GME - Are Gamers Gaming the Markets?

1. SHIELD GME ARE GAMERS GAMING THE MARKETS? It seemed innocent enough, at least at first. There was a group of traders eager to learn from each other communicating in an online forum, sharing tips, and offering insights. The subreddit thread, r/WallStreetBets, was rapidly gaining popularity and currently boasts nearly 8 million members. Fine, no cause for alarm there. ISN’T THAT ILLEGAL? Yes and no. Redditors defend their actions citing how hedge funds “do this all the time;” shorting stocks, buying it en bloc, then the investors collect their profits. The masses on the subreddit thread are arguing that the shorts placed on GameStop by hedge funds were “inflated” and “artificially large.” Posing the question more narrowly, is it illegal to bankrupt a hedge fund? No, it’s not; well, not exactly. However, what it has done is put social media into the crosshairs of regulatory agencies. More on that in a moment. WHAT ABOUT COLLUSION? That’s where things get more interesting. Social media and the rise of influencers coupled with increased accessibility (where low-dough investors can chip in and buy stocks together to gain entry – even to exclusive markets) have made it possible for communities to rally around a ringleader. Individuals can choose to become part of the collective or pursue investment independently once they get the “scoop” on which path the majority are inclined to take. And that’s the grey zone that has everyone talking. Individuals are making a choice whether or not to follow the cues from an influencer on social media. We’ll have to watch things closely to see how this war between the “haves” and the “have nots” plays out. For now, what we do know is that a bunch of smart teenage gamers gamed the markets to the tune of $20 billion in losses on Wall Street – and counting. HTTPS://WWW.SHIELDFC.COM/