Ever since the 2008 financial collapse a lot of Americans of all political beliefs have turned a critical eye to Wall Street.
The powerful New York financial district pulls the strings of the economy in ways that ordinary people never get to. When a normal person loses lots of money they go bankrupt or become homeless; when Wall Street loses lots of money the government bails it out.
The double standard is especially true for hedge funds, which make money by betting on companies to fail and pursue actions which lead to their failure.
As you can imagine this has sparked increasing anger from the left and right.
Now a group of online investors who chat on Reddit and Discord are helping to single-handedly crush Wall Street hedge funds by boosting up stocks that were being bet on to fail by big investment firms.
you might be having a bad day, but at least you’re not some hot shot wall street suit that has to tell his boss they lost billions because of some meme bros on reddit
— MJ (@morganisawizard) January 27, 2021
Reddit Bros Take on Wall Street
In what can only be described as a kind of revolution, Reddit posters and Discord chatters have managed to pump up stocks that were being hedged for complete failure, bringing GameStop (GME) up hundreds of percent from around $20 to current highs around $410 and AMC from bargain basement prices to quintuple its price.
They’ve also taken stocks like Blackberry BB and inflated them to huge levels.
Hedge funds who were betting on these stocks to fail are now caught in what’s called a short squeeze and are forced to pay for their incorrect hedges, pushing the price up further. Hedge fund firms like Melvin Capital are now on the edge of bankruptcy and professional traders have lost upwards of $14 billion just in the past few days.
The Biden Administration says it is keeping an eye on what’s happening and trading on various stocks was halted on Wednesday amid concern over what’s happening. When normal people lose money? Too bad.
When hedge funds connected to powerful Democratic lobbyists lose money? Stop the markets, the peasants are revolting!
Success Stories Making Headlines
Success stories have made headlines as small time investors cash in big and post on social media about how they can now buy their mom a house, stop being so stressed about being out of work and experience a taste of the good life.
Forty-four-year-old student Sam Daftarian says he bought around $1,000 worth of AMC stock said he’s now made around four times that much, while 36-year-old Noah Williams from Atlanta told the Wall Street Journal he’s made about $150,000 from GME in the past two weeks.
The rise of GameStop has been identified by some as a play by some Wall Street traders against hedge fund rivals, not just a Reddit revolution, but either way it’s undeniable that it’s benefiting the little guys in big ways.
Trading platforms have begun to prevent people from buying more AMC and GME stock as well as others in an attempt to stop the process from occurring.
What Does it All Mean?
This story is important for a number of reasons. Some normal investors sticking it to the big guys is a classic Robin Hood story, especially when the big guys are people who make money from crushing companies.
In addition, it shows how those who have been screwed over by the government and told to stay home and had the economy imploded in front of them have managed to get some ironic revenge on the kind of elites who screwed them over.
If ordinary people learn how to game the systems that the elites use to keep everyone down and manipulate them then it’s going to be a panicked time on Wall Street and in the Halls of Congress as traders and politicians work out a new way to run the scam.
This just goes to show that the people have a lot more power than they realize.