Power to the People: Reddit Traders Pump GameStop


Photo courtesy of Jason Briscoe on Unsplash.com

Peter Sloniewsky, Staff Writer

Recently, investors from the subreddit WallStreetBets have engaged in a David-and-Goliath battle against hedge funds, most notably the group Melvin Capital. Working-class investors on the forum have unified to push the price of GameStop stock up from $20 to almost $400, now resting around $50. The pump of money into the stock had huge implications for the hedge funds, who had placed bets on GameStop’s demise through short sales on the stock, leading them to lose billions of dollars and forcing them to buy more stock to cover their losses, which further raised the market price. 

What the Reddit push forces us to question, though, is whether it is empowering to the common person to topple the hedge funds, or if it ruins the entire goal of the stock market for the value of an arguably declining company to be rising.

Firstly, the GameStop push is clearly inspiring to the common man. In the 2008 financial crisis, many normal people lost jobs and their life savings due to the irresponsibility of Wall Street moguls, who famously drank champagne and laughed above the angry Occupy Wall Street protests after being bailed out for their own mistakes. 

Even as a result of the coronavirus pandemic, while unemployment surged to financial crisis levels and the United States slipped into a potential recession, the wealthy companies were bailed out, with profits doled out to their shareholders regardless of the suffering of the common man. Wall Street and wealthy corporations have stepped on the common man. They’ve regaled us all to the engines of capitalism that they alone benefit from, but the idea that the working class can band together to fight a common enemy and change the system that only benefits others can inspire us all. Regardless of political standpoint, we can agree that this week has marked an important turning point that proved to us all that we can defeat the moguls that keep us as a socioeconomic class down.

Secondly, the idea that GameStop is a declining company at all isn’t necessarily factual. The recent decline in brick-and-mortar stores has hit them hard, but with their new influx of capital from stock sales, the company has been able to support recent major changes, including a new CEO from Chewy.com who will help make major investments in the online market and in a new company-run streaming platform to compete with Twitch. 

In addition, the goal of the stock market is to essentially take risks calculated risks, but risks, nonetheless and at the end of the day what the GameStop controversy proves is that what the wealthy really want is to be the only ones who play the game. CEOs and hedge fund managers appearing on TV, claiming that the general public has committed some crime against the rule of capitalism by rolling the dice to manipulate the market in the same way that they do, are simply trying to manipulate the general public back to the side of gentle ignorance to the crimes they commit against all of us every day. This form of market manipulation isn’t even new; hedge funds commonly attack one another through mass buy orders and sell orders to change stock prices.

Overall, what the GameStop controversy showed us is the true power of the working class in the United States. Progressives have been campaigning for decades to reduce the power of corporations and investors, but widespread support across both Republicans, Democrats, and independents alike for the WallStreetBets community has shown a general contempt not seen before for those who benefit from our suffering. We can unify as a country to acknowledge the privilege of the wealthy that seem to plague us as the middle class, and realize together who the common enemy is, how simple it is to take their power, and how fragile our system really is.