Gamestonk!! Story
Dynasties rise and fall but 2021 is the time that goes down in the history of the internet to not collapse an empire but make them roll in their own sty. Our story starts back in the summer of 2009 when reports of the surface of AT&T Company had been blocking the users from accessing the 4chan website.
Threatened, plugged-in patronizers of the board did not take the news well. As an act of reprisal, hatched a scheme to spread a fake report that the CEO of the company–Randall L. Stephenson had died. As an attempt to tank their stock. As bonkers as it sounds, this unassuming plan worked. With many news outlets taking over this rumor and reporting the same as genuine news. What started as an aleatory story of internet pranksters affected real-time scenario, and they unleashed the power of the internet the reveling groups' power did not go mute as they saw lines go down big time.
Scenarios and actions that reveal themselves a decade later are nothing short of a crazy Hollywood story. I guess now is the time to quote indeed “the reality is strange than fiction”. Just like the saying, history reprises as the pattern repeated and our Redditors irked.
A group of minor online investors has been able to destroy Multibillion-dollar Hedge funds using their own game. Well now, is the time to bring in a pesky subreddit –r/wallstreetbets. To brief it up, the r/wallstreetbets filled with self-proclaimed “degenerate gamblers” as the term used as a badge of honor for its members. The group comprises day traders -more dramatically, incorporates members who play dangerous games, where they either make a fortune or lose everything in a matter of days. As opposed to long-term and conservative investments in well-established companies. Making the world of the stock market a complex slot machine.
Navigating the Devil or Deep Sea paths, their main add on would be commission-free trading apps like Robin Hood. These were only more helpful in making the throne laced entrance barrier amusing. The steep stakes being lower than ever before, the community was gathered and immense.
The stories of these communities are prolific and worth narrating to keep some nettlesome teenagers at bay. The group has been conspicuous in gathering a name for itself in the stock market. Grasping the pulse, the group had realized its worth in the numbers. This brings us to the discovery of GameStop (GRE) short sellers. For all the rock dwellers, GameStop is a video game store chain. The company has seen a slow and painful demise in the stock market, as more and more people started buying their games in digital form. With many Wall Street, hedge funders seeing the riding of the stocks on the chart shorted selling GameStop stocks. Which essentially means borrowing stock so that you can sell them. You then have to pay that stock back later. Betting that the stock will go down so that you can buy it later at a lower price and pocket the difference. By doing these millions of times, you’re selling the stock, which drives the prices down if it’s done in mass like was happening here. So, for example, you borrow when it is $10 a share and sell it. You now have $10. When this happens with billions of dollars’ worth of stock, you drive the prices down. Then when the stock is $3 a share, you buy back the stock you owe and repay it. You keep the $7 difference. Multiply by millions of shares and so on.
Since the Hedge Funds saw there was no way for the company to rebound, it was a sure way for Wall Street investors to make some easy cash. It was until the aforementioned subreddit got involved. Some users on WSB realized that if they all started buying GRE stocks to raise the price. The bigwigs would lose, and in the way, they would make some bucks for themselves. The idea caught on fast and thousands bought it. In a matter of days, the stock value went from $40 to over $400. Just as they predicted the Wall Street, short-sellers lost billions. Some are now reported to looking for bailouts–rumors are to be believed, then some already received the bailouts from executives. Elon Musk fired up this humor by tweeting out for this internet gag. And a cherry on top of the pie Media caught up with this phenomenon. The most recently noticeable entry for this dying industry and refusing to blow out stocks is AMC -a movie theatre chain that has been hurt because of the pandemic has been forced to close some of its locations. As the meddling subreddit has, the company stocks go up to over 250% in value (not current positioning).
With no dearth to the drama, the elite and CNBC have declared this to be trolling against Wall Street, and also many got on CNBC with delusional statements of declaring Russia was to be blamed. Only camouflaging their primary concern addressing the government to regulate the market and stop these “no good Redditors.”
Many pointed out the hypocrisy that Wall Street cries for regulation only when normal/individual investors have the upper hand. So, what did they want the government to do? Stop a group of individuals from Reddit and 4Chan from buying the stocks to halt their meager profits?
This day, therefore, be forever known as a group of Redditors taking down on the real bull in the market with bear hands (pun). The so-called stock market gurus and experts with multiple financial degrees besides their name and a crazy number of followers below their channel names were out naked, to be seen as for their short-selling schemes and big bucks being pocketed while their plans were shown to be easily foiled.
The fundamental fact always that is slept on is about Index funds, which I might add that charges practically no fees and diversifies your portfolio. With a piece of supporting evidence at a time when stock market legend Warren Buffett challenged five hedge funds to give a better return than an index fund over the course of 9 years. To the surprise of many by the end of the challenge, not a single proclaimed expert came close to the returns of the Index fund.
This raises a question. Why pay the hefty commissions? While there are n number of technical experts walking around being paid a fortune for their work. While a group of like-minded sub-Redditors had closed the curtains for the puppet show. As a layman, it is safe to say go conservative with stock market investments. With all being said, the billionaires on wall street are powerful people, and in no time would turn the tables. At the bare minimum, all it takes is to keep one of their person inside for the insights. With all this, the subreddit was made private and its discord was banned, and even the trading apps like Robinhood, TD Ameritrade restricting the trading abilities for the GameStop and AMC stock being put on hold. The Wall Street Big Wigs have cried for help to stop this trend, the trend of power in hands of a common person. A quick visit to this subreddit clarifies that the folks are fully aware of the risks being involved and actions that would be taken. Quoting Dark Knight’s Joker quotation “It’s not about money; it’s about sending a message.” There would be repercussions for the actions which would be as extreme as being taken down, but the increasing power of tech conglomerates have over free speech online it’s not all surprising.
