Inside The Crazy Week of The Stock Market

Jordan Mendiola

GameStop

https://img.particlenews.com/image.php?url=0t4Fya_0YV61jAg00

In the recent week, there was a lot of action revolving around the stocks GameStop and AMC. The stakeholders involved in the situation are retail traders and billionaire hedge funds. 

Many people on Reddit started a movement to stick it to the hedge funds. The hedge funds have made tons of money off the public for years and have utilized market manipulation with their funds.

People on the internet got together and realized exactly what was going on and capitalized on it. GameStop’s value at the beginning of the Pandemic was worth around $4 a share. On January 28th, it hit $468. 

You would have multiplied your money by 100 if you had got in when it was worth nothing, and exited at this insane high.

According to Forbes, “much of the moonshot was driven by retail investors, who used online forums like Reddit’s WallStreetBets to organize a concerted push at the expense of hedge funds like Melvin Capital Management LP.”

This is a perfect example of unity in America. Millions of Americans joined the movement to take from the rich and give back to retail investors.

A billionaire hedge fund manager, named Steven Cohen runs Melvin Capital, who lost billions of dollars due to GameStop’s short positions and deleted his Twitter account after receiving threats (Financial News London).

Many retail investors lost traction on their movement when brokerages such as Robinhood limited the number of shares users could buy, ultimately boosting the number of sellers versus buyers. 

The Redditors want everyone to have “diamond hands” and refuse to sell their positions, even if they’re down. It’s been a week of back and forth battle between the people and the hedge funds.

Some of the solutions to the potential issue include the brokerages stopping the limits on traders who want to invest in these particular “meme stocks”. Another solution is that the retail traders squeeze out lots of the hedge funds and make tons of money.

At some point in time, the hype will calm down, and everything will head back to normal, but until then, traders and investors can expect to see lots of volatility, especially during earnings season. The past week has united much of the country and inspired young people to start investing.

Comments / 0

Published by

Creative entrepreneur, U.S. Army Engineer, and dedicated runner. Committed to sharing ideas that lead to more fulfillment in all areas of life. Email: mendiola1829@gmail.com

Chicago, IL
1486 followers

More from Jordan Mendiola

Comments / 0