By Oisin Sweeney • 28 January 2021 • 7:14
New technology has allowed amateurs to take on Wall Street pros in the stock market - Image Source: Pixabay
FINANCIAL experts and authorities have been left baffled by the astronomic rise in Gamestop share value as a rise in tech-savvy amateur investors take on the Wall Street professionals of the trading world.
Gamestop – a failing video game retailer – has recently taken the financial world by storm with its share value now worth 300 times more than last year. Huge amounts of amateur traders have bought into the company, while some of Wall Street’s biggest firms have lost billions by betting against its meteoric rise.
The phenomenon can be traced back to Ryan Cohen, an entrepreneur who bought a 13% stake in Gamestop with the intention of turning into an online retailer to rival Amazon. This led users of online trading forums on Reddit and other platforms to buy shares in the ailing shop chain, causing its share value to rise by 300% in the last year.
The astronomical rise in share value has worried Wall Street. Some of the financial sector’s top hedge funds – companies that make stock market bets on behalf of clients – have lost billions by “shorting” Gamestop. Believing the surge in interest to be a passing fad, they bet against the company’s rise with catastrophic results.
The White House was forced to intervene on Wednesday, with press secretary Jen Psaki confirming that the government was “monitoring” the unusual stock market activity. As new technology allows anyone to make easy stock market bets and communicate with their fellow enthusiasts, it seems certain that Gamestop’s rise marks the first battle in a war against the financial elite by an army of amateurs.
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Oisin is an Irish writer based in Seville, the sunny capital of Andalucia. After starting his working life as a bookseller, he moved into journalism and cut his teeth as a reporter at one of Ireland's biggest news websites. Since joining Euro Weekly News in November, he has enjoyed covering the latest stories from Seville, Spain and further afield - with special interests in crime, cybersecurity, and European politics. Anyone who can pronounce his name first try gets a free cerveza...
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