What the GameStop Controversy Has Revealed About Wall Street
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FEATURING DOUG HENWOOD – Wall Street hedge fund managers are deeply rattled over a Reddit collective beating them at their own game in stock purchases of the video-game chain store GameStop. Small investors over several months collectively bought up enough shares of the company whose stock prices were rapidly falling in part due to hedge funds’ “short selling” the stock. But the collective stock buys by members of the “Wall Street Bets” group on Reddit drove prices up to hundreds of dollars a share. Hedge funds that had bet on GameStop failing now owe billions as many small-time investors have seen their fortunes rise.
The story has revealed a deep well of public anger at Wall Street investors who have long gamed the system to their own ends but are now balking at small investors banding together. Senator Elizabeth Warren echoed this anger saying, “For years, the same hedge funds, private equity firms, and wealthy investors dismayed by the GameStop trades have treated the stock market like their own personal casino while everyone else pays the price.”
Read Doug Henwood’s article on the Jacobin called, ‘The GameStop Bubble Is a Lesson in the Absurdity and Uselessness of the Stock Market,’ HERE.
Doug Henwood, political economist, editor of Left Business Observer, author of After the New Economy, and My Turn: Hillary Clinton Targets The Presidency. He is also the host of a weekly radio show on Pacifica called Behind the News.