It’s a story that will go down in stock market history: a group of Redditors from the subreddit “r/wallstreetbets” organized a nationwide movement for people to invest in the dying video game retailer GameStop. This was done in an effort to cause financial ruin to hedge funds, who were betting against GameStop by short selling the stock. 

 

A short squeeze occurs when a stock jumps sharply, forcing traders who bet against the stock to buy it in order to prevent greater losses. In this case, everyday people, initially spurred by posts from r/wallstreetbets, rapidly drove up the price of GameStop to force traders to buy in at massive prices.

 

The plan was successful. GameStop’s stock price went from a low of $2.57 per share to a high of $483 per share early on Thursday, Jan. 28.

 

However, later that day, Robinhood, TDAmeritrade and other brokerages halted the buying of GameStop, attracting accusations of market manipulation from major figures as diverse as Alexandria Ocasio-Cortez, Donald Trump Jr. and Dave Portnoy, an internet celebrity beloved by University students.

 

In a time where the United States is more divided than ever before, to have political figures from across the aisle agree on this subject demonstrates the gravity of the situation. Not only did Robinhood, TD Ameritrade and other brokerages stop allowing people to buy GameStop (GME) shares, but on Jan. 27, the communication platform Discord banned the r/wallstreetbets server on Reddit, causing stock speculation and communication on the forum to seize. Once this occurred and people could no longer discuss or buy the GameStop shares, the price of the share plummeted, causing people to lose significant amounts of money overnight. 

 

The Villanovan spoke to several University students who were involved in this high stakes war with Wall Street.

 

Muhammad Sian, a graduate student, was urged by his older brother to buy GameStop stocks one month ago, before this entire situation became widely publicized. 

 

“My older brother told me, ‘Buy this many [GameStop shares] at this time,’” Sian said. “And so I did.”

 

Sian bought 10 shares at about $20. Soon, the value rose to $60. On Wednesday, Jan. 27, Sian dumped his 10 shares and made about $300. 

 

“I’m buying AMC next,” Sian said.

 

Indeed, many are now turning their attention toward AMC Theatres as a potential company from which to buy stocks. Like GameStop, hedge funds have been betting against AMC. Unlike GameStop, AMC is actually expected to eventually resume its operations. In-store video game purchases are becoming obsolete, but this is not as much the case with in-person movie viewings.

 

Senior Joe Torres had a similar story.

 

“I heard about GME the day after it hit $150 for the first time,” Torres said. “I checked out some other subreddits and heard about r/wallstreetbets. When I went on r/wallstreetbets, it felt like a movement. Everyone was united around the cause of making money and trying to take down the hedge funds. I ended up buying in on that day at around $90, and selling 2 days later around $300. I tried to put my money in AMC afterwards, but Robinhood was restricting purchases of the stock, so I couldn’t. I am going to try to buy back in later this week.”

 

Some University students, however, did not have such a positive experience with the short squeeze. 

 

“I heard about the trend with GameStop, Blackberry, and AMC, so I bought $500 worth of GameStop and doubled my money in two hours,” one sophomore said. “I decided that this was a really quick and easy way to make money, so I sold all my other stocks and went all in. And then overnight I lost $5,000.” 

 

Due to Robinhood no longer allowing users to buy more shares in GameStop, the stock began to decrease at a concerning rate, starting a financial plummet of thousands of people, including Villanovans.

 

Lucas Deane, another sophomore, also had a negative experience.

 

“I’ve always known about r/wallstreetbets and have been a part of the online Discord chat community where people announce opinions on stocks,” Deane said. “But this last week definitely caught my attention when I started to see thousands of new people join and tons of posts about GME and AMC stock … I definitely sided with all of the Redditors who wanted to combat the hedge funds and give the “little guy” a chance to make some great gains. I went ahead and bought a few shares at $250 dollars a share on Wednesday morning. The day started out well and the plan seemed on track, with the price reaching over $350 on that same day. I was quite happy with my investment, until the next day when everything really made a turn for the worse. I remember I woke up and saw the price inflate to nearly $500. I was so happy, until all of a sudden, bam. Everyone on Discord started saying that Robinhood canceled buying of the GameStop stock, even delisting the stock from their app, and only allowing people to sell … I use TD Ameritrade so I was not affected in the same way. But still, I saw my position more than cut in half in the matter of minutes due to this.”

 

Deane went on to give more of his opinion about Robinhood’s restrictions.

 

“I cannot express enough my contempt at how wrong and illegal this seems to be,” he said. “I believe in free market principles and that everyone should have the ability to buy and sell stocks at any time during market hours, but Robinhood restricted that right with a moment’s notice. I know that Robinhood has since explained on social media that this was necessary to ‘protect the condition of the market,’ but I think this behavior is a bit sketchy given that 40% of their capital comes from the Citadel, which helped bail out Melvin Capital from their losses due to GameStop. Now, I’m looking at closing out my position on Monday in the hope that I can at least secure some profit from this whole situation. But this has really shaken me up from investing in financial markets, making me really question who is pulling the strings at each turn.”

As this particular battle begins to die down, everyone must ask themselves, what’s next? Who is to say that this was not just the first battle in an even bigger war: the war against Wall Street.