What happened to GameStop’s stock at the end of January will be remembered by investors for years to come, as it was probably the first time in the history of the “free market” that a group of self-described internet “degenerates” outsmarted a bunch of Wall Street pros at their own game.
As a recap, on Jan 27, when the Dow Jones Industrial Average fell sharply by over 2% — in large part due to the United States Federal Reserve announcing its move to maintain interest rates around the zero percent mark — shares of video game retailer GameStop (GME) and movie theater chain AMC Entertainment (AMC) proceeded to rise by 130% and 300%, respectively, taking their market capitalizations to $24 billion and $6.74 billion.
This unprecedented surge was facilitated by a group of independent small-time traders operating out of a Reddit subreddit called r/Wallstreetbets. They were able to recognize that executives over at New York-based hedge fund Melvin Capital were shorting GameStop shares in order to net handsome profits for themselves.
In a nutshell, “shorting” is a practice used in stock market trading wherein an individual borrows shares only to sell them off immediately in Title: Time to shine? Crypto should be given a chance after GameStop drama
Sourced From: cointelegraph.com/news/time-to-shine-crypto-should-be-given-a-chance-after-gamestop-drama
Published Date: Sat, 06 Feb 2021 13:31:00 +0000