Over the past couple of weeks, the Reddit page r/WallStreetBets has been setting a plan of buying stocks and not selling them.
Now, the page has blown up all over the internet, and Wall Street is panicking.
Stock market watchers have been carefully paying attention to GameStop, whose shares have exploded to a whopping 2,000% these past couple of weeks.
Because of the pandemic, GameStop has had to close down dozens of stores all over the country.
This caught the attention of billionaire hedge fund managers and short-sellers. The hedge fund managers and multi-billion dollar companies would borrow and sell stocks that didn’t exist from failing companies like GameStop, and then they would profit off of it later on.
Yes, this is technically legal.
For years, many people have been asking the government to do something about it, but the government would just give these same companies bailouts so their companies don’t fail.
But, recently, many people have decided to play the exact same game, which led to the r/WallStreetBets Reddit page.
Many in the group have been buying stocks and encouraging people on the internet to buy these stocks too, but not sell them. They’re able to do this by using stock-trading apps like Robinhood. This has caused GameStop’s stock prices to soar, meaning that the same billionaire hedge fund managers that were profiting from GameStop’s failure are now losing billions of dollars, since they have to buy back all of these stocks.
This, of course, is not being taken lightly by Wall Street. Many people in Wall Street have tried to do what they can to have the internet take down the Reddit page, which was successful – but only temporarily.
When r/WallStreetBets went back up, many people have decided to start moving on from GameStop to other companies like the movie theater chain AMC, which has now spiked more than 300%.
Many people all over the internet have been telling users that have bought stocks to not sell them, so Wall Street would have to keep losing billions of dollars by buying back these stocks.
This arms race is now slowly bringing in the government, which people feel they’re going to give these companies bailouts again.
Robinhood has now stopped people from buying stocks from GameStop, AMC, and other companies that are being targeted by the internet. Many people have reacted negatively to this news.
Even though many know that they will most likely lose this battle, the internet is having a great time watching billionaire hedge fund managers lose billions of dollars.
