One of the most prominent weeks in the market is upon us, as it is a David vs. Goliath fight.
Going into the start of the business week the NYSE was coming off of an all time high up and around 31,000 points on the Dow Jones Industrial average. As the week began the market took a hit as many people believed the market was correcting itself from overpriced stocks at such a difficult time in the COVID-19 pandemic.
Tuesday the market was able to make its way back up surprising some people who thought they would be seeing a continuing short term bear market.
Wednesday was a shocking day on Wall street as for most suffered losses, but others made serious profits off of weird stocks people thought were going to go bankrupt. GameStop and AMC were the two biggest movers as GameStop was trading at nearly $470 share more than 600% up from its prices were on Monday. Why was this happening?
Over the last week or so a Reddit page called WallStreetBets has been getting large numbers of smaller investors to buy these stocks. The main reason for this was to stick it to the billion dollar hedge funds who were shortening the stock. Shortening a stock in other words is betting that a certain stock would go down. Investors from around the world at the same time created a short squeeze that pumped the stock value up insanely high losing the rich millions or billions in funds.
Once investors realized the power they had, they realized that they could make tons of money this way themselves. This took off and everyone started talking about it on social media. Persuading people to take action. Other companies that were also taking off were Nokia, Build a Bear, Blackberry, and a few more.
Once investment firms and others in Wall street took a look at all the money they lost they felt the need to strike back.
Thursday morning the leading stock brokers around the world attempted to take back control by not allowing anyone to buy these stocks but only sell. This would drop the value of these stocks and lose millions of average investors money.
This completely angered everyone as many of these stock brokers were owned by billion dollar hedge funds that lost money in their stock-shortings earlier in the week.
By disallowing the stocks the abilities to be bought this helped regain the funds that the brokers lost.
Thousands of people took to twitter to complain about the power grab of the rich and powerful. People even questioned if this was still a free market. Politicians from both democrats and republicans such as Alexandria Ocasio- Cortez and Ted Cruz asked if this was legal or even allowed.
Friday is going to be a weird day as some speculate these investing apps will only let a small amount of these shares be for sale. We never know what the future may hold.
By the way, Nokia to the moon!