1,119 5 minutes read
Photo credit: Corey Coyle (Wikimedia Commons)
The closing days of January shook Wall Street with a struggle between powerful stock market players and amateur investors that left investment firms reeling with billions in losses.
On one side were hedge funds that had bet big on stock prices dropping for the video game store chain GameStop and other companies. On the other, a large number of small investors coordinating on online platforms such as Reddit’s WallStreetBets forum to buy shares and encouraging others to do the same.
These hedge funds were blindsided as prices quickly shot up in a matter of days fueled by amateur investors flooding the market with small purchases of GameStop shares. As of Jan. 29, investors who had bet against GameStop had racked up $19 billion in losses with the company’s stock price up some 1,800 percent since the beginning of the year.
Fury as trading platforms halt buys on GameStop, other meme stocks
Trading app Robinhood is among those being slammed after a movement originating on Reddit drove up stock prices.
Author:
After a week that has seen the price of so-called meme stocks driven up by a determined community of Reddit users, a number of trading platforms hit back on Thursday by preventing people from buying shares in certain companies, including GameStop.
GameStop has been the poster child for the effort led by the Reddit group r/WallStreetBets, a collective of retail investors who have been driving up the prices of certain stocks, calling the bluff of hedge funds and institutional investors who have bet on the stocks decreasing in value – otherwise known as shorting.