Most of us know that Wall Street is a ‘dog-eat-dog world’ and everyday people want a turn at the water bowl. Last week, rookie investors spiked interest in a Reddit thread called, “WallStreetBets” discussing the newly bankrupt company GameStop.
On Jan. 28, 2020, GameStop was trading right under $4 and this year, on the same date, that number briefly exceeded $480. Thousands of traders, amateurish and sophisticated alike, made money fast. Hedge funds that had bet against GameStop lost billions.
Hedge funders invest in stocks where they are valued relatively low then, drive the market to make great profit and, feed fuel to the fire of why Wall Street has the reputation it has.
Redditors whose antics tend to be risky as is, began investing in GameStop as well as AMC, Dogecoin and XRP forcing hedge funds to then buy back stock at a much greater price. This is also known as a “short squeeze.”
WallStreetBets subreddit is now leading a financial revolution giving orders to hold and buy more GameStop stock until further notice. Financers are now trying to guard their secrets. They are now under a microscope with columns like WallStreetBets watching their every move.
Investing is at the tip of a phone user’s fingers with apps like Robinhood, Acorn and now CashApp. Pushing a button allows users to buy or sell stock and Redditors are furious with platforms like this and their actions capping GME stock that prevents investors from purchasing any additional shares.
Apps like Robinhood acted in the interest of white-collar crime bullies while at the expense of the little guy. This is against their entire platform that built the democratization of trading.
Robinhood acted in the interest of white-collar crime bullies while at the expense of the little guy. This is against their entire platform that built the democratization of trading.
As a brokerage with the name “Robinhood”, it might be a bit ironic that a company who has a business model surrounding distributing wealth, they have fallen to the hand of power.
Many big-name politicians and entrepreneurs like Texas Sen. Ted Cruz and Elon Musk have taken their opinions to social media mocking and criticizing the Wall Streeters. New York Rep. Alexandria Ocasio-Cortez and Ted Cruz attacked Robinhood’s restrictions.
The GameStop revolution gave real people like college students and people working to make ends meet a chance to make some real money.
For years many have sat back and let Wall Streeters call the shots. This gave everyday people a chance to make a small fraction of billions that these hedge funds are in control of. This financial revolution was long overdue and let’s hope it’s not the end of it.
