On Jan. 29, the Internet went insane. Reddit was bankrupting hedge funds by investing in GameStop? Like 99% of people during this time, I was wildly uninformed on the implications of statements like this, but I was certainly fascinated.
After days of Twitter browsing, I was able to understand it a bit better. The hedge funds were losing money because they were essentially betting on GameStop’s value diminishing due to the lack of in-person sales as a result of COVID restrictions, and because of Reddit users’ investments in GameStop, the hedge funds went bankrupt from their bets. Once Robinhood, a stock trading website, saw the impact this was having, they shut down their site for trading, keeping people from trading anymore and causing an uproar from the people who wanted to keep this going.
What a mouthful.
However, despite the mental gymnastics it takes to understand events like this, the implications are tremendous. The people got a hold of the stock market and changed the market landscape, no matter how briefly. It gave common people the power only stockholders on Wall Street had ever held.
Robinhood’s backlash indicates how little the people in big business want people to actually succeed in business. They want people to remain in their bubble of small trading with little impact actually making its way up to “proper” business.
Since this grand event, the people on Reddit who bought GameStop stocks have been holding onto them despite the huge increase in stock value that could easily make them millionaires when liquidated. They want to keep the value up in order to keep these hedge funds from resurfacing and profiting from their failures. Robinhood is also being investigated for fraud because of the insane amount of investments in such a short amount of time.
Let’s hope that the power can remain in the hands of the people when all is said and done here.
