Let the people trade.- Robinhood MaWhy GameStop? " Let the people trade," the company stated. Robinhood's ethos, as expressed in a tweet from 2016 has been brought into question. The restrictions placed on Thursday sparked allegations that the hedge funds had wielded influence over Robinhood and other trading platforms to stop the upward rally. But Friday morning Robinhood lifted some of those contested restrictions and GameStop remained a hot ticket, instantly jumping 50%. Until Thursday, when several brokers including Robinhood, Ameritrade and Charles Schwab restricted trading of GameStop as well as a handful of other stocks on their platforms.įollowing the restrictions, GameStop stocks plummeted. In essence this democratised the whole system. I've been laughing for ten minutes because apparently Wall Street Bets fucking bodied a hedge fund that was shorting Gamestop and now the hedge fund needs a $2.75 billion bailout lmao - Edward Ongweso Jr JanuRobinhood app resumes trading in GameStopĪmateur traders on the stock market like the now-famous Reddit traders are enabled by commission-free trading apps, making it possible for "normal people" to buy and sell stocks as they please. Morgan has now listed 45 stocks that may be vulnerable to future “fragility events” like this in days to come, including real estate company Macerich Co, restaurant chain Cheesecake Factory Inc and clothing subscription service Stitch Fix Inc. Now that the play is truly out in the open, the fact remains that GameStop's shares are unlikely to remain high for very long and so anyone who is still buying stocks with the retailer at the inflated prices stand to lose out. Reddit traders who were smart enough to get out while the going was good – at the peak a share in GameStock was over 100 times August’s value – will have made a life-changing amount of money. The former is believed to have lost around 30% of its $12.5 billion under management already this year on a series of shorts, which includes GameStop.īusiness Insider predicts that combined, short sellers have lost over $5 billion in betting against GameStop so far and has compiled a list of funds that have now lost out to the "Reddit army" Point72 Asset Management, D1 Capital Partners, Maplelane Capital, Candlestick Capital Management and of course, Melvin and Citron mentioned above.Īccording to Reuters, global equity markets have also suffered as some funds were forced to sell some of their best-performing stocks, including Apple, to cover billions of dollars of losses. Two big hedge funds, Melvin Capital and Citron Research, are thought to have been the most exposed. The Wall Street investors who had "shorted" stocks of GameStop were relying on the price falling so they could get their money out but a huge surge in investment has seen the price skyrocket and left them unable to close their positions. It was worth $100-ish at times on Monday and Tuesday and at its peak on Wednesday reached over $450. GameStop’s stock price jumped from $4 last summer to $20 at the end of 2020, to $40 two weeks ago. The amateur traders, whose subreddit bio is “ Like 4chan found a Bloomberg Terminal” and led by user “DeepFuckingValue” organised themselves to gradually buy up shares in the retailer, forcing the price of GameStop’s stock into the heavens, simultaneously making a lot of money for themselves and crushing the strategy of the colossal hedge funds who’d bet against it. Quite literally against all odds - in what has now become a class war - some investors on Wall Street have now lost millions of dollars. It all started with a subreddit called WallStreetBets on the chat site Reddit. It's the now famous tale of a band of keyboard warriors who decided to bet big against gigantic financial institutions by changing the fortune of a video game retailer on the downturn called GameStop.
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