Money Stuff will be off tomorrow, back on Monday.
Every meme-stock story is about two things:
- Memes, and
- 2. Limits to arbitrage.
Sometimes the memes are what get things started, and the limits to arbitrage are what keep the meme alive. A bunch of people on Reddit will decide that they like a stock because its chief executive officer does funny stuff online, and they’ll buy the stock and it will go up, and hedge funds will say “this stock is too high, we should short it,” but then they won’t because it is too hard to short the stock. Other ...