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Fred Weinberg: Redditors Are to GameStop What Trump Has Been to America

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Back when I ran my college radio station in the 70’s, my father was the founding dean of Bradley University’s College of Communications and Fine Arts. He retired as dean of engineering.

I ran a pretty good radio station, but I virtually never went to class.

Eventually, it didn’t matter whose son I was, I got fired by the powers that be — including my father.

Needless to say, I was pretty hot and I went to his office. He listened to me as I pled my case, waited politely until I was finished and then told me, “If you want your own [expletive] radio station, go buy your own [expletive] radio station.”

I did, but first took a detour to the floor at E.F. Hutton and then Dean Witter Reynolds to learn something about money — something I did not study in college.

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My late father gave me a book to read. The book, “Where Are the Customers’ Yachts? or A Good Hard Look at Wall Street” by Fred Schwed, was written in 1940 and it served a new E.F. Hutton employee well as a warning on what I was getting in to. With all due respect to Bradley University, I spent a few years learning serious lessons.

Then, I bought my own [expletive] radio stations.

To say that I used my time in the financial industry to learn something is a huge understatement. It was practically a post-graduate education in how the world really works. That’s not a college curriculum. I not only learned a lot; I found that creating things was fun.

So a year or two ago, I saw the startup of Robinhood and Stash. Buying and selling broadcast facilities, I have had more than a passing relationship with Wall Street and its offspring over the years.

Do you think the little guy has to be able to stand up to Wall Street?

So when these guys came along, I opened small accounts and made regular purchases of stocks — nothing fancy and certainly no day trading. I thought to myself, great! They were democratizing investing. Sort of the Southwest Airlines of investing.

I concentrated most of my purchases on the Ford Motor Company. Why? Well, the stock was inexpensive and very undervalued and they make a superior product. And, oh yeah, they were paying nearly a 10 percent dividend at the time. Put another way, my daily driver is a 1994 Ford Explorer with almost 400,000 miles on it. When I travel — a lot — I use Avis.

Any company that could make my Explorer — still on the road after 27 years — has to be a pretty solid company.

I accumulated a lot of Ford at prices ranging from $4.30 to $8, sold it when USA Radio needed some money, and I’m still pretty pleased with the commission-free transactions at both Robinhood and Stash.

Turns out that some other folks had a more sophisticated strategy. They saw big Wall Street players, hedge funds, going short on GameStop. So they suggested — out loud on social media — a great way to make money would be to buy GameStop — as many players as possible and squeeze the shorts.

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The result was that big-time “professional” traders at hedge funds were getting their teeth kicked in. It became an embarrassing story in The Wall Street Journal. And worse, most of this was being plotted out, publicly, in chatrooms on — gasp — Facebook and Reddit. Last week, I got this email from Robinhood:

An update on market conditions

Hi Fred,

It’s been a tough day, and we’re grateful to you for being a Robinhood customer. In light of the extraordinary market conditions this week, we temporarily limited buying for certain securities this morning. Starting tomorrow, we plan to allow limited buys of these securities. We’ll continue to monitor the situation and may make adjustments as needed.

Right. I’m betting that no matter what they told us, they were getting their butts kicked by the Wall Street establishment and they caved.

They picked the hedge funds which were trying to kick the snot out of GameStop as opposed to their own customers. And don’t give me that crap about shorting stocks bringing reality to the market. When the fight broke out, GameStop shares sold short amounted to more than 113 percent of the company’s total outstanding shares. That’s not “checking” the market. That’s manipulating the market.

Boy, I’m glad I got out of Ford when I needed the money.

How can I say that?

Well, for years, funds were put together by Wall Street royalty to allow the ultra-rich to do things mere mortals couldn’t do.

They are called lots of things but the most polite is hedge funds. One of those things they do regularly is to hammer a specific company’s stock by going short, that is, borrowing a company’s stock, selling it and buying it from those who want to unload when the stock has dropped enough. In other words, making money on the little guy’s back.

It used to be that the only defense was to find your own billionaires to have a battle.

Now, assuming companies like Robinhood don’t cave, there’s another way. A way that little guys like you and I can fight back.

And the Wall Street royal establishment is having a conniption fit. Almost exactly like the conniption fit the Washington establishment had over Donald Trump.

As they say on the east coast — or used to, anyway — film at 11.

Stay tuned.

The views expressed in this opinion article are those of their author and are not necessarily either shared or endorsed by the owners of this website. If you are interested in contributing an Op-Ed to The Western Journal, you can learn about our submission guidelines and process here.

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Fred Weinberg is the publisher of the Penny Press, an online publication based in Reno, Nevada (pennypressnv.com). He also is the CEO of the USA Radio Networks and several companies which own or operate radio stations throughout the United States. He has spent 53 years in journalism at every level from small town weekly newspapers to television networks. He can be reached at pennypresslv@gmail.com. You can subscribe, free, to the Penny Press weekly email on the website.




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