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Today in business news: GameStop’ shares are soaring, Budweiser is skipping the Super Bowl and Coke with Coffee is just the chaos we need right now. Let’s get into it.
Leave it to a Reddit day-trading mob to inflate a stock based on little more than spite.
GameStop is up more than 450% so far this year. The stock was extremely volatile on Monday — up 145% at one point and finishing the day 18% higher.
Even though the company is expected to lose money this year and next — because gamers can download new titles directly without going to the mall to buy them — there’s a spirited group of investors on the WallStreetBets subreddit propping the stock up.
Why? Because, the internet. Reddit is home to hordes of day traders who are doing battle with short sellers, aka investors who place bets that a stock will crash.
One of those short sellers is Citron Research, whose founder last week called GameStop a “failing mall-based retailer” and mocked the online traders fueling the stock’s rise. At the time, GameStop was trading around $40, and the Citron founder predicted it would crash to $20. Those Reddit traders pounced, and the stock surged. It’s now trading around $100.
Note to short sellers: I didn’t think I needed to say this in 2021, but internet mobs are unpredictable, ruthless, and relentless. The victory for GameStop’s Reddit bulls underscores the risk of betting against stocks — like GameStop and BlackBerry, another Reddit fave — that have a cult following. Never underestimate the collective power of bored Millennials with Robinhood accounts.
This year, the Budweiser Clydesdales, like so many of us, are staying home.
For the first time in 37 years, Budweiser is skipping the Super Bowl. Rather than spending millions of dollars on ads in which puppies and horses become BFFs, Bud is funding Covid-19 vaccine awareness.
The Super Bowl is, in normal times, a massive opportunity for companies that can afford a commercial spot. And Budweiser’s creative team pulls out all the stops to make tiny masterpieces (I literally can’t with the puppy-Clydesdale commercial from 2014.)
Budweiser isn’t the only big company skipping this year’s game. Coca-Cola and Pepsi are also declining to buy ads.
And it makes sense, both for the bottom line and for the optics. For example, Coca-Cola recently cut 2,000 jobs because of declining revenue. It’d be a bad look to lay people off and then spend $5 million on an ad. The beverage companies are reading the room — America is living through a trauma, and no amount of “buy the world a Coke” kumbaya is going to change that.
If you miss the classic commercials, I recommend rewatching that puppy ad about five times in a row. Maybe those Budweiser frogs from the mid-90s, too.
RELATED: Coca-Cola’s seemingly late entrant in the canned coffee wars, “Coke with Coffee,” launched Monday in the United States. It’s soda, and it’s also coffee but not as strong as coffee, which leaves me wondering when I’m supposed to drink it and why.
QUOTE OF THE DAY
“If anyone asked me what are my greatest career achievements in life, one is the creation of CNN, and the other is hiring Larry King.”
— CNN founder Ted Turner
CNN was only five years old when Ted Turner recruited Larry King to join the network. “I had no idea if CNN would be successful,” King later wrote. “But I liked Ted and figured it would be fun to go along for the ride.” The legendary journalist and longtime CNN host died Saturday at age 87.
WHAT ELSE IS GOING ON
- Google Maps will soon display Covid-19 vaccination sites.
- An important heads-up for iPhone owners: Apple is warning customers that its smartphones could interfere with medical devices, including pacemakers.
- Godiva is closing or selling all of its US stores.
- Got a package you didn’t order? It could be a scam.