GameStop Stocks Rise by Over 1000% Because of Reddit Users
The internet is a powerful tool that connects users worldwide through common interests. With that reasoning, nothing should be unexpected online. However, the unthinkable occurred when a handful of Reddit users decided to mess with the stock market.
GameStop had been struggling with its stock for a while prior to its sudden explosion at the end of January. With video games becoming more accessible online in the past decade, the price of its stock had fallen gradually over the past couple of years. Seeing this, Wall Street hedge funds bet that this trend would continue until the company shut down.
After hearing the news, the people decided that they were going to prove the rich wrong.
In retaliation to these bets, r/wallstreetbets, a Reddit discussion board for users to discuss stock and option trading online, banded together to help GameStop. It was created to strike up enthusiastic dialogue between small investors, but with newfound motivation from these hedge funds, they quickly decided to buy shares and invest in GameStop’s historically unloved stocks, leading the rise from its lowest price at $2.57 to an all-time high of $347.51 on Jan. 27.
“I was really surprised when I heard about this, but I also thought it was impressive to see how the internet could single-handedly accomplish such a feat,” sophomore Julie Sun said.
All of this was accomplished on a whim, with members of the subreddit egging each other on as they used cheap stock trading apps to help GameStop. As more people began to get involved in the rally, GameStop stocks continued to rise, garnering the attention of investors worldwide, including the hedge funds who had originally made the claim. The subreddit had gained a lot of popularity and respect from the drama, even getting the attention of Alexandria Ocasio-Cortez, Ted Cruz, Elon Musk and many more.
“This may redefine how the market works, but it also shows how volatile and risky any sort of investment can be,” Mr. Cubinski said. “There is just no way to predict or guarantee how anything goes, and anybody who wants to enter the market really needs to be well-read and informed.”
Unfortunately, hedge funds quickly fought back by preventing these retail investors from purchasing stocks for GameStop in the Robinhood app, which was one of the apps that they had been using to lead the movement. Trades have been canceled left and right, leading to outrage on the internet.
What comes next is a mystery to everyone. However, it is certain that this day will go down in history.
Hwi-On Lee is one of Guide Post's copy editors. She is currently a member of the Science Olympiad Club and an officer of the Astronomy Club and...