By Neil Sudhalkar
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Read Part 1 here: http://bit.ly/30c4mcI
There are several parts at play here which make up the full extent of how such a feat could be pulled off. The article will be divided into the following parts.
Who are these people? Why are they like this?
What is the role of tech?
Conclusion
Chapter 1: Who are these people?
Estimated age: 20-40 (some investors were as young as 15)
Why: Belief that companies not doing well should be doing better big hedge funds who prey on the flaws of such companies (stock shorting)
Reddit: r/wallstreetbets - share memes and financial advice.
This whole gamestonk situation began because of the hatred against establishments. It's believed that this group of redditers had something in common which was driving them to great extents. Hate. Hate against establishments and people. Many individuals part of this community lost their jobs during the 2008 financial crisis. Huge companies, which had a lot of control over the stock market crashed and jobs were lost. But, the people affected the most due to this crisis were the people at the bottom of the chain. These huge companies who causes this got billion dollar bailouts, and the people affected due to the works of huge companies got nothing. It was largely believed that major institutional investors (big guys), had more influence over the market than retail investors (tiny guys). This GameStop saga has changed this.
Chapter 2: What is the role of tech?
Reddit & YouTube (social media services): These social media services helped YouTubers like "Roaring kitty" give their financial advice to members of the community.
Discord: Discord is a instant messaging app which is gamified where people can chat, call, share memes, add bots and more. Through this coordinated effort, they managed to overturn GameStop's valuation from around 250 million dollars to 13.5 billion dollars.
Robinhood: Robinhood is an app which allows you to trade online for free. No commission. It also gamifies the experience which may make using the app for addictive and fun, hence making it attractive.
Conclusion
The role of capitalism is what drew these people close together. It's a systematic problem, and in their way, they changed the dynamics of the market. Beating all odds and coming on top.
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