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What is the story behind GameStop and what can we learn from it?

GameStop

If you’re keeping track with what’s going on around you, you certainly haven’t missed what happened to GameStop stocks recently. Have you thought about what exactly is behind this?

Let’s take a look at what we can learn from this event.

What actually happened?

GameStop shares were valued at $ 17.69 per share, shooting up to $ 347.51 on January 27. With losses of nearly $ 20 billion, hedge funds almost bled out. Melvin Capital lost more than half its value and had to be rescued by Ken Griffin (Citadel) and Steve Cohen (Point 72). Another fund, Citron, was on the verge of collapse. Everything that happened is the responsibility of the subreddit r/WallStreetBets.

Local investors have noticed that hedge funds have taken a short position in GameStop. They also noticed that it exceeds the number of shares available for trading. So, 2.7 million members agreed to buy shares to increase the price and create a massive squeeze. For forum contributors, however, this also meant blocking the Discord account and almost deleting the Reddit forum. Subsequently, investors also had trading accounts blocked, for example on Robinhood.

What can you learn from this?

The reasons for blocking are very similar to those in the past that we have heard from large companies when services or platforms have been blocked. Opinions on this fact are different and you will often hear the word “censorship” in these opinions. It is certainly strange how any action that does not correspond to the expected development will meet with blocking and attempts of censorship. However, the opinion is up to each of you and we strongly recommend that you look for all the information before forming an opinion. Nothing is just black and white. This situation has shown us how easy it is to manipulate the market.

Conclusion

GameStop stocks definitely showed us that the power of people is huge. When people come together, they can do great things, and often that connection in a community can completely change the outocme and the whole story.

Source: zerohedge.com

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