GameStop, the latest nonsense from Wall Street
Thousands of Internet users took their courage in both hands to fight a battle against the big American investors. The goal? To turn their financial mechanisms against them. The result? A speculative campaign that shakes the markets and amuses many Internet users on social networks. It is an “absurdity” of Wall Street that confirms the slogan of GameStop: “Power to the players”.
When Reddit overthrows Wall Street
It all started on the Reddit social network forum, among others. Thousands of Internet users coordinated to take a massive stand against the giants of Wall Street. They joined forces on a dedicated discussion tab, “Wallstreetbets” to buy GameStop shares en masse. On January 28th, the discussion tab had more than 4.5 million participants.
Since April 2020, the share price has increased 100-fold, as it has been overtaken by Wall Street. As a result, the stock market has been pushing sellers to go short. To limit their losses, the funds have also bought back GameStop shares, which has only accentuated the price increase.
As a reminder, some Wallstreetbets traders made record profits. One user reports having turned $50,000 into nearly $48 million in just a few months. Losses have also been there!
According to journalists, the action taken by Internet users is a form of anger against institutions. Most users of “Wallstreetbets” claim that their “tactics” are also political, as they fight against the Wall Street giants by trapping them in the rules.
Note that Reddit users have also turned to other companies, including AMC (course multiplied by 6 in one month) and (BlackBerry (x 4).
The giants of Wall Street have taken their revenge
To take revenge, the Wall Street giants resorted to a simple and effective technique: blocking Gamestop’s (and many others’) shares on online brokerage platforms. As a result, the traders were unable to access their portfolios. As a result, GameStop’s shares ended up declining by 44% (on January 28). For its part, Discord banned the “WallStreetBets” discussion on its servers.
Last Wednesday evening, the American Stock Exchange (SEC) gendarme said he had taken note of this “volatility” and “evaluated” the situation. “The exchanges would be put on hold for 10 days to ensure that all investors have access to accurate and up-to-date information,” said Frenkel, a former SEC attorney. However, he doubts that such a step would be taken.
The GameStop share, what future ?
Within a few days, the video game chain’s share price rose by 18% (January 25), then by 93% (January 26) and exploded by 135% (January 27).
According to Wall Street experts, “no one knows whether GameStop’s share price will go up or down tomorrow. It’s “Gambling” and it’s hard to know if the company will grow in the coming months or go bankrupt.
The video game company is going through some rough days right now. The group is said to have more short shares, betting down or up, than shares actually circulating on the market. No one can know how high the price will rise.
Note that the latest published figures show that American and European speculators betting on the price decline would have lost more than $3 billion.
