Polaris Your North Star newsletter- week of 2/1

First up, what happened with GameStop last week.

Selling a stock short, or short selling, is when an investor borrows a stock they think will decrease in price and sells their shares at a high price. When the price of the stock falls, they buy the shares back and return them to the person they borrowed them from, pocketing the money they made from selling high and buying low as profit. If after investors sell a stock at a high price it does not go down, but instead goes up, the investors still have to buy their shares back, losing money. This is called a short squeeze.

Gamestop, the once-popular video game store, has been losing money for months and their decline has been accelerated by the pandemic. The market’s move to online video games as opposed to games with physical software and decline in the suburban malls where it was traditionally located have contributed to its downfall. Because of these factors, GameStop stock was expected to fall in price, but this January it has risen 1,600%. Let’s look at how this happened:

  • In late 2019 and 2020, GameStop stock, then trading between $3 and $8 a share, caught the attention of hedge fund managers who borrowed many shares with the intention of selling the stock short.
  • The hedge fund managers intending to sell the stock short caught the attention of the Reddit r/wallstreetbets who then executed a short squeeze that raised the price to a high of $483.00.
  • Many of the investors on r/wallstreetbets used the mobile day trading platform Robinhood, which has since restricted trading of GameStop, among other stocks popular with r/wallstreetbets, like AMC, Bed, Bath, and Beyond, and BlackBerry. Robinhood has drawn furor from r/wallstreetbets and lawmakers alike for restricting trading in what it touted as a ‘free market.’
  • After its high of $483.00 on Jan. 28, by Feb. 2, the price had fallen to $85.00, losing almost $400.00.

Next, coronavirus updates.

Here are the latest updates on the COVID-19 pandemic in the U.S.:

  • January was the deadliest month of the pandemic, with 95,245 deaths. Many health officials are encouraging double masking as a way to help protect against both the coronavirus and its mutation variants.
  • Starting on Feb. 11, the Biden administration will start distributing some vaccines directly to retail pharmacies. These doses are separate from those allocated to each state and make it easier to treat at-risk communities.
  • In Illinois, Cook County returns to Phase 4 of the coronavirus plan. In this plan, indoor service for bars that do not serve food and indoor event venues will be opened. However, local health officials will impose stricter restrictions than those outlined in the government plan. Indoor venues will be limited to 25% capacity.
  • Vaccinations statewide were expected to reach one million on Monday, which was reached instead on Tuesday.

Now, a snowy weekend in the Midwest.

A major winter storm left much of the Midwest and Northeast covered in snow, even hitting parts of California. Here's what the storm means for school, transportation and vaccine distribution:

  • For many years, snow storms have brought along time for kids to get outside and go sledding, build a snowman, have a snowball fight or drink a nice warm cup of hot chocolate, but in an especially internet-dominated world as a result of the pandemic, snow days could become obsolete. Many schools across the country were forced to hold classes virtually this year, a method that could be used on snow days in the future. However, some educators argue that children deserve to have the magic snow days bring, even if it is possible to hold class over Zoom. In 2019, District 204 announced that e-learning days would take the place of snow days, and District 203 announced this year that remote learning days would replace the typical snow day.
  • In Chicago, the storm covered the city in around 10.8 inches of snow, the largest amount in five years. The storm caused the cancellation of hundreds of flights across the country, and the above-ground subway was shut down in New York City.
  • The storm impacted vaccine rollouts in several places, including Washington, Philadelphia, New Jersey and New York City, with the latter deciding to postpone vaccination appointments for Monday and Tuesday of this week. In Oregon, a truck of healthcare workers carrying vaccine doses got stuck in the middle of the storm on a highway. In order to prevent the doses from going to waste, the healthcare workers went car to car distributing doses.

Finally, is Groundhog's Day really a trustworthy weather forecast?

The Pennsylvania prognosticator Punxsutawney Phil emerged from his burrow on Tuesday and spotted his shadow, signaling another six weeks of winter in the United States. But how reliable is our furry friend -- Is Phil the famed forecaster he fancies to be, or is he a phony fortune teller of fantasy and fallacy? Here are the numbers.

  • Phil made his first prediction in 1887, and since he has seen his shadow 106 times and seen nothing 20 times. Nine years of predictions were tragically lost to history.
  • According to StormFax, Phil’s predictions are correct only around 39% of the time. Members of the Punxsutawney Groundhog club, on the other hand, claim a 100% success rate.
  • Some of these inaccuracies may be attributable to previous groundhog administrations, however, as NOAA found that Phil has a 50% hit rate over the past ten years!
  • Although the Punxsutawney Groundhog Club claims that the same groundhog has been making predictions since the tradition’s inception, their narrative is clearly fabricated. Groundhogs in captivity have only been observed to live up to 14 years, less than 1/15 the alleged lifespan of Phil.
  • Despite this, Phil accurately forecasted an early spring in 2020, when temperatures in the months of February and March were 2.3 and 4.6 degrees above the average 20th century temperatures in the contiguous United States, respectively.

What does this mean for Phil’s forecast of six more weeks in winter? According to the numbers, he may or may not be correct.

This week in Naperville North news...

Quarantine, simply put, can be boring. So this week, take a look at some suggestions for COVID-friendly things to do in the area.

This week's news was written by Randy, Zayna, Nora, Jeanine, and Ellen.

And after all that news...

There's no crossword this week, but it'll be back next newsletter!

Want to know more?

Check out the North Star website for more in-depth stories, and Heads Up Huskies on Instagram for your Naperville North updates.

Thank you for joining us here at Polaris, and I look forward to bringing you more news next week.