I keep seeing it in memes and people are talking about it but I know nothing about stocks to even begin to understand what is happening. I even saw a few video titles saying things about Gamestop making them rich. What the heck is going on? lol
A bunch of people started putting in a few hundred bucks to the company’s stock so it skyrocketed. This is to disrupt hedge funds and counteracts wealthy people from continuously using stock to take away money from working-class people. It is glorious.
There is a lot to it but Reddit (or rather one subreddit) started it all. They had thousands of people sinking money into certain stock markets, one of them being Gamestop stock and it caused an unnatural increase is the value of said stock. Once it levels and people pull out, it will cost investors a lot of money.
The easiest explanation, using Gamestop level understand is this:
You borrow game A from a friend knowing the price at Gamestop price is going to go up in the next few weeks. You sell game A to Gamestop for $10 and sit on it. You are waiting for the value of it to dip so you can then go back and buy it for $5, making a $5 profit and giving your friend his game back. You lose nothing but are $5 richer. Instead, Mr. Hedgefund decides to go to Gamestop and buy ALL of the copies of game A and the price shoots up to $25. You know how to spend money just to get your friend’s game back and lose $15.
What is happening is these people are inflating the stock so the people invested will lose billions. They will be out a few bucks, maybe $100, maybe a few hundred but the fat cats will be out millions of dollars and collectively, because of what this Reddit group did, they are going to be out 70 billion dollars.
This is basically Occupy Wall Street 2.0 - The first being the reaction to the collapse of 2008 in the US to the economy which was down to Wall Street and hedgefund holders milking the stocks.
What were the other stocks? I know Bed Bath And Beyond was one. I think Nokia was another. There were at least like 6 of them. I am just curious to see what they are right now.
That is the best explanation I have read. Going to steal that and use it when people ask. I know a lot of people who don’t know what is going on and I had no idea how to explain it. I been following stock for only like 3 years so I am not expert at it.
I kind of got more information on it since posting this but didn’t still understand everything. I agree with Fish, that is a good explanation. Nuts though right? Some dude went from upper-middle class to multimillionaire, worth 37 million now.
Some people are losing big now… i hope it wasn’t anyone here
Yeah a lot of people are losing cause they are pulling stock out. I mean that is how it functions. The value goes up when a bunch of people invest but when they start pulling out, the value goes down. You want to sell high and buy low.
^ I saw that. I only know of one person who invested in this stock and they pulled out before they started forcing limits. He ended up profiting a few hundred from it so not bad. He almost invested a few grand the night before Robinhood did what it did and he is glad he didn’t and just withdrew.
I don’t know of anyone who lost big or won big in all this. A friend of my brothers invested at the beginning of January and ended up making a few grand out of his investments which was good. He paid off the rest of his car with it.
So what is the deal here now? Has everything come to a stop because they limited people from investing? I am confused because this was such a huge deal and now no one is talking about it as if it never even happened.
I didn’t lose anything because I didn’t participate! So I am not a winner but I am always not a loser. lol I wish I would have at the beginning of January though. Oh well!