A GameStop-Like Short Squeeze Has Happened Before In Eve Online
GameStop has been at the center of the financial news for the last couple of days, though not for offering better trades on old games. Instead, Reddit users have banded together and started purchasing mass amounts of the company’s stock, resulting in a relatively unique situation. However, this isn’t a new phenomenon, as it has happened before—in Eve Online.
If you’re wondering why GameStop is at the center of the news, it’s a little bit complicated. However, an example can be seen in the “stock markets” that exist within video games. One of these stock markets has existed within Eve Online and can shed some light on what has happened in the real world—without the billions of dollars that were transferred.
Speaking with GamesBeat, CCP CEO Hilmar Petursson talked about some of the short squeezes that happened in Eve Online. “We had forms of short squeezes happening in the economy of Eve Online,” Petursson said. “It was kind of a form of what’s happening to GameStop right now.” Unfortunately, Petursson didn’t offer any specific examples of when a short squeeze happened in Eve Online.
However, we do know that Eve Online offers players the ability to recreate things like the stock market in-game—though such a thing hasn’t been of particular interest during the game’s 17-year history. Of course, thanks to the times that an in-game stock market did exist, we know how a short squeeze works.
A short squeeze can happen when a bunch of people start buying a lot of something. Let’s say that it’s an in-game resource that isn’t typically traded between players. When the price of that resource starts to go up, more and more people buy in, thinking that they can sell later and make a profit. Buy low, sell high is the name of the game, so when a player in Eve Online decides that they’ve made enough, they will sell that resource and the price will drop—effectively transferring money from one player to another.
Such is the case with GameStop stock.
With GameStop, though, we are talking about millions of real-world dollars that are at stake, not a resource inside of a video game. The situation has attracted the attention of the US Government and has prompted congresswoman Alexandria Ocasio-Cortez to take to Twitch to discuss the situation. Time will tell how long the short squeeze will go, and what the repercussions are, but for now, you can look at examples in video games to see what the fallout could be.
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Michael spent some time owning and running a bar. He is currently living on wheels with his wife, playing video games, guitar, and watching Pewdiepie comment on memes. #Floorgang
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