This all started when Ryan Cohen, Co-founder of Chewy.com started investing in GameStop (GME), in which he put  about $76 million this past year and has been continuously pushing GameStop to move its business online.

GameStop had already been depleting, because of the lock-down and with our current online game stores rising in popularity. While the hedge fund managers strive to profit off failing businesses, publicly said that GameStop stock will just plummet. Little did they know they were in for a surprise. 

I welcome you to the subreddit, r/WallStreetBets. This subreddit is composed of investors from all over the world, who usually come together to come for advice in situations like this. They started encouraging retail investors (individual investors who aren’t professionals). Karma is about to hit these hedge funds, thanks to short selling. Short selling is a high-risk bet against a company, you’re also investing in a company that you expect to fail.

How this happens is by taking a share from the stock inventory and sell it in the market. When the stock price drops, you are then going to buy it back for less than what you already sold it for and make a profit the more shares you sell as well.

Thanks to the retail investors, they have made the hedge funds have  losses of billions of dollars. They are paying for their losses and buying the stock. This will make their price go up even more.

While the experts are saying that after all of this settles down, GameStop will just continue to plummet as the hedge funds said. The reason for this is because lots of people bought the shares and are forcing the price to surge. That  causes a demand for a short squeeze on the short-sellers. A short squeeze is when short sellers have to pay back their part of the shares because of the increased price. In simple terms, GameStop is going out of business and it’s the smart thing to do your own research before any sort of investing. It’s your own choice whether you chose to invest or not.

If we look at the actual pressing issues that have been going for years, a class action lawsuit against Robinhood is currently happening. They are getting sued because they allegedly have stolen approximately $34.1 million from the retail investors by giving them the worst trades, which means a stop limit on your buy. Robinhood had been paid off by the market makers, they are buyers and sellers. Those same market makers will make money from the bid-ask spread, so the more people use them the more money they end up making. So Robinhood ends off making money off the bad trades, and they end off selling it for a higher price. That will only benefit them and not the actual retail investors. Now people who have fallen victim to this are getting their money back, they will also be paying $65 million for a civil penalty.

We have to understand that the hedge funds making a profit on failing businesses isn’t fair because of how deeply corrupt they are. This will just teach them a lesson on how powerful “poor people” actually are, and how they can potentially overthrow them if they chose to.