Date: February 02, 2021
“Private investors and politicians were outraged on Thursday when popular trading app Robinhood and others began stopping buyers from purchasing stock in GameStop, a struggling video game retailer at the heart of an online revolt against hedge funds that has left Wall Street reeling.
Robinhood and other platforms stepped in after GameStop shares jumped 135 percent, driven by private investors led by Reddit users on the popular subreddit r/wallstreetbets.
These investors noticed that hedge funds were short-selling GameStop stock—i.e. betting the struggling company’s value would fall further. Small buyers then began investing in large numbers, sending the stock price soaring, making enormous potential profits, and leaving hedge funds facing crippling losses.