A lot of people are saying they don’t understand what’s going on with GameStop and AMC stocks right now so open this thread if you want an explanation.

Hedgefunds are large wealthy companies that essentially spend all day manipulating the stock market to make money using small transactions. To illustrate how this works with stocks I’m going to use an analogy.

Let’s say I go to the store every day and notice that the price of pens goes down by 10 cents a day and currently costs $1. I go to you and ten other people and ask each of you to borrow your pen for a week.

I then go to the store and sell the pens to the store for $1 each, expecting that the price will continue to drop. Then in five days I go to the store and buy back 11 pens for 50 cents each and give them back to you and the other people I borrowed from and keep the extra money.

This is what hedgefunds do with stocks, they bought them sold a lot of GameStop stocks for ~$20 each. Then redditors noticed and started bulk buying GameStop stock to drive up the price to ~$300 each. Now these hedgefunds have to buy back all the stocks they sold for $20 for $300

They did this with thousands of thousands of stocks and it cost them billions of dollars, all because Reddit noticed Wall St pulling scams and decided to make it blow up in their face. In the process many random redditors made lots of money.

This is dangerous to wall st because if people realize they can do this whenever they all agree to then it won’t be a sound investment anymore and their way of making money without actually doing anything will be gone.

This is funny because manipulating the stock market to screw over other people is basically all that wall st does. It’s ironic now that they’re crying for regulation just because this time they’re the ones being affected for once.