How Redditors Changed and Almost Broke the Economy

How Redditors Changed and Almost Broke the Economy

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Everyone at least knows what the stock market is, for those who don’t know it’s when a certain company sells a part of their share an evaluation.

A specific group of people called Hedge funds which are a group or a person who has experience for example Man group has been around the market since 1784 to now and used to have 117 billion dollars in assets. When The famous and funniest person Elon musk was driving around in his tesla it changed the automobile industry, then the hedge funds short-sold Tesla stock think of it this way the stocks go green then piles of bricks stop the green and change it opposite and making loads of profits.

This Man, Vlad Tehev co-founded the company Robinhood in 2013, which is a company that allows inexperienced investors to invest in the market before it was private.

Gamestop was a place back then that was the dominant video game retailer, like how blockbuster died because Netflix was the same but online and the stocks went down like around 140 percent. Now that hedge funds became more valuable and Reddit was in the spotlight.

One Redditor Senior_Hedgehog pointed out that 84% of shares are short basically meaning there where more power driving the stock down. Let’s say you lent a friend a share of about 20 dollars if the price goes down to 12 dollars you buy it back and keep the 8 dollars in profit. If the stock went up let’s say 30 then no profit you have to pay the difference. Reddit users convinced others to buy stocks example 20 dollars from December to January about 500. This tactic is called a Short Squeeze an uncommon tactic on wall street.

Hedge funds had to bailout to not become bankrupt, A Investor expert Goldman warned if the users didn’t sell the share the market could have crashed. Even Robinhood restricts GameStop stocks as hedge funds put pressure and took a chunk of money to stay in business.

In conclusion, last time I heard for some reason Roblox stocks were up at some point and Reddit also did the same but to AMC, and lawsuits against Robinhood now Users see Tehev as a villain.

RELATED STORIES:

https://www.nytimes.com/2021/01/27/business/gamestop-wall-street-bets.html

https://www.cnet.com/personal-finance/gamestop-stock-crashed-but-reddit-still-wants-to-send-it-to-the-moon-how-and-whats-next/

https://www.protocol.com/wallstreetbets-reddit-gamestop-stock-blackberry