GameStop effect spreads as calls for probe build
An unprecedented event is currently happening as part of a battle between small-time traders on Reddit and hedge funds that have shaken both the US and European stock markets and are expected to disrupt Asia as well. Surges in several Australian companies are joining a list of Reddit fueled moves that have cost financial institutions billions over the last week. On Wall Street, the company GameStop is at the heart of the unrest. Thousands of traders on the Reddit threat r/wallstreetbets joined together to surge the game company’s stock by 1,700%.
Although this influx is not sustainable, it has caused chaos on Wall Street among hedge funds and fund investors who better on the stock’s downfall. The whole ordeal is driven by traders working through online brokerage apps such as Robinhood, organized through Reddit and other messaging boards. Other companies witnessing a massive jump in stock price include AMC Corp and BlackBerry Ltd. The frenzy has raised questions of possible market manipulation as it is illegal for institutions to coordinate in this manner. The legality of what is occurring on online forums is also in question.