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Home Business and Economics Economics

Best responses as Redditors fight back against hedge funds and win

'You have to remember this is hurting real people who own multiple boats."

Joe Mellor by Joe Mellor
January 28, 2021
in Economics

Hedge funds are not known for their social conscience. They make a lot of their money by betting on share prices going down, otherwise known as a ‘short’ position.

Shorting is ‘borrowing’ stock, selling the borrowed stock with a reasonable expectation of the price dropping enough that you can then buy it back more cheaply and return it to its original owner, pocketing the profit.

It is hard not to see it as anything other than vulture capitalism.

There is nothing the little guy can do, right?

Wrong.

In stepped, r/Wallstreetbets – a Reddit forum of small-time stock investors, including high school students, pensioners and low-paid workers.

They organised a way to increase the stock price gaming retail chain GameStop and hit the hedge funds where it hurts…in their pockets. GameStop is basically a US version of CeX.

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Members started buying up the stock in GameStop, thereby raising the value and forcing hedge funds to buy back the shorted stock at a higher price, and beating the hedge funds at their own game.

Here is a great explanation of what went down.

The plan was set as these tweets explain.

Tomorrow morning a subreddit is going to successfully drive a $13 billion hedge fund into insolvency.

— Ryan K. Rigney (@RKRigney) January 27, 2021

NBC NEWS: Short-sellers lost $14.3 billion today alone on GameStop stock, according to S3 Partners

— Josh Caplan (@joshdcaplan) January 28, 2021

Reactions

1.

If Redditors rallying GameStop is unacceptable market manipulation, what would you call it when greedy Wall Street bankers gambled away our entire economy in 2008 and faced no consequences?

— Robert Reich (@RBReich) January 28, 2021

2.

bunch of dudes on reddit joined together to raise gamestop's stock price 150% just cuz and u want me to believe the stock market isnt just straight men's astrology

— first-mate prance (@bocxtop) January 26, 2021

3.

Game Stop trading at $260 a share now.

Meme Lords – 1
Wall Street – 0

— Pomp 🌪 (@APompliano) January 27, 2021

4.

BREAKING: GameStop announces they will let you trade in their stock in-store for $0.04 each pic.twitter.com/g0I1QWZUad

— Wesam (@wjawich) January 27, 2021

5.

I legit have no clue about the stock market but if hedgehog managers are mad because people on Reddit put them in the GameStop then that seems good right

— ⚖️Imani Gandy ⚖️ (@AngryBlackLady) January 28, 2021

6.

somewhere, Leonardo DeCaprio is already getting into character for his role in the gamestop movie

— what the actual heck (@jazz_inmypants) January 27, 2021

7.

This whole gamestop thing is just reinforcing my deep spiritual belief that above the amount a person needs to reasonably live all money is fake and only serves to screw over everyone who doesn’t have it

— Katie Mack (@AstroKatie) January 28, 2021

8.

me after making $9 investing in game stop pic.twitter.com/utaDq8H09H

— manny (@mannyfidel) January 27, 2021

9.

Game Stop employees when you go and trade in random old games now pic.twitter.com/KV8PS73ZZj

— Stephen A. Smith Burner (@SASBurnerAcct) January 27, 2021

10.

GameStop sitting amongst Tesla and Amazon after reddit users make it a Fortune 500 company pic.twitter.com/AVUtcjs6gl

— Jordan Deeb (@Jordan_Deeb) January 27, 2021

11.

If I was a Hedge Fund losing billions to Reddit shitposters, I would get a second job driving for Uber, cut out the Starbuck's, and skip the avocado toast.

— Jean-Paul Blarte: Mall Cop (@OldPappyThomas) January 27, 2021

12.

I appreciate that the GameStop stuff is “funny” to some of you but I had planned to buy my wife a (modest) boat for Valentine’s Day & now I can’t & I’m going to have to work up the courage to ask my dad to loan me the money. This was NOT on my 2021 bingo card.

— Rob Delaney (@robdelaney) January 28, 2021

13.

Lots of people are asking for an explainer of the GameStop phenomenon. Here you go. pic.twitter.com/5hL0PWQcwW

— Aaron Rupar (@atrupar) January 27, 2021

14.

Karl Marx failed to account for GameStop stock.

— Mrs. Dahlia Saint Knives (@saintknives) January 27, 2021

15.

I know this GameStop stuff is funny, but you have to remember this is hurting real people who own multiple boats

— Kevin Farzad (@KevinFarzad) January 27, 2021

Related: Thoughts turn to UK as Trump administration ends

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