Stock market starts some shenanigans

Anthony Matury, Staff Writer

Recently, the stock market has had some surges in certain companies, such as GameStop, Blackberry, AMC, and more. This might seem mundane, but there are a lot more underlying effects to this. 

One very important thing that it did was cause hedge funds to lose a lot of money. A hedge fund is a limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains. 

To put it bluntly, a group of people that bets on stocks either going up or down makes the choice to either buy low and sell high or not, which ultimately manipulates the market in their favor, and they have been functioning like that for decades. 

About a week ago, a bunch of users on a subreddit named r/wallstreetbets decided to buy stocks in GameStop because the hedge funds predicted the stock sell price would go down immensely. But a lot of people on the internet decided to buy stocks in GameStop just to screw with the hedge funds. This caused the GameStop stock price to rise more than 1700 percent, almost hitting $500. 

This rapid fluctuation, along with the people who bought the stocks holding them, forced the hedge funds to either buy stocks in GameStop, making it increase even more, or lose billions of dollars, which they did. This flux eventually spread into the other companies mentioned previously, which put the hedge funds into a Catch-22 situation, because their only ways out were either filing for bankruptcy or making the stock price go higher, until they got bailed out by NASDAQ (National Association of Securities Dealers Automated Quotations), which big name technology companies use to buy and sell securities. 

The bad thing is that the government and the people on Wall Street try to villainize the people who were involved in the squeezing of the GME stock and are trying to oppress them any way they can, even though the retail investors who bought stocks did exactly what hedge funds do. The subreddit went private because of bots, Discord banned people for “hate speech” over this, even though it didn’t last very long, certain stock trading companies, like Robinhood, prohibited the purchase of stocks from GameStop and other companies, this whole event even stretched as far as the Department of Justice coming after Elon Musk by investigating him for not hiring enough immigrant workers because he simply tweeted out, “Gamestonks!” in support of the surge.

However, this didn’t go unnoticed. Rep. Alexandria Ocasio-Cortez (D-N.Y.) and Sen. Ted Cruz (R-Tex.) agreed on how Robinhood, along with others, banning purchase of certain stocks was a bad idea.