Part 3:

Let’s take a look at a label that I gave DFV earlier: “folk hero”.

What is a folk hero? A folk hero is a real, fictional, or mythological person who exists in the popular consciousness as a hero. Folk heroes are usually ordinary people who are catapulted into the realm of the extraordinary to address some sort of injustice. Folk heroes are usually defenders of other ordinary people from forces that would try to abuse them. Folk heroes are also usually outlaws.

Especially in American culture, we associate folk heroes with doing things outside the law. Perhaps because of this association, many people have been wondering whether DeepFuckingValue worked outside of the law.

On the 29th of January, the SEC signaled that they were investigating the Gamestop situation. Market manipulation is a very serious crime. It’s defined as “a series of transactions in any security. . . creating actual or apparent active trading in such security, or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others.”

Basically, market manipulation is tricking people into buying or selling a stock.

If you look at his youtube channel, it’s not just a shameless p*mp of Gamestop. All of his videos encourage people to pick stocks on their own and have their own strategy, and most notably, he encourages people not to follow what he does.

“I don't provide personal investment advice or stock recommendations during the stream. Please understand that my style of investing is extremely aggressive and I take on a substantial amount of risk. It's likely my approach would not be suitable for you. If you're seeking personalized advice, I encourage you to sit down with a financial professional who can review your personal situation, financial background, and risk tolerance.”

In this disclaimer, DFV is warning his audience to not follow his trades.

But manipulation can also be based on information getting shared. If somebody is sharing verifiably false information about a stock in order to drive its price up, that’s manipulation too.

Now imagine there was a company that the entire world thought was going into the ground. It has poor financials, a revolving door of board members, and was hit especially hard because of a global pandemic.

Then all of the sudden, it starts to pick up steam on WallStreetBets, and the stock p*mps huge amounts. When the dust settles, you see one guy. This guy had been a fan of the stock when everyone in the world was against it, and he told other people openly that he was a fan of it.

With this point of view, I could see how it could be pretty tempting to label that guy as a market manipulator. Especially when all of the media was saying that guy behind the p*mp and d*mp, and that he was an evangelist for the stock.

But that label of “market manipulator” would come post hoc: you see the result, that this stock went up 1800% in a month, and you see him being glorified online, turned into a folk hero, and it seems simple enough to say that he caused it. But the fact of the situation is that he didn’t.

It’s not a crime to like a stock that other people don’t like. It’s not a crime to talk about a stock. In fact, he was being transparent and encouraging his followers to avoid exposing themselves to more risk.

DeepFuckingValue didn’t share false information about Gamestop. He didn’t d*mp all his stock as soon as it popped. He didn’t have any malicious intent. He believed, and he was right, that Gamestop was an undervalued stock. Everybody thought he was wrong, but he stuck to his guns, and now the government’s after him.