The Wall Street is a meme

The events that have unfurled in the past 72 hours or so are going to be written in history as a watershed moment. An occurrence where the commoners decided that they have had enough and they are going to do something about it. If you are unaware, here's an explainer

The pandemic induced lockdown and economic slowdown pushed many out of their livelihood while bringing major gains to a lot of organized investors. The ones with power (have since long) used it to make and break stocks for their gains. One such stock was Gamestop. Gamestop is a retail videogame store chain that was a household name a decade ago but now. in an age where everyone just downloads games from the internet, is not doing so well. Its stock last year was just USD 15 per stock and had also dipped to as low as USD 3. Now. falling stocks like Gamestop are favorites of short-sellers. What is short selling you ask? (You may imagine Margot Robbie in a bathtub holding a champagne flute explain this if it makes it any easier for you.) Short selling happens when an investor sells shares that he does not own at the time of a trade. In a short sale, a trader borrows shares from the owner with the help of a brokerage and sells them at market price with the hope that prices will fall. When prices drop, the short seller buys the shares and books a profit. Short-selling is a little risky and hence is practiced mostly by seasoned traders and investors. For years short-sellers have colluded amongst themselves, used their influence in media as well as the government sometime to manipulate markets and stocks of companies that otherwise are honestly trying to do good. Not just that, the real problem with short-selling is that it is not real value creation. It is just speculators leeching off of the market, gaining out of someone's losses.

Come 2020. A member of a group of some 2.2 million retail investors on Reddit called 'Wall street bets' noticed that almost 84% of the stocks of Gamestop were held in a short position. A little research revealed that Melvin capital, managed by Gabe Plotkin took huge short positions on GameStop stock. They were joined by analysts like Andrew Left of Citron Research in taking the public position that the GameStop stock would go down. This is a classic wall street maneuver- clubbing with your friend investors to batter a stock price and earn fortunes out of the short sell. So these under-employed, financially troubled, and spiteful band of millennials decided to do something about it. These young investors started teaming up and buying the stocks to raise the prices. The effect avalanched into a mind-blowing rise in stock price from 17 USD on 8th Jan 2021 to the peak of 347 USD on 28th Jan. That is a 1900% increase in a span of 20 days. Internet is a beautiful place! The music was so bad that Melvin Capital needed a 2.575 billion dollar cash injection. Many more hedge funders and organized investors are set to lose more as the army is now doing similar stuff with other stocks like Nokia, Palantir, and Blackberry. These individual investors have now realized that by banding together they can not only raise the stock prices but also make money off of these social leeches. It would be no exaggeration to call this financial revolution a modern incarnation of the David and Goliath story.

And as you would've guessed it, the rich people are not taking this very well. An analyst on CNBC accused Redditors of possible illegal collusion and then suggested with a straight face it might be foreign powers at work manipulating US markets. Just yesterday, the NASDAQ CEO called for more regulations on national television. Now it is very off for the head of a trading platform to call for more regulations. High-frequency traders, flash crashes on the market, pump and dumps from hedge funds have not alarmed everyone so much as a bunch of youngsters trying to make some money. The stock market graph has been said to also be an indicator of rich peoples' happiness. But now, for some short while, it is going to show the sentiments of the common people. What really we are witnessing is that when regular people do what the billionaires do, they start crying about crimes. They want the agencies involved. They want to know if it's illegal when the little guy does what they do in a less highbrow version and without a suit on.

These stocks-GameStop, AMC. Bed Bath & Beyond, Ligand Pharma, Blockbuster, Nokia, National Beverage Corp and more, that have received backing from 'Robinhood army' are being dubbed as 'Meme stocks'. Memes because their value has been pumped artificially by millennials on the internet. But wait. If you were to have a closer look, you'll see a lot of high priced stocks that don't have much inherent value and are also pumped up. The only difference- it is wealthy investors and multiple yacht owners that have memed these stocks. Makes you think, how many stocks are really their worth. And how much of Wall Street is a meme in itself.