It has been a strange few days for Wall Street. The White House is "monitoring" the situation as many investors look on with a fascinated horror and social media users cheerfully continue to drive up the share prices of struggling companies. And it all began with a Reddit forum called WallStreetBets.
For those who have not followed the strange debacle, allow us to explain further. A sub-Reddit called WallStreetBets that dabbles in the stock market has become a talking point across the business world after it managed to send the share prices of once-unpopular stocks into the stratosphere. From politicians to entrepreneurs - everyone is dissecting WallStreetBets' actions, albeit with a degree of helplessness.
As an NBC report noted, GameStop shares began to rise on January 11 after the company named three people to the Board of Directors. This in turn prompted some short sellers to abandon their positions, further driving the stock up. By then, it had caught the eye of Redditors. According to reports, on Friday itself, GameStop shares went from trading at around $43 (a high number compared to its earlier performance) to a whopping $380. And since then the numbers have only continued to grow.
This is not the only company affected by WallStreetBets. AMC Entertainment Holdings Inc have reportedly gone from approximately $4 to $16 in just two days and shares of Blackberry, National Beverage and others have spiked after a mention on the sub-Reddit.
Quite naturally, the heroes and villains of the story depend on who you ask. Hedge funds are presently losing billons of dollars and short sellers are watching disaster unfold even as many social media users become overnight millionaires. But it is hard to feel sympathetic. As one reddit user noted the sudden spike had enabled them to pay off thousands of dollars worth of student loans. Reddit co-founder Alexis Ohanian appeared to take a pragmatic view of the situation.
"That's the sentiment, the public doing what they feel has been done to them by institutions. This is an echo of what we've seen social media enable the public to challenge institutions for the last decade," he tweeted.
And Ohanian concern seems to be primarily for the ordinary netizens caught up in the frenzy. "Please don't invest money you can't afford to lose, ESPECIALLY, in risky investments," he cautioned.
Democratic US Representative Alexandria Ocasio-Cortez was of a similar mind. "Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino," she tweeted on Thursday.
Tesla Chief and world's richest man, Elon Musk kept his take on the situation simple. Sharing the link to the Reddit forum he tweeted out a single word: "Gamestonk!!"