We all should have heard about the GameStop Stock Scandal by now–how large corporations put lots of stock money in short stocks, hoping GameStop would fail; how a Reddit group bought the stock, causing its value to go up, and making the rich stockholders lose money; how tons of normal people wanting to capitalize on the rush went in and bought stock as well, bringing the value up to 1700 percent of what it was before. (EMPIRE)
It’s so well-known that Netflix might make a movie on it as soon as it is over. This crazy idea between a large group of average people has saved a failing company, made money for the people involved, and subtracted from the pockets of the rich. These original short stock holders, who were hovering like vultures over GameStop, ready to take everything from it as it was failing, got a dose of karma.
But the taking of money away from rich elites didn’t stop there. Nokia Stocks were also boosted, damaging the pocket of anybody who bet on it to lose (Market Watch). It seems that the original people were tired of people buying short stocks, basically so they could leech off of dying companies, and then others came who were in it to make money off of the stock surge. This really began to hurt the people who were buying short stock, however, and they took notice.
Here’s where the corruption and hypocrisy are on full display. Some people who buy short stock are notorious for being media moguls, because those people can then go on TV and scare normal people into selling their stock, so the short sellers can profit. Well, notorious Hedge Fund Manager, and convicted Inside Trader Leon Cooperman did just that. (The Daily Mail) He went on TV and told the world that buying GameStop stock would end badly for them. He tried to scare people into not buying the stock and selling the stock they just bought as soon as possible. This would just give the money back to the short sellers. And Cooperman is just one of multiple billionaires who complained about the stocks and tried to scare people away from them, all working together to secure their “well-earned” money.
Many of the rich short stock buyers also said that talking about buying stocks, and planning it out is illegal. Technically this is legal, though, because they are not choosing to do it because of insider information. The Reddit and Discord group that started the whole thing just talked about doing it because they didn’t like short selling. It would only be illegal if they did it because of information given to them by an employee of GameStop, or another inside source. (Kiplinger)
People who go on TV and try to scare people out of profitable business ventures are not really interested in a free market and should not reap the benefits of a free market. Lucky for us, some billionaires and millionaires are good people, and believe in the right to make business decisions to benefit yourself. Ryan Zamo is a very rich man who owns two companies, and also invested in GameStop himself. He defended the people who were investing like him, and said he did not believe what they were doing was illegal. (Los Angeles Times)
Unfortunately, this is not the end of the story because the rich short stockholders, desperate to keep their money, pulled out all the stops. Suddenly meetings between the Reddit and Discord groups of the original stock buyers were suspended, and buying GameStop stock was not allowed on multiple websites. Every place that could be influenced by the rich short sellers stopped allowing people the basic right of buying something, because it messed up some billionaire’s pocketbook.
The places that did these things were: Discord, Robinhood Financial, Robinhood Markets, Public Holdings, Robinhood Securities, Interactive Brokers, TD Ameritrade, E-Trade, TD Bank, We Bull Financial, M1 Holdings, Citadel Financial, Apex Clearing (ATTORNEY GENERAL OF TEXAS). Very quickly, the people who had been buying stocks, or wanted to buy stocks, became angry, realizing their access to stocks was being controlled. One of the worst offenders of this is Robinhood, a company whose name is very ironic considering its business practices. As soon as it became a big issue, Robinhood blocked people from being able to buy GameStop stocks, only allowing them to sell those stocks. Many believe they did this because of third parties that put a bit of pressure on them.
This is because similar to Facebook, Robinhood sells some of its user data to third parties. It is possible that those third parties pay a lot for that information, and are important to Robinhood (Bitcoinist.com). Some of those buyers could have been the same people who were losing money because of GameStop stock, making many very suspicious.
However, lawsuits have already been filed against these companies that are getting in the way of stock buyers free trade, and they will probably be forced to reinstate GameStop trading soon (ATTORNEY GENERAL OF TEXAS).