You might have recently heard of something related to Gamestop stocks. This is because recently there was a huge stock mania happening. 

It all started on “r/wallstreetbets”, a forum community on a social media platform called Reddit, which according to CNBC, now has more than 6.5 million members. According to thebrag, Gamestop got a new board member, whose tactics caused many people to believe that the already low Gamestop stocks would go down some more. This caused many companies, funds and people to short Gamestop. Shorting or “taking a short position” is when someone bets on a company to fail rather than to succeed. According to thebrag, many Redditors started joking about Gamestop, and eventually, the joke got a bit out of hand and people started rapidly buying Gamestop stocks. According to CNBC, the traders on the forum wanted to buy up the stock “to the moon”. Elon Musk even tweeted “Gamestonk!!”. All the hype on Gamestop stocks also spilled over to other stocks such as AMC entertainment. Gamestop stocks went up more than 400% and had gone up over 1000% at the end of January. This was very unexpected and random since there was no logical reason to buy Gamestop stocks other than for the memes. Now, the problem with all this rapid growth is that it caused short squeezing. Short squeezing is, in essence, when a stock unexpectedly goes up and causes people who shorted the stock to lose a lot of money. 

This is where Robinhood came in, a popular free-trading app where people can trade stocks using the application. All this stock mania caused Robinhood to raise new funds and throttle back trading on these short squeeze stocks by blocking some of them so that you could not buy them through the app for a limited time. People got really angry at this since people thought it was unfair and did not know the intentions of Robinhood. According to TheVerge Robinhoods review plummeted on the Google play store down to just one star thanks to thousands of negative reviews. Google later controversially restored the app’s positive rating by removing the negative reviews from Robinhood’s store page that Google thought violated its policies. 

As if all that wasn’t enough, all this crazy stock madness caused Congress to get involved. According to Techcrunch, Maxine Waters, a chairwoman of the House Committee on Financial Services, announced plans for an investigation into the situation. Incoming Senate Banking Chairman Sherrod Brown also announced his plans for a hearing on the state of the stock market. 

Now you know about what happened with Gamestocks. Now that all of this is over, Gamestop stocks have already gone back down. Whether or not all this was good or bad is very much debatable. On one hand it was distributing wealth, on the other it was destabilizing the stock market. It made some people a fortune and made others lose millions. One thing is for sure though, it was all very interesting.