GameStop: how Ja Rule became the unlikely voice of a cryptocurrency revolution

Reddit users are increasing the electronic company's share price, and the rapper's emerged as a would-be financial oracle. Just don't mention Fyre festival

There is a moment to sack your financial advisor, and that moment is when they break off from a meeting about your complex investment portfolio, saying, “I’m going to need to consult my line manager on this,” pick up the phone and ask to be put through to Ja Rule.

The rapper, whose offer of a $12,000 experience of a lifetime at the Fyre Festival famously turned out to be a fight for shelter on an abandoned building site in a monsoon (soggy cheese sandwich optional), is perhaps not the best person to take advice from on how best to manage your GameStop shares.

Yet Rule was front and centre on Twitter as online investment app Robinhood stopped investors buying the electronic retail company’s rocketing stock, hollering “hold the line!” as the price – which had reached an astronomical $347 from a dip of $13 mid-December – plummeted 60 per cent as a result. His thinking – call it Ruleonomics – is sound: that if all of the Reddit raiders who united to buy up the ailing company’s shares en masse simply held onto them, then the price would remain stable. But, once again, it implies a man dreaming of a long-term of cocktails with Kendall Jenner on Pablo Escobar’s private island, no risk involved.


First, let me try to explain the GameStop story without turning NME into one of those business newspapers you dump your umbrella on on the bus. Basically, the six million-strong subreddit group r/WallStreetBets has stumbled onto the opening stages of what the cryptocurrency world calls a ‘pump-and-dump’. In the Wild West of crypto, where such activity doesn’t come with a hefty fine attached, a ‘whale’ with a huge amount of investment weight might buy up large quantities of some cheap new coin and start ‘hyping’ it, thereby driving up the price.

Once other investors have jumped on board and increased the price still further, the ‘whale’ dumps all its stock for a huge profit and the price of this unremarkable coin plummets back towards its original level. Think of it in terms of ‘interest in Jack Garratt’ and you’ll get the drift.

The ‘pump’ part is how many growing businesses manipulate the stock market to their own advantage too, buying up their own shares to encourage investment and manufacture the facade of ‘success’. And this particular pump was fascinating to watch. It attacked the short sellers, those hedge funds and investors with the most brimstone hearts; they borrow stock in fading businesses, sell it, then buy it back when the price falls, bagging a hefty profit. They aren’t all Christian Bale being moody in The Big Short; they’re often reprehensible creatures akin to vaccine email scammers or anyone who’d even consider running a private cancer service for personal gain. They’re the Martin Shkrelis of the banking world.

So to watch them lose billions on GameStop’s ascendance, while everyday punters made a killing, was tough justice indeed. An exploding Death Star, Sauron’s fall, Ben Howard having his 2013 Male Solo Artist Brit Award forcibly requisitioned and handed to Richard Hawley. Yet Robinhood’s shutdown on Reddit’s buying frenzy on Friday, temporarily halting purchases of GameStop shares to protect those short selling hedge funds (even now, Robinhood users can only buy one GameStop share each) was arguably even more important. That exposed the hidden truth behind the capitalist philosophy: it’s run by and protects those with capital, and shuts out those without.

The shutdown however, also provided a window for a unified exit strategy. So far, it appears that Reddit has mastered the pump, but has no concrete plans for the dump. By now it’s likely that the battered hedge funds have either taken their hit or resolved to bunker down and weather the price storm, so a form of stalemate has been reached.

Unless GameStop uses its unexpected rush of investment to remodel as a hugely successful company – rather than cash in its windfall and go ahead with its plan to close 450 stores this year – we’re left with the equivalent of six million web nerds carrying a dead racehorse around an Aintree with no finish line. And, as the price gets heavier and the exchanges force them to carry it on fingertips alone, how long can they keep running?


As I discovered when I leapt on the 2017 crypto wave mid-swell, it’s the latecomers who get left high and dry. A company having their shares artificially pumped by over 1,600 per cent looks like a sure bet, but if you’ve heard about it on the news, chances are you’re already too late. Those people now buying what little stock they can are getting vastly overpriced shares after the serious money has been made, risking a painful yet righteous ride back to $13 or worse.

Ja Rule’s “hold the line” policy has more logic behind it in these unprecedented circumstances. Because a short seller has to buy more shares if it decides to cut its losses (to pay back its lender), the price shoots up – some Reddit users are predicting that such a ‘short squeeze’ on all of GameStop’s shorters could see shares top $30,000. I’d love them to be right, to see GameStop stock keep mooning indefinitely and for everyone involved to get Grimes-level rich forever.

Online commentators are talking up GameStopGate as a financial revolution, a grassroots fight back against the banking system that got bailed out for causing the 2008 crash which devastated millions of lives. A little guy uprising that could democratise finance, decentralise transactions and force the world’s power brokers to consider the humans behind the account balances at last. A noble purpose indeed, and you underestimate money-Reddit’s collective desire to make the banks pay for their actions in the same way you might underestimate Colleen Rooney’s deductive skills.

CREDIT: Alessia Pierdomenico/Bloomberg via Getty Images

Yet with regulators already clamping down and politicians beginning to weigh in, holding on to shares might make people some more profit short-term, but runs a serious risk of big losses down the line. The crypto experience has taught many of us to expect a peak – maybe today, maybe next week, maybe a month or so from now at some wild multiple of the current price – followed by a decline, however steep or gradual, that leaves those arriving now and holding on for dear life as (relatively speaking) the biggest losers of all. I mean, your auntie still has that Jack Garrett album, right?

Ja Rule might well be right about one thing, though. “I think this is going to drive people more toward decentralised markets,” he told Rolling Stone, predicting “a victory for bitcoin”. Already, when Robinhood restricted GameStop transactions, we saw the Reddit rebels shift their profits over to crypto exchange Binance to pump Dogecoin, a similarly lame-duck cryptocurrency that was created as a joke, to 1,000 per cent of its previous price. Here, though, they showed signs of a co-ordinated ‘dump’, ditching Dogecoin for Ripple once they’d made their money.

Applying the same approach to GameStop stock might help to limit Redditers’ own community’s potential long-run losses, even as it risks condemning a company they hoped to save, as if they’d clubbed together to hire the wrecking balls themselves. By taking on disaster capitalism, Reddit might even have created its own new form of destruction capitalism.

In the meantime, there’s a war of attrition at play that’s not so much David vs Goliath as Goliath vs six million micro-Davids who all need to pay their OnlyFans bills at some point. And it’s not just making investing in misery far riskier and challenging the manipulative, self-serving foundations of the financial establishment – it’s waking the world up to the fact that capitalism is a game rigged against us all, in which the little guy isn’t supposed to win.

And the fight against that is a line Ja Rule should definitely hold.

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