Reddit Investors Troll Wall Street Execs By Skyrocketing GameStop, AMC Stocks, Robinhood's Reaction Disappoints
Amid the uncertainty of the past year, it seems the stock market has finally imploded, not from the global pandemic, civil unrest, or what some are dubbing the worst financial crisis since the Great Depression, but from a plucky band of Redditors looking to troll the finance industry with several meme-tastic bets. In what sounds like a strange, modern sequel to The Big Short, several of the users on r/WallStreetBets decided to boost struggling video game store, GameStop, quickly purchasing options in what CNBC's Jim Cramer has dubbed "the squeeze of a lifetime," Wired reported. As several Redditors rushed to get in on the trade, the company hit a market cap of $10 billion, sending the share price soaring from $19 at the beginning of the month to more than $230, according to the New York Times. The reason for this financial explosion? None other than the lol-z.
"It was a meme stock that really blew up," r/WallStreetBets moderator Bawse1 told the tech publication earlier this week. "The massive short contributed more toward the meme stock." As the cheeky money move began to go viral, alongside the subreddit's other suggestions of stocks to bump, like AMC and Blackberry, celebrities began to get in on the fun. On Tuesday, Tesla CEO, "Space Karen" Elon Musk posted a coy shoutout to the trades, tweeting "Gamestonk!!" alongside a link to the controversial forum.
In making themselves some serious cash, it seems these netizens have already taken down one Wall Street giant with their antics, namely Melvin Capital's hedge fund manager, Gabe Plotkin. On Wednesday, the finance mogul, known for his penchant for shorting popular stocks, namely GameStop, announced that he was "throwing in the towel and exiting his position," the New York Times reported.
Amid these unprecedented losses, other Wall Street insiders have spewed outright vitriol towards Reddit's investors, pretentiously slamming those entering the market, especially individuals who may be under financial duress due to the coronavirus pandemic. "The reason the market is doing what it's doing is people are sitting at home getting checks from the government," billionaire investor, Lee Cooperman told CNBC on Thursday in a now-infamous on-air tantrum. "This 'fair share' is a bullshit concept. It's just a way of attacking wealthy people."
You said it, Lee. Average people aspiring to make money in the midst of an unprecedented financial crisis that has left 6.7% of Americans out of work is totally all about slighting you and your fellow affluent cronies. No wonder #EatTheRich is trending.
As bankers and notable financial figures continue to lament over the implications of the market's swings, the fine people of Twitter have no sympathy for Wall Street fat cats and their backers, doing what they do best -- absolutely dunking on finance bros, noting their sudden, shifting views on the free market ...
... poking fun at their pretentious investing philosophies ...
... and even bonding over the entertainment value of witnessing large institutions losing their shit over some dudes on a subreddit. The American economy, folks!
Yet it seems this glorious act of sticking it to the (rich)man will not last forever. On Thursday, Robinhood, in an aberration of its direct message of "democratizing finance for all" ...
... has made it more difficult for vigilante investors to continue controlling the market, blocking purchases of several stocks, including GameStop, AMC, and Blackberry. "Our mission at Robinhood is to democratize finance for all. We're proud to have created a platform that has helped everyday people, from all backgrounds, shape their financial futures and invest for the long term," the company wrote in a statement on their website. "We continuously monitor the markets and make changes where necessary. In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AMC, $BB, $BBBY, $EXPR, $GME, $KOSS, $NAKD and $NOK. We also raised margin requirements for certain securities." It should be noted that users with existing positions are still allowed to close out, they just can't purchase more of these stocks. Furthermore, more than half of Robinhood users own GameStop stock, according to Vice's Motherboard, meaning the majority of customers will face the heat of the business's sudden about-face, a notion that has pissed off pretty much everyone.
"It is one of the most remarkable, illegal, shocking robberies, in plain sights," Davey Day Trader, a.k.a. certified douchebag and Barstool Sports founder, David Portnoy said in a new video entitled "Emergency Press Conference - Everybody On Wall Street Who Had A Hand In Today’s Crime Needs To Go To Prison". "They are robbing you, they are stealing from you, this is criminal. The Robinhood CEOs, they belong in jail," he added.
And it's not just financial figures absolutely roasting Robinhood -- Congresswoman Alexandria Ocasio-Cortez also lambasted the corporation. "This is unacceptable," she wrote on Twitter on Thursday afternoon. "We now need to know more about @RobinhoodApp's decision to block retail investors from purchasing stock while hedge funds are freely able to trade the stock as they see fit. As a member of the Financial Services Cmte, I'd support a hearing if necessary."
Ocasio-Cortez is far from alone -- even Texas Senator Ted Cruz, a long-time enemy of the congresswoman, publicly endorsed her stance. "Fully agree," he replied in response to her post in what may be the most unexpected re-Tweet in the history of American politics.
Yep. Robinhood managed to screw up so spectacularly that AOC, the Zodiac Killer, and Davey fucking Day Trader all wholeheartedly agree on just how terrible they are. Somewhere in a small, remote corner of Hell, a gentle dusting of snow is coating the decorative fire and brimstone -- all thanks to the trading app's humiliating blunder.
Underworld forecasting aside, it seems some have moved their ire offline, taking legal action against Robinhood. Earlier today, a class-action lawsuit was filed against the financial services company, alleging that their new regulations "deprived retail investors of the ability to invest in the open-market and manipulating the open-market," according to Philip Lewis, the Front Page Editor of The Huffington Post.
So, folks, as the markets continue to fluctuate and regulations continue, we must remember financial autonomy should not be reserved for the wealthy. If Wall Street execs truly believe in a free market and the unrealistic "American dream" they so smugly tout, they should unwaveringly support this statement instead of gatekeeping the tools of financial literacy and growing irate when average Americans work together to beat them at their own, rigged game. Aren't invention and determination supposed to be the keys to financial success -- or do those sentiments only apply to the mega-rich?
Now, reader, I'll level with you. If you're still confused about everything that's going on, you're not dumb or ignorant. Topics surrounding investing are often covered unclearly, pandering to industry workers, relying heavily on complicated jargon and confusing terminology -- and this is coming from a former CNBC breaking news writer. Financial literacy tools should be free and readily accessible to all, period full stop. Stonks -- they're for everyone, no matter what Chad, the fourth-generation Wharton legacy says.