A GameStop store in Hollywood, California busy with customers waiting in line to enter the video game retailer on January 27, 2021.
AaronP | Farmer Griffin | GC Images | Getty Images
A longtime Redditor, Ben Kusin took a front-row seat in the latest GameStop saga. But he admits the story is a little too close to home.
Kusin has been on Reddit for over 13 years and is most active on r / WallStreetBets, the forum that spawned much of the historic surge in GameStop stock trading this week.
There’s a much more personal reason for his interest in GameStop: His father co-founded the company.
“It was worlds that collided when this collapsed,” said Kusin, 42, who lives in Los Angeles and is the co-CEO of a video streaming start-up called VENN.
Since the start of the year, GameStop shares are up more than 1,500%, bringing the company’s market cap to $ 22.7 billion. It has been among the most actively traded stocks on the New York Stock Exchange lately. The social media-driven rally has turned anonymous Redditors into multimillionaires and wiped out multi-billion dollar investors who had bet the stock would fall.
It’s a very different universe than Kusin remembers as a kid traveling to malls in the United States with his father to open stores. He even recorded the gameplay so the stores had demos to display on TV for their curious customers.
Left to right: Eric Kusin, Gary Kusin and Ben Kusin
Ben cousin
Kusin said in an interview earlier this week that he and his younger brother Eric wrote “drooping jaws in disbelief” as they watch a new generation of investors shake Wall Street up and share their favorite online forum The combine company her father helped set up.
“It’s especially funny for me and my brother that this is happening to GameStop,” he said. “There is a sense of pride like ‘Hell yeah!’ It’s so cool to see. “
Gary Kusin, her 69-year-old father, lives in the Dallas area. There he founded a software retailer called Babbage’s in 1984 with the support of the late Ross Perot. Babbage was soon selling video games for Atari and Nintendo systems.
In 1999 Barnes & Noble acquired Babbage’s. A year later, Barnes & Noble changed the name to GameStop and published it in 2002 under the ticker symbol “GME”.
By then, Kusin had disappeared after leaving the company in 1995. He joined the board of directors of Electronic Arts, started a cosmetics company that was acquired by Neiman Marcus, and later became CEO of Kinkos, which he sold to FedEx. Most recently, he worked for the private equity firm TPG for 13 years.
“Grabbed Popcorn”
Now Gary Kusin is mainly watching from the sidelines. In an interview, he said that Ben is the one who keeps him updated on the latest craziness at GameStop 26 years after he left the business.
“I’m much more of a spectator than a participant,” said the older cousin. “I just got some popcorn.”
He welcomed the WallStreetBets crowd and retail investors using apps like Robinhood for improving the status quo and called it “a small honor that they chose GameStop”.
Ben Kusin said he started watching the Reddit chatter about GameStop last summer when activist investor Ryan Cohen started buying shares in the company and eventually built up a 13% stake. Cohen was known for starting pet food company Chewy and selling it to PetSmart for over $ 3 billion in 2017.
From then on, WallStreetBets debated whether Cohen could help put GameStop, a sub-$ 1 billion market cap company that had been dumped aside like the rest of physical retail, back into order.
“He seems like the kind of person who could mess things up and maybe make something great of them,” Kusin said, recalling the tone of the comment from last year.
Kusin said that over time, Redditors had started posting on WallStreetBets about the short interest issue and that investors had been betting on GameStop’s failure at an incredibly high level. About 140% of the outstanding shares were sold short, meaning investors were selling short-term borrowed stocks that didn’t exist.
According to Kusin, what began as an old game retailer’s enthusiasm for a fresh start turned into outrage over the practice of short selling. Forum attendees had a clear opportunity to do something about it and make a lot of money in the process. Individual investors piled in the stock, forcing short sellers to buy back their stock at a loss to cover their positions.
GameStop shares this year
CNBC
Short sellers lost about $ 20 billion this month, including a loss of nearly $ 8 billion on Friday when the stock rose 68%, according to S3 Partners. After GameStop, retail investors moved into other stocks with strong short positions such as BlackBerry, AMC Entertainment and Bed Bath & Beyond.
“It’s kind of a battle between good and bad,” said Kusin. “At WallStreetBets, there’s a fundamental undercurrent that shorting is un-American.”
Kusin said that while he supported the spirit of movement, he didn’t take part in the GameStop rally.
“I’ve been so close for so long it’s almost sacrilegious,” he said. “Here you just sit back.” (His wife Marina Monroe bought a stock. It went up $ 50 and said she wasn’t selling.)
However, Kusin does not stay away entirely. He said he bought shares in space tourism company Virgin Galactic, another name that has been severely shorted. He called it a “good company with a good brand promise” and said chairman Chamath Palihapitiya was “one of the brightest people.” Virgin Galactic’s shares are up 87% this year.
Like his colleagues at WallStreetBets, Kusin was furious about Robinhood’s decision on Thursday to stop buying GameStop stock. Vlad Tenev, CEO of Robinhood, told CNBC that the company must take the proactive step to “protect the company and our customers” as capital requirements are regulated.
GameStop shares fell 44% Thursday, and Robinhood users said the company bowed to Wall Street pressure.
“You protect your disadvantage and not the advantage of the retail trade,” said Kusin in a follow-up interview. “When people say the game is rigged, they mean it.”
As much as Kusin enjoys his time at WallStreetBets, he said he preferred not to reveal his Reddit grip. He gave a well-crafted reason that only an insider could understand.
“Reddit has beauty in anonymity,” he said. “And I’m glad to be just another Redditor on the never-ending quest for tendies.”
In Reddit-speak, tendies mean gross profit.
CLOCK: GameStop skyrockets as retail investors force a brief squeeze
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