I don’t really get how the stock market works. It all seems like a big scam to me.
It seems an even bigger scam after what will surely be known as the infamous “Stonks” debacle of 2021, when redditors from the /r/WallStreetBets subreddit pushed the humble $20 stock price of the game retailer GameStop up 822 percent just for fun. And now some poor, long-suffering classic car enthusiasts are caught in the middle.
First, the skinny on what’s going on over at /r/WallStreeBets gaming of the GameStop stock explained by someone smarter than I am. From CNET:
Despite the move being characterized as “insane” and a “Ponzi scheme,” GameStop is now one of the biggest bets Wall Street traders have made lately, with nearly all of them expecting it to fail. It all started last week, when posters on the Reddit stock trading chat community WallStreetBets attempted to push up shares in the struggling game retailer. With much of Wall Street betting against GameStop’s success, WallStreetBets investors believed they could force a market rally by creating demand where there had been little before.
The result: GameStop stock jumped more than 822%, from $17.25 at the beginning of the year to a high of $159.18 on Monday. Then it dropped by nearly half, only to rise back up to $147.98 on Tuesday. And then Tesla CEO Elon Musk tweeted about it (using that vocabulary we mentioned), and the price jumped 40% in after-hours trading. On Wednesday morning, it hit new highs, hovering around $315 per share.
Elon Musk did indeed tweet about it, which is always a good sign:
Well, it turns out /r/WallStreetBets isn’t the only subreddit to blow up with excited stock traders’ posts. The humble /r/amc Reddit board was flooded today by investors looking for information on AMC Entertainment, only to find it was full of people not with a love for the entertainment business but with a passion for American Motors Corporation. From Road & Track:
...today, the AMC subreddit was briefly overtaken by investors and amateur day-traders hoping to find and share info on AMC Entertainment Holdings, the largest movie theater chain in the world. We’re just has baffled as you.
In an effort to spread the word and spur conversation, traders, somewhat logically, found the “AMC” subreddit and barged on in, hoping to discuss stock-trading ideas and tactics. What they didn’t realize is that they’d found the wrong group of AMC fans.
“THIS IS A CAR SUBREDDIT, NOT A STOCK MARKET SUBREDDIT,” reads one post, written in frustration after several now-deleted off-topic posts on the movie theater chain cluttered up the once-quiet automotive community.
The confusion was eventually cleared up, but the investor posts stayed up for longer than they usually would have because the moderator lives in Germany. Once again, I don’t know how any of this stuff works, but if we could get AMC going again, it seems like a worthy cause. Come on Reddit. Do your thing.