GameStop becomes financial battlefield
Ailing retailer GameStop is currently the subject of an epic stock market struggle after the subreddit r/WallStreetBets discovered that a hedge fund had made a huge bet on GameStop’s share value falling.
The hedge fund Melvin Capital had made a particularly huge bet, and needed a $2.75 billion cash injection after margin calls cost the fund nearly 30% of its assets and forced it to close its position at a huge loss. Meanwhile, other funds kept shorting GameStop in the hopes of scaring the retail investors from r/WallStreetBets into selling en masse, causing the share value to plunge again.
Stonking the flames: Several hedge funds have made huge loses and have called r/WallStreetBets' organizing an act of market manipulation, calling for regulators and stock exchanges to halt trading. the WallStreetBets Discord channel was closed shortly afterwards, and the subreddit went private for a while to avoid being closed. The trading app RobinHood has blocked buying several stocks including GameStop, but still allow selling them.
The storm rages on: Now troubled cinema chain AMC Entertainment's stock has surged over 200% in another effort to punish more short-sellers, and several other stocks with poor prospects are suggested as future targets. The US government is monitoring the situation, although it's unclear if anything that has happened is illegal.