All eyes have been on the stock market after a group of users on a Reddit message board, WallStreetBets, sent shares of the video game retailer GameStop soaring last week. The stock peaked after an incredible 400% gain in value.
The unlikely story of the GameStop surge is a classic David and Goliath tale. Many Reddit users and casual investors rejoiced in the quick shift in power dynamics, as hedge fund executives have long manipulated the market for their benefit with little consequence. However, this unprecedented move isn’t without consequence and has instigated conversations around stock market activism, volatility and financial literacy.
Listen: What you need to know about the GameStop saga.
Hannah Denham is a Washington Post national business reporter. She says it is hard to account for the WallStreetBets Reddit group’s makeup, but that most people seem to be retail investors rallying together to send a message to hedge fund executives. “They are largely anonymous, so there’s no way to actually know how experienced these investors are… But they see this as sticking it to the man,” says Denham on the Reddit group. The WallStreetBets crowd seems keen on sending a message even after the explosion in the value of GameStop’s share. According to Denham, the Reddit group is committed to highlighting the double standards in stock market manipulation. “The messaging among those investors is really to keep holding out because they view it as having a longer-term impact on Wall Street,” says Denham.
In the last week, Denham says there has been extreme volatility, prompting many to ask what’s next. “Is this sustainable? Not really. So, how long can it last?” asks Denham, adding that many people on Wall Street are holding their breath to see how this will turn out.
Michael Lee, the managing editor of Crain’s Detroit Business, wrote a piece in Crain’s titled “In the game of life, a GameStop moment” about his conversations with his 18-year-old son Gavin, who is one of the new investors in GameStop as of last week. Gavin says he hadn’t invested in the market before but got involved in GameStop because he wanted to send a message. “I wanted to participate as a measure of fun, but also to get back at some of the hedge fund managers and investors,” says Gavin. Moving forward, Gavin says he plans to hold the line and not sell his stocks. “The entire idea behind this whole thing is that if this group of Redditors, including me, can hold the stock, then we can control the price, so I plan on holding on,” says Gavin.
Michael Lee says it’s been entertaining to watch his son participate in the GameStop moment. “It’s been amazing and cool to watch the excitement of the thing,” says Lee. While exhilarating, Lee, like many others, is wondering what’s next and how this bubble will impact the market and individuals. “Everything is interconnected and can produce unexpected results,” says Lee of the stock market and possible ramifications of market manipulation.