This has given way to ‘retail investors’.Ī retail investor is an individual investor who invests in stock markets by purchasing shares of a company or invests in mutual funds, exchange-traded funds, etc, that can be facilitated by a broker. Even though traders and investors look up to the Warren Buffet style of investment, the world nowadays is fuelled with quick runs and fixes. But do you add it to a wishlist? Most probably. Do you buy every trend that an influencer suggests? No. WallstreetBets can be termed as financial influencers. We are well aware of how influencers operate. They began buying worthless GameStop shares and drove the price of the shares from less than $20 to as high as $483 at its peak on leading to what is known as ‘short squeeze’.Ī short squeeze occurs when a stock or other asset jumps sharply higher, forcing traders who had bet that its price would fall, to buy it in order to prevent even greater losses Some were driven by unadulterated hatred for Wall Street and some were nostalgic about the old gaming company. This is where Redditors from WallstreetBets came in. The investors were confident that GameStop didn’t hold much value. You assume that you can buy it back at a lower price from the market. When you short a stock, you expose yourself to a large financial risk.
Shorting stock, also known as short selling, involves the sale of stock that the seller does not own, or shares that the seller has taken on loan from a broker. What happened in 2020? Hedge fund raiders from WallStreet shorted or tanked shares of a retail gaming company called GameStop. The follower count went up from 80,000 in 2019 to the current 11.3 million. WSB has been known for its aggressive trading discussions and community of opinionated retail investors. This has given birth to what are now being called ‘retail investors’ – individuals sitting in the comfort of their homes with the ability to move markets.įounded in 2012 by Jaime Rogozinski, WallStreet Bets (WSB) is a Reddit page that shot to fame in 2020. Meme stocks include, but are not limited to, the likes of AMC entertainment, Koss, Nokia, BlackBerry, etc. ‘Meme stocks’ are stocks that go viral and their share prices shoot up not because the company is performing well but due to the hype of social media, mostly on platforms like Reddit. This is not a recent phenomenon but when a company called GameStop, which was priced at just $20 a share in 2019, suddenly spikes to $483 per share, people want to tune in. Global finance has been buzzing with one particular phrase recently – ‘Meme stocks’. What is a meme stock and should you care? Eetika Kapoor explain the nuts and bolts of what is undoubtedly a mini revolution in global finance.
More yet regard themselves as anarchic warriors of the 99%. Some see themselves as genuine traders, others as modern-day Davids fighting Wall Street’s Goliaths. Markets have been disrupted this year by the growing clout of retail investors.
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