The Reddit Investor Rebellion

Those who have looked in the news recently have probably noticed some pretty crazy things happening. One of these events took place in the wild world of investing. The highlight of this crazy ordeal is Gamestop stock, or GME, which went from a meager $17.25 to $320 in just days. This sudden surge in value has made a lot of people rich. However, this massive growth is not the result of some genius marketing strategy conjured up by the Gamestop executives but is instead the result of pure, righteous anger.

The sudden growth of certain companies’ stocks, Gamestop being the largest growth, is the work of a Reddit stock-trading community known as WallStreetBets. Much of the inspiration behind this coordinated boost of GME value was simply to devastate short sellers. Short sellers are investors who bet on the value of a stock to go down. In order to hurt a short seller, you have to make them lose their bet, and since GME was the most heavily shorted stock, it was the best target. Those who got into the movement early and got out of it at the right time have made buckets of money, and the short-sellers who bet against GME have suffered like never before. Along with Gamestop, other stock market has-beens have also noticed significant growth. These companies include Blackberry, AMC Entertainment, etc.

These stocks are not rising because of the companies themselves, but only for the purpose of making money and sticking it to the man. However, it might be challenging to understand how exactly these stocks rose in value. By simply getting a lot of people to buy a lot of stock, you can force a stock’s value to grow. In many ways, the stock market is very complicated, but sometimes, sheer numbers are the best way to go. Many ordinary people made a lot of money from the unexpected growth in several stocks, and many wealthy people lost a lot of money at the same time. However, Newton’s laws are just as relevant as ever, as GME indeed went up, and it certainly went down. Part of what slowed the growth of GME and other stocks was when Robinhood, a stock-trading platform, along with other brokers, restricted trade with certain securities like GME.

That this was a controversial move would be an understatement, with politicians and citizens alike condemning the company and its actions. Many online rumors have spread about Robinhood being in league with the ¨men in suits¨, the same people that the Reddit rebels were targeting. Robinhood´s defense is that it had no choice but to restrict trading in those stocks until it could increase its collateral with the DTCC. For those who don’t speak businessman (which is many), this excuse means nothing, and many who do understand are still outraged. However, even if it did not last, this surge has shown that it is possible to bloody the nose of a giant. In many ways, this was devastating to the alleged 1%, and what’s more impressive is that they got burned while playing their own game. This could change the future of economic uprisings, or it could simply lead to further control of trade. Either way, this extreme event will not fizz out into anything and will certainly have an effect on the way business happens.