The Real Meaning of the Reddit Rebellion Against Stocks
(1 min read)
It’s hard to ignore headlines about Reddit, Robin Hood and GameStop. Somehow amateur investors have been able to take on large hedge funds and beat them. It is retail beating Wall Street. It is discussion platform Reddit beating the Bloomberg terminal. It is millennials beating boomers. And surely this marks peak bubble for stocks. But beyond the hyperbole, three things stand out:
The Reddit rebels were buying, not selling, stocks. Their actions were targeted towards stocks that had been heavily shorted by professional investors. This could make investors more reluctant to short stocks going forward, which in turn could provide more support to broader stock markets.
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