GME Stock Is Rising Because ConstitutionDAO Lost Its Bid… to Ken Griffin

Retail investors are capping the week off with some bad news. An archnemesis to the meme stock army, Ken Griffin, is making off with one of the 13 original surviving copies of the U.S. Constitution. Adding salt to the wound is the fact that Griffin’s biggest opponent was a group of investors pooling crypto to put the document in the hands of the people. It seems the response to Griffin’s purchase is an influx of interest in GameStop (NYSE:GME), and GME stock is on the rise as a result.

Retailers walk past a GameStop (GME stock) store in New York City, New York.

Source: Northfoto / Shutterstock.com

Ken Griffin Draws the Ire of Retail Investors

Ken Griffin has a contentious relationship with retail investors. As the CEO of Citadel, LLC, he came to be an enemy of those who bought up GME stock early in the year. Citadel’s sibling company, Citadel Securities, is the largest market-making partner of Robinhood (NASDAQ:HOOD), which investors soured on after the platform halted trading of GME and other heavily shorted securities.

While Citadel is vocal about the fact that it was not hugely affected by the rapid appreciation of GME stock, it still spent billions to bail out fellow hedge funds at risk of going under from their short positions. Combined with its close relationship to Citadel Securities, the hedge fund became an obvious target for retail investors.

It’s worth noting through all of this, there is some extra drama and conspiracy at play. Investors believed the stock’s upward momentum was the result of the retail community forcing hedge funds to cover their naked short positions. The U.S. Securities and Exchange Commission has since stated that it doesn’t believe that any type of naked shorting or short squeeze occurred. Rather, it asserts the momentum was entirely retail driven. It labels these theories as conspiracies. Nonetheless, Ken Griffin and Citadel remain symbolic of the Wall Street powers that be.

Did Ken Griffin Just Cause a Rally in GME Stock?

Today, a new group of investors are feeling punched down on by Ken Griffin. The Constitution Decentralized Autonomous Organization, or ConstitutionDAO, lost its bid on a piece of history to Griffin. In what appears to be a bout of revenge buying, traders are pumping the value of GME stock back up.

One of the 13 original surviving copies of the U.S. Constitution was auctioned off by Sotheby’s this week. ConstitutionDAO formed as a way to get this important document into the hands of the everyday people. In the blockchain industry, a DAO is a sort of democratic body. Through participating in a DAO, users can vote on the direction in which the body moves. DAOs have no central authority; when a developer creates a DAO, they step back and cede power to make the most truly democratic organization possible.

ConstitutionDAO was an attempt by investors to work together and obtain the document. It was sure to go for millions of dollars on auction; the DAO is a unique way to help people who weren’t in the elite of society find ownership in it. 17,347 donors contributed to the ConstitutionDAO, with a median donation of over $200.

ConstitutionDAO Falls Short of Goal

Unfortunately, this effort just wasn’t enough. Griffin bid over $43 million on the document and won the copy of the Constitution yesterday. As a result, Griffin is drawing ire yet again from investors who feel that they can’t catch a break. Funnily enough, it seems to be leading to a renaissance in GME stock.

As news of Griffin’s victory breaks today, investors are turning back to GME stock. The influx of buying in GME on an otherwise newsless day for the company serves as a cheeky insult to Griffin. The stock is closing out the day up 9%; about 3 million shares are trading hands against a daily average of 2.8 million.

On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2021/11/gme-stock-is-rising-because-constitutiondao-lost-its-bid-to-ken-griffin/.

©2022 InvestorPlace Media, LLC