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  • You've probably heard a lot this week about Gamestop shares going through the roof and people on Reddit earning a lot of money.

  • Here's how that happened on the stock market.

  • You could buy shares in a company on.

  • The price could go up or down, depending on how well the company is doing.

  • Typically, you hope to buy shares when there are low price on, then sell them when they were at a higher price.

  • So you make a profit.

  • People on the Reddit Message board Wall Street Bets saw an opportunity with Gamestop.

  • That's the High Street video games retailer in the U.

  • S that's been struggling, especially during the pandemic, So its share price was low.

  • They knew that if enough people bought Gamestop shares, they could cause the price to skyrocket the power off.

  • Working together, I think US regular average.

  • You know, Janes and Joes are struggling in Cove in 19, and I think this is a way to show that look, we can't survive.

  • So in response, we're going to figure out ways for us Toe actually make profits in 2019 like a lot of other industries are, and we're tired and I think this shows that if we could take control, is a collective.

  • As a group, we have full buying power, just like the big cats upstairs.

  • The plan worked on Gamestop Share price went through the roof, earning some Reddit users a lot of money.

  • But that wasn't the only goal.

  • For some, they saw it as an opportunity to get one over on big, million dollar investment companies known as hedge funds.

  • Those come bet or hope that a company is going to perform worse so that they could earn a big profit that's known as shorting stocks.

  • And here's how it works.

  • Say you own one share of an apple tree, one apple and you let me borrow it.

  • At the moment, the value of this apple on the open market is £10 but I think that's going to fall in the next few days, so I immediately sell the apple for £10 on.

  • I've made £10 brilliant, but I do still are you an apple?

  • So in a few days, when the value of apples has fallen on the open market to £5 I buy one back.

  • I return the apple to you I've made £5 profit.

  • Hedge funds do this at scale to make huge profits.

  • But if the share price goes up, they can also make a huge loss because they still have to buy back the shares and return them at some point.

  • For some people on Reddit, the opportunity to hurt a big hedge fund was just too good to resist.

  • One hedge fund lost billions of dollars.

  • Obviously, we all know that these stocks aren't the best stocks.

  • But the whole point of this isn't necessarily evaluating these stocks based on its inherent value, but to drive the price up to send a message.

  • I don't care about the money and all.

  • I could lose everything, and I'd be so happy because I just love what's going on.

  • After seeing what happened with Gamestop, some people have turned their attention to other companies that are struggling like AMC Cinemas.

  • But some of the platforms that let you buy and sell shares like Robin Hood in the US have actually intervened and stopped people buying AMC on Gamestop shares.

  • And that's annoyed a lot of investors who say Robin Hood is interfering in the market now, the weird capitalizing on it.

  • It's crazy how the system is flawed and we are in the wrong.

  • It makes no sense to me.

  • I think Robin Hood stopping investors from buying the stock is the biggest example of market manipulation.

  • Andi, I think I e.

  • Go look at their app reviews they're getting.

  • They're getting hounded right now.

  • If they think Wall Street bet should be investigated by the SEC, Robin Hood should just is equally be investigated.

  • The fact that they can pigeonhole and select stocks that were not allowed to trade openly in the free market made by the people with our money is horrid, and it makes no sense.

  • Robin Hood does now allow some trading of these shares, and it says it made its decision to protect investors on the market.

  • So what happens next?

  • Well, Gamestop as a company still faces a lot of challenges on its share, prices dipped already.

  • It could continue to fall further on people who bought shares that those really inflated prices could lose a lot of money.

  • But for others, they say, this marks a turning point for stocks and shares.

  • It shows that the power off the collective on the Internet can move markets and it could happen again.

  • This could be a trend moving forward.

  • I mean, we're playing within the rules were not sharing any insider information.

  • It's just a collective group saying to buy specific stocks.

  • I think right now, today, on Thursday, we're seeing that you can't really control this on the Internet takes hold of this.

  • There's no stopping it.

You've probably heard a lot this week about Gamestop shares going through the roof and people on Reddit earning a lot of money.

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GameStop share trading explained - BBC News

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    林宜悉 posted on 2021/01/30
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