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Over the past two weeks major shake ups in Wall Street have occurred and the subreddit r/Wallstreetbets has engaged in a massive short squeeze on GameStop and AMC Movie Theater Stock. The extreme jump in price for both these stocks have caught everyone’s attention, now allegations suggest that the media and brokers have allegedly moved in to save the hedge funds responsible for the initial shorts on these stocks. Recently many media outlets have reported that Reddit is pumping silver prices and moving on past GameStop, AMC, and other stocks, but is this true? lets take a hard look at the facts and what is going with retail trading, Silver, GameStop, and Wall Street Bets.
What is r/Wallstreetbets?
Wall Street Bets is a sub reddit dedicated to zany trades with massive payouts or horrific loses. The collective of retail traders is directly responsible for numerous policy changes at brokers such as Robbinhood. The group is also known for its edgy humor, on the homepage of the subreddit you can find the following text under the about community section “Like 4chan found a bloomberg terminal.” r/Wallstreetbets is regulated by its own team of moderators that remove anything illegal or of topic that is posted, the page currently has 8.3 million followers with a recent boom following the GameStop story.
Why GameStop Stock?
GameStop in a retailer that sells video games and other gamer memorabilia/collectables. As a business they suffered heavy loses in recent years with many video games being bought and sold over the internet as well as the Covid-19 lockdown. While Game Stop did have some potential for a rebound many on Wall Street saw potential for a highly profitable short. The users of Wall Street bets saw this heavy short as a ripe opportunity for a short squeeze and their campaign to buy and hold the stock went viral. Eccentric Billionaire Elon Musk also contributed to this by Tweeting “GameStonk!!”. Alexandria Ocasio Cortez and Ted Cruz shared a brief moment of unity while piling onto the Wall Street talking heads after they attacked retail traders.
The Robbinhood Fiasco
A few days after the GameStop stock began to be bought up by Wall Street Bets and retail investors the stock hit a record(nearly broke $500 a share) Robbinhood, a trading platform, halted the ability to buy stock in GameStop. Rumors circulated that Robbinhood was also selling users GameStop stock without their permission but this has yet to be proven with substantial evidence. Robbinhood did however leave the ability for users to sell their stock available, this resulted in a large drop off in the stock price. A class action lawsuit on behalf of shareholders and Robbinhood users is rumored to be on the horizon following this debacle.
Is r/Wallstreetbets moving over to silver?
At the start of February dozens of media articles came out that reddit users were moving over towards silver and dumping GameStop stock, this is not true and if these journalists had spend even 2 minutes doing research they would know that. The Wall Street Bets homepage is littered with memes related to holding onto your GameStop Stock, moving your money off of Robbinhood, and an Ask Me Anything(AMA) thread with Mark Cuban. The only thing on the subreddit related to silver are posts about how the media is lying about there being posts about silver. Wall Street Bets is not moving over to silver, GameStop is still the topic of discussion and it does not look like that will be changing anytime soon.
On this is clear, Wall Street and its cronies are not happy that everyday people are playing the same game they have played for years.