For anyone thats interested, here’s a brief summary of whats been happening with Gamestop stock the past couple months from someone who has been watching it unfold it on reddit:
Gamestop was on the verge of bankruptcy and the stock price was at an all time low. Hedge fund companies had issued short sales of the stock in order to drive the price down even further to make a profit, and for more shares than the amount that actually exists (it’s called naked short selling, and it’s illegal-ish depending on who does it). People on reddit noticed the strange short activity and decided to jump in and buy the stock, driving the price back up. News of Gamestop pivoting to e-sports under new management was released which drove the price up even further. The higher the price gets the more the rich hedge fund managers have to pay in order to fulfill the shorts that they placed on the stock, which again is driving the stock price up even more. This scenario is known as a “short squeeze” and has happened a couple times throughout history. Now what we are seeing is a battle between your average joe retail investors against the big wall-street entourage that have been preying on companies like this for decades. And the amazing part is that the retail investors are winning. By a lot. Many people are now able to pay back student loan debt, and Wall street is furious that someone else is making money at their expense now and are crying out for regulations and bailouts. As of today brokerage firms like Robinhood and TD Ameritrade have restricted the purchase of Gamestop stock and other similar stocks like AMC and Blackberry, in order to protect the hedge fund companies that are losing billions on their own mistake.
So yeah, you’re going to be hearing a lot about this in the news lately just a heads up. This is definitely a groundbreaking moment in history so you might want to pay attention to how this unfolds
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