It's been a heck of a month!
Jan. 28th, 2021 06:59 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
mousmeYesterday an internet meme destroyed a hedge fund.
Okay, I am being flippant, but you have to admit, it's pretty cool. Right up front, I wish to be clear: I do NOT understand the stock market. It's always been a whole bunch of wealthy people playing with imaginary money in order to make themselves more wealthy, and often ruining the lives of regular people in the process because they engage in SUPER FUCKING SHADY practices.
Case in point: shorting stock. The nutshell version is that the hedge fund in question (and others) decided to short the stock of GameStop, which has been in peril for a little while due to their business model (they're from the era of brick-and-mortar stores and are poised to try to go digital, but I am honestly not sure how well they're doing with that). However, they shorted the stock by more than 100%, and some observant people on Reddit (the subreddit r/wallstreetbets to be precise) noticed it. Those observant people made, as I understand it, a bunch of jokes/memes along the lines of "LOL wouldn't it be hilarious if we all started buying GameStop stock and made the price skyrocket, because it would really fuck over that hedge fund!"
And, uh, it worked. The meme caught on, people started buying stock using apps like Robinhood (which allow amateurs to play the stock market without commission fees), and the stock price went from somewhere around $17 at the beginning of the year to over $400 the last time I checked. Wall Street freaked out. The USA freaked out. Wall Street tried to appeal to the government, and suddenly social media went from "Hey, isn't this a fun prank" to "BLEED THE RICH UNTIL THEY'RE READY TO BE EATEN!" More and more small investors jumped on board, and a lot of the early buyers made bank. There are some really incredible stories coming out about people eliminating student or medical debt, of making enough money to pay for long-term care for their chronically ill loved ones, all sorts of things. It's mind-blowing, mostly because it's such an object lesson in how money and investments SHOULD be spent: on improving people's lives, and not on making the hyper-wealthy even wealthier.
Anyway, Shit Went Down because suddenly the Robinhood app mysteriously decided to stop people from trading... something-something-technicality-something-I-didn't-understand-because-stock-market. ANYWAY, basically the hyper-wealthy are applying pressure every which way they can, and it's not working super well for them this time around. The main hedge fund that shorted GameStop has lost billions of dollars. I saw a screencap of a post by someone named Zi Teng Wang which said, among other things: "It turns out that wealth does trickle down, you just have to make them bleed first," and DAMN, SIR.
I STILL don't understand how shorting a stock can be legal. How can you sell something that you don't own? (Multiple people have explained it to me, and just... if you are renting something, you should not be able to sell it, because it does not belong to you. What the fuck even.)
I meant to write about other things today, but I felt I should note this for my future self to read and remember how absolutely bananas this month has been.
Okay, I am being flippant, but you have to admit, it's pretty cool. Right up front, I wish to be clear: I do NOT understand the stock market. It's always been a whole bunch of wealthy people playing with imaginary money in order to make themselves more wealthy, and often ruining the lives of regular people in the process because they engage in SUPER FUCKING SHADY practices.
Case in point: shorting stock. The nutshell version is that the hedge fund in question (and others) decided to short the stock of GameStop, which has been in peril for a little while due to their business model (they're from the era of brick-and-mortar stores and are poised to try to go digital, but I am honestly not sure how well they're doing with that). However, they shorted the stock by more than 100%, and some observant people on Reddit (the subreddit r/wallstreetbets to be precise) noticed it. Those observant people made, as I understand it, a bunch of jokes/memes along the lines of "LOL wouldn't it be hilarious if we all started buying GameStop stock and made the price skyrocket, because it would really fuck over that hedge fund!"
And, uh, it worked. The meme caught on, people started buying stock using apps like Robinhood (which allow amateurs to play the stock market without commission fees), and the stock price went from somewhere around $17 at the beginning of the year to over $400 the last time I checked. Wall Street freaked out. The USA freaked out. Wall Street tried to appeal to the government, and suddenly social media went from "Hey, isn't this a fun prank" to "BLEED THE RICH UNTIL THEY'RE READY TO BE EATEN!" More and more small investors jumped on board, and a lot of the early buyers made bank. There are some really incredible stories coming out about people eliminating student or medical debt, of making enough money to pay for long-term care for their chronically ill loved ones, all sorts of things. It's mind-blowing, mostly because it's such an object lesson in how money and investments SHOULD be spent: on improving people's lives, and not on making the hyper-wealthy even wealthier.
Anyway, Shit Went Down because suddenly the Robinhood app mysteriously decided to stop people from trading... something-something-technicality-something-I-didn't-understand-because-stock-market. ANYWAY, basically the hyper-wealthy are applying pressure every which way they can, and it's not working super well for them this time around. The main hedge fund that shorted GameStop has lost billions of dollars. I saw a screencap of a post by someone named Zi Teng Wang which said, among other things: "It turns out that wealth does trickle down, you just have to make them bleed first," and DAMN, SIR.
I STILL don't understand how shorting a stock can be legal. How can you sell something that you don't own? (Multiple people have explained it to me, and just... if you are renting something, you should not be able to sell it, because it does not belong to you. What the fuck even.)
I meant to write about other things today, but I felt I should note this for my future self to read and remember how absolutely bananas this month has been.
