GameStop Stock Drama Unfolds
February 22, 2021
On December 8th, 2020, the company GameStop reported that their sales went down which caused the company to lose $63 million dollars. To try and alleviate the way their stocks have dropped, Gamestop appointed new board directors, in January of 2021, that were ultimately trying to change the firm into its best self. This report caused a lot of conversation on the forum Reddit which caused people to invest in GameStop, the stock went up 50% since the announcement. This caused controversy and a game of tug of war between investors and hedge funds. Hedge funds are liquid investment funds that invest their clients money into the market, it consists of mostly billionaires. A lot of the hedge fund and trading companies were shorting the stocks to benefit from the potential decline of the company. Shorting a stock is when a stockholder borrows a share and then immediately sells it, in hopes of getting the share later at a lower price and then returning it to the lender, pocketing the difference.
On January 28th, 2021 trading companies like Robinhood, Citadel, Td Ameritrade, and many others stopped the transactions dealing with the GameStop stock. This caused a lot of speculation that the trading companies didn’t want their billionaire hedge fund friends to lose their money at common peoples expense. They don’t want the common people to win, they want the rich to get richer and if they lose, they will save them. Barstool Sports founder Dave Portnoy says in his rant on twitter, “They are robbing you, they are stealing from you, this is criminal.” Supporting a similar statement, democratic lawmaker Alexandria Ocasio-Cortez stated on her twitter, “This is unacceptable.” She later continues, “As a member of the Financial Services Cmte, I’d support a hearing if necessary.” This is such a huge deal because big trading companies and rich people are manipulating the system in plain sight, stealing from the everyday people!