By now you’ve heard about the hedge fund-busting antics on Robinhood and Reddit.com where teenagers became millionaires overnight by investing in GameStop stocks.
The stock price is being fueled by hedge funds desperately covering their short positions in GameStop, the video game retailer.
Hedge funds were short-selling GameStop — or betting that the company would fail. The lower the stock price fell, the more money the hedge funds made.
But they didn’t bet that a group of scrappy day traders on Reddit would rally to save GameStop from certain failure.
When Redditors began purchasing GameStop stocks on Jan. 19, the stock was selling at less than $30 a share. Just one week later the stock price hit a whopping $336 a share — and the price is going higher.
The catalyst for GameStop to explode higher came on Friday, Jan. 22, when Citron Research announced it would not comment on GameStop any longer due to the actions of “an angry mob” — the “angry mob” being amateur day traders on Reddit and RobinHood.
Some teenagers who purchased GameStop stock options on the Robinhood stock trading app on Jan. 19 are millionaires today. Others are crying tears of joy because they earned enough money to pay for surgery or to buy a new car.
CNN laughably referred to the “angry mob” on Reddit.com as “Trump supporters.”
In an unprecedented move to protect hedge funds on Wednesday, stock broker TD Ameritrade halted trading on GameStop.