The meme-stockers were onto something
Photoillustration: Getty Images; Protocol

The meme-stockers were onto something

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Good morning! This Monday, it’s just another day on Wall Street. Let’s see what we’re in for this week. Hello, I’m Owen Thomas, and I gleefully stole the idea for this newsletter from an offhand comment by David Pierce in our Friday morning news meeting. Thanks, David!

Everything is a meme stock, and the economy is a lie

Don’t load Yahoo Finance’s homepage right now unless you’re looking to actualize an exploding-head emoji. Stocks are down, except when they’re up! There are more people getting jobs and more people unemployed! Amazon just took every dollar of market cap Meta just shed, with a little extra left over for Snap!

Sometimes writing about the stock market feels like a fool’s errand. The best expression of this can be found in “The First Totally Honest Stock Market Story,” an anonymous piece of financial-journo apocrypha shared by Wall Street Journal columnist Jason Zweig in 2018. The meme-stock movement has only made things more wild.

  • There is a long tradition of arguing about whether the price of a stock is signal or noise. “A Random Walk Down Wall Street,” economist Burton Malkiel’s 1973 book, whose 50th anniversary edition is coming out later this year, neatly summarized the academic thinking that “the market prices stocks so efficiently that a blindfolded chimpanzee throwing darts at the stock listings can select a portfolio that performs as well as those managed by the experts.”
  • If there’s any way to understand the meme-stock movement, which peaked along with the price of GameStop shares just over a year ago, it’s this: Gimme a blindfold and some darts, baby!
  • Meme-stock trader George Adams told CNN Business he’s lost $400,000 of the $900,000 he made, but still felt comfortable quitting his job to day-trade. There are many Adamses out there, but not all have been so lucky.

Maybe the meme-stockers aren’t that wrong. A share represents a claim on a business’ future earnings, so at its heart, the stock market has always been about putting a price on dreams.

  • There are a couple of ways to look at the recent drop. One is that investors have started to discount how much money companies will make in the future. Another is that they’ve switched from estimating companies’ potential to generate value to fretting about their ability to hold onto it.
  • One of Malkiel’s investing rules is to “never pay more for a stock than its firm foundation of value.” But as we move into the crypto-fueled Web3 metaverse, what is value? What’s a firm foundation? It’s all up for debate, and increasingly a stock represents people’s beliefs about people’s beliefs about people’s beliefs.
  • Take GameStop, which has incredibly held onto a good portion of the market capitalization that accrued to it in last year’s trading frenzy. It’s now venturing into NFTs — which is not much of a stretch, when you consider that the business it’s shedding involved pieces of plastic encoded with digital bits that, combined with some more plastic and silicon, generated a fantasy world. Take out the messy atoms and you’re pretty much in the same business.
  • Malkiel has a rule for this, too, one that’s very apropos: “Look for stocks whose stories of anticipated growth are of the kind on which investors can build castles in the air.” Humans are storytellers, and “story stocks” — with company leaders who can spin convincing visions of a profit-gushing future — are just a more polite term for meme stocks.

The collapse in stock prices is no joke if you were about to retire, of course. Though in that case, the conventional wisdom is that you should have already shifted your portfolio from stocks to cash and bonds.

  • But as you may have heard, there’s a superbubble deflating, and bonds have taken a hit along with stocks. Cash? Set to be eroded by inflation. There’s no safe haven.
  • There is a real risk to the economy, that the drop in asset values will make consumers feel less secure in spending.
  • But corporations and household debt levels are actually historically low, as people stashed away savings while waiting to see how the pandemic played out. If anything, there’s pressure on companies to spend more.
  • The sudden flow of money out of Meta stock and into Amazon and Snap is instructive: There’s a ton of cash on the sidelines, and when one asset gets sold down, that’s just more cash looking for a home. (For what it’s worth, Malkiel recommends inflation-hedged I bonds.)

So what should we make of this deeply chaotic stock market? Take a breath, for one, and maybe don’t cancel your dollar-cost averaging retirement plan just yet. The shift to higher interest rates will have effects that ripple through the economy, and the markets will likely digest those changes in sudden, spasmodic shifts, not a smooth progression. If that still gives you anxiety, how about putting on a blindfold?

— Owen Thomas (email | twitter)

On the calendar

Crypto Regulation: From buyer beware to federal oversight

How do you regulate a $3 trillion industry? Join Fintech reporter Benjamin Pimentel and an expert panel of speakers as we explore the future of crypto regulation at 10 a.m. PT Wednesday. RSVP here.


Samba TV operates the world’s largest independent source of first party connected TV data helping brands, agencies and content owners to plan, buy and measure all in one place. The State of Viewership report offers the industry’s most accurate insights into television viewing and advertising engagement. Download the report at

Learn more

People are talking

Joe Rogan apologized after a video compilation of him saying a racist slur circulated:

  • “Whenever you’re in a situation where you have to say, ‘I’m not racist,’ you fucked up. And I clearly have fucked up.”
  • Rogan also removed a number of episodes from Spotify.

But Spotify's Daniel Ek said Rogan's not going anywhere:

  • “I want to make one point very clear — I do not believe that silencing Joe is the answer."

Brian Armstrong said Coinbase will take “moderate action” for taking content off its platform:

  • “My hope is that we’ve laid out some principles we can fall back on when difficult decisions arise.”

The metaverse will simply be too big for any one company to dominate, Unity's Timoni West said:

  • "While all the companies are putting all their resources into getting their particular stronghold... it will get too big for any one company and it’ll kind of explode out again."

Coming this week

It’s DeveloperWeek. The virtual event is all about the latest developer tech, platforms, tools and technical management.

The latest episode of Microsoft Envision starts tomorrow. This one will focus on tech for frontline workers, and the manufacturing and retail industry, among other topics..

Lyft and Uber are expected to report earnings tomorrow and Wednesday, respectively. Their reports follow a couple weeks of Big Tech earnings.

The first Starship update in a couple years will be at 9 p.m. ET on Thursday, Elon Musk said.

In other news

Meta is threatening to pull Facebook and Instagram out of Europe if the company and the EU can’t come to an agreement over data sharing.

Amazon and Nike might be interested in buying Peloton, and it looks like investors liked the rumors: Shares of the company shot up around 30% in after-hours trading Friday.

OneWeb's founder is back in the space internet race. Greg Wyler's new company is E-Space, and it plans to put 100,000 satellites in orbit in the coming years, with a focus on commercial and government services.

Wag’s developer, Wag Labs, is going public. The dog-walking app’s owner will be valued at about $350 million after merging with a SPAC.

Meta is trying to stop harassment in the metaverse. The company is adding a “personal boundary” feature in Horizon Worlds that gives users a 2-foot radius of personal space, and it’ll be turned on by default.

We now know the names of two of the guys behind Bored Ape Yacht Club. People have grown increasingly interested in their identities, especially as criticism around the art grows.

Twitter’s downvote button is here. You won’t be able to see whether someone downvoted your tweet, just like the author of a tweet won't know if you downvoted.

Twitter is also exploring a new way to DM: directly from a tweet. But some users think it’ll make harassment even easier.

After the show it's the Afterparty

NFTs aren’t all Bored Apes and video game skins. NFTs are also being used as exclusive keys to exclusive clubs. Or in Afterparty's case: keys to the kingdom.

Protocol’s Nat Rubio-Licht attended a party at the Afterparty House, a mansion in Hollywood Hills that overlooks the LA skyline and serves as a gallery and community space for the NFT company Afterparty. On the night Nat attended, the company’s Utopian collection was on display, and several people were undergoing an almost sacred ceremony to claim their own NFT.


Samba TV operates the world’s largest independent source of first party connected TV data helping brands, agencies and content owners to plan, buy and measure all in one place. The State of Viewership report offers the industry’s most accurate insights into television viewing and advertising engagement. Download the report at

Learn more

Thoughts, questions, tips? Send them to, or our tips line, Enjoy your day, see you tomorrow.

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