LogFAQs > #950277124

Zeus posted...

Worth noting that most of this s*** is the result of Robinhood's decision to block people from buying stock, which killed the momentum.

Yes and no. Regardless of what Robinhood did, this wasn't going to last forever, and you were going to see quite a few people losing quite a lot of money as they clung to the stock in hopes that it would go back to rising. People buying into the meme stock of the month often aren't exactly savvy investors, after all. Gamestop is dying, and any surge in its stock price was only ever going to be temporary (which creates some excellent opportunities for short sellers to make tons of money on its way back down, as much as they lost their minds over their initial losses).

Did Robinhood et al's obviously corrupt intervention kill the stock's momentum prematurely? Almost certainly, and that's something they should really face very severe consequences for. But ultimately, that's really just going to result in a faster return to the status quo and less massive wins for the people that were going to win regardless. A similar number of people would likely lose even more money if the stocks had kept climbing until a more natural crash.

That said, regardless of what happens to Robinhood and the like over this, the consequences of this instability are going to be pretty far-reaching. Short-selling was always a pretty significant gamble, but this has highlighted just how easy it is for it to be screwed over by a bunch of memelords buying stocks for the lulz, and this will very much not be the last time something like this happens. The instability this has introduced to the hedge fund market will be lasting for quite a while, which should make things very interesting.

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