Recently, people have been feeling like they’re living in the well-known film “The Wolf of Wall Street” with what has been going on in the market with GameStop and AMC’s likes.
Ironically, Jordan Belfort posted a short clip of him reenacting a movie scene on his social media. Instead, he said, “We’re not f****** leaving.”
He said that it is hypocritical and a disgrace what Wall Street, Robinhood, hedge funds, and those who have a play in manipulating the market are doing.
Let’s start from the beginning; the pandemic has put many businesses in a rough spot: small companies, movie theaters, retail stores, and more. The ones who would profit the most from this were short sellers.
Short sellers would bet that a company’s stock would drop. If the stock rises, short-sellers would have to either buy more stocks or cover their position to minimize their losses. Who are frequently the short sellers? They usually are hedge funds since they have the money to back up their losses since betting against a company’s success is a high-risk position.
A financial data company called S3 Partners said that their analysis discovered a loss of $23.6 billion on GameStop alone for short sellers in January.
This happened because of a Reddit community called wallstreetbets (WSB). They are a group filled with investors and were discussing investing in GameStop. Their followers followed and boosted up the price of the stock.
GameStop shares were around $43, and when mainstream media caught hold of WSB, starting a “revolution” against hedge funds. The shares skyrocketed to about $380 and became one of the most traded stocks on the market.
Even Tesla’s CEO, Elon Musk, hopped into the trend and added fuel to the fire by tweeting “Gamestonk” and shared WSB’s Reddit page. The same thing happened with AMC; for weeks, the stock was at a price around $2. Then WSB attacked and shot the stock price to around $20.
The volume trading was so high that TD Ameritrade’s likes had to pause their mobile app since they were handling” unprecedented volumes.” People were making tons of money, except for short-sellers.
Then, the manipulation happened.
It was a battle of everyday people versus the hedge funds. “Gotta admit it’s something to see Wall Streeters with a long history of treating our economy as a casino complaint about a message board of posters also treating the markets as a casino,” tweeted U.S. Representative Alexandra Ocasio-Cortez.
Reddit co-founder Alexis Ohanian also had some comments on what was going on: “The public is doing what they feel has been done to them by institutions, and it’s a perfect storm at a time when lost of people are hurting, interest rates are so low, inescapable student loan debts loom, and every major institution has caught losses during a global pandemic over the last year, this something to believe in.”
Robinhood started to block investors from buying GameStop and AMC shares, basically barring us from their platform. They only gave us the option of selling the stocks. This was an attempt to sabotage everyday people’s money to bail out the hedge funds that were taking heavy hits.
Why is it when the big brother is losing money, and the ordinary people make money, the higher-ups make moves to stop us from making money? Why isn’t it the same thing when big brother makes all the money, and we don’t?
There has never been a moment where we stop and think, “Oh, the big guys are making too much money, too quickly, so we have got to stop it.” The reason why is because it is supposed to be a free market. When we are making “too much money, too quickly,” they are moving things in their favor.
If they can do this, they can do anything. They are changing the rules at the moment and time for any reason if they don’t like the way it is going.
So people retaliated. The trend became “hold the line,” to hold their shares and do not sell. To not back down from the “big guys.” Ultimately, the shares started to drop, as AMC closed at around $6.80 slowly and GameStop closed at approximately $64 on Friday, Jan. 5.
“What a difference a week can make in the stock market. Investors pivoted to concentrate on a potential new stimulus package and stock rose this Friday, with the S&P 500 having its best week since November,” said University of Tampa student Ryan Halfpenny. “The Nasdaq also rallied this week and gained 78.55 points, hitting a record high and having the best week since Nov. 6th. The Dow Jones Industrial Average rose 92.38 points. Although there was market turmoil triggered by GameStop and other high-interest short stocks over the past week, my outlook for the economy has not changed. However, this doesn’t mean it’s going to be a smooth road from here, my outlook for the economy has not change” said University of Tampa student Ryan Halfpenny.
Well, what happens now? I don’t know. People will brush this off and give up to become controlled, or people will fight this. Remember, this is an opinion piece.