Rogozinski can’t say if the brokers were correct to step in to limit trading, only that given the scale of the disruption, authorities could be expected, rightly or wrongly, to find some channel to curb the activity. On Thursday, popular trading conduits – Robinhood and Ameritrade – clamped down on retail investors’ bets on several highly popular but volatile stocks, locking traders out of the market and drawing sharp criticism from some users and politicians from the conservative Texas senator Ted Cruz and the self-described democratic socialist congresswoman Alexandria Ocasio-Cortez, longtime sparring partners.įully agree. As of early on Friday, GameStop short sellers had lost $19.75bn so far this year, according to analyst S3 Partners. Incredibly, the WallStreetBets crowd won the round, forcing some out of the trade and causing consternation and fears of an electronic financial insurgency on Wall Street.
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The professional investors had “shorted” GameStop – a bet its price will collapse – along with other companies that have since soared including the cinema chain AMC and BlackBerry. Small investors bonded together on the Reddit forum, spurred on by members with names such as Roaring Kitty, to take on some of Wall Street’s biggest investors who they believed had made a bad bet on the company collapsing.
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That casino mentality was on full display this week when GameStop – a 37-year-old struggling retailer – became the world’s hottest investment. I’m amazed how far it’s gone Jaime Rogozinski Little by little it has turned into a casino, a place for speculative games,” he says. “Wall Street has always been getting away from its original intent, which was to provide capital to society. In part he sees it as payback for the way financiers have behaved. Rogozinski, 39, is still trying to get to grips with the role his 2012 creation, now with more than 3.5 million subscribers, is playing in shaking up financial markets. To an extent, coronavirus has helped fuel the velocity and direction of the changes taking place,” he says. I don’t think anyone thought this was possible. “I predicted it would go in this direction but I didn’t think it would go this far. To some, the activity signals the barbarians have reached the gates to the high citadels of finance to others, it is a liberation from the control of entrenched masters in a corrupted system. The frenzy has also taken on political overtones, as if the elective struggle of 2020 had simply transferred to competing ideologies about the distribution of wealth. Conceived around the time that social media was propelling democratic movements worldwide, WallStreetBets has played an important, if now contentious, part in lowering barriers of entry to financial information. “I’m amazed how far it’s gone,” Rogozinski told the Guardian from his home in Mexico City.
This week WallStreetBets was at the center of a full-scale war between Wall Street and an army of small investors over GameStop, an ailing video games chainstore, that has shaken financial markets, angered billionaire bankers and made unlikely allies of political enemies.
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