How Redditors devastated Wall Street hedge funds by buying GameStop stock – with the 15 funniest responses
When Kpop fans swamped social media with pictures of their favourite idols to subvert the anti-Black Lives Matter hashtag, #WhiteLivesMatter, it was a clear signal that ordinary people have a lot of power on the internet, as long as they organise.
The follow-up to that is playing out over on Reddit, where a group of small dabblers in the stock market have already hit some huge hedge funds right where it hurts – in the bank account.
THE POTTED EXPLANATION
A gaming retail chain in the US, GameStop – the kind of place where people trade in old games for a few pence – has been struggling in the aftermath of both the pandemic and the move towards online selling, leaving its share prices perilously low, and leading to job losses.
So far, so normal.
This is where it turns into a Cohen Brothers plot.
Some Wall Street hedge funds – that’s just dynamic investment teams, to the rest of us – have been shorting on the GameStop stock.
Shorting is ‘borrowing’ stock, selling the borrowed stock with a reasonable expectation of the price dropping enough that you can then buy it back more cheaply and return it to its original owner, pocketing the profit.
Risky, but it works enough of the time to make it a common practice.
Enter stage left, r/Wallstreetbets – a Reddit forum of small-time stock investors, including high school students, pensioners and low-paid workers. The GameStop stock became a bit of a project for them, with members buying up the stock, thereby raising the value and forcing hedge funds to buy back the shorted stock at a higher price, pushing some towards a financial cliff edge.
Tomorrow morning a subreddit is going to successfully drive a $13 billion hedge fund into insolvency.
— Ryan K. Rigney (@RKRigney) January 27, 2021
NBC NEWS: Short-sellers lost $14.3 billion today alone on GameStop stock, according to S3 Partners
— Josh Caplan (@joshdcaplan) January 28, 2021
ME: explain the gamestop thing to me like i'm a little kid
*10 minutes later*
— Ben Rosen (@ben_rosen) January 27, 2021
tl;dr Redditors are screwing with billionaires by buying up worthless stock, to make them lose money.
A David and Goliath story for our time.
Just to let y’all know, people on Reddit are buying lots of shares in GameStop to raise the price of the stock. Doing this will make billionaires who bet GameStop stock would fall lose a ton of money and it’s the most beautiful thing I’ve ever seen. pic.twitter.com/IjhSfQeuv1
— randall (@_ZevLoveX) January 26, 2021
People are acting like the Gamestop move is just trolling.
Read the threads.
Desperate people, ravaged by pandemic and with little government support made a profit of over 4000% on their stock. People are paying bills, helping their parents, finally getting medical care.
— Thomas Moore (@TomAandTom1) January 28, 2021
The short squeeze, as this attack on shorting is known, is such a big deal that the White House is monitoring the situation.
Psaki on Biden's thoughts about GameStop stonks: "It is a good reminder that the stock market is not the only measure of the health of our economy and it does not reflect how working and middle-class families are doing." pic.twitter.com/xAopMdOcWU
— Aaron Rupar (@atrupar) January 27, 2021
everybody thought we’d get less weird headlines when trump was gone but it’s day 7 and we’re at “Biden team aware of Gamestop situation”
— nuanced opinion guy (@charles_kinbote) January 27, 2021
Elon Musk had a more pithy reaction.
— Elon Musk (@elonmusk) January 26, 2021
GameStop is still more accurately valued than Tesla.
— Jacob Bacharach (@jakebackpack) January 27, 2021
Here’s what other people have been saying about it on Twitter.
I know this GameStop stuff is funny, but you have to remember this is hurting real people who own multiple boats
— Kevin Farzad (@KevinFarzad) January 27, 2021
*Stock market hits record highs at a time of record lines for food banks*
"well, the rich just know how to invest"
*Regular people game the same system through GameStop*
"we must stop this immediately"
— Dan Price (@DanPriceSeattle) January 27, 2021
Karl Marx failed to account for GameStop stock.
— Mrs. Dahlia Saint Knives (@saintknives) January 27, 2021
Lots of people are asking for an explainer of the GameStop phenomenon. Here you go. pic.twitter.com/5hL0PWQcwW
— Aaron Rupar (@atrupar) January 27, 2021
I appreciate that the GameStop stuff is “funny” to some of you but I had planned to buy my wife a (modest) boat for Valentine’s Day & now I can’t & I’m going to have to work up the courage to ask my dad to loan me the money. This was NOT on my 2021 bingo card.
— Rob Delaney (@robdelaney) January 28, 2021
If I was a Hedge Fund losing billions to Reddit shitposters, I would get a second job driving for Uber, cut out the Starbuck's, and skip the avocado toast.
— Jean-Paul Blarte: Mall Cop (@OldPappyThomas) January 27, 2021
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