A Reddit Takeover: The Situation with GameStop

In January 2021, GameStop was at risk of going out of business. But the franchise was assisted by an unlikely group of people: Redditors.

About three months ago, GameStop, a chain of video game stores, experienced a fall in its stock prices. Due to the rise of online shopping in the past few years, it’s understandable as to why stores such as this are struggling. To make matters worse, large investing groups known as hedge funds decided to take advantage of this. The groups made bets that GameStop’s stocks would continue to fall, which would increase their own monetary gain if their bets were correct (which, at this point, was more than likely).

However, large amounts of internet users became aware of the situation. Using various platforms, especially the Wall Street Bets forum on Reddit, people encouraged others to purchase GameStop stocks. These sparks soon became flames in mid to late January as thousands upon thousands of everyday people began to buy stocks in GameStop. The franchise saw an increase of over $20 billion within days. As a result, hedge funds experienced significant losses as their bets backfired. Additionally, despite their risky actions, many average people who invested in GameStop gained thousands of dollars.

As the investing continued, the financial company Robinhood placed limitations on how much their users could become involved in GameStop’s stocks. This company, which provided a platform for people to trade, buy, or sell stocks, faced significant backlash. Robinhood’s chief executive, Vlad Tenev, appeared at a virtual hearing with Congress, along with Keith Gill, a YouTuber known as “Roaring Kitty” and one of the Redditors who invested in GameStop. At this hearing, the investing situation, as well as issues surrounding Robinhood and Wall Street, were discussed.

How GameStop or hedge funds will be affected in the long run is uncertain, but it’s evident that many people have developed stronger views regarding the functionality of the U.S.’s economic systems.

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