Written By Jannah Bolds
EIC, The Bold Opinion
The stock market events that took place on Wednesday and Thursday revealed, yet another reason to believe in America’s economic unfairness. Last week, two stocks, AMC and Gamestop saw an astronomical increase in shares due to a group of Reddit investors pouring money into the, already, tanking brands which caused their stock prices to rise. This seemed like a fair and legal act, until the independent investment platform, Robinhood, decided to restrict user buying and selling power once they realized users were flexing their stock market muscles.
At the beginning of the week (January 25th), a share of Gamestop cost $69.32 and again, thanks to the efforts of social media and small investors, stock prices soared to $396.51 by January 28th, the highest the company had ever seen! That’s not even the kicker. On January 12th, a share of Gamestop sat at only $19.78. I’m no mathematician, but I believe that’s approximately a 2000% increase!
So if this was a free and fair market, there shouldn’t have been a problem at all. Right?
However, a problem rose when Robinhood began restricting their users trading power to stop the stock increase. Why? Well, billionaire hedge funders who’d bet against Gamestop, and other short stocks, in the position to lose tons of money. It’s ironic that Robinhood, the commission-free brokerage, claims to be a platform that “believes the financial system should be built to work for everyone”, yet stepped in to protect those hedge funders from major losses.
Since the sh*t hit the fan, users have been forced to hold their stocks and have produced at least two class action lawsuits against Robinhood, meanwhile the money-making hedge funders were allowed to continue buying and selling. Robinhood CEO, Vlad Tenev says that the platform restricted trading in order to protect the firm and its customers.
I say, if it looks like a duck and quacks like a duck, it’s probably a duck.