What happened with WallStreetBets?

Photo credit Mike Mozart under CC-BY-2.0.

Since the pandemic and the closure of many nonessential businesses and retail stores, hedge fund investors have been quick to find failing companies and short sell their stock. Short selling means that the investor will gain money if the stock fails, but if it doesn’t they have the possibility to lose a lot of money. By betting against declining companies like GameStop, a video game retail store, investors in hedge funds had the potential to make significant returns. This seemingly simple money making bet was derailed late January when a well known reddit group called WallStreetBets began to encourage its members to buy GameStop stock, causing it’s value to skyrocket dramatically and costing hedge fund investors billions. The trading became so volatile that the New York stock exchange had to halt GameStop’s stocks from being traded multiple times over Jan. 27 and 28. Reaching an all time high at $347.51 per share on Jan. 27, many experts are worried that this incredible uptrend is just a short squeeze, which will result in both amatuer and hedge fund investors losing their money. For many who have taken the gamble on GameStop, however, the money isn’t as important as the message they’re trying to send. Members of r/WallStreetBets continue to encourage other investors to hold as a part of a campaign against the financial elite. With a stalemate brewing between investors on both sides, the question isn’t who will win in the GameStop saga, it’s who will walk away with the greatest losses.