A year in retail

Commentary

James LeVan, Staff

Five years ago, a week before “Star Wars: The Force Awakens” arrived in theaters, I had taken a job in a local grocery store pushing carts in the evening. It was during the holiday season, a time when grocery stores and other retail businesses hired anyone with a pulse. Pushing carts wasn’t a bad gig overall. When the weather was warm and they were constructing the overpass near my work, I loved watching the sunset in the parking lot and listening to the banging of metal in the night air. The work was simple and pleasant. Since then, I have been a cashier, janitor, seafood rep (that lasted a week) and now a floater (a fancier term for stock boy). Being a floater has never been an easy job. It is not just stocking cans of corn on the shelf with a bunch of teenagers and college students. Retirees, teenagers, other college students, people looking for a second chance, parents even college graduates (a coworker who worked overnight stocking shelves had a degree in Business from Temple) work in retail. It has become a major source of employment for the educated and the uneducated, the skilled and the unskilled alike. Regardless of race or creed, what unites us is our frustration for our work and since the pandemic that frustration has only exasperated.

When the pandemic first hit a year ago, our shelves were quickly depleted the weekend Pennsylvania began to shut down. Our freezers became barren, most if not all of our meats were sold, and, of course, we ran out of toilet paper. By the end of the day Saturday of the first weekend of the pandemic, all we really had were Little Debbie products and some sparkling cider left over from Christmas 2019 (that stuff sells poorly, even in the middle of a pandemic). It is hard to believe it has been a year since COVID-19 first hit — those months of March to maybe June of 2020 feel both distant and recent to me. I tried keeping a log back in April, but many of my notes were mundane. I did not record all that happened at work and when I was not working, I was at home puttering around my house. The supply chain did not collapse, but it was under pressure that had not been seen before in the recent history of the United States. 

Courtesy of James LeVan

Pictured above is a frozen food aisle in early April 2020.

It was hard telling people who were desperate for toilet paper that we did not have any. I tried directing them to the nearest small corner store or family-owned chain (in the beginning they maintained a better supply than we did). When people would ask me when we would get more stuff in, I would shrug my shoulders and tell them I did not want to lie to them. Some people would accuse us of hoarding supplies and truth be told, we were not. Some coworkers bought a pack of toilet paper together and divided the rolls amongst themselves. For me, my parents had to drive out to the rural parts of PA to find ground beef and toilet paper. We had plenty of Lysol spray and wipes left over from when I had the flu a month earlier (an odd stroke of luck when I think about it). At the beginning of the pandemic, a coworker gave me a can of Lysol and I felt bad taking it, so I took it back to the shelf and explained that we had plenty of it at home, and it felt like I was hoarding. A woman quickly came and picked it up from me and said thank you.

In normal times, delivery trucks come in the early evening, and the overnight crew comes in around 8 p.m. to break it down. However, during the summer, trucks became infrequent. I remember one time I had to come in early (5 a.m.) to help overnight unload a truck that had gotten there an hour earlier. Sometimes we would not get a truck for a day or so and then multiple loads in one day. It really depended on the luck of the draw that day. One surprising phenomenon was that at one point, just so we had stuff, we got stacks of toilet paper and flour that were originally meant for hotels. But since no one was travelling, it made more sense for us to stock shelves with it. Things are semi-stable now, though we still end up running short on supplies depending on what they are.

On social media and television, we were praised for continuing to come into work. That we were in a way heroes for making sure communities had food and supplies. The media certainly thought we were awesome, and we had some customers thank us for what we were doing. However, I do not think people realize just how bad it got on some days. The fear that your coworker sitting across from you had COVID in the breakroom, to customers who would lose control and act like a child having a tantrum in a toy store. One moment that stands out in my mind was the time me and my manager had to go over to our beer garden because an older white man was screaming at a co-worker and an African American customer. When we asked what was wrong, the old man started screaming at our manager claiming that a Black man was following him around the store (he was not, we checked the cameras). He spent 20 minutes screaming at us, telling us about how his wife left him in the store alone, that he thought we were discriminating against him because he was white and not questioning the Black man, he was accusing of following him, that he had PTSD and that if he did not yell, he would get violent. I honestly thought I was going to have to fight this guy who was twice my size at that moment and that I was going to end up on the news. The guy tired himself out and then proceeded to leave and went about our business.

We who work at stores like Acme, Giant, Walmart and Target have been through Hell this last year. We have gone home crying, scared and exhausted. I have broken down in tears personally three times this past year. Many of us did not choose to continue working during this pandemic because we were brave or had a sense of duty. We did it because we had bills to pay and mouths to feed. Our work was not a breeze to begin with and the pandemic only exacerbated our problems. Grocery stores face issues of sexual harassment, disrespect and abuse from the communities we feed. The latter is still being felt now as we struggle to get vaccines and the latest attempt for a minimum wage increase died with Senator Sinema’s obnoxious thumbs down. It is important to remember that behind that mask, the cashier that sounds like a robot reciting the “thank you for shopping with us,” the women in health and beauty care and the guys stocking the shelves are all human and we are so tired.

Robinhood’s Long Nightmare Ahead

Business

Michael D’Angelo, Staff

cnbc

Robinhood can be accessed by retail investors anywhere from their mobile phone. Robinhood boasts giving investors autonomy over their finances with low barriers to entry and nonexistent brokerage fees.

The old English tale of Robinhood has been passed down for generations and describes a story of populism where a legion of men equipped with bow and arrow take from the rich and give to the poor. Fast forward to the 21st century and Robinhood is known as a discount brokerage firm used by many new investors and retail traders. You may have heard in the past few weeks that Robinhood was at the center of the GameStop saga or you caught their Superbowl ad during the game, chances are you have heard of the investing app. The news certainly is filled with Robinhood headlines lately. 

            Introduced in March 2015, the platform gained popularity with their approach of having no commission fee investing. The story of Robinhood began with Stanford roommates Baiju Bhatt and Vlad Tenev. Both worked on Wall Street for a period of time, designing software, until the two decided they needed a change. They founded Robinhood with the purpose of eliminating barriers for the little guy and democratizing investing. Since Robinhood’s inception, the app now boasts well over 10 million users, but the company has been struggling with a public relations nightmare since the start of the year. 

            When the pandemic began in March, many people with strong gambling tendencies turned to both the stock market and the internet. They chose Robinhood as their choice of brokerage and they flocked to a reddit forum known as Reddit Wall Street Bets (WSB). Headlines popped up from the Wall Street Journal, Forbes, and, most notably,  the Collegian about some of these traders and their impact on the financial markets. Robinhood was picking up some negative publicity at the time with complaints of slow software, minimal customer service support and hidden fees. They were even threatened with a lawsuit surrounding high frequency trading data and hedge funds. In addition, a Robinhood user committed suicide after an in-app glitch showed he was in the red for over $700k. Currently, Robinhood is faced with a pending lawsuit from the individual’s family. 

            But things went from bad to worse at the start of 2021. Users from Reddit WSB saw that hedge funds were heavily shorting GameStop (GME). Retail investors flocked to reddit and called for many to buy shares into GME. As many bought shares and GME’s stock price flew over $300 a share, Robinhood entered a cash crisis. They ran out of cash to clear trades with the Depository Trust Clearing Corporation (DTCC) and Robinhood changed orders of GME to sell only, after only a few days the stock price declined heavily. In that short period of trading, they were forced to raise $3.4 billion. 

            The world erupted and many were livid. They took to social media websites like Instagram, Reddit and Tik Tok preaching that Robinhood violated their rights to trade. The Federal Trade Commission (FTC) received more than 100 Robinhood related complaints between Jan. 24th to Feb 2nd and in response to the criticism, Robinhood issued a statement. They described a DTCC clearing issue and then aired a commercial during the Super Bowl promoting their slogan, “We are all investors.” The commercial did very little to help the company and many continued to complain over social media. 

            With a public relations nightmare on their hands, the company might be forced to postpone their plans to go public in the second quarter, but, as of now, Robinhood is in full swing to go public this year. They are currently valued at $20 billion or more. With the public’s frustration, Robinhood’s future is in question. If Robinhood is to continue on, they must update their customer service, apologize to the angry masses, and make right to achieve change in the financial sector.

dangelom2@lasalle.edu 

GameStop and Robinhood: Power to the investors

Business

Elizabeth McLaughlin, Staff

CNBC

GameStop stock reached an all-time high of $492.02/share on Jan. 28, 2021, putting Wall Street investors at risk of losing millions on shorts.

In January of 2019, GameStop (GME) was trading at $15. By January 2020, less than $5 per share. Shorting the stock of a company that becomes increasingly obsolete as we continue to redefine the digital age is widely regarded as a smart investment; that is why a lot of Wall Street investors felt confident in shorting GME. But on Jan. 28, 2021, GameStop reached an all-time high of $492.02—and those investors were taking on hemorrhaging losses. Who do they have to blame for initiating their downfall? Users from a Reddit forum called r/WallStreetBets.

These users conspired to drive up share prices of fledgling companies, yielding them significant profits while simultaneously stealing profit from Wall Street investors. When put that way, it sounds Robin Hood-esque. It then follows that these users waged their war via the online trading platform, Robinhood. This app aims to “democratize finance” by enabling anyone to buy and sell stocks and other securities. It was developed by two Stanford grads who built their own finance companies where they sold trading software to hedge funds. The app, which is designed to incentivize trading, makes trading simpler than ever. Robinhood transplants the stock market from the stuffy, befuddling environment of a traditional brokerage firm to your own personal smartphone. When a user makes a trade, an animation of confetti congratulates them, nudging them to keep trading. Robinhood’s design and objectives, combined with the economic effects of the pandemic, have prompted nascent investors to try their hand at the stock market. In the first quarter of 2020, Charles Schwab, TD Ameritrade, Etrade and Robinhood — the major online brokers — saw new accounts grow as much as 170 percent. The ease at which one can trade stocks is what allowed a group of Reddit users to wage an expensive attack on Wall Street.

Those on r/WallStreetBets started a trading frenzy, driving GME up 134 percent. On Jan. 11, GameStop announced three new directors to its board whose goals were to reposition GameStop in the modern video game retail environment; to save it from going under. For this reason, GME stock began to rise modestly. But once Redditors got a hold of it, its price rose so rapidly that they triggered automatic trading halts designed to stem market volatility.

Wide price swings and heavy volume fluctuations should prompt self-regulating organizations like the Nasdaq to take certain precautionary measures. But a bunch of lower-to middle-class citizens who decide to capitalize on financial literacy in any way they can — through a free subreddit rather than a pricey stock broker, for example — deserve access to the free market. Is this a battle between populists and institutions? Some of these “populists” have criticized those in the financial sector who have profited off of the coronavirus pandemic. The phrase “eat the rich” is quickly becoming a defining cultural statement; a memetic imitation of the frustration regarding 21st-century wealth inequality. Robinhood’s decision to restrict trading, effectively siphoning off profits from the everyman in favor of Wall Street hedge funds, is controversial.

Robinhood faces criticism on their trading restrictions not only from slighted day traders on Reddit, but also from Democratic and Republican politicians as well as the Securities and Exchange Commission (SEC). On Jan. 29, the commission released a statement that they will be investigating the situation with GameStop and that it will “closely review actions taken by regulated entities that may disadvantage investors or otherwise unduly inhibit their ability to trade certain securities.” Despite this, the Fed is not likely to get involved in the frenzy. For one thing, market fluctuations associated with GME, AMC and other similar stocks are not likely to impact the broader market. David Beckworth, an economist at George Mason University, said that fallout from GME means that “people would lose equity, but it wouldn’t lead to the problems of homes financed with mortgages and exotic mortgage securities.” In other words, the Fed has bigger fish to fry. Additionally, raising interest rates to change people’s expectations about the market would yield “a very high likelihood of causing a recession,” says Adam Posen, economics of the Peterson Institute for International Economics. “On the other hand, if you raise interest rates quite a bit, you are not by any means assured that you would pop the bubble.” 

The SEC promises to investigate Robinhood’s actions; politicians continue to tweet angrily at Robinhood executives and their cohorts; the Fed can’t and likely won’t do much. So what can be done? The SEC could evaluate its leverage and reporting requirements on firms like Robinhood. Doing so would protect retail investors who serve as the app’s product, not its users. Robinhood employs an order flow payment model — they sell accumulated trading histories of retail clients to earn a substantial amount of its revenue in lieu of commissions. “On top of that, trades are executed in dark pools, which lack transparency and regulatory oversight,” said a representative from the International Financial Law Review. If their goal is really to empower “the next generation of investors to take charge of their financial futures,” then it should allow those who use it to execute the trades they want, even if Wall Street hedge funds lose some money and have to reevaluate their trading strategies. On the evening of Feb. 1, Robinhood released a statement saying that they “didn’t want to stop people from buying stocks and [they] certainly weren’t trying to help hedge funds.” Whether or not that is true, one thing remains clear: these disgruntled Wall Street investors simply have to learn how to adapt.

mclaughline7@lasalle.edu

Amazon’s Founder, Jeff Bezos, to pass reins and step down as CEO

Business

Michael D’Angelo, Staff

BBC

Pictured above is former Amazon CEO Jeff Bezos delivering a speech discussing Amazon’s future to investors in 2019.

The infamous Jeff Bezos is stepping down from his position as CEO at e-commerce giant Amazon Inc. and will move into the role of executive chair starting in the third quarter. He is the richest man in the world with a net worth over $180 billion. He is a majority shareholder of Amazon and also owns the Washington Post and space company Blue Origin. Bezos will be replaced by Andy Jassy. 

Bezos is a Princeton alumni and began his career on Wall Street. He quit his job checking out balance sheets and investments in 1994 and opened Amazon.com in 1995. The company originally sold books on their website in the U.S. and other countries. Amazon went public in 1997 with an IPO price of $18 per share. The conglomerate has grown from a simple website selling books to a massive corporation that manages a video production segment, owns the Kindle reader, manages Amazon web services and owns Whole Foods. Amazon has plenty of room for potential growth in the future, and the stock price closed on Tuesday, Feb. 3, 2021 for $3,380 a share. The future is bright for Amazon and many consumers, from young college students to retirees, who love to purchase items on the site. 

Bezos is reportedly stepping down to focus on other business prospects and devote more time to Blue Origin, the Washington Post, Day 1 Fund and his Earth Fund. If you are wondering if you can buy stock in Blue Origin to chase earnings like Amazon, you are out of luck. The company was founded in 2000, is privately held and the business intends to transform space travel. Many rumors have circulated online that Bezos will compete with Elon Musk for space travel objectives. The Washington Post is a major news organization and Bezos bought the company in 2013 for $250 million. The Day 1 fund is Bezos philanthropic approach to life and the fund intends to create preschools for underdeveloped communities. Bezos’s earth fund is dedicated to providing grants to people who fight and provide solutions for climate change. As Bezos will leave Amazon to focus on other prospects, he will pass the reins onto Andy Jassy. 

Andy Jassy has been with Amazon for years and he assisted in developing Amazon Web Services (AWS) in 2003. He became CEO of AWS in 2016. Jassy, who is Harvard educated, came onto the scene with Amazon in 1997. AWS represents 10 percent of Amazon’s total revenue and they mainly compete with both Google and Microsoft. For the fourth quarter of 2020, AWS reported a 28 percent growth in sales but fell short of many expectations. Jassy would like to propel Amazon and grow the company. 

The future is looking exceptionally strong for Amazon; the company has the opportunity to continue as a highly profitable business for shareholders. In addition, time will only be able to tell the legacy of Jeff Bezos, as he strives to push human innovation further by pushing the limit of space travel with Blue Origin.  

dangelom2@lasalle.edu