"Is there any way we could destroy a stock that is currently up, just to bring it way up again?"
You can almost see it. A dimly lit room threaded with smoke and the smell of expensive whiskey. Massive, ornate furniture that squeak when you sit on them and a posse of serving staff attractive enough to front-line Vogue. Even the shadows would look posh here, all velvet and round-bellied silhouettes. There would be laughter in the wake of that artless question, quiet and knowing. As it fades away, someone, their face perhaps hidden behind an elaborate Venetian mask, would eventually lean forward and go,
That's how Hollywood would probably envision it. But the reality is paradoxically more fantastical and more mundane. The question wasn't posited by a skeevy oil baron in an Illuminati hideout but an anonymous figure on GTAMarket subreddit.
If you've spent any amount of time with GTA V at all, you probably already know that Rockstar shipped their blockbuster production with a pair of stock markets: the LCN and the dubiously named BAWSAQ. The first is straightforward: it correlates with whatever is currently going on in a person's single-player campaign. The second is far more interesting. Instead of being unique to each individual player, BAWSAQ, rumor intimates, is possibly subject to the whimsies of GTA V's online collective. Both, however, share one vital commonality:
"There are many simpler ways to make money but none are as easy (in terms of effort) or can match the sort of raw profit potential for time in game as the BAWSAQ," Kevin, an Economics graduate and one of the many patronizing the GTAMarket subreddit, enthuses. "Not even close."
"Not even close?" I press, in between trawling the GTAforums and the various subreddits for information on how a handful of players became armchair economists.
The results are expansive. And a little intimidating. According to Kevin, it started two weeks ago. After completing the game, many players found themselves at an impasse. The performance was over, the final heist now just a blood-stained memory. But though GTA V was done with them, its user base was not done with it. There were still golf courses to buy, strippers to dress in dollar bills, avarice to satisfy. With 20 million dollars in the bank and a host of unsatisfactory answers, players needed a lucrative solution.
"That's when they noticed (at least on the 360) that two of the BAWSAQ stocks (HAL and PIS) were far below the average price, around $1.50. Many of us decided to pool our resources into buying HAL before multiplayer got released. Since they are a weapons manufacturer, many (including myself) thought they would grow steadily with GTA Online."
Could a few thousand opportunistic souls rock the economic fabric of the industry's fastest selling sandbox? Miraculously, the answer seemed to be yes. HAL, in tandem with player efforts, shot in value and people took it a sign. While it remains debatable as to whether it was human intervention or simple serendipity that increased prices, the results catalyzed a storm of interest. Money was to be made here. And much like how the California Gold Rush drew a torrent of would-be prospectors, this new knowledge brought people running.
"Once people saw that they were able to get about 150% to 200% return on HAL, a more organized experiment took place where PIS was the stock of choice." Jack Nixon, one of the many who participated in the attempted machinations, explains.
The objective? To see if a 'pump-and-dump' could effectively change the market. "PIS was at about $3.25/$4.25 on PS3 and Xbox360 respectively. The official plan was to sell all PIS stocks as a group on 9/30 at 10:00PM GMT +0000. This would hopefully sync global efforts to manipulate the stock price to drop sharply, in the hopes that we could all buy-in again at a low price and continue the trend of buying low/selling high and manipulating this stock like a rollercoaster. It seems that the organized buying of PIS and HAL definitely made the price go up, but as of now, the price of each has not dropped, as HAL is now at $16.58/$19.86 and PIS is $24.08/$24.68. The price of both stocks continues to climb."
Not everyone agrees with Nixon. For every individual who believes in the underlining hypothesis, another remains skeptical. All of this conjecture, after all, was built on a single, glib line from the Social Club: Watch stock prices fluctuate in real-time as buyers and sellers react to in-game activity. Everything else is mere speculation.
"There's been a lot of ideas thrown around about how Rockstar developed BAWSAQ. Some people think that Rockstar is directly manipulating the market as they see fit. Some people think there are protections in place for the market to be self-aware, and prevent huge crashes that would allow us to manipulate the market with the pump-and-dump methods we're using. Still others think that it was put together lazily, but personally I am hoping that Rockstar tried to make it mimic how a real market operates, because Rockstar is all about satire and poking fun at serious issues and political issues. I feel it'd be just like them to make it so that we can all become billionaires overnight just to highlight how easily the market is manipulated by the elite in real life." Nixon muses.
Jeremy Spoke, an investment banker and quant trader by profession, is quick to point out that Rockstar's choice of phrasing is more than a little ambiguous. "That [line] doesn't necessarily mean it's reacting to players buying and selling stock, just that it fluctuates based on in game activity. That could be human players buying/selling stock, but it could also be referring to "virtual" stock market traders buying/selling based on how human players interact with those companies assets in game (e.g. blowing up companies vans in game). "
The behavioral accuracy of the in-game stock markets, in case you were wondering, is tenuous at best. Jeremy explains, "The main issue is the fact that the real life stock market needs both buyers and sellers. That is to say, when you buy stocks on the real life market, you are technically buying the stocks from somebody else. It's not that you're buying a stock from some guy down the street who wants to sell, usually with the big companies you're buying stocks from market makers, who are financial institutions that acts as intermediates between the company whose stock we're talking about and the buyers on the stock market. So if everyone wants to sell their stock, they are usually selling to a market maker who are obliged to buy the stock you want to sell, because they're being paid to make sure people can freely buy and sell the stock."
He continues: "Now the key thing to understand is: In real life, when you buy shares, you are buying a piece of ownership in a real company. If I want to buy 1% of a company, somebody else has to sell 1% of a company. After all, you can't have an extra slice of pizza without somebody else having one less slice. However, in GTA there isn't a real company you're buying ownership of. Pisswasser isn't real. All 15 million GTA owners can buy $100m of Pisswasser stock and it would never 'run out' of shares to sell, because it isn't a real company that is selling portions of its ownership."
Nonetheless, it's possible. Rockstar can get BAWSAQ to function like an actual stock market if only in the most rudimentary of ways: by increasing prices when the 'infinite' stock is purchased and lowering them when the reverse occurs. At first glance, this might seem like the concrete evidence proponents have been looking for but it's an answer paved with more questions.
"How do you account for the fact that I could buy loads of stock, reload my last saved game with all my money back and repeat the process ad infinitum. Does this mean one player could make the stock rise indefinitely? What about if I bought loads of stock, but on an alternate save, whilst keeping an old save with my cash still intact? These issues really make it difficult for me to imagine the stock markets on GTA are behaving like real stock markets." Spoke laments.
Still, assuming BAWSAQ is operating on rules of its own, does that necessarily invalidate the suppositions of GTA V stock traders? Not really. But it doesn't substantiate them either. Spoke argues, "Let's say for the sake of assumption that it is human players buying/selling stock that is driving stock up and down. What we observed was that PIS and HAL stocks were low for some reason, and a big movement started on the GTA forums (that Reddit and subsequently other forums like Neoseeker tagged on to) telling us to buy these low stocks and force them back up again. And the stocks actually did rise significantly after that. Many people took this as a sign that the community was having a successful impact on stock prices. However, there was a community appointed "sell-off" time for these stocks, which was last Monday at 10pm GMT. Everyone was to sell off the stocks at that time and if we were having any impact on the market, we should have seen a big drop in share price as everyone sold their stocks. However, after the mass sell off, there was no price drop and stocks continued to rise (and actually the rate of increase has been getting bigger over the last day)."
He adds. "After that, many people claimed that the community didn't have any effect on prices, because if they did then surely the price would have dropped with the mass sell-off. These people have said PIS was programmed to rise by Rockstar and that we just got lucky jumping onto that low stock when we did."
There is a counter-theory, of course. What if, it asks, these efforts did indeed lead to a low stock rising? What if uninformed users noticed the changing trends and decided to jump on the band wagon, thereafter further inflating the numbers? At the same time, however, said users would be ignorant to the manipulations organized by the various co-conspirators. Those who knew of it would sell their stock at the appointed time but everyone else? They would continue doing what was most logical: hold onto the rising stock.
"According to that theory, the manipulation didn't exactly fail, it just didn't behave as predicted." Spoke notes.
(Let's not forget the splinter groups who decided to sell early for some reason and the inevitably missed memos.)
Either way, the vagueness is apparently no hindrance. GTA Online might be a buggy piece of work but that hasn't stopped players from speculating, from researching, from catapulting one another towards unthinkable wealth. Some folk have even gone as far as to develop smartphone applications and websites that let you monitor prices in the BAWSAQ market. There's even talk about a third experiment. At the time of writing, WIZ, BET ("Cheap, stable and seem to be in a good position to skyrocket the same way PIS did." Nixon offers hopefully) and CNT, which may be the target for the next pump and dump, are purportedly being examined for suitability. It might eventually be discovered that is all just wishful thinking, a by-production of confirmation bias and general hype, but the whole affair would still be worthwhile. Already, the group involved taught the Internet how to capitalize on Lester's assassination missions. More crucially, it's brought people together and made stock fraud experts out of the regular Joe.
Spoke quips. "Whether or not HAL or PIS was a failure, the fact that within two weeks of the games release we had a full community coordinated stock manipulation event is just an awesome thing to behold. Maybe that was Rockstar's aim all along? I mean, isn't that the ULTIMATE meta-commentary on Western profit oriented culture?"
Those interested in getting in on the action or in simply learning more should saunter rapidly over to r/GTAMarket right this instant.
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