I BET I MAY, I BET I MIGHT
What's Going On With GameStop, r/WallStreetBets And The Stock Market?
How a bunch of Redditors made GameStop's stock soar, much to the chagrin of the hedge funds attempting to short it.
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The Lede
In recent months, day-trading has soared in popularity, with scores of individual investors buying and selling stocks over short periods of time to make a profit. This isn't remarkable on its own — but what's different right now is that people are coming together online to drive up particular stocks, making it more difficult for habitual traders to predict whether stocks will rise or fall.
Key Details
- GameStop is a video game retailer that, in the digital age, seemed destined to die out, which is bad news for its stock. Short sellers routinely bet such stocks will fall and profit from it.
- Users on subreddit r/WallStreetBets came together to either buy GameStop stock or bet on it rising, resulting in the company's share price skyrocketing from $6 to almost $150 over several months.
- Hedge fund Melvin Capital, a principal bettor against GameStop, finally bought back its shares at a huge loss.