By: NIKOLAI PASHKOV
In the past year’s many iconic stocks like GameStop, bitcoin, and dogecoin have all been very low. This is mostly because people aren’t using these brands anymore and especially because of COVID-19 they cannot survive. Recently a group of people on an app called Reddit came together and devised a plan to inflate their stock. By everybody putting money into these companies hedge fund managers that initially bet on their demise would soon lose thousands of dollars because insead of the closing/lowering of the stock the instantaneous injection of the stock value made them lose all of their bets for the failing company. Within a matter of days, the stock would go from $4 in August 2020, $18 in December 2020, then to $329 on January 29, 2021. With this new breakthrough of these Reddit users sticking up to the wealthy hedge fund managers it started to create a lot of drama and backlash within the community. Because of this, the popular stock trading website called Robin Hood decided to lock the stock of GME to the point where people couldn’t buy anymore. Since the recent lock of this stock, many Short sellers are outraged because they feel they cannot equally compete against these other bigger businessmen.
About 5 days ago Elon Musk the CEO of SpaceX and Tesla had the opportunity to heavily question Robin Hood CEO, Vladimir Tenev about the inflation of these meme stocks (Stocks that people buy as a joke from failing companies), And when questioned about it Tenev says the (N.S.C.C) National Securities Clearing Corporation needs about 3 Billion Dollars for clearing, settlement, risk management although in the interview Musk sounds curious as to why this would be so much, why Robinhood wouldn’t tell the open public about this, and even asks “Is there any shady business going on there.” Recently During this year’s Super Bowl a group on Reddit called r/superbOwl spent their whole budget and bought a 5-second ad talking about the recent dilemma with GME and said “Powerful things happen when people rally around something they really care about. And there is a place for that, It’s called Reddit.”
Overall this is a really sticky situation where many people feel like they are getting unfair treatment. This is because they feel like the rich hedge fund managers have Robinhood wrapped around their fingers. In reality Robinhood is saying that they have too because N.S.C.C is charging them. While on the other hand these hedge fund managers are losing millions of dollars because of this injected cost of the stocks, not because it is a good company but strictly because they want to see your downfall.
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