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Gamestop Stock: From Toilet Flush to Royal Flush


The key to a bad poker hand is the ability to convince people that the hand is good. Likewise, the key to the rise in Gamestop stock was the ability of Reddit users to convince everyone that it was a good idea, despite the recent Gamestop downturn. In fact, Reddit users led to one of the greatest stock spikes of all time.

The increase in Gamestop stock started due to a term known as shorting. CBSNews gives a very good explanation of what that actually means. “When the stock is high, you borrow shares from your brokerage, and then you sell them. Now, of course technically you still owe those shares to your brokerage, so you wait for the price of the stock to go down, and then you buy them back for much less money. You return the shares to your brokerage – and you’ve just made money!”

Because of the decrease in value of hardcopy video games, Gamestop has been the perfect stock for shorting. Gamestop has been on a downward trend for a couple years now, until Reddit users decided to beat the system and give Wall Street a nice slap in the face.

Reddit users from subreddit WallStreetBets is a very active account that has been used for suggestions on how to invest in the stock market. They decided it was time to teach Wall Street a lesson, and used their platform as an attempt to sky rocket their Gamestop in order to stop stock brokers from shorting stocks. Their attempt was quite successful.

Within one day, Reddit users had doubled Gamestop stock. However, they did not stop after one day. A stock that was originally on six dollars sky-rocketed to 469 dollars within a week. As a point of reference, the stock market as a whole normally increases roughly six percent a year. Gamestop went up 1,700 percent in a matter of weeks.

Wall Street did not take too kindly to this movement. WallStreetBets was briefly shut down, and apps such as RobinHood and Acorn set a ban on the ability to purchase Gamestop stock. This did not stop the people of Reddit from sending out their message; “Buy, Hold it til 1000.”

Gamestop stock has currently fallen to a semi-realistic number as of late. However, Reddit users may not be done. A mysterious buyer purchased a five second Reddit Super Bowl ad giving a shoutout to everyone that helped with the Gamestop movement. While Gamestop stocks surge may be over, who knows what is in store for future Reddit movements.

As Kenny Rogers famously sang, never count your money when you are sitting at the table. The Gamestop movement wasn’t about counting money (although some investors will have a lot to count now). The movement was started to show Wall Street, and everyone else that when people unite, anything can happen. Because of that, Reddit users should be applauded for such a valuable life lesson.

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Gamestop Stock: From Toilet Flush to Royal Flush