Simple yet Bursting
The GameStop mania is believed to be a marketing manipulation by many investors. This can be perfectly addressed as retail investors rebel in the share market. Yes, no one would have expected such a blow from members of a social media platform. A silly thought changed into a discussion which was later put into action and now flipped the whole share market upside down.
A few months ago there was a storm in the stock market. A mischievous plan by the investment firms pulled right from the root by the retail investors. This act left many investors a huge blow that they could never stand again.
Gabe’s Melvin Capital
Gabe Plotkin found Melvin Capital in 2014 which was intended to be a human-intensive investment management firm. He claimed that a lot of analysts work on each project. To pull up the failing company GameStop they decided to do short-selling. By doing this they would gain a profit which can hold back the company. Though a little risky the company went for it.
The Wall Street Bet
In a Reddit community, a discussion was made on this topic and people found it to be a manipulative trade-off game. They decided to buy maximum shares all to increase the price of the share. This would leave the short-selling traders to buy a share at a very high price. Thus, the plan was demolished and Melvin Capital faced a big loss.
Coping up with the loss
Gabe has a net worth of 300 million and the loss in this trade-off game did not affect him. He continued to work on the business. Melvin posted 22 games but still, 75 more is needed to balance off the loss. Though it’s a calculated risk and they are reluctant to accept the fall blaming by the retail investors.
This shows the strength of social media and also a warning for the big shots that if the minor category gathers they would wash off the whole market.