GameStop at the center of stock trading controversy

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Nicholas Eckhard/licensed under CC BY-NC-SA 2.0

GameStop stock shares rose to as much as 14,300% after Reddit users coordinated efforts to boost the fledgling stock on the Robinhood investing app.

Pogue Regan, Copy Editor

When buying stocks, you’re buying a miniscule portion of the company. This doesn’t mean you have a say in what happens with said company, but you are entitled to a fraction of their profit. This is where Wall Street and other smaller hobbyists come in. Now, we’ve all heard of the Reddit users who have increased GameStop’s stock value, but not exactly why or how it happened.

With the stock market, any and everybody can buy a share of stock if they’re a legal adult. You can short a stock, a form of borrowing a stock to give it back for profit once it drops, or you can simply buy stock that you think you will profit off of. While it’s completely legal, it’s seen as a low blow. 

In this case, Wall Street had shorted GameStop with the intention of it dropping once more. This would have allowed them to profit off of GameStop’s downfall. However, Reddit quickly took notice of their plans and ended up buying copious amounts of the stock, driving the stock price up, instead of down like Wall Street had wanted. 

When this happens, you go into debt. Shorting a stock is used when you don’t want or have the money to fully buy the stock. Because the stock shot up, they still had to return the stock, along with paying them extra to meet the price of their stock. 

In the end, around seven billion people bought GameStop stocks. This number would have been higher if stock trading sites hadn’t shut trading down. The controversy surrounding the sudden shut down had exploded, as everyone who had invested in Game stop had lost their chance to profit. 

It sparked such an outrage that members of the government, one of which being Alexandria Ocasio-Cortez (AOC), spoke out about the apps shut down. 

“For so many people at home that are seeing this happen, people were really feeling like everyday people were finally able to proactively organize and get back at the folks that have historically had all the marbles on Wall Street and forced one hedge fund into an existential crisis,” said AOC on the popular streaming website Twitch. 

Reddit users and hobbyists alike had also expressed their intense animosity towards Wall Street and Robinhood, a stock trading platform. When the site saw mass amounts of people buying stocks, they shut it down and suspended trading with GameStop.