{"id":162673,"date":"2021-01-27T17:50:16","date_gmt":"2021-01-28T01:50:16","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=162673"},"modified":"2021-01-28T10:10:10","modified_gmt":"2021-01-28T18:10:10","slug":"big-bets-on-gamestop-make-wall-street-look-like-a-casino","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/big-bets-on-gamestop-make-wall-street-look-like-a-casino\/","title":{"rendered":"GameStop the Market: Big Bets on Stock Make Wall Street Look Like a &#8216;Casino&#8217;"},"content":{"rendered":"<p>The biggest bets made over the past couple days haven\u2019t been placed in a casino on the Las Vegas Strip. Instead, the action\u2019s taken place on Wall Street, as a group of stock traders on Reddit have aimed at hedge fund traders, who have made high-stakes wagers that businesses like GameStop and AMC Entertainment would stumble.<\/p>\n<figure id=\"attachment_162675\" aria-describedby=\"caption-attachment-162675\" data-style=\"width: 1200px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-162675\" src=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/01\/bigstock-163457444-1024x683.jpg\" alt=\"GameStop\" width=\"1200\" height=\"800\" srcset=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/01\/bigstock-163457444-1024x683.jpg 1024w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/01\/bigstock-163457444-142x95.jpg 142w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/01\/bigstock-163457444-768x512.jpg 768w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/01\/bigstock-163457444-1536x1024.jpg 1536w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/01\/bigstock-163457444-2048x1366.jpg 2048w, https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/01\/bigstock-163457444-600x400.jpg 600w\" sizes=\"(max-width: 1200px) 100vw, 1200px\" \/><figcaption  id=\"caption-attachment-162675\"class=\"text-description\">A GameStop retail storefront at The Grossmont Center in La Mesa, Calif. The company has seen its stock price soar in recent days, thanks to online speculators targeting hedge fund investors who have short-sale positions on them. (Image: GrossmontCenter.com)<\/figcaption><\/figure>\n<p>GameStop, the brick-and-mortar retailer of video games, saw its shares end Wednesday at $347.51, up nearly $200. The rise is meteoric, as just a week ago, shares were trading at $39.12. Movie-theater chain AMC\u2019s rise hasn\u2019t nearly been as big, but its move just started. It closed Tuesday at $4.96, and on Wednesday the price more than tripled to $15.70.<\/p>\n<p>Through it all, <a href=\"https:\/\/www.casino.org\/news\/vegas-loop-developer-elon-musk-new-worlds-richest-man-at-190b\/\">Elon Musk<\/a> got involved and spurred the online investors to keep it up. Then, as some raised concerns and called on the government to intervene, US Rep. Alexandria Ocasio-Cortez called out critics as she compared investors to gamblers on the Strip.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"500\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Gotta admit it\u2019s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino<\/p>\n<p>&mdash; Alexandria Ocasio-Cortez (@AOC) <a href=\"https:\/\/twitter.com\/AOC\/status\/1354536220110577664?ref_src=twsrc%5Etfw\">January 27, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>One investor who took advantage of the GameStop surge was venture capitalist and former Facebook executive Chamath Palihapitiya. Palihapitiya, now a co-owner of the Golden State Warriors, said he made $500,000 through his trades and donated it all to the <a href=\"https:\/\/www.casino.org\/news\/penn-national-gaming-donates-1m-to-barstool-fund\/\">Barstool Fund<\/a>, the fund Barstool founder Dave Portnoy founded last month to help small businesses that have been affected by COVID-19.<\/p>\n<h2>Short Selling Explained<\/h2>\n<p>It all started, according to <em>CNET<\/em>, when Reddit users in the group \u201c<a href=\"https:\/\/www.reddit.com\/r\/wallstreetbets\/\" class=\"broken_link\">Wallstreetbets<\/a>\u201d took it upon themselves to game the stock market. That&#8217;s after learning that a hedge fund investor targeted GameStop for a short sell because a higher number of video games are now sold online as digital downloads.<\/p>\n<p>A short sell is a risky and somewhat controversial practice where a trader borrows shares of a stock and sells them.<\/p>\n<div class=\"callout\">\n<p>So, for a generic example, if you borrowed and sold 10 shares of Company X at $10, you\u2019d have $100. Then, you\u2019d have two weeks to pay back the value of the borrowed shares. If Company X was selling at $5 at that point, you\u2019d pay $50 for the 10 shares. The investor gets to pocket the rest, after paying interest, as profit.<\/p>\n<\/div>\n<p>However, if the stock was selling at $20, then the short seller must pay out the $100 difference. In theory, as the Reddit traders are proving, the losses when a short sale goes wrong can be massive.<\/p>\n<p>In defending the Reddit users, Alexis Ohanian, co-founder and executive chairman of the social media site, said they\u2019re simply doing to Wall Street what many have felt Wall Street has done to Main Street in recent years.<\/p>\n<p>He also gave a word of warning that\u2019s applicable for any bettor.<\/p>\n<blockquote class=\"main-blockquote\"><p>I know they&#8217;re all &#8216;random people on the internet,&#8217; but there&#8217;s a lot more empathy and community there than people realize,\u201d said Ohanian, who is also married to tennis star Serena Williams. \u201cIt&#8217;s why I&#8217;ve been saying for 15 years that (online) community is still massively undervalued.<\/p><\/blockquote>\n<p><strong>\u201cAnd also &#8211; please &#8211; don&#8217;t invest money you can&#8217;t afford to lose, ESPECIALLY in risky investments.\u201d<\/strong><\/p>\n<h2>SEC Monitoring GameStop Situation<\/h2>\n<p>The trading has caught the attention of the US Securities and Exchange Commission. However, as of Wednesday night, no letup appears in sight, as the phenomenon is now targeting Blackberry.<\/p>\n<p>&#8220;We are aware of and actively monitoring the on-going market volatility in the options and equities markets, and consistent with our mission to protect investors and maintain fair, orderly, and efficient markets, we are working with our fellow regulators to assess the situation and review the activities of regulated entities, financial intermediaries, and other market participants,&#8221; commission officials said in a statement.<\/p>\n<p>Some online stock trading sites, including eTrade, Robinhood, and TD-Ameritrade, reported outages as the stocks soared. In addition, TD-Ameritrade announced it capped trades on GameStop and AMC, calling it a risk mitigation move.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The biggest bets made over the past couple days haven\u2019t been placed in a casino on the Las Vegas Strip. Instead, the action\u2019s taken place on Wall Street, as a group of stock traders on Reddit have aimed at hedge fund traders, who have made high-stakes wagers that businesses like GameStop and AMC Entertainment would [&hellip;]<\/p>\n","protected":false},"author":45,"featured_media":162675,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,61],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v23.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Big Bets on GameStop Make Wall Street Look Like a &#039;Casino&#039;<\/title>\n<meta name=\"description\" content=\"Shares of GameStop and other stocks have exploded as a group of Reddit investorrs go after traders betting against the companies,\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/big-bets-on-gamestop-make-wall-street-look-like-a-casino\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Big Bets on GameStop Make Wall Street Look Like a &#039;Casino&#039;\" \/>\n<meta property=\"og:description\" content=\"Shares of GameStop and other stocks have exploded as a group of Reddit investorrs go after traders betting against the companies,\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/big-bets-on-gamestop-make-wall-street-look-like-a-casino\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2021-01-28T01:50:16+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2021-01-28T18:10:10+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/01\/bigstock-163457444-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2560\" \/>\n\t<meta property=\"og:image:height\" content=\"1707\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Steve Bittenbender\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Steve Bittenbender\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/big-bets-on-gamestop-make-wall-street-look-like-a-casino\/\",\"url\":\"https:\/\/www.casino.org\/news\/big-bets-on-gamestop-make-wall-street-look-like-a-casino\/\",\"name\":\"Big Bets on GameStop Make Wall Street Look Like a 'Casino'\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/big-bets-on-gamestop-make-wall-street-look-like-a-casino\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/big-bets-on-gamestop-make-wall-street-look-like-a-casino\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/01\/bigstock-163457444-scaled.jpg\",\"datePublished\":\"2021-01-28T01:50:16+00:00\",\"dateModified\":\"2021-01-28T18:10:10+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/eb30e765d812fc9b38b333f8d13068b2\"},\"description\":\"Shares of GameStop and other stocks have exploded as a group of Reddit investorrs go after traders betting against the companies,\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/big-bets-on-gamestop-make-wall-street-look-like-a-casino\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/big-bets-on-gamestop-make-wall-street-look-like-a-casino\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/big-bets-on-gamestop-make-wall-street-look-like-a-casino\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/01\/bigstock-163457444-scaled.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2021\/01\/bigstock-163457444-scaled.jpg\",\"width\":2560,\"height\":1707,\"caption\":\"A GameStop retail storefront at The Grossmont Center in La Mesa, Calif. The company, along with AMC Entertainment and Blackberry, has seen its stock price soar in recent days thanks to online investors targeting hedge fund investors who have targeted the company's stock for short sales. 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He also specializes in sports betting and horse racing. Steve is a veteran reporter and brings more than two decades of experience covering sports, business and politics. He joined Casino.org in 2019. Steve has also covered major collegiate and professional sports for the Associated Press and the Louisville Courier-Journal and is frequently featured on local network TV newscasts and podcasts for his horse racing business and legislative expertise. A Reuters contributor, he has also previously served as editor for Government Security News. Steve lives in Louisville, Kentucky -- the epicenter of the US horse racing industry -- with his wife and son. He is also an avid poker player, having learned from his uncle as a wholesome after-school pastime with cookies and milk. 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