The modern business world has basically flipped upside down in light of recent events regarding GME or Game stop. Melvin Capital, a hedge fund, announced that they were shorting the game stop stock a few weeks ago. This essentially means that the hedge fund managers were betting that the game stop stock would drop in price. After hearing this information, a Reddit group by the name of Wall Street Bets decided to take action. The one million members in the group came together to drive up the game stop stock through the roof to upset Melvin capital and other hedge funds. Wall Street Bets drove up the price so high that hedge funds were losing billions in dollars and were furious. This brought many people to question the power of the everyday trader. The fact that they could counteract wall street firms was a little shocking to many, but others would disagree. I believe that both sides are in the wrong.
On one hand, you have greedy Wall Street bankers. Wall Street bankers have been notorious for performing whatever they can to get away with the largest amount of money. On the other hand, you have the common people like the Wall Street Bets Reddit group who have the power to unite together and take down a hedge fund. However, Wall Street Bankers have been doing similar things like Wall Street Bets did, just on a smaller scale. This brings into question both sides of the conflict. I believe that both sides should be regulated to control a situation like this. There have been many famous people like Ted Cruz, Marc Cuban, and Alexandria Ocasio Cortez who have agreed with the people that Melvin Captial and other hedge funds deserved this. I would agree that they definitely deserved something like this coming their way, especially because they decided to continue shorting the stock even when they shorted GME multiple times before that. There was no need to be cocky and drive GME so low that they would make another million, which isn't much to them. Although the bankers deserved this, that doesn't mean the people were in the right to unite to drive up a stock. The fact that only a couple million people in a Reddit group could cause such a big controversy is very scary and outrageous. They should never have that much power and should be regulated to some extent.
Another reason why the people were very outraged is that trading platforms like Robinhood and Yahoo decided to close down trading temporarily and have limited trading on GME and AMC afterward. The people were outraged because they thought this was a direct attack on the people. Many individuals even went on to accuse Robinhood and Yahoo of teaming up with the wall street firms and helping them out. However, the Robinhood CEO had a different explanation for the scenario. He stated that there was a 2 day waiting period to purchase the stocks from the brokerage firm. The brokerage firm continued to raise their prices as the stock price went up, which caused the Robinhood clearinghouse to become short of money. This forced Robinhood to temporarily close GME and AMC. This explanation makes sense, but I still believe there are some underlying connections from Robinhood to Wall Street Firms.
All in all, both sides of the conflict are in the wrong and need to be regulated. I feel like the Wall Street bankers were put in their place and deserved this, but that doesn't mean the people can act like this all the time. This conflict has divided the nation in terms of which side they agree with. Do you side with the people or the bankers?