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@voodoo said in r/wallstreetbets, GameStop, and institutional investors:
Its not even just that, though I agree that's a thing. But this stock is now down to $90 from $400. How many retail investors got burned on the way down after buying late on reddit advice?
A fool and their money are easily parted.
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That particular subreddit is mainly for the laughs of loss porn. It also has professional-quality analysis, but those posts are much rarer than someone sinking $100 of entertainment money on what amounts to a lottery of a terrible stock/share and then everyone having a laugh at it when it almost inevitably loses money. If people are putting in more than they can afford to lose expecting a return, that's a financial literacy problem that is much wider than a particular share or subreddit, and Gamestop was just today's tulip for those people.
I'm not sure that the positives outweigh the negatives of speculative trading, especially over short intervals (like a day or two, or minutes or seconds), but it's a thing that exists currently, and is tough to regulate without causing other issues.
The Gamestop short squeeze was mostly a battle between hedge funds - the retail investors on Reddit had an impact, but I don't think it was as large as they think it was.
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3.5 to 4 million users on that sub reddit according to many sources. If you're going play with those self described "retards", then you better know what you're doing.
A welcome exposure on the practices of hedge funds and short selling/gambling, all within the rules of the game. May the internet nerds lift the veil on many more of our societal dysfunctions. That might just lead to some real equality rather than the lip service variety commonly spouted.
r/wallstreetbets, GameStop, and institutional investors