Some Redditors say the GameStop rally is revenge against Wall Street for the 2008 collapse
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Some Redditors of the r/WallStreetBets forum aren’t helping to drive up the price of GameStop shares for the money – they say it’s for revenge.
“GME is about more than just money. GME is about sending a message,” said one Redditor in reference to GameStop’s ticker “GME.” The post continued: “For all the recessions they caused. For all the jobs and homes people have lost. For all the people that can’t pay for college because minimum wage has stagnated while wall street gets rich. For all the retail traders they left holding the bag. For all the times they got bailed out with our tax money while we got nothing.”
The Redditor didn’t respond to Insider’s request for comment.
Others joined in the sentiment, referencing the 2008 global financial recession as they mentioned parents and family members who lost their jobs and homes and haven’t been able to recover.
Ahead of the 2008 recession, banks created a housing bubble by selling mortgage-backed securities with impossibly high profits. The bubble eventually popped, and on September 29, 2008, the Dow Jones Industrial Average fell almost 800 points, the largest one-day drop in history. In the US, millions lost their jobs as the unemployment rate hit 10%, according to the Bureau of Labor Statistics.
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In 2008, the world struggled because Wall Street “got greedy,” one Redditor told Insider. The Redditor, who agreed to speak on the condition of anonymity, added, “Millions lost out, businesses collapsed, countries went bankrupt and the culprits got away with it.”
Read more: One chart shows how 3 GameStop shareholders gained nearly $4 billion in a week
Members of r/WallStreetBets, which has more than 2 million users, have been bidding up GameStop shares in the past weeks, causing the stock to skyrocket more than 1,200% since mid-January. The stock closed at $344.99 Wednesday, a record high. Analysts who cover GameStop have a target price range between $3.50 and $33.
Redditors’ reasons behind pushing up the stock price have varied, from those reminiscing about going to GameStop as adolescents, to those just wanting to make money, to those wanting to get revenge on Wall Street.
The skyrocketing share price has largely had a negative impact on short sellers, who were betting the stock would decline. Data from S3 Partners showed short-seller net-of-financing mark-to-market losses in Gamestop reached $5 billion this year. Well-known GameStop short-sellers Melvin Capital and Citron Research have both closed out of their short positions, with CNBC reporting that the former ate a huge loss.
Not everyone on Wall Street is hurting at the hands of the army of Reddit day-traders, though. GameStop activist investor Ryan Cohen, who took a 9-million-share stake in the company last year, has made billions off his investment following the stock’s record rally. Other Wall Street investors with a stake in the company have also benefited.
After hitting a record $450 per share Thursday morning, GameStop shares have pared some of their gains throughout the day, trading in the afternoon around $230. Also on Thursday morning, Insider reported that the Robinhood app stopped allowed traders to buy GameStop shares, only allowing them to sell because of the market volatility.