By Simeon McFarland
In the midst of a global pandemic people have been finding new ways to make income. Many people have tried buying and reselling items on eBay, while others have been going different routes.
Hedge funds bet on GameStop Stock
GameStop was no secret of a dying corporation. In fact, in late 2020 multiple outlets such as GameRant were predicting that GameStop would be going out of business if they continued to fall behind in the digital gaming industry let alone the impact COVID has had on businesses.
Hedge funds on Wall Street saw that GameStop stock was plummeting, so they decided to bet against GameStop saying that they would go bankrupt, which would have made Hedge funds richer if GameStop did go bankrupt.
Reddit group takes over
A Reddit group by the name of Wall Street Bets saw this and decided to counter what hedge funds were doing. They knew that if they got enough people to purchase GameStop stock the hedge funds would lose money, and that they did!
CNBC reported that hedge fund Melvin Capital Management lost 53% in January as GameStop stock surged past 400%. People around the United States were buying GameStop stock and reselling it for profit, some saved and hoped for the price of shares to increase even more.
Robinhood shuts down purchase of GameStop stock
GameStop stock kept increasing until a trading app by the name of Robinhood, but this was quickly stopped however. The Verge reported that Robinhood blocked people from purchasing GameStop stock after shares were at an all time high. Whether that was legal or not remains to be seen as CNN reported that multiple lawsuits were filed against Robinhood after restricting GameStop stock.
Ever since the Robinhood restriction, GameStop stock has been declining ever since as Yahoo Finance has tracked the stock and it went from over 354 in February to 116 as of March 1.
What do you think about this situation? Do you think that Robinhood illegally stopped lower income individuals from buying stock to protect Wall Street?
Only time will tell.