Subreddit /r/WallStreetBets decided to buy Game Stop’s stock when a $13.1 billion dollar hedge fund called Melvin bet on Game Stop to fail. The result? Game Stop’s stock was worth $17 a few days ago and as of this morning is worth over $192.
Check it out here:
By shorting the stock, that means that Melvin profits if Game Stop fails. This is public information. The moment the stock went above $175 that meant that Melvin went bankrupt.
Twitter is on fire with this information as pundits, commentators and reddit users cannot stop talking about this historic event. When you short a stock there is tremendous rick involved. Reddit called the bluff of the wealthy hedge fund managers…and won.
The response by the market has been fascinating. For all intents and purposes what the reddit community did was no different than what wealthy traders and hedge funds do. However once the market realized they stopped trading. All sorts of alarm bells once everyday men and women are able to trade at that level.
Now there are even talks of bailing out Melvin. For their terrible bet. Capitalism for their gains. Socialism for their losses. Let’s see if this narrative changes and how the current administration responds.