna destroy you, and that’s what’s happening with GameStop."
Limbaugh then explained that a bunch of people on Reddit figured out how to "game the system" and turn the stock market in to a "profit-making device for themselves" but it came with consequences.
"In the process they are harming the intended winners in this financial circumstance and that would be the hedge funds out there. The hedge funds are supposed to be the ones making a lot of money. They’re not and they’re begging other hedge funds to bail them out," he said.
GameStock share prices instead spiked this week as retail investors, spurred by the online Reddit forum WallStreetBets, piled into the stocks. The volatility continued Wednesday as platforms like Robinhood and Interactive Brokers limited trading on certain stocks.
GameStop Corp. shares have risen by more than 1,900% since the start of this year, hurting market short-sellers. Shares soared from $17.08 a few weeks ago to $347.51 at Tuesday's close. GameStop's stock had been struggling for six straight years before a slight surge in 2020 and its most recent explosion.
Limbaugh said that the elite doesn’t simply call ordinary people racists, sexists and bigots any more when looking to shame Americans.
"Now they’re actually making it clear to anybody that has the ability to notice that you’re not allowed to use the stock market the way they do, you’re not allowed to profit, you’re not allowed to make the kind of money they do," he said, noting that the "elites" expect many perks.
"And the perks are, the ability to guarantee your kid’s financial future. The ability to guarantee yourself a financial future, the ability to guarantee yourself a position of some power, depending on who you are in the establishment, the club of elites, whatever you want to call it, and it extends to far more than just political," Limbaugh said. "This GameStop business now makes this something that is understandable beyond the political world and that is its value. It’s not just political anymore. It’s not just that you can’t think for yourself, on issues, and matters of politics… everything is rigged in favor of the elites and this has come along and set that rigging."
Limbaugh said that the establishment censors or cancels anything that doesn’t benefit the ruling class, whether it’s free speech or even attitude.
"Well now, with this GameStop story, and the revelations contained in it, the elites, the same people that were hell-bent on getting rid of Donald Trump, the same people are now trying to tell you what you can or can’t do with your money," he said.
GameStop had lost most of its charm among investors in recent years as a brick-and-mortar store trying to survive in an Amazon world, but a spike in video game purchases amid the coronavirus pandemic suggested that things might turn around for the video game retailer.
Meanwhile, a lone investor on Reddit, a social website on which users can discuss news and opinions, was promoting GameStop and suggesting users band together to short squeeze its stock, despite initially getting little interest from other investors, on a forum called WallStreetBets.
After the Reddit user then suggested a short squeeze, smaller investors exhorted each other online to keep GameStop's stock rolling higher as short-sellers were betting against it.
As a result, big bets short-sellers made that GameStop's stock would fall went wrong, leaving them facing billions of dollars in collective losses. In such bets, called "short sales," investors borrow a share and sell it in hopes of buying it back later at a lower price and pocketing the difference. GameStop is one of the most shorted stocks on Wall Street.
As GameStop's gains grew and short sellers scrambled to get out of their bets, they had to buy shares to do so. That accelerated the momentum even more, creating a feedback loop. As of Tuesday, short sellers of GameStop were already down more than $5 billion in 2021, according to S3 Partners.
Much of professional Wall Street remains pessimistic that GameStop's stock can hold onto its immense gains. The company is unlikely to start making big enough profits to justify its $22.2 billion market valuation anytime soon, analysts say.
Mobile brokerage apps faced outages on Wednesday and Thursday amid market volatility.
The Robinhood app, popular among new and young investors, restricted transactions for certain securities, including GameStop according to a press release. TD Ameritrade also restricted certain transactions.
Fox News’ Aubrey Conklin contributed to this report.