28 minute read
The Hawk staff urges community members to follow COVID-19 safety
from February 4, 2021
by The Hawk
DEVIN YINGLING ’22
News Editor
The university expanded its testing procedures this semester by mandating pre-arrival COVID-19 testing for all residential students, in addition to on-site entry testing for all undergraduate students. Weekly surveillance testing will be conducted as it was during the fall semester among undergraduate students, according to a Jan. 29 university announcement.
Residential students obtained self-swab nasal test kits by mail ahead of their arrival and were instructed to follow the step-bystep instructions to collect a sample. Students had to send their sample to the testing lab on the same day they collected their sample. The university needed to receive students’ results no more than 72 hours prior to their arrival time. After moving into their residence halls, residents were required to take a follow-up self-swab COVID-19 test on campus. The tests were provided through Color, a genomics and testing company partnered with St. Joe’s. Color will continue to provide surveillance testing services.
At the beginning of the fall 2020 semester, the university only mandated one-time on-site entry testing. The university received approximately 4,600 tests by the Aug. 28, 2020 deadline to take a test, as reported in the Sept. 2 issue of The Hawk. On-site campus testing was highly recommended at first in the fall, but was made mandatory after approximately 2,000 community members completed a test.
Other universities in the greater Philadelphia area are expanding their testing programs this spring as the number of confirmed COVID-19 cases in Philadelphia is now over 100,000, according to the Pennsylvania Department of Public Health. Villanova University, for example, implemented pre-arrival testing for all students and is continuing surveillance testing from last semester. Villanova now reports 262 active COVID-19 cases as of Feb. 2, according to their university dashboard.
As of Feb. 1, St. Joe’s reported 26 total positive COVID-19 tests through the entry-testing program, according to the SJU Dashboard.
The Hawk reached out to Jill Bodensteiner, chair of the university’s testing working group, for the total number of pre-arrival and entry tests administered so far this semester. In response, Gabrielle Lacherza, public relations and communications specialist, wrote in response to written questions from The Hawk that “all available testing and case data is provided through the University’s dashboard.”
The dashboard does not list how many pre-arrival tests were submitted by residential students, how many entry tests have been conducted thus far or how many positive cases were determined through pre-arrival testing. As of Jan. 29, there are a total of seven isolation and quarantine housing spots occupied, and the dashboard will reflect a daily snapshot of available spaces to isolate and quarantine beginning on Feb. 8, according to Lacherza.
Entry testing on campus, originally scheduled to conclude on Jan. 26, has been extended to Feb. 2 and Feb. 3. This is to “allow additional community members, especially voluntary testers, the opportunity to participate” in testing procedures, Lacherza wrote.
Faculty, staff and graduate students were encouraged to do on-site testing but were not required to complete tests.
Cary Anderson, Ed.D., associate provost and vice president of Student Life, said the university decided to implement pre-arrival testing per the guidance of “available science, public health indications and our experience from the fall semester.”
According to the Centers for Disease Control and Prevention’s (CDC) health and safety recommendations for institutions of higher education, “Symptom screening, diagnostic testing and contact tracing are some of the strategies that can be taken to slow and stop the spread of COVID-19.” The CDC also lists, in addition to masks, social distancing and hand washing as mitigation methods.
Jeffrey Morris, Ph.D., professor of biostatistics and the director of the biostatistics division at the University of Pennsylvania, said the keys to stopping the spread of COVID-19 in larger populations include pre-arrival testing combined with entry testing, continued systematic testing and enhanced contact tracing protocols.
“The forest fire analogy is a good one because this virus spreads so fast that when it really gets going in a closed population, it does get to become like a forest fire that’s hard to manage, but when it’s just starting, it’s a spark, and there are little brush fires,” Morris said. “If you find it then you can put it out. You can isolate it, and it won’t burn the forest down.”
Anderson said because most transmission last semester was identified within the residential student population, those students were selected to complete pre-arrival testing as a preemptive isolation strategy.
Maura Farrell ’23 was a residential student in the fall and decided to continue living on campus for the spring semester. Farrell said implementing both pre-arrival and entry testing eased some of her worries about moving back.
“Knowing that the people you’re living with were negative coming in, and then re-testing and knowing [their results] right away is just better,” Farrell said. “More testing is better.”
On the other hand, James Gilhooley ’23, a residential student during the fall 2020 semester, decided to go fully virtual for the spring despite supporting the expanded testing protocols. Gilhooley ultimately decided not to return to campus even after completing pre-arrival testing.
“I have personal concerns about the new COVID-19 strands and the atmosphere at school is just so different,” Gilhooley said. “Most of my classes had also transferred to hyflex, so it made sense for me to stay home.”
The university will also conduct weekly surveillance testing among undergraduate students only, and systematic testing within populations of concern throughout the semester, according to Anderson.
Students who are fully remote, received a positive COVID-19 test in the previous 90 days or are in isolation or quarantine are exempt from surveillance testing.
The surveillance testing is aimed at detecting asymptomatic cases of COVID-19, according to a Jan. 29 university announcement.
“Each week, a sample will be identified for testing,” the announcement stated. “Initially, this will only be among undergraduate students but if needed, this will expand to include graduate students, employees and affiliates.”
Community members who are selected for testing will be notified by email.
Students who did not or do not comply with testing protocols will be contacted by someone in the Office of Community Standards, according to a Jan. 28 university announcement.
“Disciplinary action could result. Further non-compliance will result in suspended access to student services in The Nest,” according to the announcement. “This could affect registration, access to financial aid information and other important information.”
Morris said noncompliance is a variable in any COVID-19 testing strategy.
“This type of testing strategy is not going to be absolutely perfect,” Morris said. “But it’s going to catch a lot of the positive cases and keep them from getting onto campus.”
Morris added in order for testing strategies to be most effective, it’s important for students and the larger community to participate in testing programs and to continue to do their individual part in reducing transmission.
“It’s probably going to be annoying to a lot of students and staff to do this, but just keep in mind that this might be the key to enabling a college life that’s much closer to normal this spring,” Morris said.
Students dropped their entry test sample into a box for shipping to the Color lab.
PHOTO: MITCHELL SHIELDS ’22/THE HAWK
Department of Public Safety reports (Jan. 18 - Jan. 29)
Jan. 18
No incidents to report.
Jan. 19
No incidents to report.
Jan. 20
No incidents to report.
Jan. 21
No incidents to report.
Jan. 22 Jan. 24
No incidents to report.
Jan. 25
Public Safety was notified of a fire alarm in Lannon Apartments. Public Safety officers responded. The preliminary investigation revealed a student cooking activated the alarm. The alarm was reset.
Jan. 26
Public Safety was notified by a St. Joe’s student in regards to an unknown person removing their laundry basket from the basement of Villiger Hall. Residence Life was notified. The incident is under investigation. alarm in Lannon Apartments. Public Safety officers responded. The preliminary investigation revealed a student cooking activated the alarm. The alarm was reset.
Jan. 28
No incidents to report.
Jan. 29
Public Safety was notified by a St. Joe’s employee in regards to an unknown person removing a catalytic converter from their personal vehicle while it was parked in the Mandeville parking lot. The Philadelphia Police were notified and a report was taken. The incident is under investigation.
ALCOHOL RELATED INCIDENTS
1
On campus
0
Off campus
DRUG RELATED INCIDENTS
0
On campus
0
Off campus
Call Public Safety: 610-660-1111
Preferred names now allowed on university documents
CARA SMITH ’21
Copy Chief
Jordon Constantino ’22, who identifies as transgender, now has a student ID that matches his preferred name after two years of being identified by a name that no longer belonged to him.
“My Hawk Card is huge,” said Constantino, referring to his student ID. “That’s something [I use] everyday that nobody really thought about.”
St. Joe’s students, faculty and staff are now able to select their chosen name, gender identification and gender pronouns to be displayed across most official university systems, according to a Jan. 19 university announcement.
Constantino said having his preferred name displayed across multiple interfaces alleviates anxiety that is brought on by every new semester.
“The fact that it’s showing up in the directory is also huge, in terms of emailing my professors my preferred name,” Constantino said. “Here’s the professor who has all the power to say no to my identity. Going forward, having it reflected and be in the directory and then not having to go through that at all is great. That’s a really big deal to have the possibility of denial of my identity kind of removed.”
A student’s preferred name will appear on class rosters, The Nest, Canvas, some Residential Life information and diplomas. However, a student’s legal name is required to be on billing information, tax documents, official transcripts, National Student Clearinghouse information and payroll information. Community members are not charged for new IDs with their preferred names.
Chris Heasley, Ed.D., head of the Transgender Inclusion Working Group, has been working with the Office of the Registrar, the Office of Inclusion and Diversity, the Office of Human Resources and the Office of Information Technology (OIT) for the past year and a half to implement preferred name guidelines.
“The reason it’s been complicated is because the university has multiple platforms and software systems that it uses,” Heasley said. “It’s not all just housed in one center, central software. There’s been a need to trace every place where these different social identities exist.”
Amanda Sciarra, director of application services for OIT, said the university purchased an integration platform to manage different social identities across systems.
“That is the mechanism that is allowing us to now pass it to other systems in a coordinated way,” Sciarra said. “The more systems that we move into our integration platform, the more we’re able to propagate where appropriate. There are some systems where the legal name is required, but everywhere we can [use preferred names] we do that.”
Students, faculty and staff can update their chosen name by logging into The Nest and accessing the School Services tab. Users should then locate the Administrative Services menu on the right hand side, click the Personal Information menu to expand it and click the General Profile link. Next, users should select Personal Information on the menu button. In the Personal Details box, users can click the blue Edit button and will be able to input their preferred name.
These technological modifications are vitally important to creating a safe and comfortable community at St. Joe’s, according to Heasley.
“It reinforces our commitment to allow our members to be their authentic selves, express this social identity in a way that best represents who they are and where they want to be in the community,” Heasley said.
Constantino said he was included in some discussions with the Transgender Inclusion Working Group about the implementation of the preferred name guidelines.
“It was good that they were including somebody who actually knew what it felt like to be having this issue,” Constantino said. “At the same time, it’s a little bit frustrating just because as a student, and just like only being somebody putting my thoughts in there, I couldn’t have as much control and power and influence as I wanted to.”
Nicole Stokes, Ph.D., associate provost for Diversity, Equity and Inclusion (DEI), was also involved in the implementation of the guidelines.
“It is so critical to our values of seeing God in all things and valuing the whole person,” Stokes said. “And identity is valuing the whole person.”
St. Joe’s is one of seven Jesuit colleges and universities that have similar preferred name guidelines, according to Stokes. There are 28 Jesuit colleges and universities in the U.S.
According to Campus Pride, a nonprofit that supports the rights of LGBTQIA+ college students, about 262 colleges and universities nationwide enable students to use a chosen first name on campus records and documents.
Heasley said the next step is modifying St. Joe’s StarRez Housing program, a third party housing accommodation automation software. Right now, preferred names must be manually entered into the system as they do not automatically populate the system through The Nest.
“That’s an outdated system, so we’re going to have to work with StarRez headquarters in Denver with their project management team to make those changes,” Heasley said.
Sciarra said she is working on modifying the system as soon as possible.
“I just hope students know that this was a really great start. We’re not done,” Sciarra said. “As new systems get brought into the technological platform, or landscape, that exists at St. Joe’s, it’s going to start there. There’s no conversion. It’s always going to be inherently there from the jump.”
Constantino displays his new student ID card in the Post Learning Commons.
PHOTO: MITCHELL SHIELDS '22/THE HAWK
Kaylah Hernandez ’23 contributed to this story.
St. Joe’s implements new dining regulations
CARLY CALHOUN ’21
Copy Editor
Eliminated and restricted seating in St. Joe’s dining halls and eating areas at the start of the 2021 semester are the result of new dining regulations in the City of Philadelphia that went into effect on Jan. 16.
The Philadelphia Department of Public Health issued the regulations to help slow the spread of COVID-19. They include limiting indoor seating capacity to 25% occupancy, according to Matt Rankin, COVID-19 media relations assistant for the Philadelphia Department of Public Health.
In response, St. Joe’s temporarily eliminated seating in Campion Student Center, including both dining halls and at the tables across from Saxby’s, and shifted to graband-go service only, according to Director of Dining Kevin Bargeron, in a written response to questions from The Hawk. Seating in the Merion Hall Atrium outside of Einstein Bros. Bagels is limited, and the tables and chairs are spread out to encourage social distancing.
Bargeron wrote that university administrators are in continual contact with the city in order to keep up with ever-changing information regarding COVID-19 and regulations that impact the university.
“Leadership of the university, including SJU Dining, take part in a call each week with the City of Philadelphia Department of Public Health where all universities/colleges in Philadelphia County come together to discuss the regulations and how to best implement them,” Bargeron said.
Other universities in the Philadelphia area are following similar guidelines. According to Villanova University’s dining website, limited seating is available in their dining halls, and take-out “is standard at all dining locations.”
Additionally, the University of Pennsylvania is not allowing any seating in their dining halls, serving all meals in to-go containers and “limiting the number of people who can be in the dining café at one time,” according to their website.
The university announced dining modifications for the fall 2020 semester on Jun. 23, 2020, which included a reduction of price for meal plans and the expansion of seating to Doyle Banquet Hall South.
In addition to the fall semester modifications, this semester the university added additional lighting and furniture on Villiger Lawn and on Barbelin Beach to facilitate outdoor eating and socializing. The tent on Villiger lawn is also an area for students to eat.
Rebecca Maurizi ’23 said the current lack of designated spaces for students to dine inside on campus has been an adjustment.
“I live in Ashwood, so I don’t really have a dorm that I can go back to easily, sit down and eat,” Maurizi said. “So I’m stuck with sitting outside, especially when it’s really cold.”
Although Ellie Gallo ’24 understands the dining and seating regulations the university has put in place, sitting in the dining hall was one of the only times she would socialize with her close friends.
“If we want to hang out [now], we have to find something to do off campus or maybe outside, but it’s freezing outside,” Gallo said. “It just doesn’t really give me a good opportunity to spend good quality time with my friends.”
Kevin Villec ’23, dining chair for University Student Senate, said he has communicated with Bargeron about the impact of the new regulations and other initiatives SJU Dining has taken.
“We’re planning a meeting, hopefully this week, to have another look at all the changes,” Villec said. “Hopefully, as virus rates start to go down, we’ll start to get more seats available in Campion and DB, and as the semester goes along, we’ll be able to use the tent more on Villiger lawn and eat outside more at the tables.”
Campion Food Court (DB) is open Monday -Friday from 11 a.m. - 8 p.m.
PHOTO: MITCHELL SHIELDS ’22/THE HAWK
Editor in Chief Jackie Collins ’21
Managing Editor Ryan Mulligan ’21
Copy Chief
Cara Smith ’21
Faculty Adviser Shenid Bhayroo
Contributing Adviser
Jenny Spinner
Copy Editor
Celia Hegarty ’21
Copy Editor
Carly Calhoun ’21
Multimedia Editor Nick Karpinski ’21
News Editor
Devin Yingling ’22
Assistant News Editor
Eddie Daou ’22
Assistant News Editor
Christine DiSanti ’21
Opinions Editor
Tayler Washington ’22
Assistant Opinions Editor
Sehar Macan-Markar ’22
Assistant Opinions Editor
Maggie Brennen ’22
Features Editor Giana Longo ’22
Assistant Features Editor
Nenagh Sheehan ’21
Assistant Features Editor
Elaina Wall ’21
Sports Editor Riley Frain ’21
Assistant Sports Editor
Tyler Nice ’23
Graphics/Illustrations Editor
Casey Wood ’23
Photo Editor
Mitchell Shields ’22
Social Media Manager
Sam Jenkins ’21
Business Manager Angela DiMarco ’22
Assistant Business Manager
Colin Messenger ’22
Assistant Business Manager
Danny Remishevsky ’23
Distribution Manager
Alec Mettin ’24
Distribution Manager
Deborah Duong ’24
We can’t let our guards down
Although St. Joe’s students are better able to navigate campus in a pandemic this semester, we cannot ease up on following COVID-19 protocols. The “new-normal” of our college experience is defined by how we are choosing to handle this pandemic, and we must take the precautions necessary to prevent the virus from overtaking our campus and surrounding communities.
Many students shared that they feel safer with the pre- and post-arrival requirements for returning to campus this semester in comparison to the fall semester’s protocols, when testing wasn’t required until the first week of classes. But, as we’ve seen, these new requirements still do not assure absolute protection from the virus. Even if we managed to escape the virus last semester, it does not mean we can do the same this semester.
A majority of undergraduate students returned to campus the weekend of Jan. 22, and were required to take a “pre-arrival” COVID-19 test if they lived on campus. However, even though this test was mandatory for students to take before their return, we heard from many students that they were not asked about their test result status, or if they had even gotten results back yet, when moving in on Jan. 22, 23 or 24.
Other universities, such as the University of Pittsburgh for example, were much more meticulous about allowing students to physically return to campus with a negative COVID-19 test. It delayed an in-person start until all COVID-19 test results were in, to assure that all students attending any in-person gatherings had negative results.
It would have behooved St. Joe’s to adopt a similar model to avoid having students with positive test results, possibly unknown due to the lack of checking during move-in, on campus and in shared public spaces, such as classrooms. However, the responsibility does not fall solely on university administrators. This lack of structured accountability means that it is essential that students act responsibly and get tested. If you’ve neglected to get tested, you’re letting your St. Joe’s community down.
Some students tested negative for the pre-arrival testing and then attended classes, only to receive a positive COVID-19 test result
for their on-site entry testing. These students unknowingly attended in-person class. Vulnerable members of the community are the ones who suffer when there are cluster outbreaks and spikes in cases.
The responsibility of getting tested doesn’t only include basic health and safety protocols, but it also includes transparency. If we have come in contact with someone who has tested positive, it is our responsibility to self-isolate, get tested as soon as possible and fill out the official self-disclosure form. The university recently added more testing dates and availabilities to ensure that all students get tested.
In addition to getting tested, students should be taking all necessary precautions to limit the spread of the virus in our community. Using breaks to travel and take vacations is irresponsible, as well as gathering in Manayunk over the weekend for parties and bar-hopping. These reckless behaviors are not a way to “blow off steam,” as they’re only prolonging this “new normal” and continuing the spread of the virus, especially with new variants.
Additionally, there is indisputable scientific evidence that masks limit the spread of COVID-19 significantly. Masks are required by the university, as stated in the iCare Pledge, which all members of the community signed upon returning to campus. Recently, Dr. Fauci even recommended that we wear two masks when indoors and within six feet of others. Regardless of your political beliefs, and what you hear from politicians and others peddling misinformation, you must wear a mask, or two, in order to slow the spread.
This goes for faculty and staff as well. Faculty and staff cannot expect students to follow guidelines when they are in classrooms lowering their masks to lecture, or taking them off completely. This encourages students to do the same.
In order for things to “go back to normal,” as we’ve all been wishing for for months, we have to take responsibility now. Tackling this virus is a collective effort and requires willingness from all members of the university.
- The Editorial Board
The Hawk welcomes Letters to the Editor, typically no more than 300 words. They can be emailed to hawk.editorial@gmail.com.
NOSE SWAB BEST SWAB Okay, we know this might seem like a strange “hot,” but we can’t be the only ones who feel this way. If we had to choose between the nose swab and last semester’s spit test, the nose swab would win every time. It was quick, painless and we didn’t have to fast beforehand.
DOUBLE MASKING IS TRENDY People are saying that double mask layering is like when girls in grade school made layering camis a thing in the 2000s. Women now have a layering superpower that protects against the virus.
DUNKIN'S VALENTINE'S DAY MENU
Valentine’s Day is right around the corner, and whether you’re excited for the holiday or not, we can all agree to be excited about the new options at Dunkin’. Heart-shaped doughnuts that are cute and delicious? We are here for it.
SNOW DAYS ARE A THING OF THE PAST
We hate to be the ones to break the bad news, but in the days of Zoom university, it seems unlikely that there will ever be a real snow day again. It’s okay to cry. We did too.
NETFLIX AND NO CHILL Sadly, so many iconic shows and movies left Netflix in the past few months. What are we supposed to do now that we can’t rewatch “The Office” or “Gossip Girl”? To make matters worse, Netflix is planning to raise subscription prices by the end of February. We still love you Netflix, and don’t worry we aren’t going anywhere, but we are disappointed in you.
WE'RE FREEZING OUT HERE! That feeling when you wake up in the morning, check your weather app and see that it’s less than 30 degrees outside— no thanks. It’s just not fun walking to campus when it feels like you’re in the Arctic. Time to make friends with people who have cars so we can hitch a ride down City Avenue.
What the recession tells us about economic fragility
MAX GIULIANA ’24 Columnist
Within hours of his swearing in, U.S. President Joe Biden got to work introducing his vision for the U.S. With several strokes of a pen, the president reversed Trump-era policies such as the construction of a border wall and the “Muslim Ban.” President Biden also began introducing his own agenda on immigration, climate change, health care and racial justice.
Despite being an efficient method for enacting a president’s policies, executive orders can not be President Biden’s only instrument for change – especially when it comes to the financial crisis we find ourselves facing.
The 46th president publicly stated that he wants to pursue a $1.9 trillion economic rescue package that includes greater funding for vaccinations, another round of stimulus checks and a host of other investments. This type of government stimulus is needed to help improve American lives, save American jobs and help our economy gain momentum. However, the necessity of such spending is indicative of a deeper issue that America is unwilling to acknowledge.
The American market needs reforming. In my lifetime alone, I have seen two economic recessions. One was caused by unregulated Wall Street greed, risk taking and predatory loans, and the other by a global pandemic the world was clearly unprepared for. Based on what I have seen in my 18 years in America, I would be led to believe that this type of economic volatility is natural. Recessions happen, right?
As I was reading former U.S. President Barack Obama’s “A Promised Land” over winter break, I found myself constantly re-
flecting on his handling of the 2008 financial crisis. As Obama writes about his economic team’s decision making and thought process while they were stewarding the nation’s economy, I found myself agreeing with the policies they pursued.
I believe that the Troubled Asset Relief Program (TARP), and more importantly the Recovery Act, were policies that were correct short-to medium-term solutions. They saved people’s jobs, homes and led the economy to 75 straight months of job growth. However, they did require massive government spending. As I was reading, I kept thinking to myself - “Is this sustainable?” I always came to the same answer - no.
Today, we find ourselves at a similar inflection point. While thousands die per day from COVID-19, the billionaires are thriving and the average American is barely surviving. President Biden and his team believe the nation needs more massive government spending, and given our current system and circumstances, they are correct. But, as COVID-19, it also reinforces what many people felt during the financial cri-
sis of 2008; something about the American economy is not right.
No system, no economic modality that requires massive stimulus and bailouts twice in two decades is without need of improvement. We need a change. Wall Street needs to be regulated. Those at the top should not be allowed to watch their wealth exponentially grow as the overall economy suffers. The fact that the stock market is at its highest point ever is further evidence that the stock market is not an indicator of the economy as a whole.
Furthermore, the pandemic is proof that our social safety nets need to be improved. Millions found themselves uninsured and without income simply because of a pandemic. This cannot happen. Nobody should be devoid of health care, whether it be public or private. Nobody should be a productive member of society one day, and then worry about how they will feed their children the next, out of no fault of their own.
Now, I am aware my rhetoric may sound bitter or radical, but it is the opposite. I am more frustrated that America is less than what it can be. I am not advocating for socialism, but a reformed version of capitalism–one where those at the top don’t receive bailouts, those at the bottom don’t cover the nation’s losses and the economy works in a way that creates prosperity for everyone.
In addition, the social safety nets that we have in our society need to be strengthened. Social Security will no longer be viable without reform, the Affordable Care Act needs improving and we need to move towards an economy that puts money into the hands of the middle and lower class of society and doesn’t have tax breaks for the 1%–because history has taught us trickle-down economics do not work.
I look forward to watching what the Biden administration does. I believe their shift towards renewable energy is just one example of how they are changing the economy for the better. I believe their pursuit of a return to bipartisan politics is the correct strategy to shift Washington and the nation away from our increasing polarity.
I believe President Biden will be able to remind Americans what Obama loved to say - in the end, the presidency is still a job, and a job in which you are supposed to work for the benefit of the majority of your constituents, not the few.
TODD ERKIS
Columnist
Professor Erkis, GameStop has been all over the news lately as its price has been up a huge amount. Why is this happening? Is it too late to buy the stock? - multiple students
Yes, we live in interesting times. At the close on Friday, Jan. 29, the price of GameStop stock was around $330 per share, down from a high of $483 per share.
This column is not advocating buying or selling any stock or stock options. For full disclosure, at the time of this writing, I own a financial instrument (a put option) that will profit if the price of GameStop stock decreases below a certain level. Readers should consult a financial advisor before making any investment decision and should not rely on anything in this column as financial advice.
As for the explanation, here it goes. Stock prices are determined in the short term by supply and demand. This is basic economics. More demand leads to higher prices and less demand leads to lower prices. Many people believe that over the long term, a stock’s price should reflect the company’s long-term profit potential or the company’s intrinsic value.
GameStop has been closing stores and having financial issues due to the pandemic. The stock price was about $13 per share in November 2020 and rose to $18.84 at the end of 2020. The stock price jumped to $39 in early January when the company added new board members. Often, the addition of new board members leads to optimism that a company can turn things around financially. The optimism sometimes is valid and sometimes is not.
During this time frame, some large investors, called hedge funds, believed the stock’s price was too high and would soon fall. These hedge funds decided to “short” the stock by borrowing GameStop shares, selling them immediately and then expecting to later repurchase the stock at a lower price to end the loan. Hedge funds often short stocks on a huge scale and can profit handsomely when it works.
In this case, things did not work out as the hedge funds expected. Individual investors, using social media, said they were going to buy GameStop stock and hold onto it no matter what the price does (HODL) and suggested others do the same. This additional demand led to further stock price rises. As the price started to increase, more and more people saw the price going up, thought it would continue and also bought the stock. This led to rocket-like increases in the price of GameStop’s shares.
The hedge funds who shorted the stock had losses and many attempted to buy the stock back to end the loan. Unfortunately for them, they needed to quickly buy a lot of stock before they experienced even larger losses. This rush to buy, coming at the same time, made it difficult to find people willing to sell (this is called a “short squeeze”), leading to higher and higher prices.
Like every buying mania, those who buy early can make a lot of money. For example, 50 shares of GameStop purchased at $20 per share at a cost of $1,000 would now be worth $16,500 at $330 per share. Those buying at higher prices often lose money as the stock price over time should find the level close to the company’s intrinsic value (i.e., what the company is really worth over the long run). As the old saying goes, “What goes up, must [eventually] come down.”
