Here’s the thing: the handful of hedge funders who took a path shorting GameStop will be fine. The ordinary people who lose their life savings buying into the bubble, not so much:
As GameStop’s stock plunged 60 percent Tuesday, the online horde that had raced to invest in the “meme stock” scrambled to reckon with the financial bloodshed, wavering between a desire to sell and settle for heavy losses or stick with their online peers who had admonished them to “hold the line.”
In interviews Tuesday with novice traders on r/WallStreetBets, the gleefully reckless Reddit forum that helped fuel the onslaught, several said they were holding out hope that the hyperinflated stock would turn around.
But others expressed deep turmoil, posting screenshots from their online banks and brokerages to the forum that, in some cases, showed hundreds of thousands of dollars vanishing in a matter of hours.
GameStop stock’s climb in recent days captured the international spotlight as a “David vs. Goliath” tale for the digital age: a madcap web of everyday Joes winning billions of dollars from short-selling hedge funds that had bet on the stock’s collapse.
But with the stock having plunged about 80 percent since last week’s peak, the whiplash also highlights how so many investors, lured by the promise of a gold rush, have been quickly dismantled, with help from stock-trading discussion boards and apps that make it easier than ever to invest — and lose — a fortune.
The idea that the run-up of a few legacy company stocks was a blow against “Wall Street” it the most misguided thing ever. Wall Street is the casino! If there’s a high volume of shares being exchanged, they’re making money! Short positions get busted every day but the idea that buying up random stocks to strike a blow for the little people is going to cause a lot of them to lose a lot of money they can’t afford to lose.
For a particularly grimly hilarious version, here’s a libertarian journalist attacking AOC for not making the deals to stick it to Wall Street that could e struck with…Ted Cruz, whose random tweets definitely represent offers to pass tough anti-finance regulations that should be taken in good faith. You cannot possibly make this stuff up.