GameStop is a retail chain that is known for selling video games, consoles, and merchandise from different video game franchises. With each passing year, it loses its grip on being a reasonable and loved chain. It sticks around only because of the newly released games and new consoles. It allows people to have an option if they want to attempt to obtain a Playstation 5.
Along with their competitor being Amazon as they are another reason why Gamestop is becoming obsolete. As this chain is becoming obsolete each year, it would make sense for its price for a share of its stock to below. Well, that all changed when users from a site called Reddit noticed something.
Those Reddit users found that there were hedge funds that were waiting for Gamestop stock to go down so they could profit off it. A hedge fund, to those who want to understand a bit better, is an investment company that invests their clients’ money in stock.
These hedge funds that these Reddit users found had a lot of money that was invested in GameStop only for it to be sold when it goes down. They were going to short sell GameStop as short selling is another way to gain from a stock going down. If a stock goes up then they would lose money, which is what this Subreddit did.
A subreddit named r/WallStreetBets allowed those who like to be involved with the economy to join together to invest in GameStop. That moment on Jan. 27 was a historical event. Not because a chain was able to compete with Fortune 500 companies but because it shows the power that the everyday people can have against the rich. It did not just stop there.
It garnered traction on social media and on the news. The news of it helped raise the price of Gamestop’s stocks even more. It even gained the support of Tesla CEO Elon Musk and Rapper Ja Rule with him tweeting “Hold the Line.”
There were attempts to stop people from buying stock in GameStop. A well-known investment app RobinHood and many other investing apps had restricted access to buying any stock, which had caused a short-lived agreement with Republicans and Democrats.
As the restrictions caused reactions within the parties as AOC and Ted Cruz agreeing that Robinhood should have not done that. Robinhood now has limited its users to one share of Gamestop but that is still not acceptable.
There are many mixed opinions and reactions to this moment of history. Mostly positive as many see it as a power move against the wealthy that likes to manipulate the market for their own gain. Economics teacher, Tom Hubner stated that
“It was an amazing anomaly in the market fueled by a simple Reddit site.”
AP Microeconomics Teacher, Tom Hubner
The negative reactions are coming from those hedge funds that were losing money. CEO of Omega Advisors, Leon Cooperman, even cried on TV to garner support.
Overall, this was a moment of history that is sure to be told. It will serve in the future as a lesson. As of now, the stock market price for Gamestop is 45.94 dollars a share on Feb.17, 2021
Anthony Perez is a First-Timer Senior in the AT Torch Staff. He chose to take part in the Torch to improve as a writer and to get out of his comfort zone. He decided that was the best choice as he loves the work because he views it as challenging yet fun.