so by now you have probably seen that
parts of the stock market have been
thrown into utter chaos
gamestop american airlines gamestop
stock has been on a wild ride
amc two and by the time you're watching
this any number of random mall chains
may have had their stock sent
rocketing up by an organized group of
day traders hanging out on
a subreddit called our wall street bets
somehow during the pandemics stocks
became a meme now
redditors and wall street jumping in
behind them have moved so much money
so quickly that it's already gotten the
attention of the new treasury secretary
to understand how you have to look at
the big picture
okay so let's start by explaining how
this all began
we're all home and bored during the
pandemic
now some of us started baking our own
bread about this but other people
started day trading before the pandemic
a bunch of online brokerages got rid of
trading commissions so it was a lot
cheaper for retail investors that's
people like you and me to trade stocks
in fact last year was a record for
volume and retail trading
now gamestop has been losing money and a
reliable cash register for people who
bet against it for years
its stock usually goes down after its
earnings they do this by shorting stocks
there's sort of a technical explanation
for how this works but basically they're
just betting on the stock going down
one thing that does happen though is
that if you're shorting a stock
you're exposed if the stock goes up a
lot in fact
your losses are theoretically infinite
on our wall street bets about a year ago
a user suggested that
gamestop was undervalued and in fact it
became a joke
that our wall street bets would take
over gamestop and then
suddenly it wasn't a joke so that's how
it started
here's how it's going there's a way
doing options trading that you can force
the stock up which
makes the shorts cover their positions
and the free online trading platforms
such as robinhood although i want to be
very clear
not exclusively robinhood make this
possible buying gamestop
calls suddenly became a meme and people
began to coordinate in a way retail
traders hadn't
ever before meanwhile on reddit a bunch
of people are demanding
lost porn which is when you post your
losses and point out all the ways that
professionals have manipulated the
market
they see this as comeuppance i just want
to be clear with you guys though there
are rich people on both sides of this
trade and some rich people are just
getting richer
meanwhile several online brokerages have
limited the trading on the stocks that
the redditors target now their editors
are
big mad so what's next
honestly i don't know and probably a
bunch of things have changed between us
filming this and you seeing it so we'll
find out
but when you combine all the new people
who are bored and doing day trading
social networks and memes there's a
powerful new force in the market
one that's being amplified by existing
players on wall street
in fact this is basically wall street
finding out what an internet mob is
capable of
and it's probably also going to end in
tears i mean
gamestop is an open pump and dump none
of the fundamentals have changed the
stock is going up because we're in the
pump and there's a really obvious next
step
the dump we just don't know when it will
happen the other thing that's likely is
regulation i mean we talked earlier
about how the treasury secretary is
already paying attention the sec has put
out a statement saying they're paying
attention
and we have lawmakers talking about this
on twitter
notably both democrats and republicans
you've got ted cruz
alexandria ocasio-cortez and rokana all
saying that they want to review this
and see if there are changes that need
to be made to sum up
i think that a new source of uncertainty
has been injected into the markets and
right now they're more like a casino
than ever
what have we learned well a lot of
people got an education on how the stock
market works
and wall street got an education on how
online mobbing works and the internet
learned a new skill
that it's probably going to repeat and
there's
probably a lesson here
if i know what it is look as i said
earlier
a lot of things have probably happened
between us recording in this video and
us uploading this video because this
story is moving really fast
if you want to be totally up to date on
what's going on
you can check out our website
theverge.com