Amateur online investors have rallied together, driving up the value of GameStop up 1,900 per cent over the last three weeks
CEO and president of Trillium Gold Mines, Russell Starr, says that the recent impacts Redditors have had on the stock market is fantastic.
Amateur online investors have rallied together online, driving up the value of GameStop (GME) up 1,900 per cent over the last three weeks.
At the same time, they have caused hedge fund short positions to lose billions of dollars, causing controversy among Wall Street high rollers – and Starr says that’s more than ok.
If this is what it takes to just create a clarity, rather than it being opaque, and if it takes, you know, 100 million people who ever received a $1200 check to buy GME (GameStop) to wake the world up to the fact that this has been a billionaire persons club for quite some time, I think it’s fantastic, said Starr.
Starr said in an interview with CTV that what’s happening isn’t a social movement like a protest march, but rather what he sees as a truly necessary adjustment to the way Wall Street does business.
There’s been a different set of rules that existed for quite some time, with respect to call it the hedge fund community and the retail community, he said.
A ‘short’ is when someone borrows a stock from a broker and sells it immediately at its current price, then the expectation is that the stock price falls so that the stock can be bought back at a lower price, and then the buyer can return the shares borrowed to the broker, keeping the difference.
A real double standard that exists here where the people who are short, they believe that the stock should be going to zero, said Starr.
That tactic received a jolt when a sub-Reddit group called WallStreetBets pushed back against the short sellers and started a campaign to drive the price of GameStop higher.
All of it was accelerated by the use of Robinhood, a no-fee app that allowed people to purchase shares from their phones.
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