Over the past week, small investors have been pushing GameStop, AMC, and Blackberry stocks sky-high to hurt Wall Street giants.
As of 10:00 AM Thursday, Gamestop stock was valued at $468 a share, which was $4 a share only six months ago.
This market move was not the work of hedge funds and Wall Street, but the everyday American people congregating online to save retail business and break up hedge funds in the process.
Gamestop was planning to close over 1000 of its retail stores by March, but now that might not happen.
Trading platforms such as Robinhood have halted buy orders on shares for Gamestop, AMC, and Blackberry to cut losses and force traders to sell off their positions.
By halting the buy of shares, trading platforms have moved the stock market’s goalposts for thousands of everyday Americans. A Robinhood user has already filed a class-action lawsuit on the primary claim that trading platforms are finessing their traders.
Reddit user r/WallStreetBets is credited with starting this movement and gained over four million followers since it began.
He encouraged his followers to buy up GME and AMC to create a “short squeeze.”
A “short squeeze” is when a stock or asset jumps so high that it forces the short holders to sell off their positions to avoid any more losses.
Here, the short holders were hedge fund conglomerates that were betting on Gamestop stocks demise.
If stockholders (small-investors) hold out until Monday, this could force significant hedge funds’ closings and send Gamestop and AMC shares even higher.
The American people are sticking it to the man and creating phenomena that are never before seen in the markets.
Wall Street moguls have accused these retail investors of market manipulation and restricted their ability to trade, which many believe is one of the most hypocritical moves of 2021.
These hedge funds and trading platforms moving the goal post to save themselves and changing the rules at their whim could even result in criminal charges.
Dave Portnoy, the founder of Barstool Sports, ripped Robinhood for their behavior and said, “Somebody is going to have to explain to me in what world @RobinhoodApp and others trying to force a crash by closing the open market is fair? They should all be in jail.”
Even Alexandria Ocasio-Cortez agreed in a tweet with Portnoy as well as Ted Cruz and Donald Trump Jr. when she said, “We now need to know more about @RobinhoodApp’s decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit. As a member of the Financial Services Cmte, I’d support a hearing if necessary.”
Trading platforms shutting down trade to everyday Americans is now bipartisanly turned into an attack on the American people.
The consequences of this random influx of trade and violation of trading etiquette for users could result in a catastrophe for both Wall Street and the American economy.
Many more things could be coming down the pipeline as America awaits the actions that both the government and the private sector will take on this highly unusual circumstance.