GameStop shares soared from less than $20 per share a week ago to $492 today, staging an epic battle of retail folks defeating hedge funds, causing concern in the White House and Congress.
Central News Agency reported that GameStop and once into bankruptcy crisis of the global cinema leading AMC, two files of stock prices recently like a rocket soaring high. The two companies were also hit by the Chinese Communist virus (new coronavirus) Epidemic, and some Time ago they were reduced to “dumpling stocks” that legal persons were keen to short, but in the U.S., the retail investors in Reddit and other online forums linked to pull up, and the accumulation of buying completely repelled the short side of the big players.
AFP reports that the epic battle between Wall Street retail investors and hedge funds is quite similar to the flavor of the “Occupy Wall Street” movement 10 years ago, but specific stocks soared triggering the White House to worry about manipulation of the stock market, and the U.S. Securities and Exchange Commission (SEC) is also afraid to get involved in the investigation.
The economic team, including Treasury Secretary Janet Yellen and others, are watching closely,” said White House spokeswoman Jen Psaki. It also reminds us that the stock market is not the only indicator of the quality of the economy.” The SEC also issued a statement on the evening of the 27th, saying it is monitoring the follow-up developments.
But for some on Reddit, the U.S. version of PTT, GameStop shares have bucked the trend, soaring from less than $20 a share a week ago to $492 today, leaving short-selling hedge funds in the dust and highlighting the revolt of civilians against the global wealth that has been amassed in the hands of the very few.
Reddit user Responsible-Height77 told AFP in a forum, “We always see the one percent pocketing trillions and trillions of dollars a year, and during an epidemic…yet millions of Americans are claiming unemployment benefits.”
“I think it’s time for civilians to speak up and highlight that we’re not just air.” Responsible-Height77, a 21-year-old American college student, said that he was feeling the hardships of 2020, and that he had been hit by the epidemic and had friends around him who had died of the disease, so he participated in the campaign to raise GameStop’s stock price in order to give the hedge fund some color.
A BBC article analyzed that GameStop, a U.S. video game retailer that still specializes in selling physical video games in an era that speaks of online streaming, lost $795 million in 2019. The recent surge in the stock price is due to some users in the Reddit forum saw some shorting investment companies see GameStop shares will continue to fall, so they called on others to buy GameStop shares to support the stock price, and let the shorting fund big investors lose money.
The reactions to the incident were polarized, with some suggesting that the U.S. regulatory authorities should investigate such public opinion-driven stock price fluctuations, but others describing it as a reflection of the generational conflict between a new generation of individual investors and traditional Wall Street institutions.
Congresswoman Ocasio-Cortez (Alexandria Ocasio-Cortez), a member of the progressive wing of the Democratic Party, argued that Wall Street investors have always viewed the U.S. stock market as a casino, and now these folksy retail investors are merely emulating them.
Some voices have also noted a “revenge” mentality among those participating in the campaign, targeting financial institutions seen as profiteering. The discussion on Reddit is also full of criticism of the “post-war baby boomers,” saying that these middle-aged and older people control most of the wealth in society and are unfair to younger generations.
According to Neil Wilson, an analyst at Markets.com, what makes this incident special is the “lynching” of investment funds involved in shorting stocks, “a generational battle to rob the rich and then give it to the poorer millennials. It’s a generational battle to rob the rich and then give it to the poor young people born in the millennial generation.
John Patrick Lee, an analyst at investment firm VanEck, agreed that GameStop’s events reflect a clash between the new generation and the old financial establishment on Wall Street, “and I don’t think it’s going to be a flash in the pan.
CNBC reports that Richard Bernstein, who has been on Wall Street for decades and is now the chief executive of Richard Bernstein Advisors, believes that the democratization of the market is the key to the creation of this madness by the netizens, but this approach ends up with retail investors suffering, and inexperienced amateur investors end up in trouble, “the bubble comes in a different form. different forms, this is classic. You’re basically playing with fire.”
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