![]() ![]() With all of this in mind, it seems fair to suggest that a video-gaming, young-adult man is the average member of the group. In addition to posting on Reddit, WSB communicates through the popular gamer messaging platform Discord. While the exact demographic of the WallStreetBets group is unclear, Reddit’s user base is about 70% male and is mainly comprised of individuals ages 18 to 29. It feels appropriate to call Gill a WSB leader, which begs the question: what types of people are his followers? He’s treated as a hero, and whatever he does is followed by the rest of the group. That isn’t to say that only seasoned professionals can be successful on WSB, but rather to suggest that Gill is someone the group looks up to. Gill is both an “old timer,” meaning he isn’t one of the 7.5 million people who have joined the subreddit in the last 30 days, and a professional trader. However, Gill represents the minority of WSB in more ways than one. At its peak, his profile was worth 33 millions dollars. For example, WSB royalty Keith Gill, more commonly known as u/deepfuckingvalue, is a financial analyst and investor who has made millions off of GameStop. To be fair, many of the subreddit’s original members know a substantial amount about the market and are the reason GameStop stock (GME) even took off in the first place. When we translate this prerequisite to WallStreetBets, it’s unclear if the group was collectively informed enough to beat their hedge fund opponent. Because of this, he trusts he will be able defeat the beast-like Goliath. In the story of David and Goliath, the hero, David, mentions he’s killed both lions and bears in the past. Hypothetically, this is a wonderful and admirable idea: regular, working-class people uniting to take down the greedy and powerful “big man.” However, returning to the David analogy reveals the two main reasons that this story didn’t end in an underdog victory. Prices of GameStop stock hit an all-time high and WSB sold the shares they had purchased, pocketing the money of Wall Street billionaires to do things like pay off loans, buy necessities, and have a little financial wiggle room. The moment the hedge funds bought their stock back was the “big squeeze” WSB had been waiting for. Since the hedge funds bet on the stock prices going down, the price surge would put them in a bad position they would have to buy their stocks back at a loss in order to return them to their original owners. From there, they planned to buy back their stock at a lower price and make a profit.Īll was going well for the hedge funds until a subreddit of amateur stock traders heard what was going on and realized that if they joined forces and bought up the stock, the demand for and subsequently the price of the shares would shoot up. When the hedge funds saw that GameStop had been losing money over the last year, they decided to sell their shares of stock because they thought the stock price would keep going down. Shorting is a stock trading strategy wherein someone borrows stocks from a broker, sells them for a high price, buys them back at a lower price, and pockets the difference as they return the stocks to their original owner. ![]() ![]() To briefly explain the situation, WallStreetBets (WSB), the aforementioned group of Reddit users, got word that large hedge funds were shorting GameStop stock. The same cannot be said for WallStreetBets. However, in the classic story of David and Goliath, David has previous experience taking down beasts and his act is one of resolute selflessness. It’s a classic story of the big guy versus the little guy. Hedge funds are closed groups of professional, incredibly wealthy traders that represent large corporations and big-shot investors. WallStreetBets is an open, online forum, primarily used by amateur stock traders. Since the unprecedented surge in GameStop stock prices on January 28th, the now-famous subreddit r/WallStreetBets has been compared to David taking down a hedge fund Goliath. ![]()
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |