How reddit users skyrocketed GameStop stock

   GameStop is a video game retailer with declining success in the market due to more and more video games being purchased online. Most players would rather just install a game instead of having to go to a store and buy a physical copy. 

   Recently, the stock price for GameStop has risen over 1000% due to users of the popular subreddit r/wallstreetbets. Though it has since gone down from its $340+ value to almost $50, the initial spike was of great shock to many major investors.

   The reasoning behind internet users pouring all of their money into a dying company’s stock is simple: to mess with hedge-fund companies trying to short-sell its stock. Short-selling is when an investor borrows someone’s shares in a company, sells the shares, waits for that company’s stock value to go down, buys back the same amount of shares, and returns those shares to the original owner. 

   Since it costs less to buy the same amount of shares after the stock has dropped than the money received for selling the shares beforehand, these short-sellers gain a profit from the difference in prices. 

   Short-selling is seen as gambling because it’s like betting on a company’s failure. If that company’s value goes up at all, the short-sellers take major losses. That is exactly what happened to all of the hedge-funds attempting to short-sell GameStop. The general consensus around short-selling and hedge funds on the r/wallstreetbets subreddit is very negative, thus resulting in its users banding together to do something about it. As Elon Musk, CEO of Tesla, SpaceX, and more, on Twitter puts it, “u can’t sell houses u don’t own u can’t sell cars u don’t own but u *can* sell stock u don’t own!?”

   Though it still has its spikes, GameStop’s stock is now gradually falling as people who bought in on the excitement are selling for the little bit of profit they can still get. Many people have not sold stock, however, because of the mentality on r/wallstreetbets to ‘send [the stock value] to the moon’ and ‘ride it to the ground’ at the loss of the short-sellers.