Redditors cause stock market mayhem

This week saw one of the most bizarre stock price surges in history. Gamestop, a publicly traded company, saw a strange rise in stock prices after a large group of Redditers decided to buy their shares. Gamestop was doing very poorly in terms of stock prices during the COVID-19 pandemic as people stopped going physically outside to buy video games and cartridges. It was a prime opportunity for hedge funds to buy stocks, sell them to buyers, wait for the price to inevitably fall, and sell them back to the lender at the market price, forcing in a profit. This form of investment, known as “shorting”, is commonly done when investors can predict that the stock prices of a company will fall. Gamestop was indeed in a bleak position, so to take advantage of their loss, multiple hedge funds decided to begin “shorting”.

However, a Subreddit called “r/WallStreetBets” noticed the actions of these short sellers and decided to buy shares in shorted stocks in order to make stock prices surge. Thousands of people who had free time and cash to spare invested in shares, startling the hedge funds who had anticipated an easy profit. Currently, Gamestop stocks are dancing around $335 per share whereas it was around $19 during New Year’s Eve. Short sellers have lost billions and are condemning Redditers for manipulating the stock prices, despite having tried to do the same.