It’s all kicking off in the most exciting thing to happen to the stock market since the invention of money. As we reported yesterday, the price of GameStop shares skyrocketed over the last few days, as investors on Reddit disrupted the plans of many hedge fund managers by screwing up their plans to make a quick profit off of a failing company.
Now, it seems that many investors are selling while the going is good, as GameStop prices drop from almost $500 per share to just over $100. Of course, it’s unclear whether it’s regular people trying to make money on this wacky turn of events, or if it’s the hedge fund managers trying to make the best of the bad situation they’ve found themselves in.
A few key events have happened since yesterday.
“We are experiencing technical difficulties based on unprecedented scale as a result of the newfound interest in WSB. We are unable to ensure Reddit’s content policy and the WSB rules are enforceable without a technology platform that can support automation of this enforcement. WSB will be back.”
Meanwhile, the WSB server on Discord was banned, allegedly for “continuing to allow hateful and discriminatory content after repeated warnings”. The moderators responded with a message that said they were “suffering from success”, and blamed Discord for “destroying our community”. They also called out people pretending to be wallstreetbets on social media, people deliberately circumventing the “no bad words” rule on Discord, and generally turning wallstreetbets into a political movement, “in a community that was never ever political”.
The wallstreetbets subreddit is back up now, with a huge spike in subscribers (from around 2 million to almost 5 million). It currently tops the “most comments per day” and “most posts per day” charts across all of Reddit, according to subredditstats.com, with around 3.5 million comments and 26,000 posts in the last 24 hours (although it’s worth noting that subredditstats.com seems to be outdated by at least a few hours).
The second big thing to happen was Robinhood, the free-to-trade stock market app that many people were using, blocking users from buying more shares in specific companies, including GameStop, AMC, and Nokia, as well as various other companies that Reddit investors were trying to pull the same trick with. Other trading apps appear to have followed suit. According to Motherboard, more than half of all Robinhood users own GameStop stock.
Robinhood put out a statement a few hours ago, citing “volatility” as the main reason for their actions. Wallstreetbets investors are threatening to sue as a result, with rumours that Robinhood is actually trying to keep the hedge fund managers happy, rather than working for the everyday investor. As of around an hour ago, a class action complaint was filed against them, stating that the company “purposefully, wilfully, and knowingly” deprived retail investors of the ability to invest.
They even edited Robinhood’s Wikipedia page (multiple times) to criticise their behaviour, leading to the Wikipedia page being locked for further edits. It’s not a good day to be a community manager for a trading app.
American politicians have taken an interest in the ordeal, with US Representative Alexandria Ocasio-Cortez promised that she will be hosting a stream on Twitch tonight to discuss it all with everyone, including “a guest or two”.
In short, it’s a wild ride for investors, trading apps are trying to put out fires by starting more fires, and everyone who has no stake in this business is having to rapidly learn about market manipulation. Those of us who invested in the Stalk Market are thanking the gods of economics that Daisy Mae never pulled anything this crazy.
We want to say a huge, incredibly grateful thank you to every single tech and gaming news site who has covered this story in depth – we couldn’t have followed the intricacies of this chaos without you.
Did you get in on the GameStop rollercoaster? Let us know your experiences so far!