Gamestop stock simplified


Gamestop stock rises while Wall Street loses money, photo from Clay Banks.

Adam Novak, Sports Editor

The Gamestop stock had recently rocketed and much chaos had been stirred from it.

Before January 11, the hedge funds had planned on the struggling business GameStop stock to tank. The hedge funds are an investment company that invests its clients’ money in stocks that they plan on tanking. The hedge fund’s purpose is to maximize investor returns and eliminate risk. The very name hedge fund derives from the use of trading techniques that fund managers are permitted to perform. 

Although, a group on Reddit named the “WallStreetBets,”  noticed that a hedge fund had taken a massive amount of short trades against GameStop. A ‘short’ is in trading when you borrow a stock from a broker and sell it immediately at its current price. Then you hope the stock’s price falls such that you can buy the stock back at a lower price and return the shares you borrowed to your broker. 

The Wallstreetbets then started to encourage each other to keep buying GameStop and push it ever higher.

After the “WallStreetBets” started raising the Gamestop stock, the Headgefund didn’t plan on the stock going up and were originally thinking the Gamestop stock was going to fall off shortly. 

The GameStop stock went from $10 a share to $400 a share. The surge in trading drove GameStop’s value up by more than $10 billion in one day.

“I think it is funny how a few people on the internet can mess things up in the stock market so much,” said junior Matthew Grimm.

In the end, the hedge fund had managed to lose a surprisingly 13.1 billion dollars. After they lost all of this the hedge fund had to close their short positions and buy all the GameStop stock back at much higher prices. Now the hedge fund is declaring bankruptcy, and now wall street is saying that the public joining together in this fashion should be illegal.