In what has become the finance sector’s drama that won’t die, the Gamestop (GME) stock saga has endured into its ninth month. Much like at the start of the ordeal, traditional finance media outlets continue to ruffle their own feathers about the outlandishness of a social media community working together against established funds. CNBC’s Jim Cramer has been beating the drum against retail investors in the battle of Gamestop and was joined for an interview by SEC Chairman Gary Gensler, the nation’s top dog in regards to financial rule enforcement. When asked by Cramer if packs of investors on social media should be allowed to target specific positions, particularly funds in extreme short positions, Gensler chose to defend the retail investor.
While the conversation about the Gamestop ordeal was only a short portion of Cramer’s overall interview with Gensler, the SEC Chair made a point to stick up for the collection of retail investors that have spent months in a battle with hedge funds that placed bets against the future value of the video game retailer.
Cramer grilled Gensler about what limits should be set against individual retail investors working as a group via social media. Gensler explained, “I’m not going to speak to one specific company or issuer and so forth. But I think that people come into your, your show and they advocate either to buy or sell a security before we had television, people did it on radio and now we have various social media platforms. That’s, that’s sort of, that’s not only free speech but it’s part of what makes our capital markets robust that people can disagree and disagree using the medium of the day.”
Gensler made it a point to avoid commenting on any specific scenario or company, but his words do seem to indicate his friendly position towards investors who remain bullish on Gamestop in their plight against the hedge funds with short positions. If the first eight months of this ordeal have taught us anything, it is that there might not be an end to this battle in the immediate future.