The Wall Street Bets Gambit

Here is a summary for those who may have heard of the GameStop price manipulation but never gave it any thought: Due to the replacement of analog video game sales by internet sales, hedge funds (i.e., significant money from affluent contributors) purchased shares in inexpensive stocks from firms in industries that were usually considered to be on the decline, such as the shop chain GameStop.

On January 22, 2021, the online group /r/wallstreetbets started strategically buying large amounts of shares, frequently incurring significant debt to do so (a practice known as buying "on margin"). As a result, the value of GameStop increased rapidly. GameStop and similar businesses experienced price increases of up to dozens of times their original worth, forcing funds that had made significant investments in them to lose an estimated $40 billion in just the first week. In June 2021, GameStop's valuation was still over $200 per share, which is over sixty times larger than it was prior to the inflation caused by /r/wallstreetbets.

As a result, several lessons were discovered. For starters, organized middle class and lower class individuals showed that they could have an impact on the market in spite of the enormous wealth divide in America. For another, the fact that several significant online brokers, including RobinHood and E-Trade, halted all purchases of shares of GameStop and other companies and that /r/wallstreetbets did the same, demonstrated the blatant lengths to which the market was prepared to go in an effort to lower prices for the benefit of its participants. Finally, it's important to note that the mass-buy by /r/wallstreetbets also surprised hedge funds that depended on algorithmic trading, which supports a claim stated in a previous entry on this list.