• Upset on Wall Street The GameStop case or how a 'trolling' on Reddit triggers the shares of a company adrift

It started out as a lesson to bigwigs who didn't give a penny for

GameStop

and has turned out to be the biggest

Wall Street

shake

in years.

Not even a global pandemic like the

coronavirus

has shaken the foundations of the New York parquet as much as this movement organized from a subgroup of the well-known social network

Reddit.

Several of the largest investment funds in the world are still trying to fit in the

billions of dollars that have been left behind in just four days,

which have gone since GameStop shares surpassed

18 euros in

the past. Friday until the

347

in which they finished this Wednesday.

This popular chain of video game and electronics stores

was on the brink

of the pandemic.

Its actions in March, coinciding with the start of the confinements, reached a

minimum of 3.5 dollars,

which led to the entry into its shareholding of

Ryan Cohen,

founder of the online pet food store

Chewy.com .

With it came a turn in the business strategy that allowed the titles to recover to the 17 euros that they marked at the end of 2020.

Only Cohen and a few others were confident of the company's recovery.

On the contrary, a group of

more risky

traders, hedge funds

and investors bet on the fall in value.

They did so through

short buying and selling,

a speculative practice that consists of borrowing shares from a company, selling them en masse to cause their price to fall, and then buying them back for a cheaper price.

Profit is the

difference between the first price and the second.

In a simplified way, bears (as this type of investor is known)

earn more the more the stock falls

and lose more the more it rises.

And that is what has happened on Wall Street.

A group of more than

two million

Reddit

users

, organized in the

WallStreetBets

sub-forum

,

decided last week to launch a virtual offensive against the GameStop bears.

The offensive is based on

buying shares in an outrageous way

to raise their price and, with it, cause the millionaire losses that we are seeing these days in the funds.

One of them,

Melvin Capital Management,

led by

Gabriel Plotkin,

has been forced to close its bearish positions against the video game and electronic products chain due to the magnitude of its bleeding.

But beyond the specific case of GameStop, what happened on Wall Street is causing a greater shock.

On the one hand, the uncertainty has spread among investors who fear that the strategy will be repeated in other companies in difficulties such as

Blackberry

or

AMC.

On the other hand, because many of the funds and investors that have always opposed the regulation of the market are now asking for the intervention of the authorities.

For now, the

CEO of Nasdaq, Adena Friedman,

has told

CNBC

that they will monitor upcoming movements and stock operations driven from social networks.

The Nasdaq, which includes the main technology companies, has closed with

falls of 2.6%,

compared to 2% that the

Dow Jones

has left

.


According to the criteria of The Trust Project

Know more

    FutureWhat is Twitch: the secrets of the platform that has forever changed the way we watch television

    TheGrefg breaks Twitch records with the presentation of its Fortnite skin

    15 free online board games to have fun with family and friends

    See links of interest

    • Holidays 2021

    • Seville - Valencia CF

    • Burnley - Aston Villa

    • Chelsea - Wolverhampton Wanderers

    • Brighton and Hove Albion - Fulham

    • Rayo - Barcelona, ​​live